There are many money mistakes people make, especially in their 20s. If you’re reading this, you’re probably making them too. But it’s not too late to stop.
Mistake 1: Living beyond your means
Stop trying to “Keep up with the Joneses”. Today, a lot of young people are keeping up appearances. Social media does not make it any easier and young people are constantly bombarded by pictures of people showing off their expensive lifestyles and they feel the need to try to keep up.
In trying to keep up, you end up buying things that you can’t afford or buying unnecessary things even though you may not have the cash for it. Whilst it’s nice to have the finer things in life, it’s important not to make the mistake of incurring debt or buying things you can’t afford.
Mistake 2: No budget
A budget is a blueprint for achieving specific goals. In simple terms, it is a list of your likely income and expenses for a given period. When you start budgeting, you’ll be able to cut out excesses and start investing.
Failing to budget means that you will most likely live from pay-check to pay-check.
You do NOT want that.
Mistake 3: No emergency fund
An emergency fund is an account that is used to set aside money to be used in an emergency, such as a loss of a job, an illness or a major expense. If you don’t have any funds set aside for this, you’ll end up getting into avoidable debt.
Mistake 4: Financial illiteracy
Having the misconception that you need to earn a lot of money before investing or saving can stall your financial journey. It is best to start small, start early but most importantly start now. You can invest as little as N5000.
Article orginally written by Omilola Oshikoya for “The Tech World of Finance ™️ (www.wofin.org)
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