As more and more millennials are graduating with a degree, they are able to earn good income after working for two to three years. However, this sudden burst of income can have a negative impact if they do not plan their expenses properly. The bad habits formed, if not changed, will definitely be a problem to them in future.
In Singapore, the percentage of credit cardholders with incurred debts beyond their annual income is about 3 per cent. Life-changing events such as marriage, financial downturn or medical problems can also cause a huge change in your financial stability. Acquiring good money habits will protect you from ‘financial storm’. One should be prepared to tackle money issues at any point in time, regardless how comfortable we are in our finances.
The 13 bad money habits that young people have include splurging on a car, not saving, taking up unnecessary loans, being a spendthrift, living on credit, not keeping track of their expenses, failing to invest, investing too aggressively, expecting their parents to save the day, not understanding finance, copying their friends’ spending habits, lending money to others and not having insurance.
Do you have the 13 bad money habits too? Are you savvy in budgeting – are you aware how many percent of your income goes to expenses and how many percent do you save? Which part of your expenses account for the highest percentage in your expenditure? Do you know any ways to save more money for your future or do you have any expenses which you can cut down more?