COMMON FINANCIAL MISHAPS COMMITTED BY MILLENNIALS
Millennials, believe it or not, you are committing the following mistakes when handling your finances. Stop whatever you are doing and read this article.
Not optimizing free money. We are talking about free money opportunities. Take for instance your employer’s 401(k) matching contribution. Majority of companies will match dollar-for-dollar their employee’s contribution up to a certain level. Unfortunately, not all millennials maximize this benefit.
A recent Vanguard report revealed approximately one-third of 401(k) plan participants contribute below their plan-specific employer match level. Remember, the free money you left on the table could pile up to tens of thousands of dollars in missed retirement savings.
Ignoring the fundamental money equation. What is the basic money equation? The frugality equality. In essence, it entails living within or below your means that goes like this: Income - Expenses = Savings. Many of you focus on lowering expenses, but do not consider the income portion of the equation.
Young professionals, you have greater potential to earn more money because you are healthier and tech savvy, unlike other generations. You also understand the digital economy. Do everything possible to maximize your income. That way, you can save more money over time and enlarge your retirement fund.
Failing to grasp the significance of time and money. Time and money are correlated. Time is the greatest driver of wealth because compound interest does wonders in the long run. But, millennials often ignore this fact.
Practice delayed gratification. Save every penny possible during your early years. For instance, you save $264 in a year. If done consistently for 10 years, you will have $2,640 in your savings. That’s a lot of money!
Being allergic to risks. Millennials have witnessed two financial crises: the dot-com bust and the Great Recession. These two crises affected their mindset, as they fear investing in stocks. However, stocks in general are one of the best assets to choose for long-term growth, especially if one seeks to bolster their retirement fund.
Take advantage of your age and focus on long-term growth. Allocate a bigger portion of your portfolios in stocks or you will come up short when it comes to retiring. It is a long way off, but do it now, anyway.
Falling into the "Millennial Trap". Stop believing all millennials are doing poorly. On the other hand, most young professionals are addressing these issues and making great progress. Others are doing well.
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