What is more bloodcurdling than ghouls, goblins, or the zombie apocalypse? Answer: The financial outlook for an overwhelming number of millennials.
I wish I was kidding. Recent TIAA surveys have found that the finances of most are in a spine-chilling state of disrepair. For instance, far too many lack short and long-term plans or have put aside even a cent for emergencies. When some get around to reviewing critical financial matters, they often find more tricks that will sabotage their financial futures, rather than treats that produce wealth-building opportunities.
Just in time for Halloween, Amy Podzius, a director in TIAA’s field consulting group, sent me an email with her list of scariest millennial money gaffes. She maintains that, “While the chilling thrill of Halloween will soon come and go, money mistakes can cause a year-long scare (or more), if one isn’t careful.”
Check out her frightening five:
1. Accumulating Terrifying Credit Card Debt
Balancing housing and living costs is no small feat, and it’s tempting to use plastic to pay for things that seem a bit out of reach.
Podzius’ advice: “Exercise discipline with credit cards and keep balances to a minimum. Also, track monthly expenditures to avoid overspending, and use that process as a guide to create and commit to a strategic budget plan.”
2. Racking Up Hair-Raising Education Costs
With the rising cost of college tuition, many must use loans to pay for education. Podzius suggests borrowing judiciously at the undergrad level, to stave off a horrific debt load. As for grad school, weigh job placement rates and average starting salaries against financing and student aid options. An alternative plan could be to attend grad school part-time or find work as a researcher or teacher, so you don’t fall deeper into ‘the student loan hole.’
3. Making the Grave Decision to Sacrifice Health Insurance
“While you might dress up as a superhero for Halloween, you aren’t invincible,” asserts Podzius. She advises those who currently don’t have parent or employer-sponsored health coverage should assess when they can immediately enroll into a plan, to shield their wallets from nightmare scenarios. Remember, a low-premium, high-deductible policy is far better than no protection at all.
4. Fearing the Ghosts of What’s to Come
Many don’t consider nail-biting expenses tied to life events—such as weddings, honeymoons, or down payments for homes—just to name a few. Save diligently and plan ahead to avoid being haunted by rash financial decisions. And don’t let the future give you the jitters; save and invest now for retirement, so the power of compounding can work in your favor.
5. Being Unprepared for Real World Nightmares
Whether your car breaks down or you’re laid off from a job, you must be ready for life’s unpredictable turns. Keep in mind that mom and dad won’t be able to bail you out forever. Says Podzius, “Protect yourself by building up a solid emergency fund that covers three to six months of your living expenses.”
So, follow these recommendations to keep the financial hobgoblins at bay.