5 Common Money Mistakes People Make in Their 20s (And How to Avoid Them)
Your 20s are for learning, not for being broke. Here are 5 common money mistakes young adults make — and how to fix them early.
Your 20s are a wild ride. First salary, first credit card, maybe your first rented flat.
For the first time, you're handling money on your own.
But let’s be honest — no one teaches us how to do it right.
And while it’s okay to make mistakes (it’s how we learn), some money mistakes in your 20s can cost you for years.
Let’s talk about 5 of the most common ones — and how to avoid them without becoming a boring “no-spending” person.
❌ Mistake #1: Thinking “It’s Too Early to Save”
“I just started earning. I’ll save later, when I earn more.”
This mindset delays the most powerful tool you have — time.
Even saving ₹500–₹1,000 a month in your 20s can grow into lakhs later, thanks to compounding.
✅ What to do instead:
- Start with a small SIP or recurring deposit
- Automate it so you don’t “feel” the money leaving
- Increase it as your income grows
🌱 “Save first, spend what’s left” — not the other way around.
Bitveen Admin
❌ Mistake #2: Not Tracking Where Your Money Goes
Swipe here, UPI there, a quick Zomato order — and suddenly your bank balance is a mystery.
If you don’t track your expenses, you won’t know where to cut back.
✅ What to do instead:
- Use a simple app like Money Manager, or a Google Sheet
- Categorize spends weekly: Food, Travel, Shopping, etc.
- No need to be perfect — awareness is enough to improve
❌ Mistake #3: Ignoring Credit Score and Credit Cards
Many 20-somethings avoid credit cards out of fear, or worse — misuse them like free money.
A bad credit habit now can hurt your chances of:
- Getting a home/car loan
- Renting a house
- Even getting premium credit cards or job clearances
✅ What to do instead:
- Get a basic credit card and pay full bill before due date
- Keep usage below 30% of your limit
- Check your credit score (CIBIL) once a year — free!
📈 Building good credit early gives you more power later.
❌ Mistake #4: Not Understanding Tax & Salary Breakups
When you get your first salary, it’s exciting — until TDS, PF, and deductions kick in.
Many people think:
“I earn ₹50K a month” — when they’re actually getting ₹42K in hand.
✅ What to do instead:
- Understand your salary slip (read our blog on it!)
- Learn how 80C deductions help you save tax
- Submit rent receipts, investment proofs, and health insurance details early
Even a little tax knowledge can save you thousands every year.
Bitveen Admin
❌ Mistake #5: Living Beyond Your Means (Thanks to Social Pressure)
Instagram shows everyone traveling, shopping, and “living their best life.”
It’s tempting to spend like them — even if it means borrowing, EMIs, or zero savings.
But remember:
- You don’t see their credit card debt
- You don’t need to match anyone’s lifestyle
- Your future self will appreciate your discipline
✅ What to do instead:
- Treat spending like a reward, not a habit
- Plan your spends. Don’t say “yes” to everything
- Build an emergency fund first, then enjoy the extras
💬 Final Thoughts
Your 20s are the best time to build strong money habits.
You don’t need to be rich — you just need to be aware and intentional.
Start small. Be consistent. Forgive yourself when you mess up, and try again.
💡 Because financial freedom doesn’t start in your bank account — it starts in your mindset.
Bitveen Admin
📢 Bonus Coming Soon:
“Smart Money Starter Kit: A PDF checklist of habits to build in your 20s”
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This post is for educational purposes only and should not be considered financial advice.