
When I was in my early 20s, I made what felt like the dumbest mistake ever. I over-drafted 20 times from my checking account without knowing.
Each over-draft cost me $31.26. When I found out where my hard-earned saved money was going, I almost passed out.
Bit of exaggeration. Yet, it felt like a slight earthquake hit my savings.
My mistake was I thought my debit card was also like a credit card.
Once it happen, I made it my business to carefully watch how money was coming and going.
That was one of my first major money mistakes. The truth is most money mistakes are done due to a lack of education.
In this post, we cover dumb money mistakes in your 20’s and how to avoid them. We’re only scratching the surface with this list, but I think these are some of the most common.
Not Saving Enough or Not Saving At All

Not saving enough or at all almost feels like a rite of passage to becoming a young adult.
When you start making money it feels like the world is finally unlocked. It is but at the same time, it’s not. You must set money boundaries. You know, that thing called a budget.
If you don’t have a budget and spend every penny, what will do when eventually go broke?
This concept is very elementary but lots of people struggle with this. Starting a habit of saving is important.
On a small scale, it’s a positive but as you make more money you tend to manage it way better and have more saved up.
It makes zero cents to work and literally have nothing to show for it. Setting aside a minimum automatic transfer of $25.00 from your paycheck into a savings account adds up.
Even this minimum is to low, so I challenge all the readers of this post to try and save $100 a Paycheck.
Saving $100 every pay period is equivalent to you going out to Chipotle 8 times a week. I have many friends who do this, so those numbers aren’t fabricated in the slightest way.
Only Saving Your Money In A Bank
This is more of a missed opportunity than and a mistake but in my book there interchangeable.
No one in my family has ever had their money in anything else but a bank. It’s not a bad thing but it’s also not the best thing especially when there is a lot of good options.
On average the interest received from the money you save in a bank account is around 0.09% and there are plenty of other banks that pay far less.
Options to consider are the money markets like stocks and bonds, or real estate. Personally, I have some money in bitcoin and own shares in various mutual funds.
If it feels like I’m throwing the kitchen sink at you with this information take a look at this video from two 2Cents. 2Cent goes more in-depth about mutual funds.
A lot of people are intimidated by the stock market for a few reasons and I completely understand why they are.
Collapsing of the economy in 2008 and just the general lack of knowledge when comes to investing.
There is a lot of uncertainty out there but the returns out weight the cons. A “good” long-term mutual fund can return 8%-10% in a 10-year period.
Bond mutual funds can see a good long-term return of 4%-5% (reference The Balance).
I have an account with one of the top financial services companies and the agents are always more than happy to teach and give you an understanding of good funds to prospect.
There isn’t any barrier either anyone can join a financial service like Fidelity, TD American Trade or E-trade just to name a few.
Now, I’m not telling you to forego your savings and just invest everything into stocks.
The keyword here is to diversify where you invest your money. Don’t just leave it all in a bank because you won’t get much in return.
No 401k or Retirement

I know everyone is worried about today but what about tomorrow? At some point, we’re going to retire like our parents before us.
So, having some sort of retirement plan is important. Yet, just like savings no one plans for retirement.
A dumb money mistake in your 20s is not having a 401k or retirement fund.
Most employers offer some sort of 401k option and if they don’t it’s still not an excuse.
Requires a bit of research but you can set up your 401k plan and make your own contributions.
If you work for a big box store like Publix or Home Depot, they offer there employees generous retirement plans as well.
I know for large percentage of millennial’s retirement seems so far away but weren’t you like ten or fifteen a decade ago? Yeah, I know time moves fast so think about that.
Choosing to pay down your college loans later… instead of now
There’s a huge epidemic in today’s society everyone is ignoring their student loans.
Don’t be that guy or girl who say’s YOLO (I know that fad is dead) and ignores this debt.
That’s the dumbest money mistakes you can do in your 20’s. This is going to be a big issue for a lot people in the future.
Loans can seem overwhelming so people feel they can ignore it and pay later.
Interest compounds, compounding begins to take affect and what looks like 30k debt balloons to 60k in a short span of time.
Student Loans: Worst Case Scenario’s
Late 20’s or early 30’s is the time you decide to start paying down your student loans.
Because you waited so long there is a chance your wages can be garnished or the payments every month become overwhelming. The minimum amount is paid every month and it seems like those stubborn loans will never go down.
It’s harder to save for anything or plan for retirement because a portion of income goes to paying your growing student loans.
Then you say screw it, continue to make the minimum payments and now it’s just part of the everyday struggle.
(This is a true story from a friend. Hope he doesn’t read this.)
These are the many harsh realities that can occur when you choose to ignore.
Instead of falling into one those scenarios, devise a plan of attack. First acknowledge your debt, know numbers, and understand how much interest each on has.
Then pay more than the recommended monthly contributions so you’re not stuck paying down your loans for an entire century.
Thinking you know it all or there is nothing new to learn

A cardinal rule in life comes via a famous quote from a wise green creature named Yoda he once said, “much to learn you have, much to learn”. It’s a great quote because in life there is always much to learn.
Even the most wises man must learn new tricks. A dumb money mistake in your 20s is to assume there is nothing more to learn.
Right, if there is change you must adapt which means learn and learn again. Invest in yourself. Every savy person does, it’s how you get better.
Especially in your early 20’s, investing in yourself is best way to grow. Reading books, learning from others, or paying for a course are all good investments. You can soak up all the juicy knowledge and afford to fail.
Mistakes don’t seem so bad and the knowledge learned can be carried throughout life.
Worse thing to do is shut your learning down. Don’t be that person who feels like that old man spreading knowledge is just talking to run his mouth.
It can feel like you got the world all figured out. Truth is you’re at the bottom, you haven’t even got on the first rung of this tall ladder called life.