As much as the older generation have received flak from millennials about being less tech-savvy, we, millennials, tend to get disapproval from them for our poor knowledge on money matters. With our rapidly evolving economy, the increasing demand for people's time and money makes it a struggle for us to keep cash in our pockets.
Falling into lifestyle creep, not monitoring our transactions, and failing to invest early—these are just some of the common mistakes that millennials make with their finances. Fortunately, Ms. Gina Uy, Sun Life's Financial Advisor, eagerly shared some tips on how we can avoid mistakes that can derail our future financial stability. Read on and see some of the few common errors we make with our money, and discover how to correct them—or, even better, avoid them entirely.
1. Not cutting unnecessary expenses. Whether you're an old or young millennial, most of us aren't just providing for ourselves—some of us are making a living to support our siblings or parents while sustaining our personal needs as well. If you're having a hard time budgeting your income and finding yourself without any savings, here's a tip from Uy: "Find better opportunities for your income and cut some unnecessary expenses—gadgets, travel, expensive food, or vices—so that you'll be able to save more than you spend," she says.
2. Relying heavily on parents for financial decisions and provision. This might be more applicable to young millennials who are just starting out in the work force, but this also applies to some older millennials who still haven't achieved financial independence. "Millenials think their parents can always be there to provide for them. That's a big no-no," Gina says. Keep in mind that your parents won't be around forever, and, at some point, you'd have to make financial decisions on your own. So it's better to start getting used to it as early as now.
3. Not living within your means. Yes, you probably want to impress that person with your new bag or pepper your Instagram feed with flatlays. Fast-forward to a few years from now, however, would you think that expensive bag or those gadgets were really necessary when you need to settle down or you find yourself in an emergency situation that'll require you to shell out a huge amount of cash?
4. The YOLO life. This is probably one of the most famous mottos of our generation today: "You only live once." Millennials earn to travel, party with their friends, etc. because they "deserve" happiness. They wait for payday after payday just to repeat the whole cycle. They feel like they always have to take a break from work and have fun, but sometimes they forget that their savings always suffer as they do this.
5. Not seeking financial advice. According to Uy, money matters are quite a taboo, especially to millennials. "Sometimes, they're ashamed to talk about it or let other people know that they're having difficulties with their finances. Hence, they don't really seek advice; thus, they don't really know what to do with it either," she says. "They tend to spend their money or just keep it in their homes or banks, which is financially unproductive because that doesn't make your money grow. Lumiliit lang ang value ng naipon na money because of inflation. So, yes, P1,000 might sound big before, pero if P1,000 pa rin yan in 5 years time, ano'ng value na niyan, 'di ba? Ano'ng mabibili mo sa P1,000 dati, at ano na lang and mabibili mo ngayon? It can make a huge difference!" she says.
6. No experience, no confidence. Since most millennials are not knowledgeable about their money, they're also afraid to do some financial risks that might help them grow their money, or they don't have the confidence in people who were trained to help them do so. "If we have doctors, engineers, architects, we also have fund managers. Financially helping you is their profession and their expertise. Learn to trust them if they give you an advice on how you can earn more. But also be aware about the certain risks you should be willing to take," Uy shares.
7. Waiting too long before investing. "Millennials often think they need millions before they can invest. Nope. You can always start somewhere then expand and grow," Gina says. It' just like doing business—open one branch then franchise. Saving isn't a one-time thing, you're always saving—just like how you're always working. You wont stop working to earn, so you shouldn't also stop saving or investing. It's forever, just like your expenses."
8. "I'm still too young." Oftentimes, we feel like we're still too young to start saving or investing. "We usually think that it's only something we do when we're already in our 30s and beyond, but just think of it: if you start saving at age 20, consider how much your retirement would be? Whereas if you start saving at 40, you'll only have 20 years left, unless you don't plan to retire or you cannot retire because your savings aren't enough," Uy says. "When's the right time to plant a tree? Now. When's the best time to plant a tree? 20 years ago."
In our world where nothing's ever free, it's never easy managing our finances and making it grow, especially when everyday is a financial battle. Being discerning between spending for what we need and what we want can spell the difference between financial stability and financial chaos. We believe with the right mindset and enough self-control, we'd be able to manage our finances like we should!
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Banner photography by Fabian Blank via Unsplash. GIFs from GIPHY.