Top 5 Money Mistakes That Millennials Make
Money mistakes are a big deal among millennials resulting in quite a negative reputation. The media often calls them entitled, lazy, shallow, and whiny. If you’re a millennial, you know that these stereotypes actually don’t apply to many millennials. There are plenty of people within this age group that are working hard to save money, advance in their careers, and generally get ahead in life. However, like people of any age, millennials sometimes lack the appropriate financial advice to make the right money decisions.
In this article, we share some of the top money mistakes that millennials make. Once you’re aware of them, you can take steps to avoid them and boost your personal financial health.
Below are five money mistakes millennials should avoid making
Putting off Savings
Millennials are still very young. 30 is the new 20, right? Unfortunately, too many millennials are putting off saving money because they think they have all the time in the world ahead of them. You may still have time to save money, but life will only get more and more expensive as you grow older. Children, healthcare costs, and housing costs can all put a burden on your wallet. The key is to prepare as much as possible for what the future holds. You don’t have to put aside a small fortune every month, but getting in the habit of saving your money now will pay off in the long run.
Not Investing In The Stock Market
Young Americans are shying away from investing in the stock market. Yet, investing in stocks is one of the quickest ways to grow wealth. According to a 2018 Gallup poll, approximately 37% of people under 35 said they don’t own stocks. The risk that is present is real. You don’t have control over what the market is going to do but you do have control over how much you save. You decide how much money to put towards long-term investments as well as how to allocate those funds. If you don’t know where to start when it comes to investing, definitely consider working with a financial advisor.
Planning an Expensive Wedding
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Congrats on meeting your life partner! Naturally, you want to celebrate this amazing milestone in life by throwing a big party for your friends and family. Before you move forward with your dream wedding, you’ll want to think about how an expensive event will impact your finances. Flowers, cakes, decor, food and more can add up. Could you cut some corners and apply some of this money toward a house or a future? Think twice before you make that deposit.
If you have made a decision on how much you want to spend on your wedding, credit cards could help fund your wedding day. You just need to be smart about how you use them. The one thing you don’t want to do is fund your day with a credit card that you don’t have the cash to pay it off with. Use the right credit cards that offer the best promotions that make sense for you. Travel rewards, sign up bonuses, cash back offers can help you out if you use the cards properly.
Having Too Many Credit Cards
We get it: credit cards offer some very enticing deals and promotions. If you like to travel, there are travel credit cards for you. If you like cash rewards, you have no shortage of options. However, having too many credit cards can complicate your financial life, since they can make it difficult to keep track of your expenses. Furthermore, it can be more difficult to remember to pay off your cards every month. Instead, focus on using just a few credit cards that give you the best benefits and then be responsible about paying them off promptly.
Not Having An Emergency Fund
According to a CNBC poll, only about 44% of millennials (ages 22-37) say they have enough savings to cover at least three months of living expenses. That means many people in this age range would need to ask for help from friends or family. This is not entirely all that surprising since more than half of Americans in their twenties still rely on financial help from their parents.
If one doesn’t want to continue to rely on dear old mom and dad, millennials must start putting some money towards an emergency fund. This doesn’t mean never leaving the house or never enjoying a Starbucks every now and again, but it does mean coming up with a certain amount each paycheck to put away in a savings account that won’t be touched. Start small and build up from there. As long as the money remains untouched, you will have a nice stash after a while. Just think of how much better it will feel to be able to tackle those unpredicted expenses on your own.
Millennial Money Mistakes Can Be Avoided
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Now that you know about these top money mistakes, you can take proactive steps to avoid them and be a more responsible millennial who proves the media wrong.