It can be overwhelming trying to figure out where we can begin when budgeting for our future. In that, we can end up making some critical slips that can make it even more difficult, even with a larger paycheck. Here are some tips for avoiding a rude awakening in your later years, or even just the end of the month.

  1. Not Saving Enough for Retirement: Many millennials prioritize short-term goals over long-term savings, leading to a lack of retirement savings. They may also think that they have plenty of time to save for retirement, but delaying contributions can have a significant impact on their future finances.

  2. Overspending on Non-Essentials: Millennials are often portrayed as the “avocado toast” generation, spending money on luxuries like eating out, travel, and fashion. While it’s essential to enjoy life, overspending on non-essentials can quickly add up and leave little room for savings.

  3. Not Having an Emergency Fund: Unexpected expenses like car repairs, medical bills, or job loss can wreak havoc on a millennial’s finances. Without an emergency fund to fall back on, they may have to turn to high-interest credit cards or personal loans to cover the costs.

  4. Taking on Too Much Debt: Many millennials have student loan debt, credit card debt, and car loans, making it challenging to make ends meet each month. Taking on too much debt can lead to high-interest payments, missed payments, and ultimately damage their credit score.

  5. Failing to Track Spending: With the rise of digital payments, it’s easy for millennials to lose track of their spending. Without a budget or tracking system, they may not realize how much they’re spending on non-essentials or overspending in certain categories, leading to financial stress and missed savings opportunities.

When I started my financial recovery journey, my focus was tracking spending. Even if I overspent, tracking would hold me accountable and also help me find what things were taking up a good chunk of my paycheck. That habit eventually helped with overspending and taking on too much debt. Once you can master those, you can use that money to start contributing to your emergency fund, then your retirement.

Don’t feel like you have to be perfect at managing all of these at once — it’s a marathon, not a sprint! All of these require good habits, which take time to build. To make things easier to manage, pick one that seems most doable for you and start there!