8 biggest money Mistakes are Millennials make!

Are you trying to live the life you want, but is money a constant concern? You are not alone!

Baby boomers like to tell anyone who will listen that “today’s kids don’t know how to handle their money!”

Regardless of your age, the way you handle money is often the culprit. Knowing which financial mistakes to avoid can be difficult without help. Still, several mistakes are typical for a millennial.

You can stop buying Starbucks coffee (every little bit helps), but the real mistakes you make have nothing to do with that cup of coffee.

If you find yourself always waiting for your paycheck in the bank account, read these money mistakes to avoid today.

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8. Focus only on the present

Millennials are known as the generation that lives in the moment. Between FOMO (Afraid of Missing Things) and the desire to strive for experiences rather than material wealth, it can be easy to incur irresponsible expenses.

Poor financial planning can lead to a troubled future. If you’re already stressed about money, how do you feel about your life as you get older and have less energy?

 Make sure you find the right balance in time

Living right now, life probably isn’t bad – you can find satisfaction in living a certain way once you have the money for it. In the meantime, do not forget to focus on the areas in your life that are worth living at the moment, but also be aware of the areas in which you should be more economical.

Explore different ways to save. From fixed costs to visiting a supermarket. There is a way to save that suits every lifestyle. Try to find this way through our articles.

Try to change your mindset about how you think about saving. Life may feel great right now, but saving for your future can give you a sense of security and save you a lot of future worries. Again try to find the balance, so you have the best of both worlds.

7. Waiting too long to save

When it comes to saving, the sooner you start, the better.

When you’re not making that much, it’s easy to think there’s no point. Why would you put money aside for the future when you have to pay all those bills the next day?

Due to the skyrocketing home prices in recent years and high student loan debt, millennials are facing a higher cost of living than ever before. To make ends meet, they are expected to work for longer periods in their lives than their grandparents, or parents!

The truth is, no one likes to see the money you’ve worked hard for not being spent. The opposite is true. Sending money to your savings account today is an important step towards a comfortable, stress-free future.

Unfortunately, interest rates are not yielding much at the moment and will most likely remain so in the coming years. Still, it is advisable to have a safe piggy bank. When it gets bigger, it’s a good idea to read on in this article.

6. Not measuring is not knowing

Whenever we buy things, we exchange part of our life for things we own. You probably only measure costs, but how much time did you spend to earn this amount?

Try to train yourself and change your mindset. Think about how much time you trade in for your belongings. For example in the following way:

1. What is your working time worth?

 2. Calculate the actual value of each hour you work. If you earn $ 40,000 a year and you work 40 hours a week, you will earn about $ 15 an hour.

 3. Now calculate the true value of each hour of work and the lifetime cost of everything you buy. A cup of coffee for € 5? 20 minutes of your life. A handbag of € 500? Just over 33 hours of your life (and therefore almost a week!) A house of € 500k? 33,333 hours (about 16 years of your life!)

 4. So always ask yourself before you spend your money: Is this worth it?

5. Not having a plan to repay 

In the summer of 2019, it was reported that 11% of Dutch millennials (25-40-year-olds) were in payment arrears. This does not include student loans.

How did this number become so great?

Building up debt has never been easier: and that’s one of the biggest money mistakes you can make! Banks are only too happy to offer that you can have an amount in the red, large purchases such as bank telephones and TVs can now be made on installment and so it seems almost inevitable to get into debt.

Once you get into this debt cycle, it seems impossible to escape.

Interest rates and late payment penalties will be added to the total amount you owe. If you go wrong a few times, it will quickly cost you hundreds of euros!

So always have an action plan ready to settle your debt. Before you go into debt, you must have several figures clear in advance and plan ahead. Coincidentally, this is also the first step in drawing up a budget.

List everything you currently pay for a month, including:

  • Energy bills
  • Groceries
  • Subscriptions
  • Interest
  • Insurances
  • Repayments on Loans

Add these together and subtract the total from the amount of money you make each month. The difference between these two outcomes gives you an insight into what you can afford before making a new commitment.

Think forward

Suppose you have about $ 200 left after your monthly bills. If your new debt payment is around $ 100, you should be able to afford it. But what if something happens when it falls from $ 200 to $ 100?

