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When you're in your 20s and you’re all caught up in your work and your other activities, it’s easy to forget about the payments on your student loans, which is one of the biggest money mistakes. If you miss just one payment your loan becomes delinquent. This will have a very adverse affect on your credit rating. In addition, your wages may be garnished, the government could withhold your tax refunds. And you would lose your eligibility for future federal and state financial aid.
If you are having a problem with your student loans, here's a short video about all the options for repayment, one of which could be better than the one you're on now.
Failing to negotiate your compensation package
When you're in your 20s and offered your first job it's easy to just accept whatever compensation package you’re offered. You feel just amazingly grateful to be offered anything. But before you leap to say yes to a compensation package, you need to be willing to speak up and do some negotiating. If you fail to negotiate the best salary package you can and if you don't ask for periodic raises, you'll be pretty much stuck where you are for years to come. What can you do if the idea of negotiating your salary package kind of terrifies you? Go buy a good book on successful negotiating and take notes.
Not creating an emergency fund
Into every life there comes unexpected and unbudgeted expenses. A big money mistake is if you fail to put money away to cover that expensive car repair, to pay for that trip to the emergency room or to buy a new laptop because yours just dropped dead, then guess what? You’ll have to borrow the money, which again is stealing from your future. You should do your best to build up an emergency fund the equivalent of three months of your living expenses. That way, when one of those unexpected expenses hit you'll be able to cover it without adding new debt.
Neglecting to save for retirement
Whether you want to think about this or not, you will eventually grow old. And when you do you'll probably want to have a decent retirement. This means you need to start saving now. You could start by saving just $25 out of each paycheck. That might not seem like much but thanks to the power of compounding interest that $25 will eventually grow into a nice-sized sum. Of course, you will want to increase that $25 as your earnings increase. If your employer offers a 401(k) plan, jump on it – especially if it provides matching funds as this is like getting free money. If there is no 401(k) plan where you work then open an IRA, invest in just index funds and leave them alone.
If you make these money mistakes
When you're in your 20s and just starting out in life it’s easy to get lost in today and fail to think about your future. But if you do this and make some or all of the six money mistakes you’ve just read, they could still be haunting you 10, 20 or even 30 years from now.