Learning how to manage money can be tough, and for a generation that grew up during a recession, did their best to emulate the steps that brought their parents success, but still ended up poorer than any previous generation?
Millennials have their struggles, folks.
If you’re looking to learn how to manage your money better, or at least stop making mistakes that make your financial life harder, here are 6 pitfalls to avoid.
6. Don’t spend every raise.
The best thing to do is act like you didn’t get a raise at all, just apply the difference to long-term investment goals.
If you want to treat yourself, use 10% max as a reward.
5. Don’t let credit card debt pile up.
There’s no good reason to buy things with a credit card that you can’t afford with cash.
You do want to take advantage of cards with awesome perks, but not paying off the balance every month is a recipe for disaster.
4. Don’t overthink it.
The internet is a blessing and a curse, and Millennials have a tendency to spend all of their time in the research phase of decision making.
Talk to people who know, do some reading, listen to your gut, but then pull the trigger – after all, your time is worth something, too.
3. Save for a rainy day.
Sure, you’re young and healthy now, but that’s not going to last forever -and sadly, bad things happen to young people, too.
We’ve all recently learned that having 3-6 months of emergency living expenses saved up could definitely come in handy.
2. Investing in “fads” is incredibly risky.
Anything unregulated, like Bitcoin, is a huge gamble – and there’s no guarantee that it’ll be around when you need the money.
As the saying goes, Vegas wasn’t built on winners.
If you’re going to invest in something that’s highly speculative, only invest what you can afford to lose.
1. Learn tax law.
Millennials aren’t likely to have done their own taxes, according to a 2016 study, and so they’re pretty clueless about how they work – and what pitfalls to avoid to get the best return.
Do some reading; it can help you plan financially for the year ahead.
Definitely need to clean up my act on a few of these.
If you’re a money person, what other pitfalls do you see younger people making? Share with us in the comments!