Having a savings account will not only help you in the future, but it can also help you when you are short. To prevent your debt from hurting your credit score and costs quickly adding up, you want to pay on time and in full.

If the amount of money you have leftover after your monthly bills is not enough to cover a new monthly payment, consider looking for a new source of income. Think about a second job or another way.

Avoiding debt you can’t afford may seem simple, but sooner or later you might fall for it. Make sure you always have emergency scenarios, surprise bills, and other excess expenses covered that allow for debt repayment.

If your monthly income is not enough to cover a new monthly payment, consider getting a new source of income. This could mean taking a second job, saving money, or finding a way to make extra money.

4. Don’t invest

Investing is one of the easiest, yet least popular, ways for millennials to make money. Due to the rise in debt and the cost of living, millennials are often less likely to take risks. Buying stocks and bonds often seems riskier than it is.

Don’t get it wrong, everyone is a bit anxious at first when it comes to investing! Still, investing is one of the most important steps to achieve financial freedom.

While investing may seem difficult if you have no experience, using money as a growth vehicle can be one of the easiest ways to generate new income.

What is needed is a little research. There are numerous ways to invest, including:

  • Dividend Shares
  • ETFs
  • Index funds
  • Real estate
  • Shares
  • Investment funds

Each investment type has its pros and cons. The key to getting the most returns versus the risk you want to take is to research the market, the returns, and the amount of attention each method requires.

Of the different classes, stocks are likely to require the most attention. Index funds and ETFs are other types of investing that don’t require much attention. This is called passive investing. Passive investing often involves little risk against a stable return. This is because the risks are spread by continuous investment.

3. Not knowing how much money you are spending

It’s not uncommon to lose track of how much you spend. Payment is also being made easier nowadays. Many millennials are spending way too much money thanks to these new tech gadgets.

Don’t get carried away by your convenience

The best way to avoid spending too much money is to pay attention to every payment. Check every purchase through your bank and if you use a different method, write down your expenses. Keeping this in mind allows you to factor in future expenses.

How to keep track of your expenses

There are many different tools you can use to track your expenses. Some of the most popular methods are:

  • Old school: pen and paper
  • Budget apps
  • Spreadsheets
  • Banking apps

Most of these methods can be performed online, on your computer and also on your smartphone. If you need extra reminders, most apps offer push notifications to notify you when you’ve reached your spending limit.

2. Too small a financial buffer

Unlike saving for retirement – a time most millennials see as a million years later – emergency funds are for the here and now. Life can be unpredictable. It is therefore important to always have a financial buffer to help when the going gets tough.

What if you drive your car to work and it suddenly breaks down? Suppose you urgently need € 1,000 to fix it, but your bank balance is € 0. You can put that debt on a credit card or take out a loan, but you will undoubtedly pay hefty interest on it, which will eventually end up in debt.

There are a lot of things that can count as an emergency, including:

  • Medical problems
  • Job loss
  • Accidents
  • Car problems
  • Unforeseen large bills

An emergency fund protects you against a financial setback in unexpected situations. It is best to have enough money to be able to do it without income for at least 6 months. Have you done this?

1. Spend more than you pay in

Without a doubt, the most damaging financial mistake millennials make is spending more than they have. This often goes hand in hand with not knowing how much you are spending. It’s impossible to know if you can afford to buy something if you don’t keep track of your expenses.

The idea of ​​not buying what you want and when you want can seem like a no-fun life. After all, what’s the point of working if you can’t enjoy what you deserve?

Living within your means doesn’t have to be the end of the world

Add up all your monthly expenses, including all bills, money spent on food, and money spent on entertainment. If this is more than the amount coming in each month, it may be time to make changes to your spending habits.

Fortunately, these changes don’t have to be drastic. There are tons of ways to save on items you buy or use every day, including meals, utility bills, and even relaxation!

Once you get your expenses back on track, you know what you can afford and can do things you love again. This gives you peace of mind and you don’t have to feel guilty about it after that time.

By the way, have you ever thought about earning a little extra during the weekend? This works both ways, you cannot spend money at that time, but money will come in!


In short, most millennials waste money every day. From paying for an unnecessary streaming service to paying too much for branded electronics. The world of millennials is all about spending money without regard to the consequences.

Preventing money mistakes is not difficult. All it takes is a little bit of attention and self-discipline.

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