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5 Money Mistakes I Made When I Was 18 That Cost Me Thousands.

I’m not trying to be an old man. I'm just trying to let you know that I made a ton of mistakes when I was 18, and some of them cost me thousands.

By Claudiu CozmaPublished 4 months ago 3 min read
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5 Money Mistakes I Made When I Was 18 That Cost Me Thousands.
Photo by Mathieu Stern on Unsplash

Spending too much on rent.

You should never be paying more than 30% of your income on rent, and ideally, you should aim for 15%. If you're spending more than 30%, try cutting back in other areas so that you can afford a smaller apartment.

You might think that living in a nicer neighborhood or having more space are worth the extra money, but they don't have to be.

Consider looking at factors such as commute time and proximity to work when choosing where to live, instead of letting yourself get carried away by all the cool amenities available nearby.

Failing to save money for an emergency.

Having an emergency fund is one of the smartest, most important things you can do. It’s true that some emergencies are small, but that doesn't mean they're any less stressful or expensive.

When you don't have money saved up and something bad happens, it's easy to feel like you're at rock bottom—like there's no way out of your situation except for borrowing money from someone else or going into debt.

For example, imagine your car breaks down just after paying off a bill at the dealership. You'll need money to get the car fixed so it can pass inspection before renewing your registration; otherwise, you won't be able to drive anywhere until the next year rolls around (and if I've learned anything from my own experiences with this scenario over the years? It's not fun!).

Having an emergency fund would help alleviate some of those stressors by giving us some breathing room during these types of situations—a cushion between us and our creditors so we don't feel like we have no options left other than taking on more debt!

Having insufficient health insurance coverage.

As an 18-year-old, I never imagined that I would need to purchase my own health insurance. When I was younger and living with my parents' plan, it was easy to forget that this coverage wasn't a given when you became an adult. It seemed like every year my doctor's appointments were covered by the state or some other mysterious entity. My mom paid for them out of pocket instead of submitting a claim through their health plan.

But what happens when you have no one else to pay for your routine medical expenses but yourself? You can start researching various types of plans and costs later on in life—but if you don't do so as soon as it makes sense for your medical needs (which may change significantly throughout adulthood), then it could come back to haunt you later on down the road.

If you don't have health insurance and something goes wrong, it could be devastating. You may end up having to pay for your medical bills out of pocket—or worse yet, get a bill for thousands or millions of dollars that you just cannot afford.

Eating out too much.

When you're a young adult, it's hard to resist the allure of eating out every night of the week. After all, it's a fun way to unwind from work and catch up with friends.

But if you eat out too much—and especially if you order more expensive menu items—you will spend more than you need to. It may be tempting to splurge on an appetizer or dessert when doing so seems like such an indulgence, but think about how many unplanned meals end up costing in the long run!

And if this is something that has gotten out of hand for you in recent months or years, consider cooking at home more often as a way of saving money while still getting what tastes good (more expensive ingredients can often make cooking at home even cheaper).

Making impulse purchases.

Impulse purchases are a major problem for young people.

Research shows that when you're young, your brain hasn't fully developed. You have a tendency to make rash or impulsive decisions because you haven't had time to learn from past experiences yet.

This can lead to big money mistakes like buying something on impulse just because it looks cool or it feels good in your hand at the moment.

If you find yourself impulsively buying things, try these tips:

Write down how much this impulse purchase will cost (including taxes) before making your decision about whether or not to buy it.

Think about where else you could use that money instead of spending it on something frivolous right now—like paying off student loans or saving up for retirement!

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