The financial outlook for the majority of millennials is frightening. Too many are drowning in different types of debt. From the inability to survive on their paycheck to being denied mortgages, millennials’ debt is a real problem. It is important to learn the four money mistakes haunting millennials to avoid your own children from falling into this path.
Four Money Mistakes Haunting Millennials
First, credit card debt. These days it isn’t uncommon for parents of teenagers to hand them their very own credit card. While the intention is to teach them good money management, it often has the opposite effect. Kids should be taught to charge and pay off debt in the same month. Instead, most teenagers graduate high school with debt they carry into college. Similarly, many young college students get offered credit cards too quickly. Stressed and overworked, college students rely too heavily on credit cards to fund purchases they don’t need.
Second, student loan debt. Sadly, the majority of students today simply could not afford college without a loan. The rising costs of tuition, room and books puts getting a degree nearly out of reach of most people. That is, unless they borrow the money. Student loans aren’t inherently bad, but how much you borrow and from whom is. Students should only borrow the bare minimum amount to cover tuition and books. Rent, groceries, gas, and utilities are not things that should be bought with student loan money. Students should work while going to school to cover living expenses and opt out of borrowing more than needed for tuition.
Third, being uninsured. Young adults remaining on their parent’s health plan until mid-20s hasn’t always been a thing for every family. Some parents’ jobs provide plans that allow dependents to remain on until 24 or 26. Those that don’t have no other option but to buy their own coverage. Health insurance is expensive and many college students can’t justify the cost. So they go uninsured. What happens when there is a major illness or injury? Most students end up in the emergency room and leave with a hefty medical debt bill.
Last, not having a savings account. Many millennials have less in their savings account than needed to pay one month’s rent or mortgage. With a weak savings account, any unexpected extra cost quickly leads to financial disaster. A savings account should be renamed “emergency fund” to remind us all of the importance of having one. You never know what tomorrow holds, so it is important to be prepared.
If you are struggling with any type of debt, contact a Dayton bankruptcy attorney. We can help you learn your options and choose the best path for you.