Everyone wants to feel in charge and at ease with their life decisions but, millennials, in particular, are caught between a rock and a hard place–not quite established as Baby Boomers and, Gen X was prior in their 20s and 30s but also not as free-willed and seemingly unconcerned as Gen Z will be eventually. Here are a few ways to reverse the common mistakes millennials are making with their money:
3. Renting A Fancy Place With No Financial Foundation
If your housing situation is costing you 50% of your income–it’s too expensive and won’t allow you the opportunity to save for a rainy day or potentially owning a property, should you choose to buy one day. Decide which amenities, utilities and add-on’s you can’t live without and rid yourself of paying for the rest to help you meet your financial goals.
2. Using Credit Cards To Purchase Luxury Items
The definition of “luxury” has shifted over the years and, instead of designer bags and fancy cars, we might consider first-world luxuries like paying for loads of premium streaming services or taking Uber XL trips to the grocery store the norm. These self-care expenses may not seem like a whole lot but, they add up in the long run. So, cut back on the big and small luxuries and credit card purchases.
1. Prioritizing Paying Student Loans Over Retirement Funds
Student loans are tough but instead of hyper-focusing on paying them right out the gate, if your interest rate is less than %6, consider paying off your debt in the long term and avoid the idea that you are running out of time. If your employer can match your 401(k) or HSA you should contribute a little to get the full match. Once that is taken care of, adding even $50 a month to your retirement savings can amount to six-figure difference years down the road.