7 Most Common Money Mistakes to Avoid in Your 20s

Ricky Publico

Ricky Publico

Last updated September 02, 2022

Contrary to popular belief, marriage isn’t the be-all and end-all in life. Being single rocks! If you haven’t found “The One” just yet, don’t sweat it and just enjoy your freedom. Now is the time to travel, explore new things, focus on your career goals, and enjoy your own company.

It’s also the perfect time to make mistakes—that’s how you learn, after all. For instance, you’ve probably already committed a few money mistakes to avoid in your 20s. That’s perfectly fine, but just because you’re single doesn’t mean you can be irresponsible when it comes to money forever. Take this opportunity to improve the way you handle your finances.

Money Mistakes to Avoid in Your 20s, Especially If You’re Single

1. Living on Takeouts and Food Deliveries

money mistakes to avoid in your 20s - living on takeouts and food deliveries

Food delivery apps may be the best invention since sliced bread, but did it ever occur to you that you’re bleeding money because of it? Think about it: if you spend at least 200 per meal from restaurants and you eat at least twice a day, you’ll end up spending 12,000 a month. That’s a lot of dough. Good luck scoring a date when you’re broke!

Imagine turning that dough into a cookie by learning how to cook meals for yourself. It’s not rocket science anyway. All you need is a little practice and a good eye for grocery shopping. You’ll end up saving more money than half of what you spend eating out at restaurants. And if you’re good at it, you’ll end up enjoying dinners a lot more, even if you’re by yourself.

2. Saving Your Credit Card Details to Your Device

money mistakes to avoid in your 20s - saving your credit card details to your device

Online shopping made everyone’s lives easier, especially during the pandemic. It also enabled everyone, especially single people with no responsibilities, to commit a few money mistakes. All you have to do is save your credit card information on your browser or phone’s autofill and boom—you can now shop for unnecessary stuff with just a few clicks. 

Admit it, you’re guilty of this one. The obvious countermeasure is to delete your credit card information and disable your device’s autofill feature.[2] Since you now have to type your credentials manually, you’ll be able to reconsider unnecessary purchases. Save your money and instead focus on growing your wealth, not your collection of impulse buys.

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3. Keeping Your Spending Habits to Yourself

money mistakes to avoid in your 20s - keeping your spending habits to yourself

“But I’m single and I don’t have that many friends. I’m not wasting money,” you’re probably thinking. However, not having anyone to talk to about your spending habits may lead to terrible financial decisions. After all, most unplanned purchases happen when your judgment is clouded by sadness, loneliness, or anger.[3]

No matter how introverted you believe yourself to be, you should still strive to make meaningful connections with others. This will help you improve your mental health, which will then lead to better financial decisions. Remember that having negative feelings is okay, but committing money mistakes to cope with them is never okay.

4. Having a “Do It For the Money” Mentality

money mistakes to avoid in your 20s - having a do it for the money mentality

It’s common for anyone to consider getting rich as their top goal in life, especially if you’re single and obligation-free. While it’s not a bad goal, making decisions solely to get rich will also get you nowhere. You probably took your current job because it pays well, but is it worth the long overtime hours, the stressful office politics, or the lack of promotions or positive reinforcements?

Aside from the salary, consider other things like career growth, working environment, and your own passion in choosing a career. Don’t overwork yourself trying to get rich. You won’t enjoy the money you make anyway if you let your health deteriorate while on the job. Remember: It’s possible to make money out of things you’re passionate about. If you can afford it, go do it.

5. Not Having an Emergency Fund

You never know when emergencies might happen, and you need to make sure you’re financially prepared. Your car might suddenly break down due to a faulty battery, or your home might require repairs after a particularly heavy typhoon. You might unexpectedly lose your job or—knock on wood—fall seriously ill. This is especially tough if you’re single and getting by on your own.

To avoid the added stress of debt during an already difficult time, prepare an emergency fund separate from your savings. Your emergency fund should be three to six months’ worth of your current salary. With an emergency fund, you can rest easy, whatever uncertainties may be headed your way.

Read more: Best and Worst Places to Put Your Emergency Fund in the Philippines

6. Not Getting Health Insurance

On a related note, health insurance is also a must. The idea of getting sick might seem unfathomable when you’re young and in your prime, but no one’s spared from unexpected medical emergencies, as the pandemic proved. 

Most likely, your employer’s medical insurance won’t cut it for major health issues. You’ll save yourself from years of debt with your own health insurance. The good thing is that applying for insurance at a younger age can be substantially easier on your wallet since insurance premiums increase with age. 

7. Believing that Love Will Fix All Your Problems

money mistakes to avoid in your 20s - believing that love will fix all your problems

Some people believe that having a significant other or getting married will magically inspire them to stop making money mistakes. In reality, you’ll just end up passing the burden to your potential partner. 

What if they’re just as much of a financial wreck as you? What if the relationship doesn’t work out? You shouldn’t base your financial decisions on your emotions.

Isn’t it better to build your wealth before searching for “The One”? Work on improving yourself first, especially your financial literacy. After all, when it comes to settling down, a financially independent person is more attractive than a carefree, come-what-may type of person. It’s not other people’s responsibility to take care of you. Show yourself and your partner some respect and do the fixing yourself.

How Should You Manage Your Money in Your 20s?

If you’re a complete budgeting novice, the 50/30/20 rule is a good place to start. Allocate 50% of your income to necessities such as groceries, utilities, rent, and transportation; 30% to your savings and emergency fund; and 20% to nice-to-haves such as your Netflix subscription, travel fund, and new gadgets.[1]

Of course, this varies depending on how much you're earning and whether you have other financial obligations to your family. You can tweak the formula according to your own lifestyle. 

Is It Normal to Struggle Financially in Your 20s? 

Are you feeling left behind by your peers? Or are you dismayed by the dismal state of your savings? Don’t pressure yourself. Remember: you’ve only just begun to establish your career. You’re probably living on a tiny paycheck while struggling to make ends meet on your own for the first time. Relax and be kind to yourself. You’ve got time on your side! 

That said, there’s no better time to start saving than in your 20s. With fewer responsibilities on your plate, you can set aside a bit more cash. Depending on your bank’s interest rates, these savings will grow bigger over time.

Final Thoughts

Being single shouldn’t give you an excuse to spend like a millionaire. You may not have a love interest at the moment, but you still have your immediate family and close friends, right? If you think about it, no one is truly alone in this world. You’ll always have people in your life you can talk to and pamper with your efforts.

So if you don’t want to get your life in order, at least do it for the people who truly care for you. Don’t let your list of money mistakes to avoid in your 20s get longer by the minute. Start changing your ways while you still can. You deserve a financially healthy life, with or without a significant other to share it with.

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Ricky is the zaniest Product Marketing Manager at Moneymax, with over six years of writing experience in the digital marketing industry. He had written for SEO, cybersecurity, and other related industries prior to joining Moneymax. He also specializes in content writing, copywriting, and email marketing. He is a huge fan of pro-wrestling, One Piece, and smartphones in general. Follow Ricky on LinkedIn.