With accumulated student debt, a difficult job market and volatile global economy, Millennials face an uncertain financial future. The generation of young adults aged between 16 to 36 lack the financial freedom compared to their elders, as their share of Australia’s wealth has stagnated in recent years*. But with a few simple financial strategies this influential group born between 1980 to 2000 can master control of their finances and make positive changes to their spending habits.
Here are five financial pitfalls for Millennials to avoid:
Avoid getting into further debt and ditch the credit card. With high interest rates, credit cards can be bad news and encourage spending outside your means. If you have multiple credit cards, simplify repayments by paying off more on the card with the highest interest rate. Then work your way through the other cards, paying off as much as you can each month to avoid late payment fees and reduce interest - and stress!
- Careless spending
Catching up with your friends can mean weekly meals out, partying and other expensive activities. Keeping track of everyday expenses will help you take control of your finances and see where your money goes. From daily coffees to late-night drinking, you may be surprised by how much you spend on having a good time. MoneySmart’s TrackMySPEND app is an easy way to track your expenses to see where your money goes so you can make changes - a few simple luxe to less swaps like getting the bus instead of cabs after a night out will help you spend less and save more.
- Not saving
Escaping winter and heading to Europe? Starting to plan for a family? Always dreamed of buying your own home? Visualising your goals and planning for them is the key to success. MoneySmart have a series of tools you can use to save for these life goals, important milestones and bucket list items.
- Late payment fees
Put in place direct debits for reoccurring bills like your phone, utilities and rent so that they're automatically paid each month. This will save you time worrying about when you have to pay them and ensure you avoid late payment fees.
- Living in the moment
Being short-sighted and not accounting for life’s unexpected events could put your plans for the future at risk. Make sure you’re covered when times get tough or you’re unable to work due to illness or injury with a good personal insurance policy. With income protection from TAL you can protect up to 75% of your monthly income so that you can continue to pay your living expenses such as groceries, rent and utilities during times you’re unable to work.
So break bad money habits and start the new financial year by making these positive changes.
*Source: The wealth of generations
This is general advice only and does not take into account your particular objectives, financial situation or needs. Please read the Product Disclosure Statement available at tal.com.au and consider whether this product is appropriate for you before making a decision to acquire this product. Insurance issued by TAL Life Limited ABN 70 050 109 450 AFSL 237848. Promoted and distributed by TAL Direct Pty Limited 39 084 666 107 AFSL 243260.