Millennials are generally frustrated about their finances. They are frequently clueless about where they are and what they want to achieve in their financial life. A common belief about millennials is that they struggle to manage finances as they do not bother about it, but this is not true.
You will be surprised to know that millennials are using TikTok to learn about personal finance. There are a couple of videos, including Humphrey yang video with over 865,000 followers taking the platform by storm. According to yang experience, a large number of the audience are under 25 and most commonly asked questions fall under the category of budgeting, credit, taxes, and investment.
Although Generation Y has taken a good move to enlighten themselves about money management, it is expected to take a longer time to make them understand about it. Undoubtedly, some young people have come up with an initiative to share financial tips on TikTok to help people learn money management tips. Still, many are not familiar with this platform for some reason or other. Here is how you can help millennials improve money management habits.
Acknowledge that financial liberty does not refer to financial misconduct
Of course, when your children grow, you stop interfering in your life. It is up to them how they want to manage their money. To some extent, it is true, because if you are paranoid about their financial habits and statements, they will never develop decision-making power. Still, the other aspect says you cannot let them be because the approach they follow is likely to be nothing but financial misconduct. It is equally essential for millennials that financial liberty cannot justify your reckless attitude toward money.
Help young adults develop good financial habits
The best time to give financial advice to your children is when they are struggling to manage their finances. Saving and investing seem to be daunted to millennials. Do not let them dwell in the fact that they are earning less money because a good income source does not guarantee that you will successfully manage your money.
No matter they are financially dependent on you or they have their income source, make sure that you help them develop good habits before it is too late. Try to give them a task, for instance, save £50.
Encourage them to create a budget. Tell them how they can track their spending to meet their saving goal. Money management is no rocket science, but you cannot learn it without trying it.
Share your experience
Let your children know what hardships you have faced and how you managed to deal with them. You do not need to hide the financial mistakes you committed in your life from your children just because it sounds embarrassing.
They will likely grow a better person if they learn from the mistakes of others. For instance, you had borrowed money from private lenders to meet your expenses just because you did not stash away money.
Let them know when you slipped up and what repercussions you faced. If you tell them, they will likely avoid making those mistakes.
Update them about pitfalls
Millennials are using online apps to invest money. Several financial apps are allowing millennials to invest money in mutual funds just within a couple of seconds. A few clicks and you are all set to go – how easy it feels?
Undoubtedly, it is a good way to start investing money. Further, your children can develop the habit of making money from money without grinding them into the headache of a lot of formalities.
These apps will allow you to invest in systematic and lump sum investment plans. It seems tempting for millennials to make investments through these apps, but make sure that your children know pitfalls about these apps. Though these apps are promising to make good money with mutual funds, you are still in the formative years of investments. Regardless of personalised guidance, you should know about the type of investment you are investing in. Make sure that you know how it works and what risks are associated with them. If you undervalue the risk, you will likely lose your money.
Tell them loans are not for meeting regular expenses
Much as you have been earning a good amount of money, you may need to borrow money from lenders in case of financial emergencies. Though you can get unsecured loans for bad credit at affordable interest rates, it does not mean that you will not keep your expenses in control. Tell them that they should borrow money in case of emergencies only. If they begin to fund everyday expenses, they will fall in a debt trap.
Money management is not rocket science though, most of the people, especially millennials, have no idea of how to do it. With the help of tips as mentioned above, you can help millennials build money management skills.