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Navigating This Thing Called Money: 5 Mistakes To Avoid In Your 20s

You’ve been looking forward to this time of your life for many years and it’s finally here! Yaaaaayyyy!!!

You’ve probably moved out of your parent’s house, gotten your dream tech job and finally, you’re living life on your terms with no  ‘mummy or daddy’ hovering around you anymore.

Welcome to your 20s – the decade of discovery, growth, and yes, financial decisions that can shape your future!

While it’s easy to get caught up in the excitement of newfound independence, it’s very important to lay a solid foundation for a worry-free financial future by making the best financial decisions possible.

In this blog post, we’ll explore five common financial mistakes to steer clear of as a young person saving towards a worry-free financial future.

5 Common Financial Mistakes To Steer Clear of As A Young Person

Ignoring Emergency Savings

Investopedia explains that preplanning is a key factor to successfully handle the difficulties everyone is sure to face in life. 

Imagine experiencing a sudden layoff at work, an unexpected medical emergency or other unplanned financial situations without having an emergency fund handy.

If you underestimate the importance of creating and building an emergency fund early on, unexpected expenses can turn into financial emergencies pretty fast.

Always budget at least 3 months of living expenses as your emergency savings. Putting away a small amount every month can soon add up to large funds that come to your aid when life deals you unexpected blows.

Not Investing Early

According to the Delloite Global 2022 Gen Z & Millennial Survey, nearly half of the 23,000 millennials and Gen Zers internationally are living paycheck to paycheck without any savings or investments.

You may feel like you have long days ahead of you and focus on other ‘important’ things, but the earlier you start saving, the better it is for you and your loved ones.

The world of investment is huge, and without having much experience it might seem intimidating and overwhelming to you. Not to worry, that’s where Rosabon Financial Services comes in. 

Aside from offering an array of highly rewarding investment options which you can easily set up on our user-friendly Rosabon App, we will also walk with you to ensure that you make sense of investments and opt for the ones that suit you most. 

Starting early offers many advantages when it comes to wealth accumulation and you shouldn’t miss out on them.

Overlooking The Importance of Insurance

‘Insurance for what? I’m still in my 20s and I have a long way to go so why start now?’

According to Leadway Insurance, Nigeria has the lowest and worst insurance penetration rate in Africa with a 0.5% penetration rate as of March 2022. 

This goes to show that in the course of navigating big life transitions like job changes, moving overseas or even marriage and children, many young adults underestimate the value of insurance – health, car, life or even disability coverage. 

Insurance might seem confusing and overwhelming, but you can get professionals to help you find and set up the necessary financial coverage while you work towards your desired future. 

Failure To Set Financial  Goals

The constant feeling of uncertainty about your future, career, relationships, or the general state of the world, may discourage you from setting financial goals in your 20s. However, there’s a way around this!

Whether it’s saving to buy that BMW you’ve always dreamed of or experiencing the beautiful beaches in Barbados, think of your financial goals as gems waiting to be discovered. 

But with a flexible investment plan like the Rosabon Earning Plan – REAP, you can easily set achievable, incremental goals that can be tweaked and adapted to realities and income at every step of the way. 

With REAP you get the flexibility, rewarding interest and a sense of security to empower you to take the first steps towards long-term financial planning.

Spending More Than You Make

It may seem like nothing to spend an extra N20,000 on a cab to ‘hang out’ with your friends where you’ll still spend on food and drinks, but it is important to note that consistent spending without thought can add up to a large bill at the end of the month. 

If you’re always overspending on things you either don’t need or could save money on, now is the time to reevaluate that plan for the long term. 

Some spending habits and mistakes can lead you to financial insecurity, especially if you’re spending more than you make and going into debt to make ends meet.

Constantly look for ways to cut back on spending and put that money toward paying bills or building your savings instead.

Your 20s are a period of deep transformation for your personal and financial life. It’s the decade that defines your future and how you approach it could make or break you.

Whether you’re 21, just beginning your financial journey, or 28, thinking about buying your first house, avoiding financial mistakes during this time is essential for securing a stable and prosperous future for you and your family. 

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