7 Mistakes Millennials Unconsciously Make When It Comes To Money Saving
Are you one of the 92 million Millennials in the US? If yes, have you started saving your money yet?
Millennials are often being mocked for being the generation that is lazy and entitled. They say that we’re more of a spender than of a saver. They say we’re spending more than what we’re earning. That is what some people say, but we are not big spenders. A survey from Bankrate found that Millennials are saving more than any other age group and the most comfortable with their financial situation.
In the 2016 survey, it states that they are saving more than 10% of their income increased to 28%, compared with 24% a year ago. Yet, the Millenials have saving problem and here are some of unconsciously made mistake, why savings goals cannot be met.
Having the “I’ll do it later” attitude
Let’s admit it. We always like to put things off last minute. We always think that we all have the time to do it, when in fact we don’t. This is applicable to the way we save our money. We wanted to start saving, but we don’t know when to start. If we were asked if we’ve already started saving, we would usually say that they will just do it later or tomorrow or next month, a year after and so forth.
Millennials 18-34, in fact, are significantly more likely than seniors ages 55 or older to forget what day it is (15% vs. 7%), where they put their keys (14% vs. 8%), forget to bring their lunch (9% vs. 3%) or even to take a bath or shower (6% vs. 2%). Once we’re thinking of something, we frequently forget about it. If you have this kind of attitude, you will end up not saving money until you’ve already reached your 40s.
Not paying their debt
If there’s one important thing that Millennials should consider before saving their money, it should be about paying their debt. If you’re already saving, but you’re still in debt, the money that you have is not the actual money that you are saving. It’s better to pay all your debts before starting saving money for the future. Why? It’s because there might be a chance that the interest on your debts became higher. If you find that you do have debt, start putting as much payments towards them as possible. The larger your payments are, the faster you will dig yourself out of your hole.
Make a budget plan but not sticking to it
This is the reason why they couldn’t spend their money wisely. They do have a budget plan and made a list of things that they need to buy, but in the end, they always forget that they had one. Having a budget plan ensures that you will always have enough money for the things you need and the things that are important to you.
Budget plans might be a very old school practice, but following it won’t hurt you. Do you know what will hurt you? It’s when you check your credit card and the amount of money left is lesser than the price of the rent for your apartment.
They are not committed
Not being committed when it comes to saving your money will affect the amount of money that you could save. There are commitment strategies that you can use to save money. First, you need to set a goal. The more specific you can be when setting a goal, the more likely you are to reach that goal. Second, you need to set a date if when will you start saving. You need to prepare yourself before you start saving your money. Do want to know a tip? You can start saving right after you’ve fully-paid your debts.
Challenges themselves then quit
Millennials usually love to be challenged. They are unafraid to challenge the status quo of the world of work. But, if they’re already halfway there, sometimes, they’ll eventually stop. Not because we’re lazy but because we’re just tired of doing the same routine. The technique here is you should research for new ways where you can effectively save your money. You can ask someone who’s good in saving their money and get a bit of advices from her/him. You can incorporate it to yourself and if you’re comfortable with their ways, that’s a good sign.
They spend before saving
Warren Buffet once said, “Do not save what is left after spending, but spend what is left after saving.” This is true. Why? It’s because if you will not save your money before you start buying things for yourself, you might end up spending all your money without even knowing it. One of the consequences of not saving before they spend, consumers spend anywhere between five percent and 20 percent of their income on interest.
If you will spend before saving your money, there will be a possibility that you end up borrowing from other people so you will still have money that you could save. Yes, you’ve saved your money, but how about the money you just borrowed? Do yourself a favor, save your money before you spend it.
Always make impulse purchases
We don’t think before we buy. Whenever we saw something that caught our attention, we ended up buying it without even considering whether we could really use it or not. There are ways where we can beat the urge to spend. What are these? a) don’t go to the mall, b) don’t go to online retail sites, c) plan your purchases, and lastly d) keep your saving goals in mind.
Millennials know the importance of money saving, but the thing is, they aren’t aware that there are mistakes that they’re actually doing while they’re in the process of saving their money. There might a lot of misconceptions if you will talk about Millennials. It’s hard to live in an expectation that it’s easier to live today because of the advancements of technology but these innovations might somehow not helpful to them.
The moment you go online, you will be seeing a lot of promotional advertisements. There are a lot of posts about the sales, discounts, and some other things that could trigger the spending capacity of the Millennials. Millennials can save money, it’s just they’re not aware of the mistakes that they’re unconsciously been doing over the years.
When it comes to financial goals, which are the top priority for everyday consumers? LendEDU has conducted a survey of 1,000 adult Americans to answer this very question. Click here to learn the results and see what percentage you fell into.
Post written by Donna Estrada who is an editor for Scoopfed. She is a happy-go-lucky millennial and a young professional at the same time. She spends her time reading books, blogs, traveling, and sometimes writes contents for Aviv Movers.