Millennials often get a bad rap. They’re trapped in the space between the baby boomers and Gen X; dealing with the consequences of the baby boomers’ actions, and trying to shift into a space where they fit with the newest technologies of Gen X. Older generations have a habit of teasing millennials about not being able to take care of themselves financially, but millennials also don’t have the right financial education to help them avoid making silly mistakes.
There are a few common mistakes that millennials are making on a regular basis and they don’t realise it because they were brought up to believe that they are untouchable. Without the right planning, though, finances become a minefield. The whole idea here is to educate, educate, educate. There is no excuse for not knowing how to manage finances when we live in a time where there are a multitude of tools to get there. So, what are those common mistakes millennials are making financially?
It may seem like a way off to a young millennial, but that thought that it’s far away so there’s no need to worry is detrimental to the future. The idea that there is plenty of time to worry about it causes a short, sharp smack in the face when the years fly past. You need lots of time to build a good retirement fund, so jumping on that sooner than later is important.
It is a daunting concept for most people, not just millennials, but insurance is an important outgoing to factor in. Doing your research about Medicare Part A coinsurance is a good place to start, but even car insurance and life insurance are important. You need to understand that your insurance costs are going to protect you.
Millennials are taught that they are invincible. This way of thinking means that when the worst happens, there is no coverage to replace broken boilers or appliances. Emergencies are going to happen and you cannot predict them, so saving up as much as you can is important.
Living Beyond Means
Without the right kind of financial education and budgeting help, you can easily live far beyond your means. Getting carried away is easy when you’re new to a career and all the benefits that come with it.
Millennials are not taught effectively enough about how to balance a cheque book, how to pay for a mortgage and what a credit score is. Without this knowledge, millennials are going to fail spectacularly! Working hard to understand how taxes work and how insurance work is going to make the difference between a fine at tax season or not. As a millennial, you may be struggling to find your path in life, but if you work hard enough now, you can set yourself up for stability later on. Maximising your tax benefits as well as your use of technology and you have a recipe for solid financial education. Lay the groundwork now, and no one can call you uninformed.