Feb 02, 2017 11:39 AM EST
Financial Mistakes Millennials Make That Could Jeopardize Their Future
The older generation often mock millennials, people in their 20s and 30s, on many issues. Whether the points are valid or not, however, one financial planner observed that millennials are doing some financial mistakes that, when left unaddressed, can financially ruin their future.
Depending too much on credit cards
Credit cards are not evil; however, the real problem begins when a person use it to splurge on luxuries he or she cannot afford. Kelley Long, a financial planner, wrote in an article on Forbes that the majority of millennials have a lot of imagined 'needs' (translated as luxuries) which they can't afford to pay in cash. In order to meet those 'needs,' they turn to credit cards until the spending adds up and it's too late to find out they are neck-deep into credit card debt.
Long advised that if you are unable to pay for something in cash, you have to find an alternate solution or delay it until you can afford it. For example, if you can't afford for your grocery delivery, you can do it yourself and find better deals. She added that you have to discipline yourself in identifying which ones can be delayed and which ones are urgent.
Rushing into adulthood
FOMO - fear of missing out seems to be the big word among millennials, especially when it comes to responsibilities of being a full-fledged adult, such as marriage, kids, and buying a house. As tempting as they may sound, delaying such responsibilities, will do you good than harm. There may be a lot of pressure as well but thoroughly enjoying your freedom and taking risks when you are in your 20s and 30s will give you the experience and wisdom later on in life.
Fear of investing long-term
Compared to the generation before them, millennials can be considered as conservative investors. That's because a lot of millennials witnessed firsthand what the market meltdown did to their parents and the others during that time. More so, a research showed that millennials have less general investment knowledge than the older generation.
However, it might come as a surprise that those who decided not to sell their stocks during the 2008-2009 stock market meltdown are, in fact, doing well than those who decided to get out.
Not saving for retirement
Another popular millennial motto is YOLO - you only live once; thus, enjoying the moment without a care is common. However, their retirement is put at great risk because of too much 'living in the moment.' Setting aside $50 every time you receive your paycheck may not be a lot but over time, the returns can make a huge difference in your future.
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