As per the financial experts, millennials who are entering into professional life should also give priority to the financial achievements. Only earning a good money is not enough. A person who is working hard for earning should know how to save a portion of his/her income.
Most of the millennials believe in earning a lot of money and living a lavish lifestyle. They spend their perks, incentives, and dividends on their wishes. The joy and the excitement associated with these financial gains tempt them to spend the money immediately. So, these do not help to build up saving. Thus, most of the young adults don’t have remarkable savings for their future, which is considered as a deadly financial mistake.
Becoming aware of financial mistakes is important as it can help to achieve the financial goal neatly.
Some other deadly financial mistakes that often millennials commit and suffer in their lifetime are as follows:
1. Not keeping track of your expenses
Every month, you have to make payments on the basic expenditures like utility bills, gas, food costs. But, it is often seen that you spend money very casually on some of the items that are not necessary. But, at the end of the month, this puts huge pressure on your finances. So, it would be wise if you keep a track of all your expenses. If you write down your expenses on all the items for few months, then you can exercise more control on your expenses in the subsequent months. This, in fact, helps you a lot to save something on a regular basis. Moreover, if you are already into debts, this helps a lot in making regular monthly payments to your creditors.
2. Using credit cards randomly
Credit cards are often proving as the culprit for the personal debt crisis. This plastic money is very tempting and often encourages you to spend more. To get rid of this, the best way out is to completely avoid using credit cards. If you are not able to completely do away with a credit card, then minimize the number of credit cards to one.
3. Keep borrowing to pay off debt
If you think that it is fine to keep on borrowing and pay off debt, you’re again mistaken. It may apparently seem that getting a debt consolidation loan may ease off the pressure of making multiple payments to multiple creditors, but this is not true. By taking out a debt consolidation loan, you’re again liable to repay it within the stipulated time period. Thus, it is always better to manage your personal finances and take steps on your own while repaying your debts.
4. Seeking costly professional help
Young adults think, seeking professional help is the best option to get rid of financial obligation. They think it takes forever to get rid of the debt that they owe. However, this is not the fact, and if you can follow a proper budget and keep a track of your income and expenses, getting rid of the financial crisis will not take much time for you.
5. Not making small savings regularly
Make it a point to save something on a regular basis. Time and again, the virtue of regular saving has been preached by financial experts. But you forget this trait quite often. If you get a pay hike, try to save the additional money. If you can imbibe this habit, you will be able to accumulate a huge amount of saving within a very short span of time.
6. Living extravagant lifestyle
You may be a person who prefers to eat outside along with friends quite often. This creates a big hole in your pocket. Try to curb this habit and do not eat outside that much frequently. And do not shop impulsively. This will surely help you save a lot of money for the future.
7. Believing that paying the minimum amount on credit cards is fine
If you think that it is fine to pay off the minimum monthly payments only, it will take years and hundreds of dollars to pay off your debts entirely. Although there’s nothing wrong in making just the minimum monthly payment, but you must always try your best to add payments in excess of just the monthly payments so that you can become debt free sooner.
Related blog posts:
- Read about how credit card interest is charged and why it can be super hard to pay off
- Read this article to see if credit cards are worth it
8. Filing bankruptcy to solve financial problems
Many millennials think that filing bankruptcy can solve all their financial woes. You must consider the negative effects of bankruptcy before resorting to it. Bankruptcy can trash your credit score and will stay like a blotch on your credit report for the next 7-10 years. Better if you try DIY debt repayment to repay your debts Instead of filing bankruptcy.
Lastly, leading a flawless financially disciplined life has many benefits; it secures your retirement age, it builds a sense of confidence to make investments, and above all, it provides financial independence.
Author’s Bio: Amy Nickson is a web enthusiast. She completed her graduation from Oglethorpe University, Atlanta, Georgia. She works as a financial writer and she shares her expertise through her crisp and well researched articles based on money management, money saving ideas, debt, and so on. Follow https://www.facebook.com/OVLGr