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If 2020 has taught me anything, it’s that being able to properly manage your finances is a non-negotiable. But as someone in their early 20s with no professional financial knowledge, how the fuck are you supposed to know what’s a great decision and what is a *really* bad one?

Well, in an effort to stop being such a dumb bitch with my own finances, I asked finance expert and host of the My Millennial Money podcast Glen James for his advice on the biggest money mistakes young people make. You know, so I can hopefully avoid making them myself.

In addition to hosting the wildly successful podcast, Glen James is a certified financial adviser, so unlike the investment bros on Reddit, he’s actually qualified to give me advice on how to stop being so stupid with my money.

me when i spend all of my money on dumb things.

Glen’s #1 Red Flag When It Comes To Managing Money In Your 20s:

When asking about the biggest money mistake young people make, I was expecting it to be something along the lines of over-spending on Uber Eats (guilty), having too many subscription services (also guilty) or Afterpaying everything (thankfully, not guilty).

But I was shocked to find that Glen’s biggest red flag when it comes to managing your money is a lot broader, and is actually a really great way to think about it.

“Not thinking strategically about their money – money doesn’t just work itself out, you need to shape it to suit your goals and personality. For example, I’m a natural spender – if I hadn’t automated my savings to somewhere I can’t access it, I wouldn’t have any savings. Start to learn about your own money style, and build a money system that works,” he said.

So basically, managing your money isn’t a one-size-fits-all situation.

Sure, you might luck out if you blindly copy whatever financial advice your best mate is following, but you’re probably going to be better off looking at your own situation and making a plan that works for you. Do you want to buy a house? Are you naturally good at saving? Is investing a big goal of yours? Whatever it is, work it out *before* you try to manage your money.

Sounds simple enough.

But while I had the opportunity to pick the brain of someone who is far better with money than I am, I thought I’d ask what his top five red flags are, again, so I can *hopefully* avoid them.

1. You Don’t Have Cash For An Emergency:

If the pandemic didn’t already prove this, let me make it really clear for you: FOR! THE! LOVE! OF! GOD! HAVE! AN! EMERGENCY! FUND!

Experts have differing opinions on exactly how much money you should have saved up for an emergency, with some offering a dollar amount, while others recommend having three months worth of living costs saved.

It doesn’t really matter whose advice you follow here, as long as you have some sort of buffer to save you if you run into a huge bill (*cough* the $500 vet bill I had to pay yesterday *cough*).

2. You’re Using Credit Cards To Pay For Basic Bills Or Groceries:

Ahh credit cards, perhaps the thing finance experts argue about more than anything.

Personally, I chuck everything (including groceries) on my credit card, but it’s only so I can make the most of Frequent Flyer points, so I pay it off in full every month and keep a close eye on my statements. But I think the red flag here is putting basic bills on a credit card if you’re not paying it off in full and are accruing huge amounts of interests on your basic costs.

Obviously, if you’re in a situation where you absolutely *need* to do this, it’s a different story. But basically, you should avoid paying credit card interest as much as humanly possible.

3. Your Savings Aren’t Growing, Even A Little Bit:

This is probably the easiest red flag to spot, but God, it’s hard to actually fix.

I consider myself to be pretty good with money, but I truly don’t think I’ve saved a cent in the last three months. And sure, I can acknowledge it, but can I stop myself from wasting money on pointless shit that I don’t need? No, not right now.

If you’re not saving money, it means that you’re probably living beyond your means. If this is how you choose to live your life, more power to you, but if you’re trying to manage your money responsibly, it’s a red flag.

4. Money Stresses You Out:

Ouch, this one hit me harder than I thought it would.

If money stresses you out, it’s probably a sign that you’re not handling it very well (obviously assuming that you’re working and don’t have any external issues causing your financial woes).

Maybe it’s stressing you out because you’ve got huge loans that you regret taking out, or maybe you just know you’re spending beyond your means. But basically, if it’s causing you huge amounts of stress, it’s probably time to reevaluate how you’re managing your money.

5. Everything You Own Is On Borrowed Money:

From financing a car to personal loans to Afterpaying everything, Glen thinks owning everything on borrowed money is a big red flag.

Obviously, if you’re buying a number of items on borrowed money, it’s a sign that you’re living a lifestyle that you likely can’t afford. While one loan (or maybe two) is might not be a huge cause for concern, if you’re going down this route for everything, you might want to ask yourself some questions.

Basically, all of Glen’s tips have the same overarching message: live within your damn means. As much as it’s fun to treat yourself to a $6 latte every morning and Afterpay a new outfit every weekend, if you’re spending more than you realistically can afford, it’s probably going to come back to bite you later on.

Image: Bridesmaids