Our millennial cohort is known for being well educated, tech savvy and conscious of health, social and environmental issues. Fantastic traits to have, I’m sure you’ll agree. However, there’s something that we’re constantly criticised for as a generation — and that’s our money management. We’re known for blowing our money on luxuries, not saving for the future and hopping from job to job. Forbes contests these points, and it’s true that you can’t necessarily stereotype an entire generation (especially one as large as millennials). However there are some trends which we know are true, and looking at the stats, here are some of the mistakes we as millennials are making with money.
We’re not utilising credit in the right way
As millennials, most of us experienced the recession in early adulthood — and saw just how much devastation borrowing incorrectly had on the economy. For this reason, many have been scared off using credit completely. While borrowing as a way to live beyond your means is of course something to be avoided, credit can be used to your advantage. For example, taking out a credit card and not carrying a high balance each month will mean you’re not paying loads of interest but building up a good credit score. This can come in useful for essential purchases later on, such as getting a mortgage for a house, or finance for a car.
We’re not buying as many homes
Speaking of houses, this is another thing that millennials tend to do ‘wrong’. However, in many cases it simply can’t be helped, with a high price of living, low wages and things like zero-hour contracts, it can be incredibly difficult for lots of millennials to ever get a foot onto the property ladder. However, things are now improving. The economy has picked up since the recession, and the Government have created lots of schemes that can help first-time buyers. If you’re able to, it’s always worth buying a home. It prevents you from wasting money on rent, as every mortgage payment goes towards something you will later own outright. It gives you more stability both now and later on. Companies like Key, for example, allow you to utilise equity in your home when you want or need money for other things.
We’re not driving until later (if at all)
Coming back to driving, this is another thing that we as millennials are doing less. Again, the high cost of living can be blamed here, but another reason is that as a generation we tend to like living in cities. In cities you of course have good transport links, and so the need to drive is reduced. However, it’s a skill that everyone should aim to have. If you’re offered a job further out, you might only be able to take it if you can drive. Later down the line, you might prefer to move out of the city into a home that’s less expensive. Having a license could well improve your financial situation in a number of ways.