Ways Millennials Are Sloppy With Money
Pensions. Tenure. 401Ks. Not only are these things that many millennials will never see—they’re also concepts with which many millennials aren’t even familiar. As a generation, we are so anti the 9 to 5, corporate life, the idea of working for the man, and the prospect of working a job we don’t necessarily love but that provides financial security, that we’ve lost touch with and access to many of the financial pillars that held up previous generations. Many of us cannot imagine ever owning a home and yet, most of our parents own their homes. We don’t talk about retirement—we don’t even acknowledge its existence. Retirement=death. It means being old. And we believe that 60 is the new 40 (or whatever) so that whole turning 65 and getting senior discounts thing just doesn’t resonate with us. I’m afraid that, because we have resisted the old way of doing things, we’ve become sloppy with money in many ways.
Living on a dream (aka a credit card)
I know too many millennials that bite the bait on those first year (or first two or three years) zero APR credit cards, live way beyond their means, and just hope that their circumstances change before it’s time to pay off those credit card bills and that APR kicks in.
Keeping a flimsy budget
Many of us don’t realize just how much we should be saving every month. While I don’t want to discredit those who are putting a side a few hundred bucks a month, I also must urge us all to remember that even a brief bout of unemployment, or a medical bill that eats up our deductible, could obliterate our savings in a matter of months. We need savings both for emergencies and retirement. Many of us only save enough for just one or the other.
Or not budgeting at all
“Spend as little as possible and hope for the best?” “Just sort of live and make sure my bank account is increasing not decreasing?” There are some of the “budgeting” tactics I’ve heard from many of my millennial peers.
Failing to prioritize debt
Millennials carry $1 trillion in student loan debt. Yikes. And still, I’ll see my peers who carry such tremendous debt enjoying plenty of meals at restaurants and getting rounds of shots for everyone. They aren’t prioritizing paying off their debt. If we prioritize it, we can pay it off quicker and avoid some of the interest.
Faking it ‘til we make it—financially
I can’t tell you how many individuals I know who do things like join expensive work/social clubs a-la Soho house when they cannot afford it, all with the idea, “Well I’ll meet people there who can give me high-paying opportunities.”
Chasing a dream with no backup plan
We are a generation that loves to chase dreams. And that’s good. We should try to make a living doing what we love. But we should also have solid backup plans that we’d also enjoy if it came to it. There are a lot of individuals out there who are driving for Uber or bartending while they pursue careers in standup comedy or music. So what if comedy or music doesn’t happen? They’ll drive Uber in their sixties? What about having a backup plan that would be lucrative and enjoyable?
“Investing” in crystals et al.
Can we please not spend another dollar on “healing crystals,” sessions with “Chakra healers,” or anything related to witchcraft, in the hopes it will help our financial situation? You know what would help your financial situation? If you took the $300 you were going to spend on that crystal necklace and put it in your Roth IRA.
Ignoring the existence of Roth IRAs
Speaking of Roth IRAs, we aren’t opening them enough. I will say that we are opening them, so that’s good, but we don’t have the same mentality our parents had. They saw Roth IRAs as mandatory, whereas we just pat ourselves on the back if we have them, but we don’t realize just how important they are.
Living in the city
Did you know that 88 percent of millennials live in metropolitan areas? That’s a lot of us living in some rather expensive areas, when we don’t really have the means to do so. If we were willing to live a little further away from the concert venues and gastro pubs, we could save a lot of money.
Rent, rent, rent
Less than 40 percent of millennials own homes, and we represent overall the smallest group of homebuyers out there. The truth is that, this is a tricky subject, and maybe it’s for the best some of us don’t buy homes. But, there are obviously upsides to investing in property, and many of us just don’t see it.
The Postmates craze
Can we stop it with all of the Postmates? The fact that we can use one app to get literally anything delivered to our door hasn’t helped our already lazy attitudes towards running simple errands. We have a burger delivered, then a sweater, and then a carton of milk. It adds up.
Spending too much on rent
In addition to mostly renting rather than buying, I think we spend too much on that rent. It’s advisable to spend no more than a third—and really, we should keep it at a fourth—of our income on rent. But many millennials spend nearly half of their income on rent.
Going for “likes” instead of money
Look: everyone wants to be the best, of course. If you’re a musician, you hope to be world-renown. If you’re a comedian, you hope to have a special on Netflix. There is a lot of area in between obscurity and fame where millennials can make money, but it seems we’re all too fixated on being the top one to recognize those mid-level opportunities. I know too many millennial musicians just putting out social media content, for free, hoping something goes viral, but who never reach out to a local carnival or restaurant about paid gigs.
Tempting credit card rewards
We’re all about the travel credit cards and the entertainment credit cards. They give us twice the points on things like restaurants and concerts but…we shouldn’t be eating at restaurants and going to concerts all of the time. We have student debt to pay off.
Going to festivals. Period.
We have to stop it with these multi-day music festivals, for which the admission runs somewhere in the $600 to $1,200 range. They are not “enriching” us, so we can stop that lie right now.