People often think that making a lot of money is difficult, and they are right, I can tell you that from my personal experience. But what happens is that people usually make silly mistakes along the way that prevent them from getting rich even when they are making a lot of money. How do I know that? I’ve made these mistakes and I’ve learned the lesson.
Here are the 3 money mistakes to avoid in your 20s :
- You rationalize when you overspend :
When you live from paycheck to paycheck, you imagine that when you will start making more money, you’ll start investing, but what happens often is that you will start spending that money elsewhere by the name of investing. You’ll start taking an uber instead of a bus or eating the exact same meal at the more expensive restaurant, or just buy more clothes that you will never wear.
The worst part about it is that in order not to feel bad about yourself when you waste so much money, you will start rationalizing that you are investing in yourself when in reality you are just wasting money. Let’s not be against living comfortably or going to expensive places, we do that every now and then, but what you have to understand is that overspending will keep you where you are ! just because you are making a lot of money today, doesn’t mean you will going to stay like that forever, so you have to manage that money responsibly and stop lying to yourself.
- Budgeting based on your current situation :
Time is such a strange thing that we don’t even realize how fast it passes, it feels like it was just yesterday when we were kids, and now we grow up as old man or woman. What we don’t consider is that, as we age our expenses grow one way or another, just think about how much you use to spend 5 years ago. I’m sure that you use to spend much less. And you know what ! 5 years from now your expenses will grow further.
So when you budget and plan your finances, do not only think about today but consider your expenses 5 or 10 years from now. You might start a family, have kids, so you will no longer be able to simply rent a room or little flat like you do now.
- You keep postponing money management
Most people do not consider money management important, it looks so simple and easy that we often ignore it, I mean; look I have my paycheck and these are my usual expenses, what am I supposed to manage?
When you don’t have a clear understanding of where your money goes, you end up spending it carelessly, a dollar here and two there, and then at the end of the month, you will be wondering where on earth did you spend your entire salary !! In order to avoid that, all you have to do is to stop saying «I will figure it out » and start managing your money
Money management isn’t only about where are you going to spend your money but HOW! , How can you minimize your expenses? How can you use your money more effectively than it earns more money?
These are the most common mistakes that we often see people making, of course, it takes time and dedication but, if you aren’t ready to manage your finances, you shouldn’t be complaining in the first place.