5 Stupid Financial Mistakes All Millennials Are Prone To Making
Dealing with money is rough, and after watching the world go through wars, a recession and a housing crisis, you’re rightfully scared and downright confused.
Millennials who are single and starting their careers generally aren’t risk-takers when it comes to money, which is a good thing, but you’re still making plenty of financial mistakes that could end up costing you later on in life.
Here are the top mistakes Generation Y keeps making and how you can address them ASAP.
1. Falling into the trap of bank fees
Fees seem inevitable. You’re always on the move and you can’t find your bank’s ATM so there’s a fee. You didn’t keep a close eye on your balance so you got hit with an overdraft fee. It may not seem like much, but these fees add up! In 2013, banks and credit unions earned $32 billions from over draft feeds alone.
The fix: Open up an account for BankMobile after downloading their app. The mobile bank caters to millennials and is revolutionary in the fact that it has no branches. You can open up an account from home on your phone, and it’s the first bank to have absolutely no fees. They also have higher savings rates than the largest four banks.
2. No budget
Thinking about sitting down and actually working out how much money is coming and where it’s going seems daunting and depressing. But creating a budget is necessary because it’s easy to overlook ways you’re mishandling money—money that could actually be going to a savings account!
The fix: Start using Mint. You’ve probably been hearing about it everywhere and just never got around to it, but it’s time. This app is free, it makes paying bills easy, and it helps you create your budget and come up with goals like reaching a certain amount in emergency savings or retirement.
3. Taking out large loans no matter the degree
It’d be nice if you could go to pay off student loans with no problem, but times have changed. When you’re selecting a college, keep in mind which field you might want to be in and take into account how much it pays. If you end up taking large loans to go to a private school to study something that isn’t known to be profitable, then you could be setting yourself up for major financial ruin.
The fix: Financial expert, Ellie Kay tells Main St. “Getting into to more than $30,000 in student loan debt in a profession that pays less than six-figures a year is a huge mistake.” You should try to cut costs by going to a state school instead of a private college and always keep a part-time job.
4. Not having an emergency fund
Chances are, you don’t have an emergency fund since millennials are the least likely to build up one. You might assume that you can’t because you’re too broke, meaning you’re a part of the 37 percent of Americans who claim the same thing. It seems pretty hopeless, so what can you do?
The fix: Don’t rule this out until you budget first. Emergency funds help give you a back up plan if something happens to your health, job and more. If you can make cuts anywhere to afford setting aside something from each paycheck then do it!
5. Skimping on insurance
Princeton Survey Research Associates International’s survey found that millennials are the least likely to get health insurance. This really is just asking for trouble, and since you have to pay if you aren’t covered you might as well go for it.
The fix: Yes, it is another thing to put on your list, but you will be thankful. Get a set of prices on health care online. Being insured means you won’t want to drain your emergency fund if something happens.