COLUMBUS, Ohio – For those just beginning to establish credit, savings accounts and household budgets, what you don’t do can be just as important as what you do. Community Choice Financial, a leading retailer of financial services to unbanked and underbanked consumers, offers advice for 20-somethings to avoid top money blunders.
“Many 20-somethings are constantly searching for advice to help them achieve long- and short-term financial goals, but it is equally as essential to know what to avoid. Be sure to stay away from these common personal finance mistakes,” said Ted Saunders, president and CEO, of Community Choice Financial.
As young adults plan their financial future, it’s important to remember these tips:
- Waiting to begin saving: Many young people are not concerned about saving for the long term, believing that they have plenty of time to put funds aside. In this economy, the type of retirement that our grandparents and possibly parents enjoy is unlikely. It is crucial to start putting aside a portion of your income for retirement as soon as possible.
- Purchasing a vehicle you cannot afford: Although it is tempting to buy an expensive car with all of the bells and whistles you want, it is not a necessity. If you need a car to get around, consider buying a quality pre-owned car at a more affordable price.
- Getting into consumer debt: Before the recession, the average American was spending more than they were making, which is a major financial blunder. Debt such as tuition or owning a home generally has a good return on investment, making them a permissible debt. Most other types of debt are considered consumer debt, which means you purchased something because you wanted it rather than needed it.
- Buying a house that is more than you need: According to financial experts, it is highly recommended that you keep housing expenses to less than one third of the income that you take home. If possible, it is a good idea to get those expenses even lower than that. If you happen to lose your job while having a large mortgage, you could get into serious financial trouble quickly.
- Rushing into graduate school: Many recent college graduates go right back to school for a higher degree. However, before going back to school it is smart to wait at least five years. If you do not have real-world experience in your related career field, you may not be happy with the jobs available with your degree.
“Unfortunately, many young people do not plan for their financial future, and learn money lessons the hard way,” said Saunders. “It’s important that they understand financial responsibility and smart money management techniques to set themselves on a path to economic security.”
To learn how Community Choice Financial is helping people manage their day-to-day financial needs, please visit www.ccfi.com.