COMMON MONEY MISTAKES TO AVOID IN YOUR 20’S
Adulting is hard, especially if you’re entering your 20’s, credit scores, loans and for a long case may seem like problem for older people, but honestly therefore important even when you’re 18 years old.
Some would argue that it’s most important when you’re 18, this is the best time to start off on the right foot and take control of your finances, unfortunately a lot of people in their 20’s do not understand how to make smart financial decisions.
In this article, I’m going to be talking about some of the most common money mistakes made by younger people, if you find yourself guilty of this, it’s time to reassess your financial situation and pit yourself back on a path towards financial freedom.
The first of the money mistakes young people make are: putting off your Student Loan. College is expensive, really expensive nowadays. Unfortunately a lot of people are getting out of school and getting hit with 10s or even 100s of thousands of dollars in student debt. This debt is scary but it’s not something you can run from. The longer you wait to pay off your students loan, the more Money you’ll have to pay in the long run, even if you’re still in college. Try to have a plan for how you’re going to pay off your students loans. Maybe you can even start with a side hustle like you can learn the skill of copywriting which I happen to teach.
The second common money mistakes is putting everything on a credit card, college isn’t the only way you can rack up debt, it’s really easy to put all your charges on a credit card and not take a look at your statement.
But if you don’t pay off your card each month, the interest fee will start to hit you hard, any kids of debt, whether it be From credit card or student loans can really hold you back from. Achieving the life that you want to live and enjoying financial freedom. If you don’t use it the right way, I recommend do not spend your 20s racking up credit card debts.
There are ways to use that as a tool to actually make money but I don’t really have the time to explain it in this article other than to say two words; real estate.
The third of the mistakes young people make Is to only pay in the minimum balance.
Sure you might only have to pay a hundred dollars each month for your students loan, car payment and your credit card but if you have the ability to pay more, I highly recommend doing it, push yourself to get rid of that debt faster and save yourself more money and free yourself sooner.
Credit card interest is usually 22%, students loan interest are around 10% unless you’re lucky and a car loan can be up to 6% of which is going to cost you much more money than if you put it in a mutual funds and you start making interest on your money instead of the other way around.
The fourth mistakes is to not getting a credit card; now if you use if the wrong way, credit card debit can really set you back on your financial goals, but the fear of credit card debit inhibits many young people who could be building their credit while their young not getting a credit card is as a bigger the mistake as getting the credit card and racking too much debt, why is it a mistake, well in the future, in order to get a home loan if even more important to get a home loan at a lower interest rate.
You need to buildup a credit,you can build up your credit by paying off your utilities, paying off your loans on time, or getting a credit card. Your credit card score will lose points if you don’t have enough credits or if you recently took up lines of credit so the best time to build your credit is now.
Credit scores are important, especially if you see yourself buying the house in the future, learn to use your credit score as an essential factor In determining the long term for mortgages .
They’re more likely to give out s higher loan with lowest interest rate, if they can see that the borrower are trustworthy and that’s something you need to spend your 20’s doing proving that you’re trustworthy with money on a credit card. If you want to save money when it comes to time to buy a house, you would want your credit score to be as high as possible consider this, if you’re buying a home and you have a bad credit, you might have a 6% interest rate on a $100,000 home.
But however, if you have an absolutely great credit you might drop your interest rate from 6% to 4% well what’s the long term difference, every month it’s around a $30 but at the end of it by the time you get a payoff, it will be a total of $44,000 and all you need to do to accomplish that is just putting $10 on a credit card and paying it off every month.
It is very simple, also I have personally earned around $800 this year alone just in sign-up bonuses and also around 82,000 in cashback rewards in spending money that I send on my business. So if used in the right way credit card are a great tools.