When it comes to money matters, if you know the basics it can be easy to fall into the trap of thinking you have it all sorted. So you know why you should have an emergency fund, how direct debiting your savings on payday can keep you on track, how to improve credit score and why you should snowball your card accounts. These things all hold true and are solid financial principles to live by. But what are the specific traps that we fall into when it comes to money management by millennials?
Don’t Allow Others to Drain Your Financial Goals
Getting serious about money to build a future with may mean making some tough, unappealing choices in the short-term to be better off in the longer term, and delayed gratification is not something our generation has ever been taught to be good at. The truth is, that our social circles are wider and more complex than ever, and can cause us to be out of pocket. Take hen and stag weekends for one. Once where a night on the town was sufficient, they now tend to span a weekend or longer in a destination city abroad with multiple activities and meals out. Several of these a year can seriously eat into any significant savings plans – not to mention weddings themselves, at the expense of transport, hotel accommodation, outfits and gifts. Politeness dictates that we respond without question to all these special days, and can mean we miss out on money for savings or use credit to bridge the gap.
Start Negotiating or You Are Missing Out
You may not have thought that negotiation skills needed to be a part of your financial armor, but they may just be the single most important part. Being able to negotiate on money matters could have a crucial impact on your earning potential and outgoings over a lifetime. The key is to start small, by calling up one of your utility providers and negotiating a lower monthly payment when your contract initial term is up. Small wins like this will build up your confidence, allowing you to head for the jugular – a salary increase. Remember to pre-arm yourself with proof of your contribution to the company – testimonials from clients, targets you’ve hit, the business you’ve brought in – anything that can back you up. Do your research on what equivalent jobs at the same level and location make, so you have proof you’re sitting below the current market rate. We all dread a no, but if you go in there with a strong case, most bosses will respect you for trying.
Try A Multi-App Approach
Most of us are now familiar with using an app to automate our savings or keep track of what we’re spending. And while they can be a great way to give your savings account a little boost, we should all be wary of becoming over-reliant on their ease of use. To make serious inroads on your savings targets, you need to diversify. Make sure you have recurring more substantial amounts set up rather than relying on apps that round up your purchases and add the change to savings accounts. These only work in conjunction with regular lump sums that are saved – some in a high-interest account and others perhaps invested. Aim for a mix of low to medium risk options to see your savings start to build.