Most of us millennial have problem about money. We’ve got the problem because of don’t have basic financial knowledge.
Go Banking Rates have give money traps than relate to us :-
1) Lacking A Basic Financial Education
– Most of millennials could’nt understand common sense money concept. Douglas Boneparth, co-author of ‘The Millenial Money Fix‘ and president of Bone Fide Wealth in New York City said that most of millenials haven’t really afforded themselves a basic financial education.
Financial education in school don’t give enough knowledge for millenials. But Boneparth disagree about it as millenials expose with internet and could grab resources availaible online (including yourfinancialblog).
2) SPENDING WITHOUT A PLAN
– Mostly millennial don’t plan their expenses. It make worst as in this era, we can buy anything online. It is easy as credit card give them opportunity to buy without knowing their limit.
A survey by digital banking app Varo Money found that majority of millennials check their bank balance at least once a week, but more than half rarely or never plan out monthly spending in advance.
|What Is Budget|
Jason Vitug, author of the book ‘You Only Live Once: The Roadmap to Financial Wellness and a Purposeful Life’ urge millinennials to take a more hands-on approach with their cash through a budget.
A budget is a framework to achieve goals, and by simply using your checking balance to determine what you can or can’t afford leaves off the opportunity to spend on bigger things down the road,” Vitug said.
3) Not Having Financial Goals
– Without budget it is hard to set your financial goals. Millenials need to figure what they need to do in the future. Calculate the goals will cost and create a plan to achieve them.
4) Not Figuring Out Whether A Degree Will Pay Off
– It is a big decision in millennials life. “If you’re unsure about what you want to do in the world, you probably should not leverage [your finances] significantly to find out,” he said. Instead, you might want to pursue a high-paying job that doesn’t require a college degree. Or, if you’re considering whether to go back to school, research whether an advanced degree will pay off for the career you want.
5) Taking on Too Much Student Loan Debt
-You might see the value in a college education or advanced degree, be aware that borrowing money to pay for that education might actually hurt your financial well-being.
Many say that their student loan debt has delayed them from buying a home and saving for retirement. So before taking out loans to pay for school, look into work-study programs, scholarships or a part-time job that can reduce your need for borrowing.
6) Not Caring About Your Credit
– Among millennials’ characteristics that could be hurting them financially is not caring about their credit. Millennials are less aware of their credit standing and place less importance on it than other generations, a survey by Discover found. However, it’s a mistake not to keep tabs on your credit. Your credit score matters because lenders use it when deciding whether to give you a loan or credit card, landlords might use it when deciding whether to rent you an apartment and even cellphone companies check it when deciding whether to offer you deals.
7) Thinking have time to save for retirement later
– Millennials’ saving habits could use improvement. A recent GOBankingRates survey found that millennials ages 25 to 34 are more likely than other generations to say they’re not saving for retirement because it isn’t a priority.
Thinking you have plenty of time to save for retirement later can be a mistake. For example, to save $1 million for retirement, you’d have to set aside more than twice as much each month if you started saving at 35 rather than 25 — assuming a 7 percent annual return. So don’t wait.
8) Afraid to Invest
– Millennials need to get into the habit of investing. “A common barrier for millennials is that many don’t feel they know enough to invest, which is holding them back from getting started,” said Rich Hagen, president of online trading platform Ally Invest.
You might be afraid you’ll lose your money in the stock market, but you’re putting yourself at a bigger risk of not having enough money for retirement if you put your money in a savings account with a paltry return. Your money won’t grow at a fast enough rate to keep up with inflation. That’s a money trap to avoid.
To get over your fear of investing, Hagen said you can take the mystery out of the process by reading articles or watching videos to educate yourself. When you do invest, make sure you don’t put all of your money into one stock. Consider low-cost index funds that track the performance of major stock market indexes.
9) Rushing to Invest
– While some millennials fall into the trap of not investing, others rush into it too early, Boneparth said. It’s great to save for retirement, but you need to make sure you’ve covered some other important financial bases before you start investing a lot of money.
For example, if you have limited funds and are just starting out, make building an emergency fund a priority, Boneparth said. Also, if you have a lot of high-interest consumer debt, focus on getting rid of that. “Many will say invest early and often,” Boneparth said. “But if you can barely pay bills, you might need that money.”
10) Falling For Scams
– Millennials might fall into the trap of thinking that they won’t ever get scammed. But, in reality, they are more vulnerable to scams than older generations, said Doria Lavagnino, co-founder of CentSai, a financial wellness platform for millennials.
Millennials are more likely to be victims because they are the first generation to do most transactions online, Lavagnino said. Plus, they’re often more comfortable providing personal details over social media.
To reduce your risk of becoming a victim of scammers, Lavagnino recommended creating passwords for online accounts that have a combination of letters, numbers and characters, and changing them every three months. Don’t use public WiFi to check financial accounts. Scan your bills and accounts monthly for unusual charges. Also check your credit report once a year to see if there are any accounts you didn’t open, which could be a sign of fraud.
11) Spending More Time on Social Media
– Millennials spend more time on social media than other generations, a GOBankingRates survey found. And they do so at the expense of their finances. The survey found that millennials spend more than twice as much time on social media each week than on their finances.
Social media can have other negative effects on your finances, aside from just consuming time you could use to manage your money. Seeing your friends post pictures of all the fun things they’re doing might make you feel pressured to spend more to keep up with them, Boneparth said.
“Sometimes you have to put the blinders on,” he said. “Think about what you’ll be able to do if you stay on track.”
How about that? Do you fall on the trap. Let’s change our lifestyle and we could success in the future.