PERSONAL FINANCE,  Tips and Strategies

Four Common Financial Mistakes a Millennial should avoid

Are you still in your 20’s or 30’s? Then you must be in the point of your life where building and growing wealth is highly advantageous since you have the great amount of time on your side to save up and invest early.

 

But if you are having a hard time managing your finances, it might be due to committing the following financial mistakes all over again.

 


1. Spending too much money

 

Sure, it is very overwhelming to finally receive your salary and spend it the way you ever wanted especially if you grew up receiving ‘limited’ allowance from your parents way back the school days.

 

Now that your financial options have already widened due to your increased financial capability, you may resort trying new things out — which is actually fine.

You have worked so hard to deserve the fruit of your labor through traveling, buying new belongings, going out with friends, and pampering your family with treats.

 

Though you are in a period where everything seems to be financially overwhelming, you should also try to make sure that you still have room for savings and investments.

 

Spending for the things you want is never a bad way to expend your hard earned money, but overspending is.

 

 

2. Resorting to debts

 

This is a result of spending too much –> debts. You may have encountered several deficits before having the next payday which will effect in borrowing money from your friends, co-worker, and even family members.

 

Instead of having that excitement, you’ll feel miserable when payday is already approaching since you know almost all of them will be used to pay your deficits. This is the result of overspending.

 

There are many opportunities for you to have debts, starting with that co-worker who sells goodies encouraging you to just pay every payday, to that banker who constantly calls you to get a credit card.

 

Debt for me means “Enjoy now, regret later”, but I am talking about those bad debts. If you are courageous enough, you can resort to good debts to fund your investments or business ideas so long as the amount of profit is greater than the interest that you have to pay.

 

Two of the most important things I can advise my fellow millennials in order to avoid bad debts is to pay with cash always and to establish an emergency fund.

 

 

3. Not saving for the rainy days and putting off retirement

 

It is very easy to spend on splurges when you experience financial abundance.

 

The feeling may be so overwhelming that you tend to delay having savings since you’re confident you’re still able to earn next time.

 

But too many next times came and you’re still unable to make up for your financial excuses.

 

Sounds familiar? That’s what you call financial procrastination.

 

Having savings does not only save you from financial worries. It can also allow you to grab investment and business opportunities that may come your way.

 

On the other hand, most millennials procrastinate in having their retirement fund. We’re too young anyway, so why bother?

 

Little did we know, starting to plan for our retirement in the early years is highly encouraged. You don’t want to cram for your retirement fund when you are already a year or two from retirement, do you?

 

If you will start early, your retirement fund will have a greater chance to appreciate in value through compounding interest provided that you have placed it into long-term investment vehicles such as stocks, mutual funds, and even insurance-linked investments such as VUL.

 

 

4. Not investing in yourself

 

Though this does not directly point out as a form of money mismanagement, it is one of the roots why most millennials fail to grow financially — by not having enough knowledge and skills to cope up with the increasing standard of the market’s demand.

 

Either it’s a new skillset, talent improvement, or craft mastery that you’re working on – whatever it is, nurture and develop it for investment in knowledge and skills always pays the greatest interests.

 

Always try to discover new things that could contribute to your personal growth as an individual and as a professional.

 

This way, you’ll be able to increase not just your market value but also the market opportunities that are waiting for you, which could eventually allow you to expand your financial income opportunities.

 


These are just some of the most common mistakes millennials commit financially. You may have committed countless financial faults at the moment, but I would like to remind you that dealing with money mistakes is a path to progress.

 

Do not let your financial journey be defined by your current financial situation. Accept and assess your current economic condition and look at the mistakes in a positive way.

 

Being in your early years doesn’t mean depriving yourself of the things that you really want, but keeping a good balance between enjoying the present and preparing for the future.

 

Of course, it will entail a lot of discipline and sacrifice, but it will always be worth it in the future.

 


GIF Sources: 1, 2, 3, 4, 5

Disclaimer: This article originally appeared on my Steemit account. Minor edits have been done for this post.

Sheila is a civil engineer by profession but has switched careers to become a copywriter. She loves making sales through stories that are relatable to the average person. She's also a sucker for memes and thinks she’s the funniest person in the world (even though she knows that’s not true). Her favorite drink is Kopiko Brown coffee, but she'll also take tea or beer if it's offered.

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