15 money mistakes in your 20s (and what to do instead)
This is general information, not financial advice. How we make money.
Key points
- Your 20s are when time does the most work for your money, in both directions.
- Expensive debt and high fees compound against you just as investments compound for you.
- An emergency fund stops one bad month turning into years of debt.
- Most fixes are habits, not big sacrifices: automate saving, check fees, and raise savings with each pay rise.
Why money mistakes in your 20s cost so much
Money mistakes in your 20s matter more than the same mistakes at 45, for one simple reason: time. A euro invested at 25 has 40 years to grow; a euro of credit card debt left alone at 25 has years to grow too. None of the mistakes below is shameful, and most people make a few. The point is to spot them early, when they are cheapest to fix.
All examples are illustrations with round numbers, computed with monthly compounding. Real returns vary, and investments can fall as well as rise.
1. Waiting to start investing
Why it costs you: compound growth needs time more than it needs money. Each year you wait is a year of growth you can't buy back later.
What to do instead: start small and automate it. Even €50 a month into a low-cost, diversified fund builds the habit. Our investing for beginners guide explains the basics.
2. Having no emergency fund
Why it costs you: without a cash buffer, a broken laptop, a car repair or a gap between jobs goes straight onto a credit card or overdraft, and the interest starts.
What to do instead: build three to six months of essential costs in an easy-access savings account. If your essentials are €2,000 a month, that is €6,000 to €12,000. Start with a first target of one month. Our emergency fund calculator helps you size it.
3. Carrying credit card debt
Why it costs you: card interest compounds against you. A €3,000 balance at 20% a year, paid off at €90 a month, takes 50 months to clear and costs about €1,415 in interest.
What to do instead: pay more than the minimum, stop adding to the balance and clear the most expensive debt first. See how to pay off debt fast.
4. Ignoring investment fees
Why it costs you: a fee is taken every year, from a growing pot, so it compounds too.
| €200 a month for 40 years, 7% before fees | Balance at the end |
|---|---|
| 0.2% yearly fee | about €496,384 |
| 1.5% yearly fee | about €348,208 |
| Difference | about €148,176 |
What to do instead: compare the total yearly cost of any fund before you buy. Broad index funds and ETFs are often among the cheapest options.
5. Letting lifestyle creep eat every pay rise
Why it costs you: when spending rises as fast as income, you earn more and save nothing extra. If you instead saved €300 a month from a pay rise for 30 years at 7%, you'd have about €365,991, of which €108,000 is deposits.
What to do instead: each time your pay goes up, raise your automatic savings transfer by part of the increase, say half, before you get used to spending it.
6. Financing a car you can't really afford
Why it costs you: a car loses value from the day you buy it, and the loan adds interest on top. A €15,000 loan at 8% over five years costs €304.15 a month, or about €18,249 in total, of which €3,249 is interest.
What to do instead: buy a cheaper, reliable used car with cash if you can, and keep the monthly cost of any car loan small compared with your take-home pay.
7. Not having a budget at all
Why it costs you: without a plan, saving becomes whatever happens to be left at the end of the month, which is often nothing.
What to do instead: use a simple method such as the 50/30/20 rule, and move the savings share out on payday.
8. Leaving all your savings in a 0% account
Why it costs you: inflation quietly shrinks money that sits still. At 3% inflation, €10,000 left for 10 years buys only what about €7,441 buys today. Euro-area inflation was 4.0% in October 2026, according to Eurostat's flash estimate, well above the ECB's 2% target.
What to do instead: keep your emergency fund in an interest-bearing savings account covered by a deposit guarantee scheme (in the EU, deposits are guaranteed up to €100,000), and invest money you won't need for many years. See what inflation is.
9. Chasing hype, tips and get-rich-quick schemes
Why it costs you: the investments that are most talked about on social media are often the most volatile, and they are a favourite tool for scammers.
What to do instead: build your base with diversified, low-cost funds first. If you are curious about crypto, learn how to check that a provider is authorised before you start.
10. Ignoring your workplace pension
Why it costs you: many employers contribute to a pension on top of your salary, and some match extra contributions you make. Not using that is like turning down part of your pay. For example, a 3% employer contribution on a €36,000 salary is €1,080 a year.
What to do instead: read your pension documents in your first month in a job, find out what your employer pays and whether they match extra contributions, and check your yearly pension statement.
11. Skipping basic insurance
Why it costs you: one accident without cover, such as damaging someone else's property or losing everything in a burglary or fire, can cost far more than years of premiums.
What to do instead: cover the big risks you can't pay for yourself. Depending on your country and situation, that often means liability, contents and health insurance. Skip small extras, such as phone insurance, if you could replace the item from savings.
12. Paying for subscriptions you've forgotten
Why it costs you: small monthly charges add up quietly. Four subscriptions at €12.99 a month cost €623.52 a year.
What to do instead: once a year, go through three months of bank statements and cancel anything you haven't used.
13. Not negotiating your salary
Why it costs you: your starting salary is the base for future raises. A €2,000-a-year difference kept over a 40-year career is €80,000, before any percentage raises are added on top of it.
What to do instead: research the pay range for your role, ask for a specific number, and raise the topic again at reviews. The worst realistic answer is no.
14. Treating buy now, pay later and overdrafts as free
Why it costs you: spreading a purchase over a few payments makes it feel smaller, which makes it easier to overspend. Missed payments can bring fees, and an overdraft used as part of your normal month is borrowing.
What to do instead: if you can't pay for something in full today, treat that as a sign to wait. Aim to keep your current account above zero all month.
15. Keeping up with everyone else
Why it costs you: social media shows other people's spending, not their debts. Matching friends' holidays, cars or restaurants on a lower income usually means borrowing or not saving.
What to do instead: set your own goals and give them a number and a date, such as a deposit for a home or financial independence. Spending feels easier to say no to when you know what you are saying yes to. If early independence appeals, read what FIRE is.
The short version
You don't have to fix everything at once. A simple order that works for many people: a small emergency fund, clear expensive debt, build the full emergency fund, then invest regularly in low-cost, diversified funds, raising the amount with every pay rise.
Questions people ask
What is the biggest money mistake in your 20s?
For most people it is waiting to start saving and investing. Time is the one ingredient you can't add later: in our example, €200 a month at 7% grows to about €525,000 over 40 years but only about €244,000 over 30 years.
Should I pay off debt or invest first in my 20s?
A common order is: a small emergency fund, then clear expensive debt such as credit cards and overdrafts, then build the full emergency fund and invest for the long term. Expensive debt usually costs more than investments can be expected to earn.
How much should I have saved by 25 or 30?
There is no single right number, because incomes and costs vary so much. A more useful target is a habit: an emergency fund of three to six months of essential costs, and a fixed share of every payslip going to savings and investing.
Is it too late to fix money mistakes at 29?
No. Starting at 29 still gives you decades of compound growth. The examples here show the cost of waiting, but the best time to fix a mistake is as soon as you notice it.
Sources
- ESMA, EBA and EIOPA: EU financial regulators warn consumers on the risks of crypto-assets
- European Commission: Deposit guarantee schemes
- Eurostat: Euro area annual inflation up to 4.0% (flash estimate, October 2026)
- European Central Bank: Price stability and the 2% inflation target
Written by Fakhri. Published 6 November 2026, last reviewed 6 November 2026. We update this page when the numbers change. Read our editorial policy.