Being a millennial myself and growing up in a rapidly changing world, it is clear that it can be seen as both a blessing and a curse. We have access to technology that our parents could only dream of, but at the same time we face a unique set of financial challenges.
From student loans to a tough job market, there are clear financial obstacles in the way of preventing financial freedom. Having asked around the office, listed below are the 5 money mistakes millennials make and how to avoid them.
Not Saving Enough
One of the biggest money mistakes made is not saving enough. Many millennials are focused on paying off debt or living in the moment, so they don’t think about saving for the future. However, this mindset can lead to a lot of financial stress down the road.
To avoid this mistake, it is essential to start saving early and make it a habit. Even if it’s just a small amount each month, it will add up over time. Setting up automatic savings transfers can also be helpful.
Another mistake made is not investing. Many millennials are afraid of the stock market or don’t think they have enough money or knowledge to invest sensibly. However, not investing can mean missing out on potential long-term gains.
To avoid this mistake, millennials should educate themselves on investing and start small. It is important to remember that investing is a long-term strategy, and it’s important to stay invested even when the market fluctuates.
Overspending on Lifestyle
The social media lifestyle of travel, dining out, and entertainment can add up quickly. One of the most mentioned mistakes was living beyond one’s means, to impress others with things that we can’t actually afford
To avoid overspending on lifestyle, a good start is to set a budget and prioritise spending. It’s okay to splurge on experiences, but it’s important to balance it with savings and investing.
Taking on Too Much Debt
With the rising cost of living, millennials are also dealing with record levels of student loan debt, but many are also taking on too much credit card debt. It’s easy to get caught up in the instant gratification of buying things on credit, but it can lead to a lot of financial stress along the line.
To avoid taking on too much debt, put a focus on paying off high-interest debt first and avoiding unnecessary purchases. It’s also key to avoid taking on more debt than you can afford to pay off.
Not Having a Plan
Finally, one of the overlooked mistakes is not having a financial plan. Many of us are focused on the short-term and don’t think about the long-term financial goals.
To avoid this mistake, take the time to create a financial plan. This can include setting financial goals, creating a budget, and investing for the future. It’s important to regularly review and adjust the plan as circumstances change.
Written by: George Kemp