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The Spending Habits of Millennials

CEBU, Philippines — Okay, in any economically hard-up country, like the Philippines, the average citizen is just short of money. The cliché is no longer “More money at the end of the month” but the other way around, “More month at the end of the money.” And it is not at all hard to understand – the Philippines would not be a poor country if there was enough money in people’s hands.

The “poverty mentality” among the people all the more perpetuates the national economic hardship. People seem to have accepted the idea that life is always hard for them; and that no matter how they try, the situation won’t change. So, they won’t even try to change their own difficult financial situation.

And yet, with the kind of modern – and supposedly advanced – education there is today, the Millennials, especially, should know better. They should have known better than their elders on how to change the generational economic scenario.  Sadly, they do not.

There are students today who have the best gadgets but are not even up-to-date with their tuition payments. They would not miss an opportunity for a ‘night out’, even if they know it means being absent in class the following day. With some, a ‘good time’ sometimes would cost them their following meals.

True, many of today’s students are resourceful enough to find part-time jobs to fill their free time. The thing is, the jobs and earnings of “working students” are often unable to improve their dire situation. Once they have money hanging around their necks, they seem to feel uncomfortable from the weight, and so they want to spend it away quickly.

Kara Peres, in an article at www.learnvest .com, relates her own awkward money habits as a student:

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Choosing Fun Over Financial Responsibility

Like her peers, Peres spent what little extra cash she had on experiences that made her happy. She traveled, and went out to bars and restaurants and ran up big tabs a few nights a week. She attended trendy events. She told herself that since she was working hard, she deserved to use her income to enjoy life.

When she slashed her expenses to just the necessities – like rent and food – she jacked up her income, as she continued to take on part-time jobs. She stopped going out, gave up frequent traveling, and worked on saving money – she paid off all her debts.

The Real Cost of Fun Experiences

The free-spending trend is not exclusive of Millennials, Peres writes. Only that Millenials tend to   prefer to fork over money for fun and nice experiences rather than for buying things. The young ones value being in some place nice than saving the money to buy a nice gear. But, of course, they still spend on gadgets and clothes if their funds allow.

Peres thinks that her generation feels that with nice experiences they’re actually getting something out of the world. If they can’t pay off their debts or start installment on a house or have their dream weddings, at least they can afford a pricey meal or long weekend out of town. These smaller price tags fit in their budgets.

But Millennials simply can’t afford to think this way any longer if they want their future to look better. They have to start on a financial habit that will “enhance our lives and give us financial freedom,” according to Peres.

Taking the First Steps

Peres believes that Millennials may refuse to ever deal with the anxiety of financial want – and be free from debt or build their savings. While savings may not be possible at all amid debt, Peres suggests three ways to make the debt payment journey a lot easier:

1. Set up auto pay. Arrange for automatic debt payment with the bank. It means the bank automatically deducts your monthly dues from your account – before you even have a chance to miss that money.

2. Set limits on fun. Life is meant to be enjoyed, of course, but if you cut down on meals out or opt for a less pricey vacation destination, for example, you’ll still be able to have a blast and socialize with friends while working toward financial solvency.

3. Imagine yourself without the burden of debt.  Try thinking of your debt payments as a “deposit” on future experiences – after all, the sooner you’re rid of your debt, the sooner you’ll be free emotionally and financially to fulfill other goals.

In the end, financial freedom – and prosperity! – take good planning and the discipline to stick to the plan. This early and with meager financial resources to deal with, Millennials may yet find availing the services of a financial advisor a farfetched idea… although it’s not a bad idea at all once money income starts to pour in aplenty. (FREEMAN)

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