Folks in their 20s are not supposed to know everything. Growing up is mostly about learning and, yes, sometimes making mistakes along the way. It’s good to be aware of some of the more egregious errors, though — especially in an area like finance. Here are five big ones:

Ignoring the flow of your finances

At your first job, and whenever you get a new one, it will take a few paychecks to notice how much money actually hits your bank account after taxes and deductions like health insurance. And your earnings can easily evaporate if you don’t pay attention.

Use a budgeting app or choose one way to make all your purchases so you can easily track spending.


Letting friends set the agenda

You’ll need serious willpower to avoid trying to keep up with friends who make more money than you and who want to go out for drinks or dinner at places you can’t afford. When you make plans, get in the habit of being the one to suggest where you’ll meet, and be honest; a brief “I’m on a budget, so let’s check out that free Friday night event at the museum” will suffice.


Not realizing time is on your side — to save

Yes, you will probably make more money in the future. That doesn’t mean you should wait until then to save in your company’s 401(k). Do it now and you’ll build a habit; wait too long and saving will feel like cutting back.

You’ll be richer if you start now. Save $200 a month starting at age 23, and at a 6 percent rate of return you could have about $425,000 at 65; start at 33 and you’d have about half that.

Jumping on quick student loan fixes

In the first quarter of this year, 2.6 million borrowers paused their monthly payments through forbearance.

In forbearance, payments are halted, but interest accrues. You’re in the hole a little deeper every day. That’s why it should be a last-ditch option. Instead, ask your student loan servicer if you qualify for deferment first, since subsidized federal loans won’t accrue interest in the meantime.

Digging deeper into debt for grad school

Going to graduate school is more and more common. But grad school is not always a sure way to have more financial flexibility in the future, especially if you need to take out more loans. Exhaust other ways to pay first, like attending part time and taking advantage of tuition assistance from work. Adding to existing student loan debt isn’t something you should do lightly.