Millennials have a complicated relationship with money thanks in part to the Great Recession and the burden of student loans. These factors and a lack of financial preparedness education in schools cause many young adults to develop habits that can be costly in the long run. Avoid some of the common mistakes below and work with your bank or credit union to establish the security you need.  

5 Financial Pitfalls to Avoid

1. Not Saving

Unfortunately, many millennials have little or no savings. Without an account reserved for emergencies, you may be vulnerable to major financial disaster if you’re laid off or experience a medical incident. Even if you’re living paycheck to paycheck, open a savings account with your credit union and set aside a little every month. There are many apps that make it easy to meet your goals or gradually accumulate spare change. 

2. Skipping Credit Cards

Millennials have a deep-seated fear of financial insecurity, which makes them hesitant to take on debt. They’re so fearful of accruing liabilities that they’re less likely to take out lines of credit. While it’s important to use credit cards responsibly, avoiding them altogether leaves your credit report blank, which can make it harder to buy a house or even rent an apartment later on.

3. Not Making Retirement Contributions

Many millennials have little to no retirement savings. Retirement may be decades away, but that doesn’t mean you shouldn’t make contributions to a retirement account. The additions you make now will have more time to grow. Take advantage of your employer’s 401(k) options or open an IRA. 

4. Not Tracking a Budget

A monthly budget helps you get the most out of your money by deciding where your resources would be most effective. Use a spreadsheet or an online banking app to track your fixed and variable expenses. Even if you don’t have a concrete goal in mind, such as saving up for a car or a down payment, it’s helpful to be aware of your complete financial picture. 

With a wide range of savings and investment options tailored to the needs of millennials, North Jersey Federal Credit Union offers a personalized approach to your finances. For over 80 years, they’ve been Totowa, NJ’s credit union of choice, building a reputation for friendly service, flexibility, and genuine concern for the financial well-being of their members. Visit their website for more on their savings accounts, follow their Twitter for news and updates, or call (973) 785-9200  with any questions.