The Financial Mistakes of Our 20s and 30s

Planning Your Future Forming Money Habits

Early in our careers, we tend to focus on the here and now.

It's an understandable impulse. Why worry about the unknown? And how would you prepare for something so far off? But the thing about the future is, it has a habit of sneaking up on us. We may not have a crystal ball, but that doesn’t mean we can’t prepare for what’s to come—and the sooner we start preparing, the better.

Buying Your First Home

Here are a handful of common but avoidable mistakes.

Not planning for retirement

Start saving for retirement when you get your first job and you’ll develop a healthy habit that will serve you well down the road. Short-term goals, like buying a new car, can overshadow what seems like a very long-term goal of retirement. But if you get your priorities straight early, you can reap huge benefits. It’s OK to start small, but getting started is the key.

Spending too much on a vehicle

It might make financial sense to buy new, but don’t splurge on a luxury SUV when all you need is a fuel-efficient sedan. Choose a car that serves your current needs without sabotaging your long-term goals and savings.

Shunning budgets

No matter your income, a budget helps. Try not to view it as a tool that will restrict your spending. In fact, by tracking your purchases, you’ll know how much “fun” spending you can comfortably do (is it weird we think saving for retirement is fun?). Keeping a budget can also be as simple as tracking money in and out. There are plenty of free online budget trackers. Financial tools within SELCO’s digital banking as well as apps like and EveryDollar, YNAB, and Spending Tracker are a good place to start.

Relying too much on credit

A credit card is a great way to make purchases you need now while establishing healthy credit for future purchases … as long as you don’t fall into a debt trap. What starts as a small credit-card balance can turn into a large debt, which may force you to dip into savings to pay your bills. To avoid this, reserve credit for identified and planned purchases. Come up with a plan to save for major purchases and pay in advance whenever possible.

Having no emergency fund

A lot of us think we’re invincible in our 20s and 30s, but illness or job loss can happen to any of us at any time. Start an emergency fund that eventually will comfortably cover your expenses for at least three months.

Having inadequate health insurance

The cost may seem prohibitive, but having health insurance—like having car or renter’s insurance—is about future planning. While you can’t predict a medical emergency, you can budget for insurance costs. Health insurance also makes it easier to take precautionary steps to help prevent costly emergencies from happening in the first place. (Remember, if you’re 25 of younger, you can be covered under a parent or guardian’s plan.)

Small steps taken early will help ensure you’ll hit your stride by retirement age. But whether you’re in college, on a budget, in your 20s, 30s, or beyond, there’s no time like now to plan for—and protect—your financial future.

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