5 Frightening Money Mistakes that can Haunt Millennials
October brings some of the year’s spookiest moments: zombies and ghouls on Halloween and even a Friday the 13th this year! But while the monster masks will be put away at the end of October, money mistakes made now may haunt you for years to come. Take charge of your finances today with these tips from Point Breeze Credit Union.
The Haunting Truth About Credit Card Debt
According to the Federal Reserve
, Americans have more credit card debt than ever before. And millennials in particular hold about 31 percent
of the total consumer debt. Although it may not seem like an issue right away, debt can damage your credit score. When you apply for a mortgage, car loan or even another credit card, lenders will look at your credit score. The lower your score is, the higher the interest you’ll have to pay.
Don’t let unpaid credit card bills haunt you for years to come. Always send at least the minimum payment on time, and if you can, try to pay as much as you owe each month. If you don’t, any amount that was unpaid will be charged with interest on your next statement.
Sinister Student and Auto Loans
The rising cost of college has caused more and more young adults to take out loans to pay for higher education. But loans are not a student’s only option. There are a lot of different ways to save and pay for college
including 529 plans, Coverdell Education Savings Accounts, scholarships
and financial aid. The best advice: start planning now.
Vehicle loans are also impacting millennials’ finances. Consumers age 21 through 34 are getting auto loans at a higher rate than other generations. Today, auto loan terms are much longer than they once were. That can be good news – it means that cash flow can be better managed – but in the long run, these loans may cost you a lot more due to interest. Save costs by focusing on the total amount you will pay and not just the monthly payment. Millennials should also do their research to find the lowest loan rates
and possibly consider a credit union, which are typically known for offering better rates than banks.
The Scary Decision to Say No to Health Care
Many millennials feel that they can’t afford health insurance, or can barely afford it, and thus choose not to buy it. Instead, they may brush off health problems or delay treatment. Unfortunately, this can cause major, unresolved health issues down the road that can lead to expensive health care costs and more debt. To help handle costs, young adults should comparison shop for a low-premium policy that fits their needs and helps them stay on top of potential health issues now.
Preparing Now for Ghosts Yet to Come
Life brings wonderful and joyous occasions such as weddings, international vacations
, the birth of a child, first homes and more, but these events are often accompanied by high costs. Set up dedicated savings accounts
to put money aside for each of these occasions. When there is a reminder of what you’re saving for, it can help keep you focused on long-term goals so that you do not dip into savings accounts to pay for everyday items.
Being Vulnerable to Real World Nightmares
Sometimes, the unexpected happens. We’re laid off or that old car finally breaks down. These life events happen to everyone at random moments in time. The best thing to do is be ready for them. Start a rainy day fund
with three to six months’ worth of typical expenses. This way, when something unexpected happens – or maybe if you decide to strike out on a new adventure – you will be prepared.