5 Money Mistakes Young People Will Make!
Sep 03, 2015 08:51
You probably remember our funny little piece on how you handle money differently in your 20’s and 30’s. Well now, as something of a follow-up, I’ve got the five biggest money mistakes people will make while they’re young!
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No doubt you spent countless nights at the bar screaming “next round is on me!” to the delight of your friends. But, the next morning you wake up and open your wallet to cobwebs and moths. Or, there’s the unnecessary spending on multiple clothes and footwear. When you’re young, you don’t care about price tags, you just buy for the sake of buying. It’s different when you’re older and have responsibilities, you become more frugal.
But, as a youngster, you have no bills or tax to worry about, everything is sunshine and rainbows. Spending may not seem like a big deal at the time, but it could end up getting you in a lot of financial bother.
Imagine finding a website that lets you borrow some money and you just have to pay it back when you can. That sounds awesome, right!? Well, for a lot of people in their 20’s this sounds like a dream come true. So, they apply for a short term loan and think they’re balling.
The trouble is, there are lots of dodgy loan companies out there just waiting to pounce on naive people. Cashfloat even wrote an article, on their site, about how untrustworthy one of the industry leaders can be! Before you know it, you apply for a quick loan and end up swimming in debt. Some loan companies get you with hidden costs and inflated interest rates. So, you think you’re getting yourself some much-needed cash, but you’re just getting into debt. You’ll end up with enough debt as it is once you’ve finished your studies, there’s no need to pile more on!
If you’re putting some of your money into a savings account, it’s there for emergencies. When you have no money but need to pay for something important, you can dip into your savings account. Plus, it’s good for saving up for big things.
Thinking about moving into a new apartment? A savings account can help with that. If you’ve got money put away, growing every year because of interest, it can come in handy. If you aren’t saving your money, then you’re going to end up in a pickle someday. Something will happen, and you won’t have the funds to pay for it.
So, you’ll probably end up going to get a dodgy short term loan like I said earlier! The bottom line is, opening a savings account doesn’t take much time or effort. And, it can help you out a huge deal.
You may not want to live with your parents when you’re 22 and ready to attack the world with your new degree. However, living at home presents a lot of financial benefits. If you’re living alone, you have to buy a house, pay for all the bills, it’s a lot of work. Most people don’t have the money to afford that when they’ve just come out of uni.
You’re much better off staying at home for a few years until you can truly afford to move out. Too many time’s I’ve heard stories of people leaving home too soon. They end up getting into debt because they can't pay the bills. Before you know it, they’re sheepishly knocking on their parents front door asking if they can stay for a while. When you’re at home, you don’t have to pay all the bills or pay off a mortgage, you’re financially safe! So don’t fly the nest too soon just because you want to be independent.
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All you have to do is pay your monthly bill on time and everything is great. Of course, lots of young people tend to forget about this and go a little overboard. When you have so much financial freedom with a credit card, you tend to spend. You buy something expensive because you can, and you won’t have to worry about it for a few weeks.
But, if you miss your monthly payments, you start to pay interest. And before you know it, you’re deep in credit card debt. It ends up being a painful cycle that is tricky to get out of.
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1. Spend, Spend, Spend!
Yes, one of the biggest money mistakes young people make is that they spend far too much. It’s not like you’re spending money on important things, it’s just because you can. When you get your student loan, you start to think you’re king of the world. You’ve never had so much money in your account at one time. You don’t know what to do with it - so you spend!No doubt you spent countless nights at the bar screaming “next round is on me!” to the delight of your friends. But, the next morning you wake up and open your wallet to cobwebs and moths. Or, there’s the unnecessary spending on multiple clothes and footwear. When you’re young, you don’t care about price tags, you just buy for the sake of buying. It’s different when you’re older and have responsibilities, you become more frugal.
But, as a youngster, you have no bills or tax to worry about, everything is sunshine and rainbows. Spending may not seem like a big deal at the time, but it could end up getting you in a lot of financial bother.
2. Getting A Dodgy Short Term Loan!
Lots of young people find themselves strapped for cash more often than not. So, they’re looking around for ways to get some extra money in a short space of time. You’ve probably Googled ‘ways to get money fast’ at least once in your life, don’t lie! And, one of the most popular ways of getting money, quickly, is via a short term loan.Imagine finding a website that lets you borrow some money and you just have to pay it back when you can. That sounds awesome, right!? Well, for a lot of people in their 20’s this sounds like a dream come true. So, they apply for a short term loan and think they’re balling.
The trouble is, there are lots of dodgy loan companies out there just waiting to pounce on naive people. Cashfloat even wrote an article, on their site, about how untrustworthy one of the industry leaders can be! Before you know it, you apply for a quick loan and end up swimming in debt. Some loan companies get you with hidden costs and inflated interest rates. So, you think you’re getting yourself some much-needed cash, but you’re just getting into debt. You’ll end up with enough debt as it is once you’ve finished your studies, there’s no need to pile more on!
3. Saving? Ain’t Nobody Got Time For That!
The third money mistake on my list is that young people don’t bother saving. Why open a savings account when you’re twenty? You’ve got your whole life ahead of you, right? Saving seems so boring and ‘old’ you want to have fun while you’re young. Well, yeah, I’m all for having fun but saving is just a sensible thing to do!If you’re putting some of your money into a savings account, it’s there for emergencies. When you have no money but need to pay for something important, you can dip into your savings account. Plus, it’s good for saving up for big things.
Thinking about moving into a new apartment? A savings account can help with that. If you’ve got money put away, growing every year because of interest, it can come in handy. If you aren’t saving your money, then you’re going to end up in a pickle someday. Something will happen, and you won’t have the funds to pay for it.
So, you’ll probably end up going to get a dodgy short term loan like I said earlier! The bottom line is, opening a savings account doesn’t take much time or effort. And, it can help you out a huge deal.
4. Too Eager To Leave Home
When a lot of people return home from university, they get something called ‘the independence bug.' They spent a good few years away from home, being independent and living free from household rules. Being independent is good, there’s nothing wrong with that. But, rushing to leave home, for good, is a bad idea.You may not want to live with your parents when you’re 22 and ready to attack the world with your new degree. However, living at home presents a lot of financial benefits. If you’re living alone, you have to buy a house, pay for all the bills, it’s a lot of work. Most people don’t have the money to afford that when they’ve just come out of uni.
You’re much better off staying at home for a few years until you can truly afford to move out. Too many time’s I’ve heard stories of people leaving home too soon. They end up getting into debt because they can't pay the bills. Before you know it, they’re sheepishly knocking on their parents front door asking if they can stay for a while. When you’re at home, you don’t have to pay all the bills or pay off a mortgage, you’re financially safe! So don’t fly the nest too soon just because you want to be independent.
Image via pixabay
5. The Lure Of The Credit Card
I find that one of the biggest money mistakes revolves around credit cards. Like I’ve said before, when you’re young you’re always looking for easy ways to get money. One of the most appealing ways is getting a credit card. This magical card that lets you pay for things when you don’t have the money at the time!All you have to do is pay your monthly bill on time and everything is great. Of course, lots of young people tend to forget about this and go a little overboard. When you have so much financial freedom with a credit card, you tend to spend. You buy something expensive because you can, and you won’t have to worry about it for a few weeks.
But, if you miss your monthly payments, you start to pay interest. And before you know it, you’re deep in credit card debt. It ends up being a painful cycle that is tricky to get out of.
