August 15, 2017 6 min read

Opinions expressed by Entrepreneur contributors are their own.

Your 20s can one of the most memorable times of your life. After all, you’ve just started to enter the workforce, have little responsibility and finally have a disposable income to call your own. However, even with all the freedom that youth provides, it can come with some significant financial consequences that can be crippling if you’re not careful.

While most people would consider themselves pretty financially savvy, I'd say that can be attributed to the fact that no wants to admit they're bad with money. As cash rules almost every decision we make, it can be tough to swallow when we haven’t held ourselves to the best standard.

Related: 8 Ways Any Millennial Can Be a Millionaire in 5 Years

Granted, for most of us, it’s easier said than done, but that’s why getting into good habits while you’re young is so imperative. That’s why I’ve compiled a few tips I wish I knew when I was in my 20s. Following these could lend you a better path and help you save quite a bit as well.

1. Report your rent to credit bureaus.

Although a relatively new development in the credit reporting world, according to NerdWallet, nearly every major credit bureau allows you to report your rent. Although less than 1 percent of credit files contain rental information, this can increase your credit score tremendously.

2. Learn how to use a credit card the right way.

This is something that we probably should’ve listened to the wisdom of our elders more, but then again, sometimes it’s best to learn on your own. As creditcard.com notes, while younger generations tend to utilize their credit for clothes, entertainment and gas, older generations use it for travel and major repairs. Granted, having a budget and sticking to it with a credit card can be a good way to build your score, but using your card like boomers is an effective strategy.

3. Don’t inquire until you know for sure.

Credit inquiries can negatively impact your score up to five points, which is especially damaging to young people. The rule of thumb here is to shop around a bit when it comes to buying something that could need to be purchased on credit.

4. Build your credit.

Your credit is the number-one key you have to financial freedom, so utilize it wisely. As CreditRepair notes, there are numerous ways you can start on this, as it’s never too early to start thinking about your credit.

Related: 4 Money Habits That Separate Building Wealth From Just Making a Living

5. You don’t have to be rich to invest.

There’s a big notion that only those with a lot of money should invest in stocks or mutual funds. In fact, a recent study by Bankrate showed that just one in three millennials are investing. Even though you most likely won’t be rich overnight, it’s never a bad idea to use investments as a way of saving. Some good sources to check out are Acorns and Stash.

6. Save enough for rainy days.

According to a study by GoBankingRates, 72 percent of millennials have less than $1,000 in savings. That’s a pretty astounding figure, especially when you consider that money could be drained pretty quick in the event of an accident or unexpected event. Try to set aside a little more from each paycheck, as you never know when it might come in handy.

7. Hold off on buying a car (even if you can afford it).

While a lot of folks tend to follow the 20 percent rule (that is, only dedicate 20 percent of your income to a monthly payment on a car), even if you can afford that, it’s still not your best investment. First, cars are depreciating assets, meaning as soon as you drive off the lot, it’s automatically worth less than what you paid. Additionally, as you never know what’s going to happen with your car (whether it’s new or old), the unexpected maintenance or expenses are going to cost you regardless.

8. Beware of predatory lending.

Predatory lenders can potentially destroy your financial status, with the average interest rate clocking in around 400 percent. In short, this is the quickest path to bankruptcy, so if you’re looking for some extra financial help, exhaust all your resources, as well as possibly talk to a financial advisor.

Related: Get Out of Debt With These 6 Simple Steps

9. Stop spending so much money on socializing.

Like most millennials, I too have fallen victim to spending money for what I consider “the short term.” You know, things like going out to eat or going to shows, which for the time being is great, but as you get older, you realize this money is well spent other places. Plus, as millennials spend nearly 44 percent of their food budget on going out, cutting back can be an excellent way to save money.

10. It’s harder to get yourself out of a hole than it is to get in one.

It’s no secret that getting into debt is relatively easy. But the getting-yourself-out part? Not so much. As The Nest points out, the average time to pay off $9,500 with monthly payments of $461 will take approximately two years, with $1,555 paid towards interest. In short, being in debt is expensive, and as such, you should put a lot of consideration into what you incur before pulling the trigger.

Perhaps one of the best pieces of financial advice I ever heard tackles this subject very well: if the debt you’re incurring isn’t helping you make money, is it really worth putting on?