Millennial Money Mistakes
It is in our 20s and 30s that money management is easiest because we are just starting out. We pay the basic rent, car payment, insurance, and food.
We usually have enough left to invest wisely, most times in a 401(k) plan that may or may not be met by our employers. However, there are also basic mistakes we all make managing our money.
Money management isn’t an exact science. There are so many ways to invest our money, that we are paralyzed by confusion.
Add to those the three mistakes everyone makes with their money, and you have a group of people with no way to finance their retirement.
1. Not Having A Clue
Youth is all about discovery. It’s all about having the latest shiny new toys. It’s about trying new things, getting new jobs, living in the greatest apartments, driving the latest and greatest new cars.
Youth hangs out at Starbucks, and eats at the local bistro. All these things take money, and youth reaches its 30s with no idea how their money disappeared.
Making a plan and a budget is vital to avoiding this mistake. Planning for retirement needs to begin in the 20s.
Set a goal, save for it, and invest wisely for it. The melt-down in 2008 made fear of investing understandable. However, it only takes a few dollars to begin to make money for the long haul.
Set aside ten to twenty dollars each week for investments. It really is that simple to begin investing.
2. Not Mastering Cash Flow
Making a budget is not fun. It’s sobering to see the income in one column and the outflow in another. Going through receipts is also confusing.
Did you really eat out that much last week? Did you really pay that much for that fashionable winter coat? Surely you didn’t need those new Jimmy Choo shoes?
Keep your receipts for one week. If the outflow column of your budget creeps too close to the income column, then cut a few things. Cash lying around puts gas in the car and buys medicine when you fall ill.
Buy two pizzas and freeze one for later consumption. You can get the same winter coat at thrift stores (sometimes with the tags still on it.) You get the idea.
3. Investing Properly
Once the first two mistakes are corrected, the third will come easily. It doesn’t matter if you’re making millennial money mistakes or any age money mistakes.
If you have a plan and a budget and can track your spending, then investing becomes simple.
A comparison of stock brokers will tell you minimum balances (most are zero,) brokerage fees (most are less than ten dollars,) and any special offers. All of them are top-name, gilt-edged traders. You will feel secure knowing they’re the best.
If you don’t know in what to invest, think about your life. Do you drive a car? Do you eat?
The clothing you wear, the electronics you use, the companies that produce the natural remedies you use are all wise investments.
Also consider natural resources such as natural gas, coal, and precious minerals. Those are solid investments with a good return on investment. Begin with those, and grow as time goes on.
One thing you want to avoid is shiny new toys in investments such as day trading. Day trading is simply gambling dressed up as a legitimate pursuit.
Playing the lottery would lose you much the same amount of money. Make sure your investments are legitimate.