Millennial Money Mistakes (And Tips To Avoid Them)
Over the last month or so, I’ve created a list of "Ten Common Money Mistakes Millennials Make" and posted them to our Facebook Page found here. I’ve decided to summarize them in series of blog posts just so everyone can see them in one spot. The list in is no particular order of importance, but I feel they do all need to be addressed or considered. I’ll post the first five mistakes this week and the remainder next week.
Millennial Money Mistake #1 – Not Saving Regularly
Ask anyone older than you for their number one money regret and they will all answer the same – “I wish I started earlier”. Fellow Millennials, it’s time to start that habit now. For as little as $50 a month, we can help you open a Tax-Free Savings Account that is out of sight and out of mind, so you won’t spend it on the next shiny thing you see. First, focus on a solid emergency fund, then you can decide whether a house or retirement is more important and we go from there. If you don’t start saving, you won’t have a pretty house or a pretty retirement.
Millennial Money Mistake #2 – Carrying a Credit Card Balance
I’m going to have to be blunt here: Credit card debt is dumb. You might as well flush your hard earned dollars down the drain. If you have credit card debt, let’s work together to formulate a plan to pay them off and make a promise to change behaviour to never have to rely on them again!
Bonus: Once you’re debt is gone, you’ll suddenly have some extra cash flow – How cool is that? It's like getting a raise at work!
Millennial Money Mistake #3 – Not Tracking Expenses
Budget… Financial experts say you need one, but the amount of work scares most people away. Here is my compromise – just track your expenses. Get an app on your phone, or use paper and pen and just start writing down where your money is going. You can’t change a bad habit if you don’t know you have one! So here’s your challenge: Track your expenses next week from Monday to Monday. You may find the results interesting. (Feel free to share with me…I’ll share back!)
Millennial Money Mistake #4 – Postponing Retirement Planning
“But I have 30 years to save!!!” Sure, sure…and next year it’ll be “But I have 29 years to save” and so on and so forth. Remember mistake #1 was not saving at all? Well, hopefully you’ve considered acting on that and putting away $50 a month because in a few months once you are comfortable with that, you need to start doing the same for a retirement fund. Group benefits at work are changing! The government benefits keep changing! Eventually, the only thing we can rely on what we do ourselves – so we better do something.
Millennial Money Mistake #5 – Not Getting Insurance When You’re Young and Healthy
Insurance isn’t sexy and insurance isn’t fun. No one wants to think about their own mortality. But one thing you have to consider is that as you age, generally your health decreases. Insurance companies know this, so as a result, as you age, premiums increase! That’s right, the younger you are the better the rate you get!
Here’s a prime example: Last week we had a newly wed couple come in for insurance. The husband was issued insurance, but because he had high cholesterol, the insurance company added a note that they wouldn’t issue any more coverage than what was applied for. What does this mean? If they waited until they had kids, the husband may not have been able to get life insurance at all…and that would suck!
That concludes the first five mistakes on the list and we’ll follow up with the final five next week. Planning for your future begins with a few financial goals and a few small steps towards those goals. By taking action on the above five concepts, you can avoid some of the mistakes the average Millennial is making.