These are the Top 5 Financial Mistakes to Avoid in Your 20s so you can set yourself on the path to financial freedom and a better life.

First on the list is student loan debt because this happens when you're just starting out on the path to adulthood it can derail you for decades. So we either want to avoid it altogether or if you've already accumulated it you'll want to focus on paying those down.

Second is buying a car that you can't really afford. And no, just because you can make the monthly payment doesn't mean you can afford it. Unless you're buying something that's limited edition or a collectors car it's not worth the large expense. Most cars depreciate right after they're driven off the lot and the first couple years of use. So, buy something that's a couple years old and at the bottom of it's depreciation curve.

Third is renting a luxury apartment with the amenities of a five star resort. Right after college, when you're moving to a new city you should have roommates just like when you were in college. Take the money you're not paying in excess rent and pay off those student loans mentioned before. Once you have your student loans paid off you can go and buy a two or three bedroom apartment and rent out the rooms.

Fourth is not starting to invest early enough. The main reason you want to start investing early on in life is because of compound interest. Compound interest is the concept that your money will earn interest and then that interest, reinvested, will earn you more interest. So starting early in life can be the difference of tens of thousands, if not hundreds of thousands depending on how much you invested.

The final one on the list is not starting a side hustle or business. There seems to be a common misconception that a side hustle or business should be there to make you tons of money or to help you retire early, but really if you can earn an extra couple thousand dollars every month that would be a huge help to a majority of people. All you need to do is monetize a skill or passion you already have.

The core of these is to get you to do four things. Spends less, avoid bad debt, earn more, and to invest your savings. By doing these four things you build a lot of leverage for all aspects of life. You can avoid a job you hate, if you are trying to get a new job you can negotiate higher payer or more vacation days. If you have a kid later in life you can take off work for a month or more and live off your savings.

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