Financial red flags in your 20s

Your twenties are this strange decade where you feel both invincible and completely lost. You start earning your own money, living on your own terms, making your own choices… We love ADULT MONEY, don’t we? It’s also about making your own mistakes. When I moved from France to Switzerland, something struck me immediately: the system here is incredibly smart, structured and efficient, but it does not forgive financial chaos. Everything is tracked, everything is connected and everything eventually comes back to you. That’s why understanding your financial red flags early is not a “nice-to-have”. It’s genuinely life-changing.

A financial red flag is rarely a dramatic explosion; it’s usually a quiet habit that slowly shapes your relationship with money. It’s the way you avoid looking at your balance because it stresses you out. It’s the impulse purchases that feel harmless until you add them up. It’s the insurance letters you put aside because you “don’t have time”. It’s the belief that retirement planning is a distant concern, something for your 40s or 50s. These behaviours don’t destroy your finances in a day, but they absolutely define them over time.

The Swiss system rewards stability and responsibility and it remembers everything. Overspending, ignoring bills, misusing credit, avoiding planning, all of these choices have long-term consequences here. They influence your ability to rent an apartment, negotiate interest rates, take out a loan or a leasing, and even build savings. This is also why Switzerland promotes responsible borrowing and I genuinely recommend reading the principles shared by the Swiss Consumer Finance Association. They explain clearly how to use credit consciously rather than emotionally and it’s one of the most useful resources you can read right now (apart from this article obviously)!

The first red flag I see constantly is spending without tracking anything. You earn money, you work hard and yet your account seems to vanish every month. It’s not because you’re bad with money; it’s because you lack visibility. When I started tracking my expenses myself, everything shifted. The simple act of knowing where your money goes gives you control you didn’t even realise you were missing.

Another red flag is living without an emergency fund. In Switzerland, unexpected expenses are part of the deal: a dentist appointment, a broken phone, a transport fine. Without a buffer, every minor issue becomes a crisis. Starting small is enough; consistency matters more than the amount.

Ignoring insurances and subscriptions is another silent red flag. Swiss insurance works beautifully when you understand it, but it becomes a financial sinkhole when you don’t. An annual review can save you money and prevent unpleasant surprises. The same goes for unused subscriptions that quietly drain your account.

One of the most damaging red flags, though, is using credit emotionally. Credit itself is neither good nor bad; it’s neutral. What makes it dangerous is using it to compensate for stress, boredom, comparison, or insecurity. Before taking on debt, it’s essential to question your intentions honestly. Switzerland’s Responsible Borrowing guidelines exist exactly for this reason and they are genuinely worth reading.

The last big red flag is believing that retirement can wait. This is probably the most common mindset in your twenties and also the one that costs people the most in the long run. In Switzerland, your third pillar becomes powerful precisely because you start early. You don’t need huge contributions; you just need time on your side.

Correcting these red flags in your twenties is not about becoming the perfect financial adult. It’s about giving yourself stability and freedom. When you clean up your habits early, you pay fewer fees, you stress less, you save more and you can start investing sooner. You also build credibility, whether that’s with your bank, your landlord or simply yourself. And believe me, financial peace feels incredibly empowering.

Imagine a 24-year-old in Lausanne or Geneva. She earns a decent salary and feels motivated, but her finances are chaotic. She spends emotionally, avoids reviewing her insurance, saves nothing and has taken a couple of small credits she regrets. This is not an unusual case… it’s one of the most common profiles I see. Yet everything changes the moment she starts budgeting realistically, reviewing her insurances, building a small emergency fund and using credit responsibly. Within a year, she doesn’t just improve her situation; she transforms it.

One of the biggest mistakes is trying to overhaul your entire financial life in a single week. Another is copying someone else’s system even though your life, income and expenses are completely different. Many people expect a magical app or method to solve everything, but financial clarity comes from consistency, not shortcuts. And of course, the most dangerous belief of all is “I’ll do it later.” Later tends to never arrive unless you decide it will.

The content in this article is provided for educational purposes only. It does not constitute investment advice, financial recommendations or promotional material.