Budgeting Mistakes Millennials Often Make in Their 20s
Are you a millennial looking to get your finances in order? If so, that’s great. In fact, according to a recent study, 61% of millennials say they worry about money every day. one of the best ways to combat these money worries is to create (and stick to) a budget. However, even with the best intentions, budgeting can be tricky – especially for those just starting out and looking for ways to start investing in top gold iras. To help you avoid some common mistakes, we’ve put together a list of budgeting no-nos that millennials often make in their 20s. So take a look and see if any of these sound familiar; then, pledge to steer clear of them in the future.
Not Having a Long-Term Goal
Many millennials focus on short-term goals when it comes to budgeting. Sure, it’s great to buy that new outfit or go out to eat with friends – but what about saving for retirement or a down payment on a house? Too often, millennials overlook long-term financial security in favor of short-term gratification. To ensure you’re budgeting for the future, set long-term goals and adjust your budget to put money aside regularly.
Not Tracking Spending
It’s easy to swipe a card or pay with cash without really thinking about it. But if you don’t track your spending, it can add up quickly and leave you with little left in the bank. To stay on track, make a habit of writing down every purchase – even the small ones like coffee or that snack you get at the convenience store. This will help you stay within your budget and keep an eye on where your money is going. You can even use a budgeting app to make tracking easier.
Spending Too Much on ‘Fun’ Money
We all need to treat ourselves from time to time, but if you’re constantly spending more than you can afford on ‘fun’ money – like going out to eat or shopping for clothes – it’s easy to get into a dangerous cycle of overspending. Setting aside a small amount of money each month that you can use for ‘fun’ activities and not being tempted to go over it are actually the best move to ensure you stick to your budget. In fact, there is an app called Qapital that even encourages you to save by giving you fun challenges and rewards.
Not Having an Emergency Fund
Life is full of surprises, both good and bad. It’s essential to have an emergency fund for those unexpected expenses, or you may call it, a ‘worst case scenario.’ To avoid getting into debt when the inevitable happens, make sure you set aside at least 3-6 months’ worth of living expenses in an easily accessible bank account. This way, if things turn for the worse, you will have a safety net to fall back on. Not only that, but having an emergency fund can also take away a lot of the financial stress that comes along with life’s curveballs.
Sure, for some, budgeting can be tricky – especially for millennials. To make sure you stay on track and avoid the pitfalls that come with trying to take control of your finances, remember always to set long-term goals, track your spending, set aside money for fun activities and make sure to have an emergency fund. With these tips in mind, you’ll be on your way to financial success.