Your 20’s are an exciting time in your life. You have finished school, you are living on your own and have started your first real job. Along with the excitement comes the responsibility of managing your finances completely on your own. What you do with your money in your 20’s will stay with you into your 30’s and beyond. Without a doubt, there will be some hiccups, but avoiding these 3-common money-related mistakes in your 20’s will make it easier to save for retirement and set yourself up for financial security.

1. Not Investing at All

This is, by far, the biggest investment mistake people make, especially in their 20s. According to the National Institute on Retirement Security, two-thirds of Millennials have nothing saved for retirement. You may tell yourself that you’ll wait until your 30’s to begin saving, but by then, the amount you’ll need to set aside from your paycheck to enjoy a comfortable retirement can go up by 50 to 100%! You want to begin leveraging the power of compound interest as soon as possible. This will make it much easier to continue saving as time goes on.

2. Not Taking Full Advantage of an Employer Match Policy

Does your employer offer a match program for your 401(k)? If you don’t know, find out immediately. If they do offer one, you need to take full advantage of it by investing up to the total they’ll match. In short, your employer is offering to invest in your retirement, if you don’t contribute as much as your employer is willing to match you are literally turning down free money.

3. Immediately Upgrading Your Lifestyle After a Raise

While this isn’t technically one of the most common investment mistakes, it’s making our list because it deprives your retirement account of needed funds. Whether it’s a raise, your tax return, or some random financial windfall, the temptation will always be to upgrade your lifestyle with that money. Avoid this temptation! Use the money to pay down your student debt or handle other obligations, but after that, use it to save for retirement. A nicer place, a better car, and all those other luxury items can wait. Keep your expenses down a bit longer so you’ll be able to retire in comfort.

You have a long way to go before retirement, but that doesn’t mean you should put off planning for it. At Mooney Lyons, we can help. Contact us today and we’ll show you just how easy it can be to enjoy life knowing your future is in good hands.