Managing money effectively is a crucial skill that every young adult should master, yet many young people find themselves making common financial mistakes that can have long-lasting consequences. In this blog post, we’ll explore 10 money mistakes that young adults often make and provide practical tips on how to avoid them.

    1. Neglecting A Budget
      Mistake: One of the most common money mistakes young adults make is failing to create a budget. Without a clear financial plan, it’s easy to overspend and lose track of where your money is going.
      Solution: Start by tracking your expenses for a month to understand your spending habits. Then, create a realistic budget that allocates funds for necessities, savings, and discretionary spending. Use budgeting apps or tools to help you stay on track. Check out our Budget Basics blog for tips on creating and sticking to a budget.
    2. Living Beyond Your Means
      Mistake: Many young adults fall into the trap of living beyond their means, accumulating debt through excessive spending or financing their lifestyle with credit cards.
      Solution: Live within your means by prioritizing needs over wants. Avoid impulse purchases, save for big-ticket items, and resist the allure of credit cards if you can’t pay off the balance in full each month.
    3. Neglecting To Build An Emergency Savings Fund
      Mistake: Failing to build an emergency fund can leave you vulnerable to unexpected expenses, forcing you to rely on credit or loans.
      Solution: Aim to save at least three to six months’ worth of living expenses in an easily accessible account. Start small and gradually increase your savings as your income grows.
    4. Waiting To Start Saving For Retirement
      Mistake: Many young adults postpone saving for retirement, thinking they have plenty of time. This creates a missed opportunity for compound interest to build up over that time.
      Solution: Start saving for retirement as soon as you can, even if it’s a small amount. Take advantage of employer-sponsored retirement plans like 401(k)s and explore individual retirement accounts (IRAs) for additional savings, particularly if your employer doesn’t offer a 401(k) plan or if you work independently or in a nontraditional field.
    5. Not Diversifying Your Accounts
      Mistake: Keeping all your money in a checking account can result in missed opportunities for growth and wealth accumulation.
      Solution: Checking accounts are convenient for making payments but don’t offer the interest rates of savings accounts. CDs and Money Market accounts are great options for increasing your savings over time.
    6. High-Interest Debt
      Mistake: Not all debt is created equal. Accumulating high-interest debt, such as credit card debt, can be a significant financial setback.
      Solution: Pay off high-interest debt as quickly as possible. Focus on the highest-interest balances first while making minimum payments on other debts. Consider debt consolidation options if it helps lower interest rates.
    7. Spending Impulsively
      Mistake: This goes hand in hand with the need to create and stick to a budget. Impulse buying can derail your financial goals and lead to unnecessary expenses.
      Solution: Practice mindful spending by creating a shopping list and sticking to it. Wait 24 hours before making non-essential purchases to see if you still want them. Consider setting a budget for discretionary spending.
    8. Neglecting Insurance Coverage
      Mistake: Not having adequate insurance coverage can leave you financially vulnerable in case of emergencies or unexpected events.
      Solution: Evaluate your insurance needs, including health, auto, renters, and life insurance. Make sure you have sufficient coverage to protect yourself and your assets.
    9. Not Seeking Financial Education
      Mistake: Many young adults don’t take the time to educate themselves about personal finance, leading to poor financial decisions.
      Solution: Invest in your financial education by reading books, taking courses, and staying informed about economic trends. Financial literacy is a valuable skill that will aid you throughout your life. When in doubt, don’t be afraid to reach out to our caring, knowledgable staff at Piscataqua Savings Bank for assistance. 
    10. Not Setting Financial Goals
      Mistake: Not setting specific financial goals can lead to a lack of direction and motivation.
      Solution: Establish clear financial goals, whether it’s paying off debt, buying a car, or saving for a dream vacation. Break these goals into smaller, achievable steps and regularly track your progress.


Avoiding these common money mistakes is essential for young adults looking to build a strong financial future. By creating a budget, living within your means, saving, investing, and seeking financial education, you can set yourself on the path to financial success and security. As always, the friendly and experienced team at Piscataqua Savings Bank is here for you offering all the traditional banking services and products, including checking and savings accounts, CDs and money market accounts. Plus, we offer special accounts for specific needs and life stages, such as health savings accounts, retirement accounts and our popular Kids’ Bank accounts. Start making wise money decisions today to reap the benefits in the years to come.

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