Posted By 
By Noel Gonzales
Millennials have many opportunities in their hands today. With their skills and talent, they can earn more and do more with their lives. However exciting this is, it also becomes quite a challenging task for millennials to use wisely what they have.
Today’s trends on consumerism entice people to buy and spend more when they earn more, and this is where the trap of debt begins. Aside from this, here are five other common financial mistakes that millennials are making:
1.) Millennials don’t invest in the stock market or other financial markets
Millennials are tech-savvy, and most own a smartphone. Hence, investing in the stock market is not difficult to do nowadays. However, a lot of people, including millennials, still consider traditional savings as the way to go; they’re unaware that stocks grow more income than savings.
If you’re confused with how to start, you can take advantage of online resources and tools that can do the following:
- Teach the basics of financial markets and investing.
- Maximize your income, like a great position size calculator, that decides the estimated amount of currency units to buy or sell.
In investing, the younger you start, the better. If you start early, you’d surely thank your young and smart self 10 years from now.
2.) Millennials don’t invest in health insurance
Health insurance is a good investment for your future, as you have a shield that covers all your costs in the event of any health issues. Remember, health is your greatest asset. Illness can be very expensive, but when you have health insurance, your expenses are covered and you can focus on recovering.
There are now easy payment plans on health insurance, depending on your salary. You’ll be surprised to know that paying your insurance premiums can cost you less than the money you spend on your daily coffee run.
3.) Millennials don’t have an emergency fund
As a millennial, you’re at the top of your health and age. Hence, you forego saving for an emergency fund. An emergency fund refers to money set aside to cover:
- Emergency travel, such as when you need to go home because a family member died
- Home repairs after a natural disaster
- Sudden job loss
You should have at least three to six months’ worth of your monthly expenses as savings for emergencies. For example, if you spend a total of 500 USD every month to cover living expenses, home loan, etc., 3000 USD should be your emergency fund.
4.) Millennials don’t write a monthly budget
Not writing down a monthly budget is a mistake that can lead you to overspend. When you write your budget down, you can visualize it better and stick to it; hence, you know where and how to allocate your money efficiently.
If you don’t like writing, you take advantage of tools and apps instead to help you, such as:
- Budgeting apps
- A fantastic home loan calculator
- Expenses tracker
- Bills payment manager
You can find these online or download them.
5.) Millennials rely too much on credit cards
Your credit card is not entirely harmful. If you manage your expenses properly, you can earn benefits such as cash rebates, points that you can use to pay bills, and free trips.
The problem arises when you use your credit card as your magic card to purchase things when you’re broke and it’s not yet payday. You buy something expensive, thinking that you can pay it anyway but, in reality, you can’t. The rule of thumb is never charge anything on your card today that you can’t pay in full tomorrow.
Conclusion
If you’re making these mistakes, it’s not yet late to start making changes. No matter how much or how little you earn, everything boils down to proper finance management. Balance and prioritize, and at the end of every day, make sure you always have a little bit of cash left to save.
Noel Gonzales is a forex broker who has helped investors make the most out of their currency trading. His training and experience in the industry equipped him to write articles for Learn To Trade. Noel uses his pieces to educate his readers about the benefits of forex trading and how they can start on the right foot. He also makes sure that his articles are suitable to different kinds of readers: from newbies to experts in forex trading. When Noel is not writing, he often cooks meals for his friends and family.
