It is no doubt that millennials are the most informed generation. The internet provides them with information they need on just about anything including on personal finance and how to create wealth. However, besides being a wealth of information, the internet can also be quite confusing and conflicting. The information obtainable on the web comes from different people with differing opinions.
It holds true consequently that besides having so much information, there are nevertheless many millennials out there that are making money mistakes and digging themselves into holes that will take years to get out of.
Here are 5 of the most shared money mistakes millennials are making and how to avoid them.
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 pursuing will bring in enough income to justify the expense.
Before you take a student loan, you need to have the following in mind:
• How much are you expected to make monthly?
• How much will you have to pay monthly?
• How long will it take you to clear the debt?
We are living in the social media age where people show off their “luxurious” lifestyles on Instagram and other social channels. Many millennials feel the pressure to show off on social media and consequently end up spending money they don’t have to impress people they don’t know and people that don’t care.
Do you really need a $2,000 smartphone, an expensive wedding, a lavish lifestyle, to use $$$ on drinks with friends just to take pictures and show off on social media? Use social media sparingly to socialize with friends and family and more for business and your life will never be the same again.
Waiting for too long to start saving
There are some millennials that start saving early but there are also those ones that 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 work more than one job or you get money unexpectedly from other supplies, increase your savings or invest the additional income in long term investment options.
Too Many Credit Cards
People are wired for moment gratification and especially the millennials. You want what you want and you want it now. This has led to many millennials applying for too many credit cards. This leads to perpetual debt that you never seem to get out of.Try using cash as much as possible and avoid getting more than one or two good credit cards to build your credit score. Also, avoid always having your credit card with you as this will rule to impulse purchases.
Buying luxurious rides
A car is not an investment. It is a depreciating asset.Only buy a car that you need and you can provide. It is truly recommended that you buy a car you can provide to pay cash for or most of the money upfront. Do not test excursion the luxurious models as this will entice you to get a loan so you can “treat” yourself.
Also, as you invest money, also remember to save for retirement and consider having an emergency fund.