Bad fiscal habits in your twenties last for years to come
Unfortunately, the effects of these decisions can last for many years to come. You stand yourself in better stead if you avoid the common perils that befall many young people in their twenties.
Here are some of the bad habits that occur:
20s MISTAKE #1 – Moving jobs frequently without making retirement contributions
It is understandable that young people in their twenties will unlikely start a job and remain in the same company for 35 years. Things just aren’t like that anymore. Your 20s are a period when you are establishing yourself professionally and may spend a year or two in a position before moving onwards, and hopefully upwards. This is why is it so important to start making contributions to your employer’s retirement plan ASAP. If you are within a company for even 2 or 3 years, make it count and have something to show for it for your future. You can stockpile a healthy amount of retirement savings in those jobs. If you don’t, you are missing out. Don’t make that mistake!
20s MISTAKE #2- Not consolidating loans and paying higher interest on debts
If you have attended college, you will almost certainly have debts and student loans that are racking up considerable interest. If you haven’t attended college, you may have personal loans or other forms of borrowing that are spread over various sources. Perhaps credit cards, and overdraft or two, some store cards or the odd personal loan. Your biggest mistake would be to continue to leave these as is. It is much smarter and more economically efficient to consolidate these debts into one more manageable consolidation loan. This will reduce your interest and can see you repay the capital faster, leaving you debt-free sooner.
20s MISTAKE #3 – Skipping repayments
Student loans, credit cards…all of these require a determined commitment to repayment in your 20s. Missing payments can cause havoc with your credit score and the effects of this can seriously curb your efforts to get a mortgage or sometimes even rent a property. Missing payments means your amounts owed increase and your credit score takes a hit. Be organized and set up repayments automatically through your checking account. Keep on top of this and you can look forward to receiving better interest rates in the near future.
20s MISTAKE #4 – Over-reliance on credit cards
For twety-somethings, plastic isn’t so fantastic. Although it is important to have a credit card in order to establish a good credit score, you shouldn’t be using it more than you can repay comfortably. Do not use a credit card for every day purchases. If you need access to extra money, consider using a personal or short term loan with a set amount that will be repaid definitely in a short period of time. If you allow your credit card balance to creep up month after month unpaid, you are simply accumulating unnecessary interest debt and harming your credit score.
We can help
Young people in their 20s have very particular finance needs. Especially for those with bad credit, it can be hard to develop better habits without some guidance. onlineloansforbadcredit.net is here to help inform your decisions and encourage sensible borrowing with our guides and articles. We can also help connect you to reliable lenders who are ready to help ease your financial burdens the right way.
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