It is little question that millennials area unit the foremost well-read generation.
The internet provides them with info they have on concerning something as well as on personal finance and the way to make wealth.
However, besides being a wealth of information, the internet can also be quite confusing and conflicting. The information available on the web comes from different people with differing opinions.
It holds true therefore that besides having so much information, there are still 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 common money mistakes millennials are making and how to avoid them.
- Student Loans
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?
• however long can it take you to clear the debt?
- Luxurious lifestyle:
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 therefore 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 spend $$$ 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 sources, increase your savings or invest the extra income in long term investment options.
Too Many Credit Cards
People are wired for instant gratification and especially the millennials.
You want what you wish and you wish it currently.
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 lead 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 afford. It is actually recommended that you buy a car you can afford to pay cash for or most of the money upfront. Do not test drive the luxurious models as this will tempt 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.
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