By Jerry Mooney
It’s easy to spend way too much when you are in your 20’s. So many youngsters are not thinking about the future and being frugal with their money. Here are some common mistakes young people make with money.
Spending too much on weddings
One mistake young people make with money is they spend far too much on weddings. It’s crazy to think that the average couple in the US spends over $25,000 on their wedding! It can end up putting themselves, and their families, in debt for years to come. They often look back and wish they spent less, so they had more money for their the future. Therefore, before you get married, consider setting a realistic budget which you can stick to so you don’t end up spending too much. We also talked previously about how you can cut costs when planning your wedding.
Not getting on the property ladder sooner
Another common mistake young people make with their money is they rent for far too long. Renting costs can end up costing young people a fortune, and they do not see anything back for their money. Therefore, you need to get on the property ladder as soon as you can. The mortgage repayments are often a lot less than how much you pay to rent. You also see something back for your money, so it’s worth it in the long run. You need to find the right company to get your mortgage loan such as prime lending.
Not setting up a pension when they are young
An additional common mistake young people make with money is not setting up a pension when they are young. They don’t think they need to worry about it when they are in their 20’s. But it’s so important to get a pension set up now so you can save for the future. Talk to your employer about whether you can set up a pension through them. Or you may need to get a private pension where you put some money in every month. If you don’t want to set up an actual pension, you should at least have a savings account. That way, you can put money in there to save as you age.
Spending too much on devices
Another common mistake young people make with money is that they spend way too much on devices. Everyone wants the latest phones and iPads in their life. However, new devices are being developed all the time that people keep buying. Therefore, devices can end up costing you a fortune! As this article explains, as much as it’s great to treat ourselves, you need to sit down and work out if your outgoing expenses are too high. Work out if you need the item and how much you could save if you didn’t buy it. It might be worth waiting till the item goes down in price in a couple of new months!
Young people also need to be careful when getting themselves a credit card. Although it’s great to build up credit, you can’t use it for unnecessary spending. You will end up getting yourself in debt as interest averages over 15%. Therefore, make sure you pay off any debts on cards sooner rather than later!