Being a millennial is like really, really, super hard in 2018. You have student loans, car payments, only a 401K, IRA or Roth to fall back on and that’s if you have money to invest in it. Some millennials have a mortgage to take care of, or kids and parents that that are starting to get older. In my opinion, it’s all a crazy mess! I can’t tell you the number of friends or acquaintances I’ve come across that don’t invest in their retirement fund because they are just trying to keep up with their bills. I also have friends that are frugal and just don’t believe in investing because they don’t trust the government or their employer with their money.
Either way, it's safe to say, that for the millennial generation, wealth accumulation is no small fleet. As someone who is literally in their 30’s and has a child and a husband, I can cosign on that and say it takes a lot of discipline to be able to save and invest your money. Luckily for me all irresponsible decisions, I’ve made with my money in my 20’s has paved the way for smart thinking and rationalization in my 30’s. I’m no expert, but the mistakes I’ve made are not going to happen again because I’ve experienced the painful regret that comes with splurging and not having any plans with a lot of money. My last bonus, I spent it on a purse, jacket and bracelet, which I lost the $300 + bracelet by the way. It’s probably somewhere in that vineyard my husband and I went to for our anniversary weekend.
The issue is that most millennials live in the world of the have’s and have nots. It’s hard to escape the bombardment of social media and people glamorizing their lifestyles. I admit one day even I had to log off because the person I was following on Instagram at the time, made my life look like poor woman’s tale. No wonder people don’t save their money, they are too busy competing with perception instead of reality. My only drive in life is to be in a place where financial freedom can grace me and I don’t have to answer to a boss and wake up early to sit in traffic for 40 minutes. I mean I spend so much time commuting, only to be away from my son and husband most of the week. The point is that it is hard out here in these streets, but you have to stay focused and most of all disciplined to accomplish these goals. I’ve come along way from learning what to do and what not to do like so many others. I take the great advice from my favorite blogger Sam, from Financial Samurai. He breaks down the issues we have about money and what we can do about it. However it doesn’t change the fact that most of us are still making them. Due to this, I've come up with a small list of mistakes made by the average millennial based on some research. I think based on these we can learn a thing or two.
5 Mistakes Made by Millennials
1. Not paying attention to debt accumulation
It’s very easy to put coffees, dinners, and night clubs on a credit card. What’s not easy, is paying it off. I can’t tell you the number of times, I look at a credit card statement and said "how did I get here?" It’s important to set boundaries with yourself. One thing that really helped me was knowing that I would never charge as much as I didn’t have in my savings. So in case the world ended and I didn’t need my savings again, I would simply pay it off and die debt free. Sounds dramatic but you get the point!
2. Not budgeting your fun
Have you ever heard the coined phrase “Ball on a Budget”. So true and so relevant. Why do we keep finding ourselves here, when we know we should have saved and budgeted for that trip or that new purse or car or whatever else it may be. I like to say if you don’t plan to succeed, you plan to fail. Also think about how fun it would be to not add something that was planned to your credit card.
3. Living outside your means
I can’t tell you how many people think when they make a little more money they actually go out and double their debt. People get promotions or higher paying jobs and they convince themselves they should be eating steak every night or hitting up the luxury stores. Trust me I’m guilty of this! I remember when I made manager, I literally went to Tiffany’s, Burberry and Louis Vuitton all in one day. So dumb and irresponsible, the only thing that saved me is I had the money, but that money could have been saved or better invested. I mean at the time, Spotify had just come out with a brand-new IPO trading at around $150 per share. Now they are averaging $180 almost 1 year later. Ahh the mistakes, the mistakes! The point is the more money you make, the more you have to keep up with the lifestyle. Wouldn’t it be better to live below your means and know you have money to actually enjoy yourself comfortably and save to invest later?
4. Going out too much and spending too much money
There is a such thing as going out too much when it comes to spending too much money every time you do it. Pick things that are free or inexpensive to do. I mean why are we focused on popping bottles every weekend anyways, when most of us have student loans and no retirement funds. I remember a girlfriend of mine wrote a rather funny post one day as a PSA announcement. It literally said “Please do not call or text me about going out, I’m am not rich and I don’t have money to do this all the time…” She said a lot more, but you get the point. She was tired of spending her hard-earned cash every weekend and felt that it was getting to expensive. In our generation, most of us don’t have the cash flow to do the simple things like save, invest and live comfortably.
5. Not saving and investing enough
A lot of people put the saving and investing on the back burner and make excuses. However, they still spend their money anyways. I find it interesting when people say they can’t afford to contribute to their 401K, but they have a BMW. No judgement here, just make sure to balance out those expenses with some savings too. You never know what type of rainy day you will have. I mean when you have savings it doesn't hurt as much as when you adding those unplanned expenses to a credit card instead.
After going through much more than five mistakes with money, it was time to actually put my money where my mouth is. I felt strong about my need to control what I did with my money towards the tail end of my 20’s. I started looking at the world a little differently because as I got dragged through the mud of Corporate America, it made me realize why are we working for things. Wouldn’t it better to work for passive income? I want financial freedom so bad in my 30’s, I can taste it. Always ask yourself what do you really want to do for your money? Do you want to work for money or do you want money to work for you?
Author's Bio: The Lioness is a financial blogger based in the Midwest. After spending most of her career in accounting, she decided to leap into the world of small business, investing and savings. As she is on this journey of juggling both her career and small business, she wanted to share what she is learning along the way, as she builds her passive income.