Millennials, born from 1980 to 2000, take a unique approach to saving and spending.
Some are rich in knowledge about technology, and many have made fortunes starting or investing in tech startups.
However, other millennials fall short of being wise with their money. Here are the top 5 financial mistakes millennials make (that you shouldn’t!).
1. Taking on Debt Like a Boss
You’re young and have the whole world ahead of you. Taking on large amounts of debt seems like a no biggie, especially since you have so many years to pay it off.
However, this faulty thinking could keep you in debt for many, many years. The majority of graduates have $30,000 or more in student loan debt.
Add that on top of a car loan, and good luck getting ahead in your finances or qualifying for a mortgage 5-10 years down the road.
2. Retirement, What’s That?
Another big thing millennials tends to skip out on is their retirement fund. The major two reasons retirement savings is ignored by individuals in their 20s is because they think they have enough time to start, and they’re not in their dream job.
Start your retirement savings now and benefit from having time on your side to grow your investments. Retirement savings is non-negotiable, even if you’re young, aren’t in the perfect job yet, or have too many other bills to pay.
3. Emergency Funds Can Save You
Feel like you’re always living paycheck to paycheck? You’re not alone.
However, you’ll never get ahead if a financial emergency is always threatening your budget. Saving $1,000 for emergencies might seem like a huge task, but having the savings will keep your finances intact if a car or medical emergency hits your wallet hard.In your 20s? Don't get caught making these 5 major #money mistakes! Click To Tweet
4. Forgoing Health Insurance
Another common mistake the younger generation makes is to take health insurance for granted. Sure, you might look and feel healthy. However, if a medical emergency does happen, you’ll be overwhelmed with the costs.
An ambulance ride and hospital stay for a car accident or serious injury can cost you thousands of dollars. If you can’t get health insurance through your place of work, there are still options on the marketplace.
Yes, it might be hard to balance your budget when you have to pay a monthly payment to a health insurer, but doing so can prevent major debt later down the road.
5. Abusing Your Credit Score
A healthy credit score is essential for many areas of your life. A good credit score can help you secure a car or personal loan or mortgage. Your credit score is also needed when you’re renting an apartment or house.
Some employers, especially ones that give a security clearance, even check credit scores before they hire an individual. It’s important to use your credit card wisely, keep your debt-to-income ratio healthy, and to always make your payments on time.
The older generation is quick to harp on millennials, but the financial mistakes millennials make are quite common throughout all generations. Hopefully by reading this, you have a better sense of what mistakes you might be making, and how to avoid them.
Are you guilty of making any of these mistakes? How did you correct them, and how long did it take?