4 common money mistakes made by millennials

4 common money mistakes made by millennials

  06 Jan 2024

Every generation seems to think the next generation isn’t doing it right.

They offer well-meaning “advice” based on their own experiences, which may no longer have any relevance in our fast-changing world.

Over the past three decades, the rate of change has been enormous due to rapid technological advances.

Plus, society as a whole is also evolving with more people choosing to never marry or have children.

Interestingly, one of the fastest-growing households is the single-person one.

My own observation is that while there is much change, some things stay the same.

Here’s the thing: one of the keys to financial success lies in starting early.

Setting yourself up correctly in your early life means you’ll be set in your later life.

The hard part is learning to focus on the future when you’ve just started enjoying freedom from school or university.

So let’s consider five common money mistakes that millennials make.

1. Taking on debt and then ignoring it

Earning money from your first full-time job is a thrill for everyone, isn’t it?

You may have been studying for a number of years, and surviving on minimal funds, so when that first pay lands in your bank account, you think you’ve won the jackpot!

The problem is that often when you start earning money, you start spending it, too.

And then you get offered credit cards or perhaps think it’s time to upgrade from your old bomb of a car to a newer model.

In other words, you’re soon buying “things” with money you don’t have.

Because you’re still in the early stages of your working life, your income is probably not that high so you then only repay the minimum.

What do you think happens next?

Well, that $5,000 car loan that attracts a 12 per cent interest rate, never goes down because you’re not repaying enough of the principal.

2. Overspending

Now, this leads me to the next mistake, which is overspending.

Having money to spend is a great feeling.

Spend Money

Unfortunately, many young people think that because they now have a salary they can spend every last cent of it.

Now I’m not saying that young people shouldn’t go out and enjoy themselves.

What I’m saying is that spending everything you earn will leave you with nothing.

There is a well-known financial theory that your expenses will always rise up to meet your income – unless you’re prudent.

Soon, while you may be earning the most you ever have, at the end of every week or month you’re still left with no savings whatsoever.

Leave a Reply

Your email address will not be published. Required fields are marked *