Your 20s are this strange combination of freedom and stress—you’re finally making (or learning how to), but you’re supposed to somehow “have it together.” Money is one of those things that can either calm you or drive you crazy for years. The decisions you make today don’t only impact the moment; they also set the course for your 30s and forward. Below are 9 financial blunders that you should avoid in your 20s to remain ahead of the curve.
1. Disregarding a Budget
Imagine a budget as your map of money. Without it, it’s all too easy to spend money and then ask yourself where it’s all gone. A lot of people believe that budgeting is about cutting yourself off, but it’s really about assigning every dollar a job—whether that’s bills, fun, or savings. Even a basic app or spreadsheet can help you identify spending patterns and keep you on top.
2. Living on Credit Cards
Credit cards are like having a mini safety net in your pocket. But if you’re swiping without caution, interest catches you in debt that’s virtually impossible to break free from. Using credit responsibly is okay—such as buying groceries or gasoline and paying off the balance monthly—but treating it as “extra money” is risky. The practice of living above your means today can really haunt your financial life.
3. Not Creating an Emergency Fund
Life loves to throw curveballs: unexpected doctor bills, a busted laptop, or even job loss. Without a cushion, these situations can spin into debt. An emergency fund doesn’t have to be enormous initially—begin with tiny sums like stashing 5–10% of your income. With time, that safety net turns into something that makes unplanned events considerably less stressful.
4. Delaying Saving
It’s easy to assume, “I’ll start saving when I’m older and making more,” but the sooner you begin, the better. With compound interest, even small amounts of money in your 20s balloon throughout the years. Doing it in your 30s or 40s just means you’ll need to save a whole lot more to get on track. Saving is essentially paying your future self—think of it as one of the greatest gifts you can provide.
5. Spending to Impress Others
The desire to seem like you have your life completely together is real. But endlessly trying to keep up with trends—designer handbags, the latest phone, dining out every night—just gets you broke and stressed. Spending money to impress others is not worth happiness, actually; it just ends up making you regret spur-of-the-moment purchases. Instead, invest in what truly adds value and joy to your life, not merely likes on Instagram.
6. Bypassing Investments
Many individuals in their 20s believe that investing is complicated or takes too great a risk, and they wait. But waiting too long is the greatest risk, as you lose out on years of increase. You don’t have to have thousands; even investing small amounts in index funds, mutual funds, or starter apps can make a difference. The sooner you begin, the more time your money has to increase quietly in the background.
7. Avoiding Debt
It’s tempting to ignore debt, particularly if minimum payments are reasonable. But the more time you let it go, the larger it gets, courtesy of interest. It could be student loans, credit card debt, or personal loans; creating a strategy to address it today prevents you from sinking later. Begin with the highest-interest debt first, and treat yourself to small victories as you whittle away.
8. Not Tracking Subscriptions
This one gets you without noticing. You get a “free trial” or install a streaming app, and before you know it, you’re paying for five services that you hardly use. Small figures—say, $5 or $10—do not hurt, but they slowly suck the life out of your budget. Conduct a subscription check-up every few months and cut what you don’t require. Your bank will appreciate it.
9. Not Educating Yourself
Money may seem scary, but not dealing with it won’t make it less scary. Financial literacy is a learned skill, just like anything else. There are so many free tools—books, blogs, YouTube, even TikTok personalities—that simplify things. The more you know, the better you’ll feel about making smart money decisions.
Final Thought: Everyone makes mistakes when growing up, but financial mistakes land differently because they persist. The good news is you don’t have to be a money guru to steer clear of these pitfalls—you just have to be aware and make tiny, steady steps. Your 20s are about experimenting and living, but being financially smart now ensures your older self can do the same.