Millennials are smart, sensitive, and highly motivated, but that doesn’t mean that they’ve got everything figured out. According to Wells Fargo’s 2017 Millennial Survey, only 32% are satisfied with their financial lives, even though 98% feel that financial security is important.
Financial plan for millennials: Millennial money mistakes
So, what’s holding millennials back? Here are some common millennial money mistakes that you might be guilty of (whether you’re a millennial or not).
1. Living beyond your means
To be finally earning your own money after being totally dependent on good ol’ mom and dad is a liberating thing. But plenty of millennials end up giving in to each passing whim, blowing their money on whatever tickles their fancy.
According to an online survey conducted by Finder, 92% of millennials make impulsive purchases, whether online or in a physical store. They may be living like millionaires around payday, but at the end of the month, you’d see them struggling to stretch every last remaining dollar.
2. Not setting financial goals
Failing to plan is planning to fail, especially when it comes to finances. But even though they know the importance of goal-setting, when it comes to making financial goals, millennials fall flat.
Instead of having vague goals like “having more money”, set a concrete goal that you can work towards, like having 10,000 in your savings account within a certain time period. Making your goals measurable makes it easier to figure out how to work towards them.
3. Going crazy with the credit card
At the Asian Money Guide media launch in Manila earlier this month, Tickled Media’s Carla Perlas said that if she could give her younger self any piece of financial advice, it’d be this: don’t get a credit card.
Why? Credit cards can easily make you feel like you have more money than you have. That’s why she advises millennials to pay for cash whenever possible, or at least make sure that credit card bills are paid on time.
4. Making money an idol
If you’re so focused on making money that you’re neglecting your family, friends, health, and personal development over it, you need to reassess your priorities.
Money is a great tool to get the freedom to do what you want in life, but remember that it isn’t the end goal. Don’t just focus on numbers, base your financial goals on what you want to get out of life.
5. Avoiding the money talk with the boyfriend/girlfriend
Money might not be the most comfortable topic to talk about, but avoiding it can place a significant strain on your relationship, especially if you’re already thinking of settling down.
If you and your partner aren’t on the same page, you're not only jeopardizing your relationship, but your financial future as well.
6. Not thinking of the long-term
There’s a difference between short-term saving and long-term saving, and millennials tend to neglect the latter. Sure, they can save up for big-ticket expenditures like vacations or the latest gadget, but when it comes to their future and retirement, they could do a whole lot better—45% of millennials are not saving for retirement.
Why? Retirement may just seem too far-off, something that can be tackled later on in life. But the earlier you start saving up for the future, the easier the whole process will be.
7. Not investing
Thinking in the long-term doesn’t just mean setting money aside for the proverbial rainy day. It means making investments, which could be as simple as opening a fixed deposit account or as complex as investing in the stock market.
Not sure where to start? Hire a personal adviser.
8. Not consulting a professional
Some financial products (e.g. stocks) are more complicated than others, but that shouldn’t stop us from making investments. But how can you make good investment choices when you know nothing about the financial landscape?
Easy. Consult a professional. The extra cost is no comparison to the amount of money you could potentially save by avoiding bad investments.
What did you think of this article on millennial money mistakes? Let us know in the comments!
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