No one is exempt from making bad decisions when it comes to their finances. Warren Buffet, who is a billionaire, has made some bad decisions that have cost him a lot. Tim Chen is the co-founder and CEO of NerdWallet. He stated that there are three main financial mistakes that people make while they are young.
Many young people forget to rollover their 401K when they start a new job. Tim stated that you lose money when you forget to rollover your 401K. This is a mistake that Tim made while he was younger. He did not realize that he had made this mistake until he checked his account statements. He was getting charged 2 percent per year just by leaving the money in his account.
Many people also make the mistake of not refinancing their loans. Many people do not know that they can change the terms of their student loans. The auto loan is one of the main loans that people forget to finance. Student loans are something else that people will need to keep an eye on.
Student loan debt has tripled over the last decade. Borrowers have 1.5 trillion in student loan debt. This is more than credit card debt and auto loan debt. Student loan debt can easily get out of control. This can make it harder for you to save for a house or a bigger purchase.
Additionally, many people make the mistake of bad budgeting. Many people say that it is okay to spend money because they are only young once. However, you have to be careful with how you spend money. Tim has admitted that he can overspend at times. He stated that food delivery is one of his biggest weaknesses. He said that he needs to discipline himself to cook more.