When you are in your twenties, you are young enough to think you do not have to worry about retirement just yet. While that may be true, this should not mean you can waste your money. Whatever you do in this time in your life will form habits that will be hard to break when you get older.
More importantly, if you are making these mistakes, you are setting yourself up for a life of financial insecurity:
Buying a House Too Big
Any young Aussie who is getting a decent paycheck will start thinking about buying their own house. The real estate market in Burnside is flush enough with choices that you are confident there will be something for you. And there is, but perhaps not that five-bedroom home you have your eyes on. In your twenties, you are dreaming big and want a place that can accommodate your needs when to achieve your dreams. However, your needs and dreams will change over time, and you might not need all that space that you paid expensively for. Keep this in mind when looking at land for sale, and consider a property that will be enough for you to pay comfortably right now and will cover your needs for the next few years. It will make more sense to upsize when there is a pressing need for it later.
Buying an Expensive Car
Who would not want to have a car that they can flaunt all around Australia? You would be the envy of your friends if you used up your savings for that dream vehicle. However, think about the reason your peers do not own this kind of car. You are not only paying for the price of the vehicle, but you also need to set aside a hefty sum for insurance and maintenance. In general, a car is an asset with depreciating value, which means there is no way you can sell that for a price higher than what you originally paid for it. As soon as you drive that car out of the dealership, its value has already started to depreciate. When in your twenties, you should think about purchases that will increase in value over time as a form of investment. When you’re truly financially secure, that’s when you can think about such a frivolous purchase.
Studying an Impractical Degree
Some jobs may be less glamorous but are definitely in high demand and will continue to be so. There are also jobs that sound romantic on paper but will not have as many job options to present to you after graduation. You are spending money to go to college; it would be wise if that money is going to earning a degree that will give you a possible future. Many study art history and other similar courses just to get a job that is not related to their degree.
Meanwhile, painters and plumbers have earned practical skills that they can use at home and in business. Ask yourself these: will you ever need the urgent attention of an art historian? Can you repair a burst pipe on your own?
You are young and open to all the fun things the world has to offer. Take care that your actions now do not leave you with crippling debt later on.