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5 Money Mistakes To Avoid in Your 20s
Many young professionals believe that in order to achieve financial freedom one day all they need is a really high paying job and then they’ll be set.
However, studies have shown that people with some of the highest paying jobs in the world still never reach TRUE financial freedom. In fact, many go bankrupt or are in loads of debt.
- Sports Illustrated once estimated that 78 percent of NFL players are either bankrupt or under financial stress within two years of retirement and 60 percent of National Basketball Association players are broke within five years of leaving the sport.
Bringing in over 7 figures will NOT magically make you into a millionaire. In fact, studies have shown that many people who have million dollar salaries have less than $500,000 in net worth – check out this book Millionaire Next Door to learn about the surprising secrets of America’s wealthy.
The book Dumb Things Smart People Do With Their Money also explains that most people don’t start thinking about how much retirement will cost until their 40 & 50s and by that point so much time has been lost that it’s nearly impossible to save up for it.
It’s really difficult to make up for past money mistakes when they have become so ingrained into our lifestyle.
That is why it is so important to focus on rewriting these mistakes from a younger age and not only that, but if we follow God’s calling to be excellent at everything we do, we should always be looking for and learning new ways to improve our stewardship.
5 Money Mistakes To Avoid in Your 20s
1. Not knowing where your money is going
If I were to ask you right now how much money you spend on average every month could you tell me the answer?
Could you tell me how much you are spending on groceries? On gas? On eating out?
If you don’t know where your money is going, it will be impossible to take control of it. In fact, you will most likely fall prey to “lifestyle creep.” Which is when your lifestyle slowly becomes more expensive as your income grows.
Start tracking your money today to find out where it is going!
2. Relying on will power to save money
Just hoping that you will be able to save enough to retire one day is a fool’s game… Winging it or telling yourself that you’ll work on saving in the near future is not going to cut it.
You have big goals and deep desires to own your dream house, travel, and still give generously along the way. If you think you can do all these things and still be able to retire WITHOUT making a plan, you’re only kidding yourself.
Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it? 29 For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, 30 saying, ‘This person began to build and wasn’t able to finish.’
Luke 14:28-30
Get your budget started in only 5 easy steps!
3. Not inviting God into the conversation
When we decide to do things on our own we are always going to come up short, exhausted, unsuccessful, and feeling unfulfilled. Not allowing God to direct your steps will only lead you to feeling empty at the end of the day.
When we trust the Lord and stop leaning on our own or the world’s understanding of how to become wealthy He will make our paths straight and ultimately lead us to his own abundance (Proverbs 3:5-6)
Learn more about how to practically honor God with your money.
4. Relying TOO much on God
Having a “don’t worry God’s got it” kind of attitude is a sign of laziness and shows a lack of responsibility. Whenever we read about God providing for people in the Bible, there was always some kind of ACTION required on their own part.
- When Jesus healed the blind man with mud, He told the man to go and wash it off before he could see (John 9:1-12)
- The Israelites were told to keep God’s commands before they could be brought into the land of abundance.
- When the paralyzed man was healed by Jesus, his friends acted on his part so he could be brought before Jesus. They lowered their friend through the roof! (Luke 5:17-39)
Each of these things took action.
5. Not having accountability
Working on rewriting your financial story is TOUGH WORK. Sure everything I’ve told you sounds relatively simple – and it is!
But it isn’t easy to build new habits. It’s uncomfortable, and challenging when so many people around you aren’t living their lives this way. It will feel natural and easier to just conform to your old ways.
But Jesus wants your financial story to be redeemed. And the best way to do that is to do the hard work with others who are also putting in the effort to accomplish the same kinds of goals.
How to Avoid These Money Mistakes in Your 20s
That is why I created a free community for faith-filled young professionals to work together so we can all gain encouragement and inspiration on our journeys. So you can begin to REDEEM your own financial situations. To rewrite your story with a new ending!
It is my joy to be able to equip you with excellent money management skills and a biblical money mindset so you can understand what money mistakes to avoid in your 20s and ultimately reach you financial freedom goals – like paying off all you student loans, buying you first house, giving more generously to the ministries you love, and even start planning for retirement way down the road.
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