Your 20s are tough enough without having money woes. Financial issues in your 20s tend to follow you into your 30s making for a very miserable experience. If you’re still in your 20s, here are 6 mistakes to avoid:

1. Living Beyond Your Means

Listen. I get it. YOLO or whatever the kids are saying now. Why shouldn’t you enjoy your life? (Answer: You absolutely SHOULD! Within reason). Create a budget and stick to it. And I know that budgeting doesn’t sound very appealing but when done properly a budget should include fun stuff like nights out or saving for that new handbag. The key is to ensure that you’re able to enjoy yourself without overspending.

2. Not Having an Emergency Fund

You might not think much of not having an emergency fund but this is one of those things where you only know you need it when you don’t have it. I wish I had put more of an effort into building an emergency fund in my early 20s because there were several instances where I had to dip into my retirement savings for unexpected expenses. Also part of me wonders if maybe I would have had enough to retire if I hadn’t dipped into my retirement fund so often (illogical? Maybe, but let me dream). A decent emergency fund should be enough for 3 to 6 months of expenses (Also, a bonus is that when you have this money you don’t need to stress as much in a toxic job. If you want to leave, you know you DO have a back-up plan).

3. Not Saving for Retirement

Yes when you’re 21 retirement seems like ages away but you have the advantage of time. By saving a small amount now, you get into the habit of saving AND you get the added advantage of compound interest. It may not be as exciting as that concert ticket you’re eyeing, but future you will appreciate the financial peace of mind it brings.

4. Buying a Car You Can’t Afford

Ah, that new car. It’s shiny, it’s sleek, and it’s… way out of your financial league. Having reliable transportation is important, but buying a car beyond your means can put a serious strain on your budget. Do your research beforehand, set a budget, and consider buying a used car instead. Remember a car loses it’s value over time so it’s less of a loss to you if you skip buying brand-new.

5. Ignoring/Not Building Your Credit Score

It’s easy to ignore your credit score but here’s the thing- having a good credit score can open doors for future loans, cellphone contracts and so much more. So, get familiar with your credit score and take steps to build it up. Credit cards can be your BFF here, just use them responsibly! Start with a low limit, make small purchases, and make sure to pay off your balance in full each month. (That last bit is VERY important).

6. Going Into Debt for Items You Don’t Need

Debt is an unavoidable part of life. But when it comes to things that are not a necessity, think twice. Yes you NEED new shoes but can an existing pair not do the job until you have the cash? If you swipe your credit card now, will you be able to pay off the balance by the end of the month? Another thing that might be worth the debt is a course that could lead to a better paying job. But imagine having to go into debt for shoes AND a course? These things add up quickly.

By building good habits now you’re going to have an easier time when your 30s hit and you’ll be surprised at how much easier it will be to manage your increased income.

I did a post a while back talking about how I did a No-Buy year and it changed my life. Every so often I revisit the challenge when I feel like my spending is getting out of control. And with Janu-worry on the way, there’s no better time to do a No-Buy challenge. Interested in trying your own challenge? Here’s a few tips to help you get started:

1. Think about what you hope to accomplish from this challenge:

Do you want to change your spending or are you saving for a specific goal? A No-Buy challenge is a great way to kickstart your savings or start saving for a big purchase.

2. What are your problem areas?

Are you an impulse spender? Do you buy expensive gifts? Do you shop as a way to deal with your emotions? Identify what your triggers are. This can be done by tracking your spending for a few days or weeks before you start your challenge officially.

3. Define rules for your challenge

Based on your triggers, decide on what you can and cannot buy, Maybe you want to spend less on gifts or maybe you want to stop splurging on Dischem every month (because, same). Will you be limiting unecessary purchases or will you have to stay within a strict budget? How long will this challenge last? (I usually do this for 6 months but you can try anywhere from 1 to 3 months just to see how it goes). Remember this isn’t to drastically change your finances- we’re trying to make better money habits.

4. Reward yourself for hitting smaller goals.

Instead of going completely cold turkey, make small changes and reward yourself for hitting these smaller milestones. Went a week under budget? Celebrate it! You can do this by buying yourself a SMALL treat or even better, find a no-buy way to treat yourself. Some of my favourite no-buy activities are walks, at home spa days and binging a new book or TV series.

A No-Buy challenge is pretty difficult to get through at first but once you get used to it, it’s a fun way to get extra money and get creative with your spending.