No other generation has been less interested in money and finances than Millenials. Here are the most common mistakes these youngsters should avoid to not encounter financial distress down the road. What 6 financial mistakes should Millenials avoid?
For a whole year our lives have been a bit "on hold", but the Covid-19 vaccination campaign is making normal life seen a reality again. Now that we can start moving again and have seen how unpredictable the financial future can be, it may be easier for millennials to understand the importance of not making the mistakes we explain below.
1. Not working on a budget
Budgets are no fun, but not having one is a terrible mistake. Budgeting is the only way of knowing how you’re spending your money and finding out what expenses are unnecessary or can be reduced.
2. Accumulating debt
At some time, everybody could need to borrow money. Buying a car, a house, or paying for college can be unaffordable without a loan, so debt should not be increased by unnecessary expenses.
3. Not protecting their credit
Poor credit can be very expensive, so it is important to build it from the beginning. Not taking care of this, could end up meaning more interest on credit card o any other loan, or not being able to qualify for them.
4. Leaving saving for later
Of course, spending your money on a new car, a trip, or the latest smartphone is much more fun than saving money for the future. But, even though things like retirement and medical emergencies may seem very far away, they’re not. Saving today is the only way to not have serious financial problems later in life.
5. Not having an emergency fund
Again, Millennials may not think that saving for emergencies is necessary because major money problems seem far away. But a car repair or medical bill that your insurance doesn’t cover can hit you by surprise at any time and turn your financial situation around in a second.
6. Thinking retirement isn’t important
Millennials should think ahead and realize that time flies Savings for retirement should start as early as possible. Whether it’s on their own account or taking full advantage of matching up their 401(k), saving for retirement is fundamental.