Your 20s are often a time of newfound freedom, exploration, and major life transitions. It’s the decade when many of us begin our careers, start earning real money, and make significant financial decisions. 

However, it’s also a time when financial mistakes are common. Many people wish they had handled their money differently during this formative period. Here are the top finance regrets people often have about their 20s—and how you can avoid them.

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1. Going Into Debt for My Wedding

Weddings are beautiful, memorable, and, unfortunately, expensive. Many people in their 20s take on debt to have the "perfect" wedding, only to regret it later when they're struggling to pay it off. Instead of going all out, consider setting a budget that won’t leave you financially strapped for years. Remember, it’s the marriage that matters, not the wedding.

Do this instead:

• Set a realistic budget: Determine how much you can afford without taking on debt, and stick to it.
• Prioritize what matters most: Focus on what’s truly important to you and your partner, whether it’s the venue, food, or photography.
• Consider alternative options: Explore more affordable options, such as a smaller guest list, a weekday wedding, or a non-traditional venue.

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2. Not Setting Aside a “Do Not Spend” Account

It’s easy to spend every dollar you earn when you’re young, especially if you’re not thinking long-term. Many people wish they had set aside money in a "Do Not Spend" account—funds that are untouchable except in true emergencies. This helps build a financial cushion that can be a lifesaver in unexpected situations.

Do this instead:

• Open a separate savings account: Set up an account specifically for emergency savings or long-term goals.
• Automate your savings: Schedule automatic transfers to this account every month, even if it’s a small amount.
• Label the account: Name the account something that reminds you not to touch it, like "Emergency Fund" or "Do Not Touch."

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3. Delaying Saving for Retirement

Retirement can seem a lifetime away when you’re in your 20s, but starting to save early can make a massive difference. The power of compound interest means that even small contributions in your 20s can grow significantly by the time you retire. Many people regret not taking advantage of this and find themselves playing catch-up later in life.

Do this instead:

• Start small: Even if you can only contribute a small percentage of your income, start now.
• Take advantage of employer matches: If your job offers a retirement plan with matching contributions, make sure you’re contributing enough to get the full match.
• Consider a Roth IRA: Open a Roth IRA for additional retirement savings, which offers tax-free growth on your investments.

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4. Accumulating Credit Card Debt

Credit cards can be tempting, offering the ability to buy now and pay later. However, many people in their 20s fall into the trap of overspending and end up with high-interest debt that’s difficult to pay off. Avoid the regret by using credit responsibly—pay off your balance in full each month, and only spend what you can afford.

Do this instead:

• Use credit cards wisely: Only charge what you can pay off in full each month.
• Pay your balance on time: Set reminders or automate payments to avoid late fees and interest.
• Monitor your spending: Regularly check your credit card statements to keep track of your purchases and stay within your budget.

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5. Not Learning to Budget Early

Budgeting might sound restrictive, but it’s actually the key to financial freedom. Many people regret not learning how to budget in their 20s, which leads to overspending, missed savings opportunities, and financial stress. Take the time to create a budget that works for you, and stick to it—it’s one of the best things you can do for your financial health.

Do this instead:

• Create a simple budget: Start with a basic budget by listing your income and expenses, and allocate funds to categories like rent, groceries, and entertainment.
• Use budgeting tools: Take advantage of budgeting apps or spreadsheets to track your spending and adjust as needed.
• Review and adjust regularly: Revisit your budget monthly to ensure it aligns with your financial goals and make changes as your circumstances evolve.

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6. Not Taking Calculated Risks

Many people play it too safe in their 20s, missing out on opportunities that could have led to personal or financial growth. Whether it’s investing in the stock market, starting a side business, or moving to a new city for a better job, taking calculated risks can pay off in the long run.

Do this instead:

• Assess the risk vs. reward: Before making a big decision, weigh the potential benefits against the risks involved.
• Educate yourself: If you’re considering investing or starting a business, take the time to learn about the field and seek advice from experts. See what side hustle you can get started without quitting your full-time job.
• Start small: If the risk feels overwhelming, start with smaller steps that allow you to build confidence and experience over time.

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7. Not Investing in Financial Education

Understanding how money works is crucial for making smart financial decisions. Many people in their 20s neglect to invest in their financial education, leading to costly mistakes. Whether it’s reading books, attending workshops, or following finance blogs, taking the time to learn about money management can pay off big in the long run.

Do this instead:

• Read books and articles: Start with beginner-friendly finance books or reputable blogs to build your knowledge.
• Follow financial experts: Subscribe to podcasts, YouTube channels, or social media accounts of finance experts who offer practical advice.
• Take courses: Consider enrolling in online courses or workshops on personal finance topics to deepen your understanding.

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8. Spending Time with People Who Are Financially Irresponsible

The company you keep can have a significant impact on your financial habits. Spending time with people who are financially irresponsible can lead to bad decisions, overspending, and missed financial goals. Peer pressure to keep up with others’ spending habits can leave you regretting your choices later.

Do this instead:

• Surround yourself with like-minded individuals: Seek out friends who share your financial values and goals.
• Set boundaries: Be clear about your financial priorities and don’t feel obligated to spend money just to keep up with others.
• Learn from positive influences: Find mentors or peers who are financially responsible and can offer advice or support as you work towards your financial goals.

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Your 20s are a time to enjoy life and explore new opportunities, but it’s also crucial to lay a solid financial foundation. By avoiding these common regrets and following the steps outlined above, you can set yourself up for a more secure and prosperous future. Remember, it’s never too early to start making smart financial decisions that will pay off for the rest of your life.

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