7 Money Mistakes You Made in Your Twenties (And How to Fix Them Now)

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If you’re like most of us, you probably wish you had been more financially savvy in your twenties. A little less partying, a little more planning for the future, right?

While we can’t provide you with a time machine so you can go back and make things right, we have collected a list of money missteps most twentysomethings make – and how to turn them around and get on the right track. Read on:

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Not Planning for Retirement

Common to most people in their twenties, especially in their early twenties, is a certain level of youthful short-sightedness, which is why it’s not surprising that most people don’t start saving for their retirement until they’ve left their twenties in the dust. When you’re twenty-one, or even twenty-six, retirement can seem such a distant prospect as to be nearly unimaginable. But failing to invest in a 401(K) means failing to earn money with your savings.

The fix? Start now! Don’t hesitate. Even small contributions to a 401(K) can improve the quality of your life come retirement age.

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Equating Youth with Invincibility

That youthful shortsightedness described above is also at fault for this common financial blunder. Many people in their twenties are not properly insured, which can be especially costly when it comes to health insurance. A serious illness or accident can easily plunge an uninsured twenty-year-old into deep debt.

The fix? Research health insurance providers and ensure that you’re adequately covered. And don’t forget about appropriate insurance for your home (and valuables) and car, too.

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Treating Credit Cards like Cash

When you’re living paycheck to paycheck or enjoying your newly acquired freedom in your twenties, it’s easy to forget that a credit card is not a plastic purveyor of cash. In fact, credit cards give you credit, which is not cash, but a loan. When you purchase with a credit card, you’re borrowing money. When we forget this and treat credit like cash, we can start racking up some serious debt.

The fix? If you’re saddled with credit-card debt from your twenties, pay it off as quickly as you can. This means forgoing the minimum monthly payment amount and opting to pay as much as you can afford each month. You’ll be saving a huge amount of cash in interest, and you’ll be debt-free that much sooner, so you can start saving or even investing the cash you were putting down on your debt.

And start using your credit card wisely: if you charge only what you can pay off each month comfortably, pay your bills on time, and maintain a borrowing limit appropriate to your income and needs, your credit rating will recover.

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Borrowing for a Better Car

Debt in your twenties should be avoided at all costs unless necessary for you to advance your career. Borrowing for a better car is certainly not necessary in your twenties.

The fix? If you need a car, purchase one that will get you from point A to point B, and wait until sunnier financial days to upgrade.

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Ignoring Your Student Loan Debt

More and more young people are attending college, which means that more and more young people are taking on debt in the form of student loans. The trouble can really set in, however, when new college graduates fail to recognize the long-term financial drain debt can have on their finances.

The fix: As with credit card debt, student loans should be paid off as quickly as possible. As soon as you are financially able, make sure your monthly payments are above the minimum set by the lender.

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Neglecting to Save

Youthful optimism can lead to shortsightedness when it comes to savings, too, which is why many a twenty-something must move back into their parents’ place when a job falls through.

The fix? Always save for a rainy day. An emergency fund should be a buffer between you and the financial pitfalls we all have to deal with sooner or later.

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Not Learning How to Manage Your Finances

All of the money mistakes we’ve listed here are essentially rooted in this final financial misstep: failing to take the time to learn how to manage your finances.

The good news? It’s never too late. Start now: dedicate an hour each week to learn about budgeting, investing in a 401(K), saving for a rainy day, and maintaining a good credit score. And make an appointment with a financial adviser. You won’t regret it.