Bad habits are easy to fall into—especially when you’re in your 20s.
Some of the worst money habits among millennial, according to recent surveys include overspending, under-saving and racking up credit card debt.
Only 1 in 5 millennial have started saving, according to a recent poll. 3 in 10 don’t even have savings accounts!.
No surprise then that almost 4 in 10 of the millennial surveyed admit to worrying at least once a week about their financial future.
The good news is, it is that hard to break those bad habits as you think.
Here’s how:
1. Track your spending
Unless people are tracking their spending carefully, they may believe their balance is higher than it is and overdraws their account.
1 in 10 millennial overdraft more than 10 times a year. That can add up to RM1000 or more in overdraft fees!
So, it is best to track your spending and create a budget.
2. Plan ahead for big expenses
Putting a big expense like a vacation on a credit card can be risky—even if you think you can pay it off soon. Interest adds up quickly.
And if an unexpected expense comes up and you’re late or miss a credit card payment, you can get hit with a penalty fee and a higher interest rate on the balance you owe.
A late or missed payment can also hurt your credit score, which can make it harder to get a loan (or a good rate on a loan anyway) down the road.
Instead, you can set up a savings account and have money automatically transferred into the account from your checking account, or from your paycheck if your employer allows it.
Just check to be sure that you won’t be charged a fee for the savings account, and that there is no minimum balance requirement.
3. Set up an emergency fund
How much? Financial experts typically recommend saving enough to cover 3-6 months of non-discretionary living expenses like rent, utility bills and car payments.
That way you’ll be prepared if you get hit with an unexpected expense or lose your job, and you won’t have to turn to your credit cards—or your parents—to cover your bills.
Setting up an emergency fund can also help you get into the good habit of saving money for your future.
The more money you save, the easier it will be to keep from falling back into bad habits.