Millennials are those who were born between 1981-1996. And at this point, they are already at the phase of adulthood. Yet, millennials are also often called the generation that can’t save money. This statement is proven by research, stating that about 69% of millennials don’t save regularly.
Why is it so hard for them to save? Is it because of their lifestyle? Or because they live in an era where everything is fast phased? Let’s find out the reason so you can avoid making the same mistakes.
It’s easy for millennials to get bored. As a result, they divert their attention to hopping into the latest trends. They buy new things they don’t even need. Following the latest trends is the leading reason why millennials can’t save.
For instance, different brands of smartphones release new models every year. If you notice, millennials are often the first ones in line to get the latest mobile phone. And even though their phones are still perfectly working, they still buy a new one to stay ‘trendy.’
Freebies, cash backs, and discounts are millennials’ most significant weaknesses. They can never say no to tempting discount offers. Indeed, discounts and promos help you reduce your expenses, but that’s only applicable if you’re only buying the things you need. It’s a different perspective when you purchase an item to get a discount.
“It’s 50% off. I might need it.” This kind of thinking is a dangerous shopping habit. Before buying anything, think about it twice. Do you need the item? Is it necessary? Can you live without it? Always limit your expenses and avoid exceeding your budget.
Let’s admit it, the prices of almost everything in the grocery store keep rising. But salaries don’t. Most millennials experience stagnant wages where their incomes don’t increase while their expenses keep adding up.
And sometimes, reducing your expenses won’t be enough. Your salary is just too low that you barely make both ends meet. There are other ways for you to earn more money. You can apply for a side hustle, start a small business, or work freelance during weekends.
If you think you can handle your finances pretty well, getting a credit card would also be wiser. You don’t have to use it all the time, only when your income is insufficient for your expenses. But be sure to pay on time to have a good credit score, which you will need if you need to file for car loans, house loans, or business loans someday.
Due to unhealthy spending habits, it’s easy for millennials to drown in debts. They use credit cards or take loans to meet their needs and buy unnecessary things. The problems start when they can no longer pay their bills on time.
Late payments for credit cards and homes can only result in growing interests. Over time, the debt will accumulate. To prevent this, you need to pay your cards and loans on time. Set a reminder on your phone, so you will not forget your due dates.
You only live once, or YOLO, as millennials call it, is living your life and enjoying it without regrets. While there’s nothing wrong with living your best life, it becomes pretty unhealthy when you start living above your means.
Shopping, eating in expensive restaurants, and traveling are some of the best things life could offer. But spending your salary on these things and not saving up will ruin your future.
Instead of planning where to spend your income every month, plan your activities ahead of time. For example, if you want to go on a vacation, give yourself at least two to three months to save up for the trip. Don’t spend all your money at once and live in poverty afterward.
Poor Financial Management
Sadly, many millennials are still unenlightened when it comes to managing finance. Most of the time, they don’t track their expenses, and they don’t find ways to reduce them. Many of them don’t have savings account too. As a result, they don’t know where their money goes and how they lost their cash.
The side effect is that they don’t get to save up, mainly because they spend their money without caution. What’s the solution for this? Set your budget, know how much your monthly expenses are, and know your limits. It will also help if you open a savings account. You can put your ‘extra’ money in the savings account to avoid spending them.
So if you’re having a hard time saving up money, you’re probably practicing one of the mentioned habits above. To resolve your problem, determine your unhealthy money handling habit and find a way to avoid it. Remember that nothing is certain. You need to save money for your future and emergency reasons.