When you're just getting started in the 'real world,' it's inevitable that you'll make some mistakes along the way. One area in particular that sees a lot of slip-ups is your finances. Here is a list of some of the more common millennial money mistakes and how you can fix them.
NOT HAVING EMERGENCY SAVINGS
Nothing can disrupt your responsible budgeting quite like an unexpected life event. Ideally, you should have at least six months’ worth of expenses saved up. So take a look at your budget and find out much you should be saving. Remember, saving a little bit, even if it's just $20 a paycheck, is better than saving nothing at all.
NOT SAVING FOR RETIREMENT
With so much going on in your life right now, it can be hard to think about something that is still between 30 to 40 years away. As a result of this, many young people are putting off saving for retirement. However, this is one area where millennials aren't alone. According to CNBC, nearly half of American families have nothing saved for retirement. Here is our planning guide for saving for retirement in your 20's and your 30's.
Investing can feel like it belongs on the bottom of the list of priorities. However, it’s important to make sure that your financial portfolio is well diversified. You can learn more about investing as a college student or young adult HERE.
NOT BUILDING CREDIT
Many millennials believe the way to avoid going into debt is to not have any credit at all. While it does work, it hinders your ability to build credit over time. In turn, it can make it difficult to buy a home, lock in a good interest rate, or receive a loan down the line. Instead, apply for a card and use it to make small, daily purchases that you would make anyway and then pay it off in full each month. Here are some other ways that you can start improving your credit.
NOT HAVING GOALS
Before making any major financial decisions, you need to come up with goals. This could something like having $10,000 in savings or paying off your high interest debt. Once you hit your goal, come up with another one and then keep going. You should always have something that you are aiming for to guide you as you make financial decisions.