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Top 5 money mistakes in my 20’s – debt, savings, credit card and credit score

What’s in your top money mistake list? Have you ever experienced being broke? Do you know how it feels when you have spent your monthly allowance within days upon receiving your salary? Have you ever thought of how your credit score? Have you ever received calls from debt collectors? Does the words “budget” and “save” ring a bell? All of these questions entered my life during my 20’s. Listed down below is the TOP 5 Money Mistakes I made on my 20’s, whats yours?

MONEY MISTAKE no. 1 – Maxing out credit LIMIT

As I never had a credit card before entering University, the moment I get to have my very first Student Credit Card my heart started to buzz with excitement. As I lived with my nan/grandma during my University years at London, I was quite spoiled in a way that I did not need to pay anything for my accommodation and food as she covered it all for me. This just means I get to spend all my credit allowance for myself. This did not work well as Oxford Circus and Piccadilly Circus was my  like my second home. I always pass by them on my way to uni and on my way back, it felt like I was the girl at Shopaholic or Devil Wears Prada (favourite movie of all time). Then after my University years, aside from the fact that I have student loan debts, I acquired an amount of debt thanks to my shopping addiction and poor financial management skills.

MONEY MISTAKE no. 2 – Not paying bills ON TIME

Carrying on from my first money mistake, having accumulated an amount of debt, I have unconsciously (seriously???) decided not to pay my monthly bills. Just a quick note, some student accounts in the UK offers 0% fee free for either overdraft or student credit cards. I was lucky enough on 2011 to have a 3 years 0% interest student credit card. Hence, I have left my credit card balance as is after maxing it all out (if you need tips on what is the best student account in the UK please leave a comment). However, when I started working after graduating from University, I started getting charged for late payment on top of the monthly standard interest charge. It came to a point that I was chased by debt collectors over the phone, e-mail and posts, similar to Shopaholic movie but not at bad. Having left this debt on my account greatly affected my credit score.

MONEY MISTAKE no. 3 – POOR credit score

I was never interested in my credit score however, I always have been interested in properties, and to be able to purchase a property it is required to have good credit score. Little did I know that the debt I had, and all the debt collectors chasing me affected my credit score badly. Another factor that affected my credit score, was searching for multiple quick short term loans to pay my credit card balance. Any type of loan search you do, they get to track all your activities hence before carrying out a search be really cautious.

MONEY MISTAKE no. 4 – Not knowing how to BUDGET

I never thought that budgeting would be an important factor in my daily life, as I used to spend all the money I have/earned because life is short – some millennials would call it Y.O.L.O “you only live once”. Money mistake 1-3 is a validation of not knowing how to budget, as budgeting would help avoid this mistakes. Thanks to my previous mistakes 1-3 I have learned to value personal finance and manage my own finances. I started learning how to budget thanks to Dave Ramsay – 7 baby steps. As I started to accept that I am in big trouble with regards to my finances, I started watching Youtube videos anf came across His and Hers money channel, where they talked about their journey towards financial freedom and introduced Dave Ramsay.

MONEY MISTAKE no. 5 – IGNORED saving 10-20% of my salary

All my salary went straight to paying the bills, and any leftovers goes straight to spending money. At first I was not keen on saving money as I did not know what should I be saving for. Then I came across Dave Ramsay, Robert Kiyosaki, Warren Buffet and Tony Robbins. All 4 talks about saving 10-20% of your salary whilst your still young as they compound as the years go by, called compound interest. Saving 10-20% alone can help save for rainy days or emergency situations, as well as paying any outstanding debt. Also, money can be saved on an investment account such as retirement funds or any investing platform and watch it compound or grow. The earlier you start the better, hence start NOW.

Check out Tony Robbins on the power of compounding video or click this link for learning about the Investing Basics – power of compounding.

Money Mistakes in my 20's

If I we’re to go back in time and and change one of the money mistakes I have done I will choose to start saving even though I was in debt. Nothing beats a rainy day savings as one of the reason why I was in debt at the first place was because I do not have emergency money to cover my daily expenses i.e. bills.

Thanks to all the money mistakes, I have realized the importance of money and being financially stable. I am still in the process of clearing out all my debt and reaching financial freedom. Let us all one another and live a financially stable and sound life.

If you’ve missed my previous post please click the link regarding my Wanderlust Fund – Savings Challenge

Do you love travelling on a budget? read my previous post about How to travel around 6 European countries in 10 days.

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