6 Things Young Adults Need To Avoid
I originally wanted to title this post “6 Things Young Adults Need To Avoid Early In Their Careers,” but it became a bit of a mouthful. There are countless financial mistakes young adults can make when they are just starting out, but these are the ones I think matter most. These are the mistakes that can quietly shape your financial life for years without you realizing it at the time.
Let’s walk through each one, and I will be honest about where I failed myself.
- Too expensive of a car
As a young male, this was the first thing I splurged on. When you land your first real job, buying a nice car often feels completely reasonable. In my case, it absolutely was affordable on paper. At the time, I was living in cheap shared apartments in questionable areas. My housing costs were far lower than the cost of my car payment. It felt like an easy decision.
The problem was that I was only thinking in terms of monthly payments. I had never owned a nice car before, so I did not think about maintenance, insurance, or long term ownership costs. More importantly, I did not think about what my life would look like a few years down the road. I did not have a plan (which comes up later in this list by the way).
A couple of years later, I had saved enough money to buy a place, which I did. My housing costs doubled, which was manageable on my salary. What I did not account for was the combination of housing and transportation costs. Together, they made life noticeably tighter for a few years.
We got married around that time, and our combined salaries made things comfortable. But had one of us lost our job earlier, which my wife eventually did a few years later, those fixed costs would have been very stressful. This kind of vacuum thinking is what gets people into trouble. I treated the car decision in isolation instead of looking at my life as a whole.
That car turned into an expensive lesson. It took more than 15 years for us (mostly me) to buy a nice car again. Except that time, we had not only the cash but also the cashflow to afford it. Also that second nice car cost less than the first one.
When you are young, you should focus on getting rid of student debt and building a solid financial foundation before "rewarding" yourself with a nice, flashy car. The wait is worth it and you won't stress about the decision.
- Flashy apartment
Anecdotally, in my friend group, people usually went one of two ways. They either bought a flashy car or rented a flashy apartment. Both led to the same outcome. They limited their ability to build a strong financial foundation.
I remember the feeling of jealousy and even inadequacy when I saw friends living in downtown apartments above trendy restaurants. We were all making roughly the same money. I could not help but wonder how they could afford that lifestyle while I lived in a shared apartment that I did not love. Of course one reason that I completely glossed over was that they did not have cars and the money I was spending on my nice car because sometimes I just wasn't very rational as a young adult.
What many young people do not realize is that flashy living is often funded by living paycheque to paycheque, relying heavily on debt, or receiving significant help from parents. Many older people do not realize this either.
A flashy apartment looks great on social media, but it quietly delays saving, investing, and building flexibility into your life. That flexibility is far more valuable early in your career than a nice view or a prime location.
- Eating out and food delivery
This was not a major issue when I was young simply because food delivery was mostly limited to pizza, and restaurants were far more affordable. Today, convenience food is everywhere, and it is expensive.
You need to eat multiple times per day. When eating out or ordering delivery becomes a default instead of an occasional treat, the costs compound quickly. A few meals here and there turn into hundreds of dollars a month, then thousands per year. Over time, that money could equal a reliable car, a larger emergency fund, or faster progress toward a home or investments.
Now imagine combining constant food delivery with a nice apartment and an expensive car early in your career. That is how people end up feeling stuck while technically making good money. These are the stories you read/hear about - some young person making $100,000 can barely make ends meet. What often gets left out of these stories are these three expense categories.
- Toxic friends
This applies at any age, but it is especially important early in adulthood. Learning to avoid toxic friendships early helps you build boundaries that protect both your finances and your time.
When you finish school and start working, you need to focus on yourself more than you ever have before. That often means saying no. No to mid week late nights. No to spending money just to distract yourself. No to lending money that never comes back. No to always picking up the tab because you now have a real job.
It is easier to step away from unhealthy relationships when you are young and independent. As life gets more complex, those ties can become harder to unwind.
- Not having a plan
I debated making this the first point because it underpins everything else. Having a plan early in life can set you up for long term career and financial success. Honestly, if I had a plan early on, I would not have bought a nice car so early in my career.
This is the ideal time to take a hard look at your income, your career trajectory, your goals, and the life you want to build. A plan does not have to be perfect or rigid, but it should exist. It should include a basic budget, an understanding of your fixed costs, and a strategy for using your income intentionally instead of reactively.
When you do not have a plan, every decision feels harmless in isolation. That is how small choices quietly stack up into big problems later.
- Not understanding how credit and interest work
If you are one of the many unlucky students, there is a good chance you will graduate with some form of debt. That might be a student loan, a line of credit, or a credit card balance. Debt on its own is not always the problem. Not understanding how it works is.
Credit can be useful, but interest is the price you pay for using it. Many people focus on making the required payments without really understanding how interest is calculated, how it compounds, or how much of each payment actually goes toward the principal. That lack of understanding can quietly cost you thousands of dollars over time.
Learning how credit works helps you do two things. It helps you pay down debt faster, and it helps you pay as little interest as possible while doing it. Those same principles carry forward into adulthood when you start making larger purchases like cars and homes, which almost always involve borrowing.
It is also important to know that interest rates are not always fixed in stone. In some situations, they can be negotiated, especially as your income, credit history, and overall financial position improve.
The earlier in life you understand credit and interest, the longer you get to benefit from that knowledge. It gives you leverage, flexibility, and confidence in decisions that will follow you for decades.
There are plenty of other financial missteps young adults make, but these are the ones that tend to have the largest and most lasting impact early on. Avoiding them does not guarantee financial success, but it gives you something far more valuable. Time, flexibility, and options.
