News outlets all over the world are constantly publishing pieces suggesting millennials aren’t spending wisely. ‘Why do millennials go on holiday all the time instead of saving?’, ‘millennials are breaking investment’ and the classic, ‘millennials spend all their money on avocados instead of saving for house deposits’ are just some sentiments that have made waves over the last few years.
But, as real life tends to be, the situation is a bit more complex than popular feeling. Let’s dive into the millennial financial situation, explore their typical spending habits and some tips for better saving.
How are Millennials spending their money?
There is no beating about the bush here, millennials have it tough when it comes to managing finances. Unlike their parent’s generation, some basic financial milestones are now almost unattainable and many millennials feel angry or despondent when it comes to discussing a financial future it feels like they may never have.
Here are some of the core issues that plague the finances of millennials and seriously impact their spending habits:
Millennials prefer to spend on experiences rather than things.
In this climate what are millennials actually spending their disposable income on?
It’s not difficult to see that due to the financial environment that they have been raised in millennials have collectively turned their back on long-term savings goals. Instead, they are finding more pleasure in living in the moment and experiencing the world. Retirement savings and housing deposits can seem totally impossible for this generation so who can blame them for focusing more on the short term?
However, despite some big financial hurdles, there are some ways that millennials can put some pennies away.
1. Make sure your super is in order
Your super is a fantastic hands-off opportunity for you to put something away for your retirement. Not only can you grow it through sacrificing a small amount of your earnings, your employer is also legally obliged to contribute at least 9.5 per cent of your wage. This is essentially free money to help you in the future.
You can make the most of your super by following some easy steps:
A little bit of saving can go a long way.
2. Don’t ruin your credit score
Credit scores can be easy to ignore if they don’t immediately impact your life, but having a bad score could seriously damage your chances of meaningful purchases in the future. This means being careful to:
3. Create a budget plan
Reaching your financial goals starts with making a solid plan. Sit down and work out what your unavoidable monthly costs are (rent, transport, bills etc.) then plan how much you have left. Out of the remaining, you can hold yourself to putting a set amount into saving every month. Even if this is only $10 it gets you into good habits and you can see your progress over time.
If you want to learn more about how you can plan to make the best future for you get in touch with the financial experts at Invest Blue today.
What you need to know
This information is provided by Invest Blue Limited (ABN 91 100 874 744). The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information. Read our Financial Services Guide for information about our services, including the fees and other benefits that AMP companies and their representatives may receive in relations to products and services provided to you.
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