Many of us young adults use our late teens and 20s as an excuse to make irrational decisions and spend money on things we don’t need because we’re young, and we’ll “make up” for it later. Not practicing healthy spending habits will result in a more complicated financial future.
If you’re looking to save money, here are a few common money-spending patterns young adults should avoid to create a solid financial foundation for their future.
Overindulging in Retail Therapy
Look, there’s nothing wrong with a bit of retail therapy. Buying those shoes, purses, sunglasses, and pieces you’ve saved up for is a rewarding feeling, and there’s nothing wrong with that. However, it becomes a problem when you’re overindulging in retail therapy.
Retail companies spend millions every year to market their “blow out” sales to consumers and even may offer a “free” gift if you pay extra money. Those sales and gifts are gimmicks for you to spend more money; be smart and spend only what you’re comfortable spending.
Slacking on Saving for Retirement
Although this isn’t a spending habit, not saving for retirement can significantly affect your financial future. Saving for retirement in your 20s will set you up for success and keep you one step ahead in your later years. Setting up a retirement account and saving at least 100 dollars a month can significantly accumulate over time.
Spending Beyond Your Means
In your young adulthood, it gets to a point where everyone has different incomes and career paths. The urge to keep up with your friends and the people around you can cause you to spend more money than you can afford. Regardless of your earnings, it would be best if you stuck to a responsible budget and created a savings account for emergencies and unexpected expenses.
Word of advice: if you can’t comfortably buy it twice, don’t buy it at all.
Paying Your Bills Late
Ignoring your bills can negatively impact your credit score, even if the bill is five dollars. Late payments and closed accounts can lower your credit score, making it harder for you to take out loans, buy a car, purchase a home, or apply to apartment complexes. Companies may even send your account to collections over small balances.
Not Trying New Things
It might seem odd to suggest trying something new with money. But your younger years are the time to try things, fail, and then try again with newfound wisdom. Take the time to look into new investment opportunities, explore new technology, and even consider new income lines.
While you probably need a ‘normal’ job to keep the bills paid, it’s worth your time trying out side hustles that might work for you. Maybe you sell feet pictures online uk, make greeting cards, or sell your writing skills on the web. Whatever you do, the point is to try things out.
Practising healthy spending habits as a young adult will help prepare you for your future, and your future self will thank you for that. Take the time to start a budget and begin a savings account for a future vacation, luxury item, or big purchase. Avoid these money-spending habits to secure a healthy financial future.