Born between the mid-1990s and the early 2010s, members of Generation Z are stepping out from the comforting shadows of their textbooks into the brilliant yet daunting sunlight of adulthood.
Along with this transition comes the advent of financial independence – a prospect far scarier than any SPM or STPM exam!
Gen-Zers are prone to making quite a few slips and slides on the financial road, some of which could have long-term repercussions.
Here are five key mistakes these young people tend to make. If you’re a part of this group, remember: the point here is not to point fingers or chuckle at your missteps, but to guide and help you towards a brighter financial future.
1. Failing to save
According to personal finance website GoBankingRates, a whopping 61% of Gen-Zers have saved up an amount that wouldn’t even fetch a decent laptop, ringing up at under US$1,000 (RM5,000).
The sad reality is that emergencies can strike at any time. As such, experts advise allocating 10% of your monthly salary to savings and emergency funds.
2. Spending way too much
Ah, the Gen-Z mantra: “Live in the moment!” Why not, right?
Alas, those trendy boba teas and that tempting “buy now, pay later” catchphrase might feel gratifying today, but they’re like durians – they leave a potent aftertaste (of debt).
Stick to a budget and do a regular “financial detox” by weeding out unnecessary expenses, and you’ll soon find yourself with a healthier (and less stinky) bank balance.
3. Not investing for the future
For Gen-Zers, retirement might seem a ways off – so much so that most young people don’t even think about the finish line. The trick, however, to a comfortable retirement is to invest today.
Whether stocks, mutual funds, or a trusty KWSP, with steady contributions and time on your side, your investment portfolio will grow faster than a durian tree in season!
That said, remember to first plant the seeds and water them by learning all you can about investing before diving in headfirst.
4. Whither side hustles?
It’s the era of the gig economy, so Gen-Zers, hop onto the side-hustle train!
Sign up to be a delivery rider or rideshare driver, offer freelance work on Fiverr, bake some cookies, or design websites – whatever it is, it’s better to do something than nothing.
This extra income could be your ticket to debt-free living or the seed for your investment garden.
5. Falling for social media fads
Social media trends are as fleeting as a KL downpour: one minute it’s there, the next it’s gone, leaving behind a little mess.
While it may be tempting to jump on the latest #FinanceHack trend, remember that these are often short-lived and might not offer lasting solutions.
So, ditch those cash-stuffing envelopes for sound financial habits, because real financial stability is a marathon, not a TikTok dance challenge!
This article was first published on MyPF. To simply and grow your personal finances, follow MyPF on Facebook and Instagram.