Even though the U.S. economy is on the rebound, Millennials are the generation left to “pick up the pieces” as they fight many major financial challenges — such as crippling student debt and minimal job opportunities.
However, according to Life Happens, a nonprofit dedicated to helping Americans gain control of their personal finances, these are not the only financial struggles this unique demographic faces.
From not developing a budget, to believing that renting – as opposed to homeownership – is the best option, there are a number of financial errors that Millennials are making. According to Life Happens, here are the top five financial mistakes Millennials are making:
- Avoiding a Budget: One of the most basic mistakes—not budgeting—can lead to living beyond your means. This puts pressure on your future financial plans and goals, even if you have a good eye for what things like groceries or car insurance usually cost.
- Misusing Credit Cards: According to a study by the credit-reporting agency Experian, Millennials are struggling to pay credit card bills on time, while also having one of the highest credit utilization rates of the four generations listed.
- Renting Forever: It’s no secret that Millennials are not active homebuyers. Homeownership is important to consider because ultimately it costs more to rent a home than to buy one in many areas. Plus, Millennials do not build equity when they rent indefinitely.
- Saving Little to Nothing for Retirement: Surprisingly, two in three Millennials intend to retire by age 65, but approximately 70 percent have not started saving for retirement, according to a 2013 survey by MainStreet.com and GfK Roper Public Affairs & Corporate Communication.
- Skipping Insurance: Getting insurance in general may seem daunting, but it’s good to consider the various types, even ones you don’t think you need at first. Life insurance is one that might not have come up yet, but there are reasons to consider it.
If you are a Millennial dealing with these financial challenges, contact Amanda Wooddell Wilhelm, a Manager at SC&H Group. She can help you get on the right path to long-term financial freedom and prosperity. We welcome you to contact Amanda here.