Every generation seems to have at least one or two struggles unique to them. For many millennials, they deal with one key hurdle – financial struggles. Some might be of their own making, while some of it could be the hand dealt to them.
Here are ten financial mistakes millennials are making and need to turn around quickly.
Racking Up Credit Card Debt
Credit card debt is onerous. It keeps you from achieving financial goals and taking care of other obligations. Thanks to purchasing decisions and increasing cost of living, millennials are racking up record debt.
Studies show the average millennial has at least $6,000 in credit card debt. Worse yet, they’re likely to have more credit card debt than savings.
Spending Keeping Pace With Earning
For many millennials, their spending goes up in lockstep with their earning. Lifestyle inflation is certainly one cause. Increased cost of living is another they can’t avoid.
Slowing this is essential for many to create wealth.
Not Saving For Retirement
Recent studies conflict with each other on millennials and retirement planning. One report shows that less than 60 percent are saving for retirement. Another shows that over 65 percent have nothing saved.
Key to turning this around is seeing the importance of time with investing. It’s never too late to start, but it is important to get into the practice of investing as soon as possible.
Avoiding Saving For Emergencies
A fully stocked emergency fund is vital to financial health. Unfortunately, millennials are struggling here as well. Bankrate found that fewer than 40 percent of millennials feel comfortable with their savings.
This lags behind the overall average and is only ahead of Gen Z. It’s time to start saving if you’re not. An online bank, like CIT Bank, is a terrific place to start growing your savings and earn interest on your cash.
Not Staying On Top Of Their Health
Millennials are known as the wellness generation, but they’re often in worse health than Gen X individuals. Like investing, starting is the best plan of action when managing your health.
Not Managing Their Student Loan Repayment
Student loans are a blight for many people, especially millennials. The average millennial has nearly $35,000 in student loan debt.
For those not wisely managing repayments, they’re making the situation considerably worse. This impacts financial stability and achieving financial goals, creating short and long-term problems.
Failing to See How Small Costs Add Up
Overspending is problematic for anyone, but it seems to be impacting millennials more. The generation has nearly $4 trillion in debt at the end of 2022, according to the Federal Reserve.
Couple that with student loans and lack of restraint in spending, and spending adds up quickly. However, a growing number of millennials are choosing friends who share spending convictions, so not all hope is lost.
Consuming Too Much Social Media
Be it a stereotype or not, millennials consume a lot of social media. Studies show they consume roughly three hours a day, and it’s rising.
While it can be helpful to connect with friends and family, that amount of time does open them to other problems, some of which may encourage wasteful spending.
Borrowing Money For Weddings
Your wedding is a memorable affair. However, it’s not worth taking on considerable debt to help consummate. Reports show that 30 percent of millennials are borrowing money to fund weddings.
Add that to rising credit card and student loan debt, as well as other overspending, and it’s easy to see why it’s a problem.
They Spend to Keep Up With Trends
Many people want the latest trend or want to have the newest flashy item. Millennials take the lead in spending in line with trends.
Studies show most millennials will spend on things they don’t need or can’t afford simply because it’s trendy. Treating yourself is one thing, but doing it to an extreme can be problematic.
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