As millennials, most of us grew up during the recession- and while we weren’t responsible for the economic crash, research has shown that we’re making plenty of money mistakes of our own. Here are some examples, and things you should avoid to secure a brighter financial future.
Mistake 1: Renting over Buying a House
Buying a house isn’t easy. Since the recession, mortgage providers require a larger deposit, and you often need an excellent credit score just to get accepted. For years, the chance to own a home has been out of the reach of many. However, as the economy is recovering, buying a home has become a little easier. There are lots of government help to buy schemes and savings schemes for a deposit. Stamp duty has been abolished for properties that cost under a certain amount for first time buyers which can save you thousands and make the process a lot more doable. There are definitely benefits to renting, but long term it’s always best to aim to own. Later in life when your mortgage is paid off, you have somewhere to live that essentially doesn’t cost you anything. It can give you financial security, and if you desperately need access to money you have capital in your home that you could release. Even if you know it will take you many years to achieve this goal, it’s SO worth sticking with it and saving what you can.
Mistake 2: Not Learning to Drive
Research shows that less people are driving now than in past generations, and those who learn tend to do so later. There are lots of reasons for this, first of all, millennials tend to like living in and around large cities the roads are ideal for public transport but can mean heavy congestion for cars. On top of this you have companies like Uber who are able to get you around for a reasonable fee, and with so much on your doorstep (or able to be delivered right to your home) it can make driving seem a little pointless. However, it’s simply not the case and learning to drive is a skill that all of us should aim to achieve. Even if you don’t plan on owning a car right now, you might need to at some stage in the future. Maybe you get a great job offer but it requires you to drive, or perhaps you need to move a little further out which means you’ll need a vehicle to easily get around. Once you have your license you can use it whenever you want, so it makes sense to get it done and you have the flexibility to drive then if and when you need to. It can give you a lot of independence and generally make life easier, and if you’re currently spending a lot on travel and transport costs it will free up money in your budget too.
Mistake 3: Not Saving for Retirement
Research shows that the majority of millennials currently aren’t saving for retirement. It might feel like a long way off, but the trick is to start early. When you put a little away each month you barely notice it, but it can make a big difference later in life once you finish working. Unless you want to live on a meagre state pension then it’s time to do something about it. Companies like https://www.hensoncrisp.com can speak to you about your personal circumstances and tailor a savings and retirement plan that works for you.
Mistake 4: Overspending on Luxury Items
Despite the high costs of living, there’s one thing that millennials are known for and that’s overspending on luxury items. From high end tech and gadgets to fancy coffee, we dine out more than other generations and are prepared to spend more on things like artisanal products. There’s nothing wrong with enjoying the odd luxury item, when you work hard it’s these treats that can make it all feel worth it. But if you know you’re guilty of splashing out and living beyond your means then it’s time to reign it in.
Mistake 5: Not Working to a Budget
Speaking of living beyond your means, setting a budget (and sticking to it) is one of the best decisions you can make when it comes to your money. Pay your essential bills first, and only buy any extras with what you have left. Most of us tend to overspend on things like groceries, so working out what you need and shopping to a list can help. Use a price comparison site to check all of your utility bills to make sure you’re not overspending. And put a savings plan in place so you’re putting away at least a small amount of your leftover cash.
*This is a collaborative post.
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