Why Young Millennials Tend to Overspend

Why Young Millennials Tend to Overspend

 

Hi Arnel, I’m a fresh graduate from a state University in the province and I’m working now in a good-paying BPO company. However, I observed from my colleagues that they are fond of spending; buying new stuffs and gadgets, maxing-out their credit cards and eating in expensive restaurants. At first I had to go with them for “pakikisama” but eventually I realized I had to refrain it because I am a bread-winner and I’m supporting my siblings. Kindly advise me on what to do so that I can keep my expenses as low as possible? – Tina Sy, Accenture, sent via email

 

 

Young millennials today are definitely taking over the scene and the spotlight, we are the new faces of the future. Millennials are very good in generating income, especially these days with the advancement of technology and social media that we can easily take advantage and dominate. Today, we can always find ways to earn more. 

 

Nothing else  in history that a younger generation are becoming Big Boys in the corporate world, business, and to any types of industries. With very promising things ahead of us, there are also issues that came with it. Most especially in finances, we are still on a challenge that we need to overcome and resolve. We matured in earning more money but we are still babies in managing and keeping them. Young Millennials tend to Overspend! 

 

That’s also the reason why that it has always been my passion to teach younger generation on the value of money because I know that proper money management is a good foundation for everyone. Having said that, we should resolve first the common bad practices that are hindering us to move forward. What are the common causes that we mismanage our finances? How to deal with it as young millennials? 

 

 

 

Young Millennials are prone to stress.

 

young millennials
Call centre agents smoke cigarettes on their break from work in Eastwood City, a BPO-targeted area of Manila, Philippines. Export-orientated companies are offered tax breaks and incentives by establishing business in Eastwood City Cyberpark, which is listed under the Philippine Economic Zone Authority as an approved IT Centre.
Photograph Paul Jeffers

 

Stress is very prevalent in various industries especially in the call centers around the country due to pressure at work, graveyard shifts and sudden change of schedules. To compensate the work-related tensions, people tried to spend huge amounts to high-end gadgets,  excessive travels, bad eating habit and vices. 

 

Because of stress, we invented “stress-eating “ to cope-up from the struggle. Emotional buying is also one thing to be aware of. Some people buy stuff not because they need it but because they want to feel good about it. That is very dangerous for your budget! To read more, kindly click this article: 7 Things you are doing today that you might end-up broke. 

 

 

Frivolous Spending.

 

young millennials

 

Spending is not bad but spending above what you are earning is very alarming. Sad to say, many people today are bad spenders. Don’t let bad spending habit control your wallet. When you do that, you are one step-away to being broke. I’m also against the excessive use of credit card. It’s a good thing that you have it but be responsible in using it. If not handled properly, it will lead you to bigger problems.

 

As a personal finance advocate, it is not a secret what I went through many years ago. I was broke twice and the reasons are all coming from unwise spending. If you have read my article that went viral in social media and was featured in various digital platforms  From Broke to First Million”, you would know where I’m coming from. I had my own struggles but I was able to overcome them. It was tough but I was able to put them as learning lessons. My advice for young millennials today is to minimize spending and live below or within your means. 

 

 

Impulse Buying.

 

young millennials

 

Another cousin to frivolous spending is impulsive buying. When was the last time that you have bought a new pair of shoes upon passing a 30% mall sale without thinking twice? Most of the times, it is not even part of the budget. 

 

This habit is a sign of financial immaturity. Yes, being wise with your money is a skill to develop. One way to enhance is to say NO  to a mall sale if it is not part of your plan. I always tell my friends to identify the needs vs. wants. For basic needs, it should be always our top priority. However, for the “wants”, we can give it a timeline so that we can save-up for it. If you want to learn more on how to be a wise shopper, kindly read this blog: Practical tipid tips to every Pinoy.

 

Extravagant Lifestyle.

 

young millennials

 

 

Earning bigger than other people does not directly give you the right to live like rich kids in Instagram. Although, it is your prerogative to do so, it will just only give you short-term happiness and problems piling-up later. You can live another day by not buying an expensive coffee, you can still live normally by just commuting on a jeepney. You can always skip booking an Uber ride. 

 

Few months ago, there was a column in a reputable newspaper about the issue public school teachers are facing today. It is their over-borrowing. I agree to this since as a teacher by profession, I observed the usual practice of taking-loans from various financial institutions and ending-up a very little take home left-over salary.

 

Common reasons of borrowing through loans in the provinces are financing it to build a house, buying appliances, buying transportation vehicles, and paying existing debts. These are all valid but borrowing is always a liability when the proceeds are spent on things that are not earning for you. Although, there’s also what we called good debt, we should always use it on things that we can benefit the most just like using it to start a business.

 

Few months ago, I interviewed two young millennials in their 20’s who stood-out from the rest. Take time to read this article and learn from their personal journey: Secret to success from young millennial entrepreneurs. 

 

 

Lack of financial literacy.

 

young millennials

 

Several years ago, I conducted a survey on different call center forums online on what are the things they have invested so far. Most of the answers were identical, “they don’t have savings, so why invest?”.

 

Most of them didn’t even know it existed on the first place.

 

It is a sad reality but it is also challenge that we need to face and overcome. In the Philippines, only 1% of of the people are invested in the stock market and many of these accounts are not active. We are still a long way to develop in this area as a country. This issue is not only happening in this industry, it is a general problem that we need to address. I believe that spreading financial literacy is the answer. Educating younger generation on personal finance and proper investing is what our country needs. We need to mature in this area. 

 

 

 

Are you one of young millennials who want to learn more? You can also read this blog: 9 Lessons from Warren Buffet everyone should know. 

 

 

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