The internet loves making millennials feel stupid — especially with managing money.
But sometimes in the land of articles written by people from older generations, there lies a bit of truth.
Collectively, millennials aren’t that great at managing our money.
We can blame anyone we want: our parents, the school system, America. Or we can take responsibility and learn from our mistakes.
Here are three things millennials do that make us broke. But unlike some other articles on the internet, I’ve also include what to do instead.
1) Go Out For Entertainment, Food, and Drinks – A Lot
When you’re a money-conscious millennial, you’ll notice compared to your friends, you don’t go out much. I notice that my friends go out a lot. Whether it’s to watch a movie, going to the amusement park, etc. And it’s like they don’t even care that they’re spending money. It’s a stereotype that younger people go out a lot—they’ve already got the car and the minimum paying job so why not?
But it’s coming to a point where if my friends wanted to hang out, it HAD to involve money. From gas money to admissions money to tip money. Why couldn’t we just have fun enjoying each other’s company? Why couldn’t we practice our survival skills and cook something together?
Several people that haven’t settled down in a family love to go out and spend money, but that’s not a bad thing if you know how to budget. But it’s a bit hard to budget when your friends are all spending money and having fun and you don’t want to look cheap.
And then when you’re looking at an empty bank account 3 hours later, you’re gonna wish you saved.
What to do instead:
If your friends are constantly going out to party/eat/watch a movie, let them know that you’re trying to save up (for a car, for a house, for retirement, etc) and that you can’t be spending too much unnecessarily.
And if they still insist on you living their frivolous yet broke lifestyle, like a credit card that’s finally been paid off after 15 years, CUT IT.
As in, cut the relationship. If they want to keep wasting money on entertainment every week and want you to do the same, what type of friends are they?
Some friends like to share everything with you, including their financial irresponsibility.
You don’t need friends like that in your life.
And if you haven’t started budgeting because you don’t know how or are too overwhelmed, we created a free automated budget spreadsheet that you can use to get started.
2) Buy Expensive Cars
Everyone wants to flex for the ‘gram and live expensive lifestyles. It doesn’t matter how old you are—millennials love show-and-tell. Especially with cars. We’d buy fresh new cars with a few miles on it to show everyone that we made it. We got our bachelor’s/master’s and a fancy job that pays the bills, including this car note.
The thing about cars, though, is that when you buy a new car, the value of it depreciates as soon as you pull out of the dealership.
The more you drive it, the more maintenance you need to do for it. And with fancy sports cars, you’re going to pay fancy money to maintain those parts.
What to do instead:
Think for the future. A sports car might be hot right now, but will it give you the same fulfilling feeling years from now? Is the respect behind the brand name worth the cost?
For some, it might be. You could wear all the expensive name-brand clothing and buy the Tesla to get into parties where the rich and famous people are and network. Or just rent out the costly material to teach people how to make money to afford the things themselves. Everyone knows Ty Lopez.
But if you assess that it’s not worth the cost, do your research and go for a used car. Buy from someone you trust or someone that has a written record of taking care of the car.
3) Rely on One Income
From a young age, we were all told to go to school, get a well-respected degree, get a job, pay off loans, and die.
Sure, it sounds simple, and it’s a great way to live…
…if you were born in the 50s.
Several of us millennials are stuck in the past, in the traditional ways of living life. When college was affordable. When the internet wasn’t even created.
But right now, with all the information you could ever want at the press of a few buttons, you could make multiple streams of income. In fact, you can have enough side hustles to eventually quit your depressing, constrictive 9 to 5.
What to do instead:
Of course, if you love learning and the school environment, go to college. But don’t think that your degree is your only ticket to income. Stable income, maybe, but don’t wait to make money. Freelance, perfect a talent, learn to make money without time restrictions or expensive classes.
Have several sources of income. Life is too valuable and you are too talented and intelligent to live paycheck to paycheck. On this site alone we have a ton of ideas for side hustles that can supplement your full-time income.
Sure, there is lots of deprecation on the internet that ridicules us for not being as financially savvy as our older counterparts. But there is even more knowledge on the internet that can guide us in the right direction, including Young Adult Money.
What are a few things you’ve witnessed your friends do that are making them broke?
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This is true until I understood that was time to think about future, savngs and budget I spent on whatever I wanted…with a budget to respect I cut bills and still have a good social life, for example a breakfast is more cheap of a lunch or a dinner and usually I plan every single event during the month….expensive car? no thanks I have an old car and when I’ll need to replace I’ll not going to overspend…
Glad you turned a new leaf and started paying attention to your future, Guila! Totally envious of your specific planning during the month, as well. Share your gems of knowledge!
After our car got totaled last year, we opted to buy a used one instead. We have saved on the insurance and note! A win for us.
So sorry to hear of your totaled car. Well, you know what they say: as one door closes, another opens, and you just walked through a wonderful one!
It’s weird how a lot of people still don’t buy into multiple streams of income. Given today’s technology there are many ways to create income streams that don’t interfere with your 9-5. There are so many ways to make money.
I’m not saying that it’s easy. Definitely takes time to get there, but the opportunities are out there for the taking.
I know, right?! There is soo much you can do on the internet and make money. It’s not easy, but the only thing that comes quick and easy 9 times out of 10 is an STD. Thanks for commenting, Lila!
Those are great! But I wouldn’t just assume there still aren’t awesome careers out there that are highly paid. I handed down a job like that to a generation X’er when I early retired and she will likely hand it over to a millennial some day. I was never stuck in a cubicle, in fact nobody was in my company, and they still aren’t. The pay was excellent as was the culture and the challenging creative nature of the work. I think those jobs are still out there. I work just for fun now in the gig economy, and it is enjoyable and profitable but corporate life wasn’t bad at the time. You couldn’t pay me to go back though! So maybe you are right after all.
Definitely not saying corp jobs are terrible. But in this day and age with online opportunities on the rise, you’re losing out on lots of money by not monetizing your other strengths and talents. But good on you for finding a profitable yet enjoyable career pathway!
I especially agree with the point about the car. Buying an expensive car (and yes that $25,000 SUV is expensive) is the fastest way to set yourself back financially. Not only will there be a monthly payment (plus gas, upkeep and insurance) eating away at your cash flow, the car actually LOSES most of its value in the first few years. Getting a cheaper and more reliable car will keep that payment low while allowing you to save money for things that will actually grow in value.
Stay away from the expensive cars until you can pay for them in cash!
Thanks for reading, Syed. I’m glad we are like-minded. You won’t see me riding a Lexus anytime soon; totally fine with my Honda!
I’ve never owned a new car, even though many of my friends chose to. In fact, my first car was such a wreck, it used to stop in the middle of the intersection and I’d have to push it and call for help almost each time I took a longer drive :D Good thing it was small and didn’t weigh a ton.
Despite feeling ‘weird’ for not spending like many of my friends, I never really cared about being the odd one in the group. I chose to be around people who respect me for who I am, not for how much I spend :)
I’ve definitely seen all three of these, but I wouldn’t limit them just to Millennials. :) Far too many make these mistakes and you’d be surprised how many of them are a good bit older. That being said, love seeing the alternatives – too many think cutting back/not overspending means you can’t enjoy life when that is simply not true.
The food thing is crazy! I see / hear so many people spending $100 for a meal – it’s ridiculous! Eating at home is not only cheaper, but it’s usually quite a bit healthier too.