The road to financial freedom can be challenging no matter what generation you belong to. Especially for the generation of millennials who often seem to have a reputation of not being financially wise to older generations, financial independence may seem like something that is difficult to achieve.
However, with the right knowledge and avoiding these errors that can lead to financial blunders, a millennial can pave the way to his financial success. It’s actually a no-brainer.
Here are 5 Mistakes Millennials Must Avoid in Order to Achieve Financial Success:
Neglecting Insurance
Being young makes us feel invincible. Being in the 20s and 30s makes us feel healthy, and can make us think nothing can go wrong healthwise. However, this thinking can take a toll on one’s finances. Medical emergencies can be expensive which can badly affect one’s financial status. What’s even worse is when we need to even get a loan in order to pay for hospital bills. Accidents happen, and if disaster hits you, it can be more devastating to leave your family without any life insurance.
Be a wise millennial. Get health insurance and a good life insurance policy. You’ll be thankful that you did.
Not Saving Early for Retirement
Retirement seems to be light years away for millennials. How many years does it take until they retire? 30 years?
It may seem like there is still much time to save for retirement, however, it can be extremely costly if you save up for it later. According to results of a poll conducted among retirees, 39% regret not starting to save retirement funds sooner and 63% advised to save as soon as they can.
Save now so you can enjoy later.
Not Investing Enough
According to a report by Financial Finesse, Millennials have a tendency to have less knowledge in investments. They actually are likely to be more cautious in investing their hard-earned income.
However, being overly cautious in investing may not be a wise decision in the long run. Even small investments can help and can bring significant returns before they reach the age of retirement.
Too many Loans
It may seem okay to take on a lot of debts when you’ve got a lot of time in your hands to pay for it. However, this “easy go lucky” attitude can hurt your finances really bad. There is easy access to credit cards and there are a lot of loan companies that offer easy payments for low percentage rates. However, when these loans get accumulated, a millennial may get caught up with paying the debt over debt which is a financial trap. Especially with all the new technology and luxuries, millennials tend to satisfy their pleasure while accumulating a lot of bad debts. While it is necessary to take a break once in a while and reward yourself for hard work, loaning money to buy something that depreciates is never a wise idea. Learn more about good debts, and eliminate bad debts.
Not Taking Care of their Credit Reputation
A credit reputation is a public record of a borrower’s payment behavior. Many millennials are not aware of how important this is. Moreover, due to rising costs and accumulation of debts, one’s credit reputation can be negatively affected. It is essential to always check one’s credit report or credit score so as to be aware and be able to make necessary fixes to improve one’s credit reputation.
Being a millennial is not a challenge to financial freedom. In fact, being a millennial is actually a great advantage as there are many years ahead to save up, invest and make wise financial decisions. Avoid these mistakes to set out a path to financial success.
