In their 20s, most young people don’t pay attention to and practice effective money management. What they fail to understand is that the decisions they make in their 20s will come to affect them in future. The following are some of the top money mistakes made by people in their 20s:
Overspending
This is a big challenge to young people. When they get some amount of money especially from their parents they overspend on buying non- essential things. One resultant cause of this behavior is peer pressure; because one saw his or her friend with Jordan’s or a nice Gucci outfit he/she also decides to buy them in order to look ‘cool’ like his/her friends.
Learning how to minimize spending and saving extra cash can be a great venture to young people, especially those aiming to join the entrepreneurial world.
Living off budget
Most millenials don’t manage their finances. Budgeting will help ensure one buys only what he or she should buy. It helps keep tract of one’s finances. Budgeting also helps in ensuring one doesn’t spend money on buying irrelevant things and be unable to cater for basic needs.
Choosing quantity over quality
A number of youths would rather buy cheap and low quality products than an expensive high quality product. Forgetting that ‘cheap is expensive’.
Instead of buying something cheap which will spoil within 3 months, why not save and buy high quality product that will last for years?
Taking HELB Loan and other cash loans
As an undergraduate of postgraduate student, think twice before applying for that HELB loan. It may seem tempting but you’ll know the pain when it comes to payment of the loan. Not forgetting the interest on the loan increases the more you delay repaying it back.
If your parents can cater for your undergraduate tuition fees and cater for all your basic needs, don’t apply for any loans that you might be unable to service.
Not saving for ‘rainy days’
More than 70% of college students have 0ksh on their savings accounts or lack savings account.
Overspending and trying to live posh lives is what mostly making saving an impossibility for young people
Avoiding above money mistakes and learning how to adopt a saving culture can positively transform the lives of the future generation.