10 Foolish Money Mistakes You’re Probably Making in Your 20s

Hey, you! Yes, you—the one trying to navigate the chaotic, confusing world of personal finance while juggling life, career, and a social life. In your 20s, it’s easy to make money mistakes because, honestly, no one really teaches us how to handle cash the right way, right?

But don’t worry. If you’ve made some mistakes (who hasn’t?), you’re not alone—and the best part? You can totally turn things around! So, grab a seat and let’s go through 10 of the most common money mistakes people make in their 20s—and how you can avoid or fix them today.

1. Not Budgeting (Or Thinking You Don’t Need To)

First things first—if you’re in your 20s and you don’t have a budget, it’s like driving without knowing where the brakes are. It’s possible to get by, but you’ll probably crash into a pile of debt sooner or later.

Mistake: “I don’t need a budget. I’m fine. I’ve got enough money to cover my bills and do what I want.”

Solution: Start budgeting now. It doesn’t have to be complicated. Just track your income and expenses and make sure you’re spending less than you earn. Apps like Mint or YNAB (You Need a Budget) can make this easy and automated. You’ll feel way more in control of your finances.

2. Living Beyond Your Means

In your 20s, there’s often a lot of pressure to keep up with friends, influencers, or even your co-workers. You see people buying expensive stuff, going on lavish trips, and posting pictures that make it seem like life is one big luxury ad.

Mistake: “Everyone else is doing it, so I should too. Plus, I work hard, so I deserve it!”

Solution: Cut yourself some slack—and cut back on those unnecessary expenses. You don’t have to live in debt to keep up with others. You’ll feel a lot more freedom if you focus on saving and investing instead of spending on things you don’t need.

Tip: Try the 30-day rule—if you’re thinking of buying something big, wait 30 days before making the purchase. Chances are, you won’t even want it by then.

3. Ignoring Your Credit Score

In your 20s, credit scores can feel like this elusive number that doesn’t matter until you’re about to buy a house or car. But trust me—it matters now.

Mistake: “I’ll worry about my credit score later. It doesn’t affect me yet.”

Solution: Your credit score affects way more than just loans—it can impact your rent, your insurance premiums, and even your job prospects (yep, some employers check it!). Make sure to regularly check your credit score and work on building it up by paying bills on time and keeping your credit card balances low.

4. Not Saving for Emergencies

We’ve all heard about “emergency funds,” but it’s easy to brush them off when you’re young and feel invincible. Until life happens.

Mistake: “I don’t need an emergency fund. I’ll figure it out if something goes wrong.”

Solution: Trust me—you need an emergency fund. Aim for at least 3-6 months’ worth of living expenses in a separate savings account, just in case. This will keep you from sinking into debt when unexpected expenses arise, like a car breakdown or medical emergency.

5. Not Investing Early Enough

The earlier you start investing, the more time your money has to grow. If you’re still waiting until your 30s or 40s to get serious about investing, you’re missing out on a huge opportunity.

Mistake: “I’m too young to think about investing. I’ll start later when I have more money.”

Solution: Start small, but start now. You don’t need thousands to begin investing. You can open a retirement account (like an IRA or 401k) or invest in low-fee index funds through apps like Robinhood or Vanguard. The earlier you start, the more compound interest works in your favor.

6. Racking Up Credit Card Debt

It’s tempting to swipe your card without thinking twice—especially when the bill is “due later.” But those small purchases add up, and credit card interest can quickly get out of hand.

Mistake: “It’s just a small charge. I’ll pay it off next month.”

Solution: Pay off your balance every month in full. If you don’t, interest charges will pile up, and suddenly you’ll be in debt that feels impossible to escape. If you already have credit card debt, create a plan to pay it off ASAP. It’s a major financial weight you don’t need.

7. Not Taking Advantage of Employer Benefits

When you first start working, it’s easy to overlook the benefits your employer offers. But these are free money and perks, so you should definitely take advantage of them!

Mistake: “I don’t really understand my benefits package. I’ll just skip it.”

Solution: At least glance over your benefits package and figure out how to maximize it. If your employer offers a 401k match, start contributing to it! That’s free money! Also, don’t forget about health benefits, tuition reimbursements, or wellness programs that could save you tons of money in the long run.

8. Not Having Insurance

You may feel like you don’t need insurance now, especially if you’re young and healthy. But accidents and emergencies can happen to anyone—and you want to be prepared for the unexpected.

Mistake: “I’m young and healthy. I don’t need insurance. It’s a waste of money.”

Solution: Get health insurance, even if it’s through the marketplace or a low-cost plan. And look into renters insurance to protect your stuff if something were to happen to your apartment. It’s way more affordable than you think and could save you from serious financial distress down the road.

9. Focusing Only on Short-Term Goals

In your 20s, it’s easy to be caught up in the moment. Whether it’s planning a vacation, buying a new phone, or just having a good time, it’s tempting to focus on the now and forget about the future.

Mistake: “I’ll worry about long-term goals later. Right now, I want to enjoy life!”

Solution: Enjoy life, but also plan for it! Set aside a little money for retirement (even if it’s a small amount). Save for big future goals like buying a house, getting a degree, or starting a family. It’s not about depriving yourself—it’s about balance.

10. Not Seeking Financial Education

Let’s be real: Most of us didn’t get a crash course in personal finance growing up. So, we stumble through trial and error. But the good news? Financial education is more accessible than ever.

Mistake: “I don’t know enough about money. It’s too complicated.”

Solution: Start learning! Read books, follow financial blogs or podcasts, and even consider taking online courses. The more you know, the better decisions you’ll make with your money. And trust me—once you understand the basics of investing, budgeting, and managing money, your financial future will look a whole lot brighter.

Wrapping Up: It’s Never Too Late to Start

Okay, I know we just went through a lot of “mistakes,” but here’s the truth: you’re not behind. Whether you’re 20 or 29, it’s never too late to start making smarter financial choices. The key is to recognize where you’re going wrong, then make the effort to do better.

And if you’ve made some of these mistakes already? No worries. Just make sure to learn from them and move forward. Your 30s (and beyond) will thank you for it.

If you’re ready to get serious about your money, now’s the time. Trust me—future-you will be incredibly grateful!

Here are 7 steps to spending like you’re living the dream.