What we think

In my early twenties I moved from a small town in Norway to New York City, and I figured the rest of my financial life would just fall into place once I had a degree and a first job. It didn’t. The job market wasn’t as forgiving as I’d hoped, New York wasn’t cheap, and a few money habits I picked up back then are still costing me in my thirties. Almost all of it could have been avoided with a little more attention. Here are the seven mistakes to skip.

1. Buying things I didn’t need

Growing up, my parents covered everything, so I never really learned to budget. I carried that lifestyle into my twenties: weekly shopping trips, pricey groceries, tanning, manicures, an expensive gym membership. The fix is simple, if not easy: cover rent, food, savings, and retirement first, then spend what’s left on the fun stuff. And give any purchase over $100 a 24-hour cooling-off period before you buy it.

2. Spending before saving

I treated saving as whatever happened to be left at the end of the month, which for me was usually nothing. Flip the order instead: pay yourself first. Set up an automatic transfer into savings or retirement for the same day your paycheck lands, so the money moves before you get a chance to spend it.

3. Racking up credit card debt

I used my card like free money, assuming I’d pay it off “later.” Interest rates make that a bad bet, and it’s harder to dig out than it looks. A credit card is fine if you use it to build credit, but only charge what you can pay off that same month, and shop around for decent rates and rewards before you sign up.

4. Ignoring my credit score

I checked mine maybe once in my entire twenties, and it came back to bite me when I tried to lease an apartment and apply for loans. Payment history matters most, followed by how much of your available credit you’re using, so pay every bill on time, not just credit cards, keep your balances low, skip store cards, and stick to one or two cards total.

5. Skipping my 401(k)

I didn’t sign up at my first job and had no idea what a 401(k) even was. It took a coworker mentioning the company match for me to realize what I’d been leaving on the table. If your employer offers a match, that’s free money, and the earlier you start, the more time your contributions have to compound.

6. Not building an emergency fund

Without any cushion, every surprise expense went on a credit card or to my parents. Build the habit gradually: aim for three to six months of expenses (more if your income is irregular) in a separate savings account you don’t touch except for real emergencies. Your 401(k) is not that fund.

7. Investing too little, too late

I assumed investing was for people who were already rich, so I didn’t start until thirty, and I can’t get those ten years of compounding back. You don’t need much to start. Put away even a small percentage of your salary, keep your portfolio balanced, and talk to a certified financial planner if you can.

None of this requires being perfect with money in your twenties. It just requires paying attention a little earlier than I did. A few small habits now save you years of catching up later.