Part of growing up is learning lessons the hard way. Unfortunately, most of the biggest mistakes we make are in terms of money. It’s usually around the age of 30 that most people start to get it together. However, by learning from other people’s mistakes, you may be able to avoid economic hardships yourself.
Here are some of the most important mistakes to stay away from:
Failing To Put Aside Emergency Savings
Although you may not want to believe the worst could happen, occasionally, it can. It’s essential to have money put aside so that if something happens, like getting in a car accident, or a tree falling on your home, you have the funds to cover it. Your financial future depends on planning for it. Setting aside money each month to protect yourself in the event of an emergency is part of being a responsible adult.
Most financial experts recommend putting away at least $1,000 in a savings account. That way, you know you probably have enough to cover basic emergencies without having to resort to your credit cards.
Buying A House Too Young
A lot of young people are in a rush to grow up. They may buy a house at a young age thinking they’re doing the right thing. However, in reality, owning a home is a considerable amount of responsibility. You should enjoy your 20’s being as stress- free as possible.
Rather than getting yourself into a considerable amount of debt, instead, save up your money and buy a home later in life when you’re ready for the commitment.
Not Building Up Their Credit Score
Young people may not realize until it’s too late how important their credit score is. Your credit score should be as high as possible in order to do things like renting an apartment to being approved for a loan for a home one day when you’re ready.
Always pay your bills on time, and if you do have credit cards, never go over 30% of your total credit limit. Making credit mistakes now could affect you for the rest of your life.
Buying a New Car
Even though buying a new car may seem like a great idea, it’s a considerable investment which could lead to a lot of financial hardship. Instead, you should consider buying a used car for a much lower price. A used car doesn’t mean that it has to be a beater.
There are plenty of great cars out there which have been lightly used that are a fraction of the price of a new car. Rather than having to worry about payments each month that you can’t afford, you can focus on building your career and putting away money for the future.
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