Top 5 Money Mistakes Millennials Make and How to Avoid Them

July 19, 2019 0 Comments

Millennials are certainly the most informed generation. The Internet provides them with the information they need on just about anything, including personal finances and building wealth. However, in addition to being a wealth of information, the Internet can also be quite confusing and conflicting. The information available on the web comes from different people with different opinions.

So it’s true that in addition to having so much information, there are still plenty of millennials who are making money mistakes and digging holes that will take years to come out.

Here are 5 of the most common money mistakes millennials make and how to avoid them.

Student loans

Education is important in life, and many millennials want to pursue expensive degree courses or attend prestigious universities. But what many are not considering is whether the course they are following will generate enough income to justify the expense.

Before applying for a student loan, you should consider the following:

• How much am I expected to earn each month?

• How much will you have to pay monthly?

• How long will it take to pay off the debt?

Luxurious lifestyle

We live in the age of social media where people display their “luxurious” lifestyle on Instagram and other social channels. Many millennials feel pressure to show off on social media and thus end up spending money they don’t have to impress people they don’t know and don’t care about.

Do you really need a $ 2,000 smartphone, an expensive wedding, a lavish lifestyle, spend $$$ on drinks with friends just to take photos and show off on social media? Use social media in moderation to socialize with friends and family and more for business and your life will never be the same again.

Waiting too long to start saving

There are some millennials who start saving early, but there are also those who wait too long to do so. If you are waiting to become “stable” to start saving money, then you will realize when it is too late that you should have started early. If you have more than one job or receive money unexpectedly from other sources, increase your savings or invest the additional income in long-term investment options.

Too many credit cards

People are hardwired for instant gratification and especially millennials. You want what you want and you want it now. This has led many millennials to apply for too many credit cards. This leads to perpetual debt that it seems like you will never get out of. Try to use cash as much as possible and avoid getting more than one or two good credit cards to build your credit score. Also, avoid always carrying your credit card with you, as this will lead to impulse purchases.

Buy luxury attractions

A car is not an investment. It is an asset that is depreciating. Only buy a car that you need and can afford. Actually, it is recommended that you buy a car that you can pay cash or most of the money up front. Do not try the luxury models, as this will tempt you to get a loan so that you can “indulge” yourself.

Also, while investing money, remember to also save for retirement and consider having an emergency fund.

Leave a Reply

Your email address will not be published. Required fields are marked *