Financial Blog

If the Baby Boomers (and every generation before them) did everything to save their money, the millennials keep on discovering new (and innovative) ways and reasons to spend theirs.

A 2016 Harris poll shows that almost 80% of millennials do not invest in the stock market. The primary culprits: lack of money and ignorance. Over 40% of respondents said they don’t have enough money to invest while 34% state that they don’t even know how investing works.

Some would say that millennials were born with something called ‘Peter Pan Syndrome.’ They’re too busy living in the now with their ‘happy thoughts’ that they forget to grow up and prepare for the future, especially from a financial perspective. If you’re twenty-something and haven’t been paying attention to your finances, then you should (really, seriously) watch out for these money mistakes.

You cannot simply wake up from debt like you can from a bad dream. When ignored, debt can turn your life into a living nightmare and just like a real nightmare, it will keep you up at night.

It’s best to manage your debts—to create a budget and a payment scheme—before it fully drowns your finances. Begin by making a list of all positive and negative cash flows followed by all your accrued debt, and then arrange them in order of importance. Start ticking off your debt list one at a time. Remember, the biggest ones aren’t always top priority. Classify them in terms of interest, risk, and the penalty fees of paying late.

Despite economic turmoil from Brexit headwinds, investing remains the single most effective method of building wealth. But even the most hardworking and frugal millennials would often brush off investing. Wake up kid! Living in the now doesn’t apply to money, not if you want to be financially independent at least.

A lot of investment options are available depending on your risk appetite. One of the best options if you’re just starting out are UITFs (Unit Investment Trust Funds). If you don’t have the time to monitor your portfolio and have very little knowledge about the stock market, then it might be worth checking this out.

Emergencies can happen anytime, anywhere so it’s important to keep a fund dedicated to expensive albeit fortuitous events like natural disasters, medical situations, economic unrest, or even unemployment. Treat this as a way of avoiding any more debts.

Keep your emergency fund in a separate account to avoid confusing it with other expenses like your next trip to the mall or your next vacation.

And yes, we mean your credit card. Those nifty little cards of happiness may be convenient and a god-send on most days, but it can also dig your financial grave when used without discipline.

Read more: I Can’t Pay My Credit Card Bill—What Now?

If you’re strapped for cash, avoid big ticket items and don’t forget to factor in your credit card payments in your monthly budget. Get a card that suits your lifestyle, preferably one that matches your saving and spending habits.

Clearance sale? Seat sale? 50% off? Should you give in to these very tempting offers? Probably, probably not—it really depends on your cash flow and how much you have in reserve. But you should always avoid buyer’s remorse– that is– buying something expensive only to realize that you don’t actually need it.

Trust us, you wouldn’t want to live like a king one day and then barely scrape through until your next paycheck. The rule of thumb is to avoid overspending: live within or below your means and save at least 30% of your cash inflow. Don’t worry, those new Mambas or Gucci bags can wait ’til December.