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5 IMPORTANT FINANCIAL PITFALLS FOR MILLENNIALS


If you were born between 1980 and 2000, you’re a millennial, and you’re among those that will experience some of the biggest financial surprises of a lifetime.

Just what are those surprises?

1. STUDENT DEBT.

While student debt isn’t a surprise when entering university, the reality of how long it’ll take to pay back is. It seems so big, so deep and so tall that it can also feel terrifying.

2. TOGETHERNESS.

Young people are living independently longer. They come into a joint partnership with financial habits that have already been established, and many are surprised to find their partner doesn’t share their views about money.

3. BUYING A HOUSE.

As housing prices continue to soar, especially in urban centres, millennials are coming to the stark realization that they may have to rent forever. A house is typically seen as a measure of success, but if buying one means never taking a vacation or enrolling your children in hockey, perhaps that measurement needs to change.

4. CHILDCARE COSTS.

Both partners often have to work to pay for a house, taxes, living expenses and the like. Add a child to the mix and it’s more than clothing costs that pile on. Couples are often completely blindsided by childcare fees.

5. TRYING TO DO IT ALL.

Childcare and children often limit flexibility. Many mothers opt out of the 9-to-5 work life to freelance because they can work when they choose while dealing with school or daycare schedules, illness, and extracurricular activities. However, this may reduce income and benefits, which can add stress back into the equation.

HOW TO GET AHEAD

It’s not all bad news, however. By starting small and starting early, millennials can have a rewarding financial future. Here are her best strategies for success:

  • Get an unbiased third party to review your finances – not family or friends – a professional.

  • Prioritize goals. It will help determine what can and needs to be done in order to achieve them.

  • Automate savings. When you budget for savings, you learn to do without that money.

  • Don’t over save. Be realistic so you can accomplish your goals and live at the same time.

  • Check in and realign. A lot happens in a short time when you’re young. Just because you’ve planned once doesn’t mean you’re done for life!

Discipline is what it takes to block out the noise, commitment is what it takes to walk the path to financial success and patience is what it takes to reach the goal.

Clement Chung, CFP, CLU

Certified Financial Planner

www.clementchung.com

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CLEMENT CHUNG, CFP, CLU

Certified Financial Planner

Fee-Based Financial Planning
Burnaby & Metro Vancouver

©2018 by Clement Chung.