Everyone makes financial mistakes, but the nature of these errors may differ depending on your age and even your generation.
When researchers at Senior List surveyed consumers of different ages, they found the nature of millennials’ money mistakes were different from today’s seniors who reported their main financial mistakes when they were in their 30s.
Looking back, seniors said they took on too much debt when they were young adults. Millennials, who are now in their 30s -- or at least approaching them -- say they tend to spend too much money.
Drilling deeper into the numbers, the researchers found that 53 percent of millennials don’t have a monthly budget. That appears to be the main thing setting them apart from seniors. Only 32 percent of seniors operate without a monthly budget.
Importance of budgeting
Having a budget and following it ensures that you live within your means. Think about a business that operates without a budget. It spends with little regard for how much money is coming in. Operating that way puts it at a high risk of bankruptcy.
Personal finance experts say budgeting is also important because it reinforces on every family member the value of money. It requires the setting of spending priorities, delaying spending on things that aren’t considered essential.
The survey found one area where millennials are doing better than seniors did at that age. Millennials are nearly twice as likely to start a retirement savings plan before reaching the age of 30 than their older counterparts did.
Saving earlier for retirement
While millennials have three decades or more to accumulate retirement savings and investments, seniors who didn’t start saving until recently are running out of time. Because of that, many seniors plan to keep working well into their 70s.
What advice do seniors have for millennials? It has to do with a hard lesson learned in their youth about debt. Seniors say they would urge millennials to make sure they save at least a little money each month and to pay off old debt before taking on new debt.