Our 20s can be incredibly exciting: we get paid for the first time, we start our careers, we fall in and out of love. (This article by Claire was first published on Business Insider)

Our 20s can be incredibly exciting: we get paid for the first time, we start our careers, we fall in and out of love.

The mistakes we make in our 20s feel like the best and the worst of times — the best because we learn and mature from them and the worst because we feel terrible about them.

Taking responsibility for our own finances for the very first time can be overwhelming and unfortunately, many of us repeat the same financial mistakes as we get older.

So here’s a guide to what you need to watch out for.

1. Not investing in yourself

In his 1995 book “The Road Ahead”, billionaire Microsoft founder Bill Gates dedicated an entire chapter to investing in yourself titled:

“Education: the Best Investment”

My father’s advice was similar: get your degree, get your professional qualification and then do what you love. If you seek a professional career, this is a proven path to success.

If you’re a budding entrepreneur, formal education may not be for you. However, growing your knowledge will give you a wonderful head-start. Ben Franklin, America’s founding father and its first self-made millionaire said:

“An investment in knowledge always pays the best interest”

His formal education stopped at age 10 but he never stopped thirsting for knowledge.

2. Not following your passion

As you start working, think about your career rather than your job. Your first job won’t last forever and when you are young you can take opportunities and more risks to turn your passion into a viable career. Follow your career passion with zeal.

A key driver of your wealth will be your ability to earn income from your chosen career and being smart about how you spend, save and invest your money. The rest of your working life is a long time to be stuck in a role that you don’t like, even if it pays well.

3. #YOLO

If your eyes glazed over at this hashtag, you’re not in your 20s. You Only Live Once is an attitude – Who cares about the future because #YOLO #CareFactor?

Burying your head in the sand about your finances is an #EpicFail. Ignorance is not bliss.

Without a budget you’ll spend too much – on the newest car, the funkiest gadgets, the most awesome holidays, the best nights out, the biggest TV and fabulous clothes/accessories. The temporary buzz from spending money wears off well before the pain of the credit card bill hits #JustSaying.

Your most successful peers in their 20s live to a personal budget to build their wealth. It may seem #Boring at first but following this simple habit will make you more successful and wealthier #Happy #Winning #StopTheHashTags

4. Taking on too much debt

Debt is a reality for many in their 20s. While investing in education is a great choice, student debt still needs to be paid off. As you start earning income, banks lure you to spend more and more with their glossy credit card offers.

Credit is an incredibly expensive way to finance anything. It’s not cool, attractive or smart.

The debt trap is an easy and attractive one. Those who choose this path in their 20s will chase their tails financially living paycheck to paycheck to keep creditors at bay.

Instead, rein in your spending, pay credit cards off zealously (or don’t use them), pay more than the minimum re-payment, set a budget, and put aside your savings amount at the beginning of each month.

5. Failing to set financial goals

Ben Franklin also told us: “By failing to prepare, you are preparing to fail. So if you don’t have goals already, the best time to start preparing financial goals in your 20s is today.

One way to think of financial goals is dreams with deadlines. They are about how you want to fund your dream lifestyle in the future. Establishing your own business or saving for a home deposit, set ambitious goals and plan to smash them – you weren’t born to be average!

6. Not getting a head-start on investing

Investing is what old people do, right? Nope, nope, nope.

Look around you, it’s what your most successful peers did in their 20s. Money you save sitting in a bank will not make you wealthy; it is great for short term goals but it will take you backwards over time after inflation. Instead, invest and put your money to work for you.

If you want to start an investing habit, take billionaire Warren Buffett’s advice and consider investing simply and cheaply with index based Exchange Traded Funds.

I hope you learn from these 6 financial mistakes which are easy to avoid if you are just aware of them. If you want to create a financially secure life for yourself, develop great financial habits in your 20s.

This article was first published on Business Insider.

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Claire Mackay LLB LLM BCom CA CFP CTA

I am a financial planner, SMSF expert and company director. I thrive on providing independent, expert financial advice to my wonderful clients. I was recognised as Financial Planner of the Year 2015 and Investment Adviser of the Year 2014.

To contact me, speak to my team on 02 8084 0453. Please feel free to connect with me on LinkedIn or on Twitter. You can also visit my personal website.