Common money mistakes young people make

For you to learn and grow, you have to make some mistakes along the way and there is no exception when it comes to money.

The thrill of being financially independent and capable of buying whatever we want can sometimes whoosh as on the wrong direction without us realizing it.

While each person is prone to learn from their own mistakes, there are common money mistakes that young people fall prey to. Here is a list of some of them:

Failing to plan

Throughout the twenties most people just breeze through the years without a concrete plan of the future.

Blame it on our school systems for not incorporating financial literacy on the curriculum, which is an integral thing to arm oneself with when they start working.

You need to know about budgeting, saving and making investments before you leave your parents’ house, but sadly most people only get to learn these after making a number of mistakes.

Most of the time our goals are shortsighted, with worries like paying rent and food for the day. When you have a limited supply of money, like in your twenties it is important to plan accordingly and look at the long term.

Avoid buying unnecessary things that won’t help you in the long run and also taking unnecessary debts. Debts will trap and enslave you for as long as you will living without a plan.

Borrowing money for a wedding

This is a big one for young people. The need to show the whole world how strong their love is and tie the knot is much stronger than the money they have in their accounts.

Weddings are very expensive considering everything you have to buy and do for only a day’s event, not to mention the honeymoon expenses.

If you can afford a lavish wedding, not a good idea still but go for it. However there is no point in having the best day of your life drown you in debt.

The need to please people comes at a heavy price and most people have not yet hacked this. They will go extra miles and borrow all the money they can only to please their family and friends, after all they are working, right?

If you cannot afford an expensive wedding, go with what you can or wait until the time is right for a wedding. Do not rush yourself.

The day you start your life with your partner shouldn’t be the day you fall into financial debt that could go for years.

Ignoring health insurance

Convincing a young and agile person to take a health insurance is one of the hardest things you can ever do. They already have their meagre salary to worry about and you want them to spend some of that on health insurance yet they are not sick?

Things happen, people get sick and sometimes even accidents, do you have spare money to spend on hospital bills?

It’s no secret that the best medical care out there in most countries is found in private hospitals, that a good number of the population cannot afford to foot the bills in cash.

As much as a health cover may seem irrelevant right now, in future it will come in handy not only for you but for your family as well.

Postponing retirement savings

Not unless your parents are wealthy and you will probably inherit everything from them, saving for retirement is best started as early as possible.

The thing about being young is you shrug off everything that has the word future in it. Youths are generally impatient and want their efforts rewarded immediately.

You can only save for as long as your career will last, the earlier you start saving the better for you in future.

Whether we like it or not, we are all going to grow old someday and it would be sad to fend off your children and relatives for the rest of your limited life.

Overdependence on parents

It is okay for parents to help you through college and support you thereafter while you hustle for a job, however when you don’t watch yourself this dependence can be of a setback.

Of course your parents will not watch you suffer and they will do what any other parent should do and offset all your bills in order for you have it as smoothly as you can into financial independence.

When this help is overexploited, you might fear branching out when the time finally comes. This is why you find some adults in their forties still leaving off their parents.

Navigating your finances on your own can be scary and it is not easy but it is the best way you can learn to be a responsible adult. The help from your parents though useful, should have a limit.