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7 Financial Habits That Millennials Already Know but Not Necessarily Follow

Updated 19 Oct 2018 – By Shopback

Millennials have an undeserved reputation for being irresponsible with money. Some studies have actually shown that millennials carry less debt than previous generations and have better saving habits as well.

However, they are more averse towards investing than previous generations, with most preferring to squirrel away their spare cash rather than putting it to work for them. So, this leads us to the first financial habit that millennials should follow.


1. Investing

It can be indeed daunting and be intimidating for first-timers. But we take risks in every decision we make in life. It's always going to be a pro and con. Such as buying a car, buying a house and which university to go to.

Making these decisions is inherently risky and as such investment should not be treated any different. Getting started is not difficult at all. There are many great apps available that can let you start learning about and actually investing. Most banks are also looking to make it increasingly approachable and friendly and you don't need a massive amount of capital to start as well.


2. Skip the Credit Cards

If you just started working, it is usually better to avoid these entirely. Credit card debt on top of other expenses and potential debt you are already saddled with can lead to an endless loop of feeling like you are never quite making any progress. That being said, if you've been in the workforce for a number of years, we recommend getting a credit card to enjoy exclusive credit card promotions. Keep a lookout for credit card promotions that may include a specially discounted Expedia coupon or Zalora voucher code.

Just starting to manage your finances? Use a debit card. It's actually as good and may even help you be more disciplined. Since debit cards pretty much suck the money straight out of your account each time you spend, it has the psychological effect of giving you pause anytime you make a purchase.


3. Track Your Finances

Track your expenditure honestly and examine each purchase every week. This is a great discipline to have as it helps curb frivolous spending. And when I say track, I do mean it. Track every purchase and expense no matter how small.

Treating yourself to something nice is a must for sure. But having extra money does not mean you can or should buy big-ticket items right off the bat with no consideration. And having money in the bank does mean that whenever you want to indulge in something big every few years such as a vacation, you will be able to comfortably afford it without having to worry too much.


4. Create a Budget

The next logical step after tracking your spending is to create a budget. This allows you to take firmer control of your finances and goes hand in hand with the aforementioned step. It is important to note how much to spend each month on investment, gifts, eating out, entertainment, clothes and other needs.

While this doesn't mean to live a frugal life of a church mouse, it should be something that fits you and your lifestyle. As long as you are saving each month and making good progress, after approximately a year or maybe even less, you'll find that tracking and creating a budget has become second nature to you.


5. Don't Buy Stuff You Don't Need

It is absolutely ok to buy expensive, good quality items that will last you for a long time. These include a good pair of shoes, a mattress and tools you use often or a hobby you are passionate about. For example, if you are passionate about podcasting, then investing in a decent pair of headphones and a condenser microphone is not a bad purchase.

However, buying stuff you don't need but want is a constant struggle. Sometimes, you need a certain product and may be tempted to spend some extra cash to get a top-shelf brand.

Instead of focusing on brand names, be coldly logical and screen out the noise. Focus on what you need and ask if you really need that extra feature. How much help will it be? if it turns out that the answer is yes and helps you immensely, sure spring for it. If not, back away from your wallet. You’ll thank me later.


6. Have an Emergency Fund

Even if you have excellent saving and spending habits, unforeseen circumstances are sure to happen. Sometimes, a household appliance breaks, the car needs repairs, you fall sick or any number of reasons really. Being prepared, having insurance and more importantly an emergency fund to pay for this does not put any undue stress on you about suddenly going into debt.

A good rule of thumb is to have the fund big enough for you to survive off for at least 6 months. And don't ever dip into this fund needlessly. Instead, have a second bank account and each time your payment is credited, have the bank syphon a small amount off to the second account.


7. Negotiate

Never be afraid to negotiate. When it comes to job offers, shopping or anything that has to do with money, negotiating is an important skill not to be dismissed. The biggest ordeal for most is negotiating for your salary. If you can prove yourself to be a valuable asset to the company, be sure to tactfully point this out to your boss and ask for what you think you should be compensated. Also look at market rates and figure out what you’re worth from there.

Other than that, do your best to negotiate prices when offered a re-contract such as your internet, credit card fees, furniture or bulk purchases, memberships and much more. Try your best without being obnoxious to push for what you want. You'd be surprised at how much you can actually get as many services and brands have policies in place to sweeten the pot to help tip customers over.



This article was contributed by Nicholas, a writer from ShopBack. ShopBack works with over 1,300 merchants regionally and is the top cashback website in Malaysia. For more ways to save money on your spending, check out the largest online shopping festival, ShopFest.


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