Your 20s are basically a decade long trial run for adulthood. You’re figuring out jobs, rent, friendships, your love life… and of course, money. The tricky part? No one really teaches you how to manage money in your 20s.

Most young adults stumble into the same financial traps and while that’s normal, some money mistakes can hold you back for years. The good news? You don’t have to repeat them. Here are 7 common money mistakes in your 20s, plus the simple fixes that will set you up for financial success.

1. Falling Into Lifestyle Creep

That first “real” paycheck feels amazing. Suddenly, you want to upgrade your flat, your wardrobe, even your daily coffee order. But if every raise leads to more spending, you’ll always feel broke, no matter how much you earn.

Fix it: Treat yourself to one or two luxuries that genuinely make you happy, but put the rest towards savings or investments. Avoiding lifestyle creep is one of the smartest personal finance tips for young adults.

2. Ignoring Your Credit Score

Credit scores sound boring until you realize they decide whether you can rent a flat, get a mortgage, or even land certain jobs. Many people don’t check theirs until it’s already a problem.

Fix it: Check your score for free online, set up direct debits so bills are paid on time, and don’t max out your credit cards just because the limit increased. Think of your credit score like a financial reputation, landlords and banks are watching.

3. Only Saving (and Not Investing)

Saving money is great, but if all your cash sits in a basic account, inflation quietly eats away at it. It’s like leaving cake out on the counter... it looks fine, but slowly goes stale.

Fix it: Start small with investing. Apps that let you invest spare change or beginner-friendly index funds are great starting points. You don’t need to be an expert, you just need time in the market.

4. Thinking Debt Is “Normal”

Student loans? Okay, fair enough. But credit card debt from impulse shopping sprees? That’s the dangerous kind. High interest debt can snowball before you even realise it.

Fix it: Focus on paying off high interest debt as soon as possible. Before using credit, ask yourself: Would I still buy this if I had to hand over cash right now? That one question alone can save you from a lot of unnecessary debt.

5. Skipping an Emergency Fund

Emergencies always show up at the worst times: losing a job, car repairs, or sudden dental bills. Without savings, these situations push you deeper into debt.

Fix it: Build a starter emergency fund of at least £1,000, then work towards covering 3 – 6 months of expenses. And no, your “holiday” savings account doesn’t count as an emergency fund.

6. Overspending on Nights Out

Some of the best memories in your 20s happen on nights out. But if you’re dropping half your paycheck on cocktails every weekend, your bank account will feel the hangover more than you do.

Fix it: Create a “fun budget.” That way, you can enjoy nights out guilt-free without wrecking your finances. It’s all about balance, not restriction.

7. Not Thinking About Retirement (Yet)

Retirement feels like a lifetime away when you’re 22. But here’s the secret: the earlier you start, the easier it is. Compound interest is basically free money for future you.

Fix it: Even if you can only contribute a tiny amount to a pension or retirement fund, start now. It’s one of the most powerful money moves you can make in your 20s.

Final Thoughts: How to Manage Money in Your 20s

Your 20s are for exploring, learning, and yes, making mistakes. But money mistakes? The fewer, the better. Start small, stay consistent, and remember it’s never too late to turn things around.

The key to managing money in your 20s is simple: spend intentionally, save for the future, and avoid high-interest debt traps. Do that, and you’ll set yourself up for financial freedom in your 30s and beyond.

Which of these money mistakes are you guilty of?