The biggest money mistakes people make in their 20s

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CLEVELAND- Angela Masciarelli, 27, is living the good life in downtown Cleveland.  That's what happens when you work hard to get where you are; although Masciarelli will be the first to tell you, she hasn't worked nearly as hard saving for her future.

"Right now it feels like I have time to put it off," she told Call for Action Reporter Lorrie Taylor.

Financial experts say that false sense of time is something Masciarelli shares with the majority of 20-somethings.  It also sets them up for some of the biggest money mistakes they will make throughout their lives, such as, failing to map out a financial plan.

"It doesn't have to be anything elaborate," said Erica Aber, a certified financial planner with Spero Smith, a fee-based advisory firm in Beachwood, Ohio.

Aber said young people who stick to a budget while saving 10 to 13% of their savings, will find financial success easier in life than those who don't.

"It's all about the power of compounding," said Aber. "The earlier you start the more that you'll have in the end."

In other words, those who commit to monthly investing early in their lives, won't have to save nearly as much in future years.

According to money blog "Get Rich Slowly" a 24-year-old who socks away $574 a month ($6,882.69 every year) until the age of 65, will have a whopping $1,932,528.09 at retirement; but someone who waits ten years and begins saving at the age of 34 will have to invest more than $1,300 a month ($1, 306.00) or close to $16,000 a year to reach the same goal.

"In your 20s is when your money can work the longest for you," said Aber.

The Beachwood CFP also said living on credit cards is another mistake of those just starting out.

"You need to set a budget and live within your means," Aber told Taylor.

Financial experts also stress the importance of creating an emergency fund.  Aber recommends having no less than three to six months` worth of living expenses in the bank; however, in today`s hiring climate when it can sometimes take a year or more to find employment, an emergency fund that can sustain a person for 12 months is preferable.

Masciarelli says she's taken care of putting money away for emergencies; it's the rest of her financial future she now plans to keep an eye on.

"I would love to just sit on a beach when I'm older and have enough money to do that," said Masciarelli, "But right now, I need to put in my work, save up enough money so I can  actually have that lifestyle."

**Anyone wanting to know how fast their money will grow over time will find a compound interest calculator by clicking here.*