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Common Money Mistakes Young People Make

money mistakes young adults make commonly

We don’t plan too much for our financial futures when we are young. Usually, we spend frivolously and rack up credit card debt while not saving anything for our lives ahead. That’s ok!

We can afford to make these mistakes while we are young! But if you don’t learn from these mistakes and change your ways, you can ruin your financial future completely.

Here are a few common money mistakes young people make.

Racking Up Credit Card Debt

Credit cards are a huge responsibility, and most young people don’t think of it that way. Using it responsibly can be a huge help and a great tool to build your credit score. And if misused, it can build up huge debts, ruin your credit score, and create multiple problems in the future.

Racking up credit card debt is one of young people’s biggest mistakes. Not managing your debt and letting it accumulate makes it very hard to pay back and makes it harder to reach your financial goals too.

Not Investing

Most young people think investing needs to be done later on in life when you are getting ready to retire. But that couldn’t be any more wrong. Yes, risks are always involved when you talk about investing, but you can afford to take these risks when you are young.


Young people need to start investing early so that their money starts making money for them. Good and diverse investments are the best way to retire early and live freely. Start saving early, and set aside a percentage of your income for investments. It doesn’t have to be too much; starting from a few hundred bucks can make a massive difference in the long run.

Not Budgeting

Budgeting is one of the most important financial skills a person can learn. Working out and sticking to a budget helps and improves your finances considerably. If you don’t plan out your regular and essential expenses and put aside the amount needed, you are more likely to overspend and get into debt.

Learn how to budget and plan your expenses and spending. Calculate your weekly or monthly living expenses, including all your utilities, rent, estimated grocery spending, and everything else you can think of, and start setting aside that money before you spend on anything else.

Not Having an Emergency Fund

Everyone needs an emergency fund. You never know when you might lose your job or suffer from an illness or accident, or just an emergency in general. Being young, you might feel having enough money for rent, utilities, and groceries for the month is enough, but building an emergency fund can be incredibly helpful in the future.

Usually, an emergency fund should be enough to cover three to six months of your living expenses. If you have built a good emergency fund and don’t really run into any emergencies, great! You have some extra money saved up to help with other expenses when you need it! If you ever lose your job, you will have enough money to support yourself while looking for a new one.

Not Planning for the Future

What are your plans for the future? Want to own your own home or car? Go to a particular country? Whatever you want to do with your life in the future, you need to start planning for it now. Most young people live daily and usually only think in the short term, but if you have any long-term goals, you need to start planning for them now.


Don’t just plan, but regularly update and change your plan according to your current situation. Life changes occur, and they cause your priorities to change, and that’s fine, as long as you can plan for those changes.

Set aside a few hours weekly and update your plan to make sure you stay on top of your goals! Maybe try and speak to a financial advisor or financial manager to help you plan better for your future.


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