Top 5 Financial Mistakes made by Millennials
Technologically savvy, effortlessly adaptable, cultured and confident — millennials are many things, but they tend to fall short in the money department. With the economy beset by rising prices, depressed wages and the morose prospect of working longer and earning less than their parents, they need to be as careful as they can with their finances, now more than ever.
There are plenty of us out there and we all know how difficult it can be to succeed financially in today’s climate. However, all is not lost. Knowing our shortfalls is the first step in avoiding the same mistakes, and moving towards better financial practices.
1. Careless Spending
The world opened up by social media brought with it a great many opportunities to liberally spend hard-earned cash. The need for a carefully cultivated online image inevitably leads to an obsession with designer clothing and fancy holidays, while thematic bars, restaurants, cafés and exhibitions charge high prices for their customers to parade fine tastes to followers and friends.
These expensive habits, coupled with advancements in payment and banking technology like contactless cards, mobile banking and online shopping, have led to a culture of blind spending, tapping cards to readers and having a good time.
The next time you’re out, just think: can you afford another round? If the answer is no, then read on to the next point.
2. Not Budgeting
There’s nothing inherently wrong with spending, however, and we know all too well the satisfaction of splashing out on something nice from the huge selection of goods and services now available. However, it’s forever important to ensure we budget.
Although it’s a mistake not to budget, we get it! The culture of student-loan shopping often leads to university and college alumni being thrust into working life without a safety net, and old habits die hard…
It can sometimes seem too difficult to budget when starting working life. This, however, is a myth! Just by cutting down on luxuries like monthly subscriptions, and prioritizing necessities, we can easily make a start on their budgeting, even in this climate.
3. Not Putting Money Aside
There could be a number of reasons why we fail to put money aside. Many millennials live with their parents long after graduating, and although you might think this rent-and-bills-free lifestyle would leave them with few financial worries, they can often become — if anything — more careless with their money.
Furthermore, even though we have educated and trained for ‘real life’, there’s still a lack of confidence in personal financial education, leaving many and younger generations struggling to efficiently manage their money. What we should be doing is tracking what we earn, and setting some aside.
4. Unaware of Total Funds
Despite ease-of-access facilities like online banking apps now being available, we often go through life without checking our total balance. I mean, why bother, when you’re constantly worrying about paying for rent, for bills… and dare we say drinks? The answer is simple: being aware of your total balance gives you greater control of your finances and lets you plan for the future accordingly.
You shouldn’t give up hope for things like buying a nice car, or going on an adventurous holiday, but these will only be possible by constantly checking on your bank balance. Failing to do so inevitably leads to further problems, not least of which is the millennial problem number five.
5. Not making an effort to learn more
With the gap in our learning stemming from too little financial education comes the responsibility to rectify it ourselves. Unfortunately, as we can see from the extent of the problems above, it can be difficult to stand up and make an effort to improve our financial situations. The first step is accepting that we can learn more, we can succeed, and that we can take ownership of our finances.
Luckily we’re here for you, so click here for our Top 5 Tips on how to increase your financial knowledge, and make every effort to learn as much about finance as you can!
To finish up here, let us say that we know finances are a minefield! If any of the above problems apply to you, then today might just be the day you decide to fix up, look sharp, and start planning a better financial future for yourself.
