Most of the money mistakes people make in their lifetimes begin during their 20s. It makes sense because this is the age that people transition from college and graduate school into the world of independent adulthood. From making first big purchases like a car or apartment to signing up for credit cards, your 20s is an exciting time. However, your 20s is also a time where you can make financial mistakes that could impact the rest of your life.
Did you know that people in their 20s and early 30s, the generation described by some as “Millennials,” are carrying a huge amount of debt that could cause financial ruin if not taken care of? CNN Money reported that about 40 million Americans are carrying student loan debt of about $35,000 or more — and the situation is only getting worse.
Like many recent graduates can attest, if student loans are not taken care of, they can ruin your credit, demolish your ability to build savings, and complicate your finances at a critical time when you should be saving up for bigger purchases, such as a home or car.
The one money mistake that you should avoid in your 20s is ignoring your student loan debt. It is understandable that large amounts of student loans in your name can be overwhelming and it feels easier to just ignore them, but doing that is a big mistake. Don’t fall into the financial trap of ignorant bliss by ignoring your loans.
A budget can help you organize your debt and set up easy payments. Budgets can be as simple as jotting down your monthly expenses and your monthly income and mapping out when you will pay what bills and the amount of money you will save each month. There are plenty of applications and online services that can help you start up your first budget and stick to it. Many banks have automatic transfers and other services that make saving a breeze.