1. Allowing credit card debt to accumulate.
The first mistake is letting your credit card debt spiral out of control, whether it’s because you use your credit card for every purchase or because you aren’t watching your debt total. Considering the fact that modern college graduates walk away from school with an average debt of more than $30,000, credit card debt can be even more destructive. With an interest rate of 20 percent, your $10,000 of debt can turn into $24,883 in just five years, and $154,070 in 15 years–so think carefully before making those purchases.
2. Failing to save for emergencies.
In your early 20s, you probably haven’t experienced many financial emergencies firsthand, so you may not consider saving for them. But getting hit with an unexpected fee (such as a medical bill or car repair) can devastate even a well-organized budget. Make sure you have a few months’ salary socked away, just in case.
3. Living without a budget.
If you ballpark your expenses, or simply live paycheck to paycheck, your poor financial planning is going to catch up with you–and fast. It’s vital to start outlining and using a budget on a regular basis in your 20s; if you don’t develop the habit, you may never get around to forming it. Plus, you’ll be inclined to regularly overspend.