There’s no question about the fact that if you’re in your 20s or early 30s you’re still learning things about life. Unfortunately, life does not come with any guarantees. As you may have already learned having a college degree does not guarantee that you’ll be able to land a job related to your major field of study. And the fact that you have a checking account and a couple of credit cards doesn’t guarantee that you’ll be a smart money manager. If you were lucky your parents sat you down and had “that talk” with you and we don’t mean the one about where babies come from. We mean the one about money management and how to avoid piling up too much debt.
Good money management and an easy life aren’t guaranteed, either. There are some money mistakes made by young adults and here are the common ones you should do your best to avoid.
Not building a credit history
If you already haven’t had to borrow money the odds are overwhelming that you eventually will need to. This could be a car loan, a mortgage or a credit card because, yes, credit cards are a form of borrowing money. If you don’t yet have much of a credit history, you need to get to work building one. You probably already have at least one credit card and it’s important that you pay off your balance at the end of every month. If you have more than one credit card, you might want to put several of them away and then try to forget where you put them. If you can’t completely pay off the balance on a credit card, pay as much on it as you can and then try to get the debt cleared the following month. The important thing is to keep current, as this will help you build a good credit history.
Not understanding the reality of your student loans
Last year’s college graduate left school owing an average of more than $30,000. Whether this is true of you or you owe less than $5000 the important thing is to understand that you must repay that loan or loans. You will be considered late on a payment the first day after its due date. This won’t be reported to the credit bureaus until you are more than 30 days late. But if you don’t get caught up on that late payment your account will eventually be turned over to a collection agency and trust us, that’s one of the last things you want to happen. Once your account goes to a collection agency you could see your wages garnished, your tax refunds offset and the amount you owe increased dramatically by fines, penalties, and attorneys’ fees.
Not getting started
When you’re fresh out of school you may find yourself falling into the “what came first the chicken or the egg” syndrome. This is how do you get on-the-job experience if no one will hire you to get it? If you find yourself faced by this challenge the answer is in two words – patience and persistence. You will need to keep submitting resumes and knocking on doors until you find something. And don’t be afraid to take a job that isn’t related to your field of study. We know of one young woman whose college major was environmental sciences but who took a job working at a Starbucks as a sort of stopgap measure. She is now running her own store. While that might not be in the area of environmental sciences it is helping her develop managerial skills she will be able to take with her into any other career. The moral of the story? The important thing is to get started even if the job isn’t necessarily related to your college major
Taking the wrong job
While you may be young this doesn’t mean that you don’t deserve a decent job. You may have to begin with a low-paying job, as did the young woman we just described. However, this doesn’t mean you should take a dead-end job where there’s no possibility of promotions or raises. This is an area where you need to learn to advocate for yourself. If you’ve been in a job some period of time but haven’t seen a raise you need to speak up. Never assume that what you’re currently earning is the best you can do.
Not learning to be savvy financially
The earlier you began creating good financial habits the easier your life will be. Many young adults make the mistake of spending the majority of their paychecks on non-essentials such as “living the good life.” What this results in is wasting precious years where they could be paying down student loans and investing. If you already haven’t done this you need to make a budget that tracks your monthly income and spending. You need to know how much you owe and when your payments are due. It’s also important to have an emergency fund equivalent to at least three months of living expenses. You’re bound to run into a financial emergency. When you do but don’t have the money put away to handle it you’ll just create more debt.
Refusing to ask for help
If you’re finances are currently in a mess, don’t be afraid to go to someone in your life for financial advice. There’s no shame in asking for help. Trying to manage your finances all by yourself can be scary. There might be someone in your family you can go to that’s very good in managing her or his finances. If not, you could go to a consumer credit counseling agency for help. There may be one of these agencies near where you live. If there isn’t, there are any number available online. Just make sure you choose one that’s a nonprofit and charges little or nothing for its services. In either case, you’ll be assigned a credit counselor who will review your financial situation and help you get things under control.
Trying to keep up with your peers
If you’re not careful it’s easy to fall under the spell of peer pressure. Just because your friends go clubbing every weekend, eat out regularly and always dress in the latest fashions doesn’t mean you need to. For all you know, they may be living this lifestyle on credit cards, which ultimately will leave them in a world of financial hurt. Live only the lifestyle you can afford based on your budget and not on what your peers are doing.
Finally, here is, believe it or not, a rap song video with some fun money management tips.
National Debt Relief helps resolve debt for people nationwide who owe $10k+ in unsecured debt. Our experts negotiate with creditors so that clients pay only a fraction of what they owe and can become debt free in as little as 24-48 months. 
