Five Financial Mistakes Those in Their 20s Commonly Make

Your 20s is a time of endless possibilities, independence, and… perhaps a few financial hiccups. Navigating the world of money can be confusing, especially when you’re just starting out.

Building a strong financial foundation is crucial for a secure future, but financial literacy, unfortunately, isn’t exactly a top priority for most young people. However, it is important to know that the choices you make today can have a lasting impact on your financial well-being in the future.

To avoid regrets later in life, read about these five common financial pitfalls that can trip most 20-somethings and see how you can avoid them.

1. Believing your good health is forever

When you’re in your 20s, you are young, healthy, and have minimal responsibilities. It’s easy then to think: “Why would I need to spend on insurance?”

Unfortunately, young people aren’t indestructible. A medical emergency can wipe out all of your savings, and even cause you to be in medical debt.

Getting yourself adequately protected with insurance, especially health insurance, can shield you from events that can deal a huge blow to your finances. Moreover, the longer you delay getting it, the more expensive it becomes.

Pro tip: Talk to insurance advisers from different companies before you commit to one. Trust your guts, do some research on your own, and get started on insurance with an adviser you vibe best with. Pay a small monthly premium to get covered, especially with health insurance. Look into an additional small savings plan if you can afford it. 

2. Not investing in yourself

You are your biggest asset. Investing in yourself means investing in your future and in your capability to achieve your goals.

Never stop learning and always be on the lookout for courses that allow you to upskill. Even as you step out into the working world, take some time to explore different areas that could interest you or help you in your career, and find ways to improve your skill set.

Investing in yourself also means taking good care of yourself. When you are healthy, well-rested, well-fed, and happy, you can better handle whatever life throws your way.

Pro tip: Investing in yourself does not have to be expensive. You can simply get more sleep, exercise regularly, eat more healthy foods, and allocate time to do things that make you happy. There are also a lot of free courses online such as on Hubspot Academy and Udemy that give you certifications after completion of their courses. 

3. Putting off retirement planning

The official retirement age in Singapore is 63. When you’re in your 20s, it’s easy to dismiss that figure and put retirement planning on the back burner.

However, the power of compounding interest is not something to ignore. Contributing to a retirement fund in your 20s allows you to make the most of compound interest, and these gains will grow tremendously by the time your retirement policy matures.

Starting when you are in your 20s is also easier as you have fewer financial commitments and dependents. It is easier to set aside 10% of your income for retirement planning when you don’t have to support a family or be tied down by a house mortgage.

Pro tip: Instead of a retirement investment, think of that 10% as a fixed expense. Let it become part of your monthly budget, like your mobile phone bill. Talk to your financial adviser on what’s the best way for you to start on retirement planning and get to it sooner rather than later.

Read more: Retirement Planning: Is S$1 Million Enough?

4. YOLO without care

You Only Live Once (YOLO) is such a great slogan to remind yourself to seize the day and take chances on experiencing new adventures.

It is great to experience new things, new cities, and even new careers while you are still young. Through these experiences, you can learn things beyond what classrooms can teach.

However, don’t let YOLO become FOMO – fear of missing out – in the sense you end up wanting any and everything that you see your peers have. Prioritising immediate gratification over more important choices such as saving for a house or future education can have dire consequences.

The key to YOLO is finding balance. You can still enjoy your 20s and have fun while making responsible choices that secure your future.

Pro tip: Your 20s are a great time to explore, but neglecting rest and responsibility can hinder your future in the long run. Find a balance between work and fun, and take time to experience adventures that you have yet to try.

5. Not having an emergency fund

Not having an emergency fund is, in fact, an emergency situation.

As much as we want life to be a smooth sailing journey, there will inevitably be times when we will need to dig deep into our savings to resolve a crisis. Unforeseen circumstances such as a car accident, sudden loss of job, or an illness can catch you off guard, requiring a huge amount of money in a short amount of time.

Pro tip: Start small so it is painless and you won’t feel disgruntled keeping up with it. Put aside 10% of your salary as an emergency fund. You hope that you will never need to use it, but you will be thankful to have it if you do.


We tend to make many mistakes when we are young. But not planning for our future when we can is a huge mistake that can bite us hard when we get older.

Your 20s are a fantastic time to lay the groundwork for a secure financial future. By avoiding these common mistakes and taking proactive steps towards your financial goals, you’ll be well on your way to financial freedom.

Take control of your finances today. Come talk to us at ask@plannerbee.co to understand how you can do so painlessly!

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