7 mistakes 20-something millennials are making with how they're spending their money.


Not all 20-somethings are great when it comes to money.

Some get a little bit happy on Afterpay. Others prefer the kryptonite of UberEats. Then there are espresso martinis and dresses from Kookai. But money isn’t always easy.

There’s so much conflicting advice and research out there; everyone has a different opinion on how you should save, invest, and spend. It’s enough to give you a coffee liqueur-inspired headache.

So, to cut through all the nonsense, I’ve made a list of the top mistakes I see millennials making with their money, and how to avoid them. You. Are. Welcome.

Side note – watch this video below if you’re thinking about asking for a pay rise. Post continues after video.

Video by MMC

1. Not investing for the future early enough.

Before you slip off into a boredom coma, hear me out.

It doesn’t matter if you’re not earning a high income or are saving for other big goals right now. Investing early is one of the key steps to financial security. Thinking long-term and looking into the benefits of compound interest might just help you retire early down the track.


Being hellbent on buying a home is fine, but it’s always worthwhile looking into other ways you can safeguard your future.

2. Keeping Up with Instagram Culture.

We all want those Gucci belts that are all over Insta. Same goes for the shiny Audis, endless holidays to the Maldives, and gold-flaked lattes. But.

Just because we want them, and they look pretty in the Ludwig filter, doesn’t mean we can afford them. The Instagram optics of what a millennial life supposedly looks like can be tempting, but putting yourself in debt (yes, including Afterpay debt) can seriously put your financial health in jeopardy.

Some debt – like a mortgage – can be good debt that serves you and your interests. Other debt – like what you owe on a credit card – simply sets you back from the pack. If you see someone your age living large on Instagram, always remember they’re probably living large on borrowed money and time.

Designer labels are not the norm, no matter how badly that influencer tries to make you believe they are.

What are young women spending their money on in 2019? Mamamia Out Loud unpacks why we’re all blowing our dosh on vacuum cleaners and homewares. Post continues after audio.

3. Buying a home you can’t afford.

Despite our collective love of brunch, we ALL have the lofty goal of buying our own place – but that doesn’t mean you should get into a mortgage to the detriment of everything else.


Think of a mortgage like a marriage; in the majority of cases, it’s a 30-year-long commitment. Just because you saved for the deposit doesn’t mean you should borrow as much as the bank is willing to give you. Approach everything with the savvy mindset of Donna from Suits. Be pragmatic and practical. Look at the monthly repayments and figure out what you can afford to pay back without being swamped.

Also, have you considered not moving in, but renting the property out instead? Renting out a home you own has a number of tax benefits which might make you wealthier in the long-run.

4. Having poor financial literacy.

The older you get, the more you’re going to have financial jargon whizz past your ears at the speed of light. So, ask yourself right now:

Do you know what compound interest means?

What about interest rates?

What’s an ETF?

If your eyebrows are threatening to rocket off your forehead right now, it’s likely you need to work on your financial comprehension. I suggest looking into the Federal Government’s Money Smart website as a starting point; they’ve got great, easy-to-understand resources that you can access for free.

5. Not keeping a budget.

How many of you are awkwardly twiddling your thumbs right now? Thought so.

YES, they sound monotonous and boring, but budgets are bursting with benefits. You need to make sure your spending habits are reflective of your values and goals. Are you working towards a bright financial future every month, or are you steadily pouring petrol all over your own dreams?


Keeping a budget isn’t necessarily about restriction, it’s about having a greater awareness of where exactly your money is going, and how you can keep growing that ‘savings’ figure month on month. (Pro tip, download the She’s on the Money one free from their website!)

simple money saving tips
When was the last time you had this much cash, let alone any cash, in your wallet? Image: Getty.

6. Not knowing the difference between ‘needs’ and ‘wants’.

Ask yourself, do you actually NEED a new dress for that wedding? Do you NEED new runners for the gym? Or, perhaps, are they items you simply want?

It’s totally reasonable and human to want to indulge yourself every now and then, but don’t let it be the norm every time you spend a Saturday night outside the parameters of your couch.

7. Falling back on ‘retail therapy’ when you’re down.

Ah, yes. We’ve all been there. You have a shocking week at work, the guy you’ve been dating ghosts you, and then you get a flat tyre on the freeway.

In those moments, it’s really common for us to say “f*ck it, I’m going to treat myself” and blow hundreds of dollars on something we don’t need, let alone really like.

But wait. While you might feel a bit of joy about that item for a few days, what about your bank account? Is that impulse purchase going to make you more stressed down the track when you log into your banking app and wonder where all your hard-earned money is?

If the answer is ‘yes’, may I suggest taking a bath instead of a trip to Balmain? Baths are a little bit cheaper, we hear.

This post was originally published by She's on the Money and was republished here with full permission. For more information on She's On The Money, head to the She's on the Money website and follow She's On The Money on Instagram.