BOOK REVIEW: How Millennials Can Get Their Financial Life Together
If you are born between 1980-1996, then you are a millennial and these are some stereotypes about you. Well, some of them could be true. For instance, according to a 2019 study, a millennial on average has a debt of around $27900 and the biggest source of debt isn't student loans but unpaid credit card bills. The report further said that millennials tend to spend beyond their means and are not willing to make sacrifices in favor of reducing their debt thereby prolonging major life events such as their wedding.
It is unfair to completely blame the millennials for their financial mess. For a generation blessed with a plethora of opportunities and financial resources, they have been given little financial education in school on the basics of financial handling and the importance of saving and investment. The good news is that with a little education and personal effort, it is possible to get your financial life in order and in this blog we will discuss just the perfect way to start.
Broke Millennials - Stop Scraping By and Get Your Financial Life Together is a book written by a millennial for millennials to help them shed their old habits and take charge of their financial life.
The seeds of financial literacy (and this book in many ways) were sown in author Erin Lowry's life at the age of 7 when Erin learnt an important lesson in finance. When Erin's mom decided to set up a yard sale, Erin had a Master Plan to make some money. Erin wanted to sell her favourite Krispy Creme donuts to her mother's customers at an inflated price of 50 cents. As per the plan, Erin and her 4-year-old sister set up a small table and won the hearts and even money of her mother's customers. They made $30 and just when Drin was to take the money and rush to the nearest Toys R Us store, her father first took $8 from her. "That's what it cost me to buy those donuts for you". He then said, "You had your sister help you sell them so need to pay her $6" and it eventually left (a heartbroken) Erin with $16.
This little experience became the cornerstone for Erin's financial education and we shall now look at a few of her priceless lessons for the "Broke Millennials" generation:
Are you Treating Money like a Tinder Date or Marriage Material?
Erin starts the book by making a scintillating point. She says that the way we handle money is primarily driven by our mental attitude toward it - either we treat it like a hit and forget it Tinder Date or we develop a long-lasting relationship with it. Setting a personalized context for the reader for the rest of the book, Erin provides us with a list of questions that help us understand our attitude towards money in a much deeper way which in turn will help us embrace the right ways to correct it and develop a long-lasting relationship with our money.
A Simple way to Improve Your Credit Score and Avoid Debt
Millennials are often dubbed as the plastic generation for more reasons than one but most notably for their(over) dependence on Credit cards. Erin offers us a simple mantra on the best way to use our Credit Card - Don't swipe more than you can afford to pay every single month and then pay it off. By paying it off, she means paying it off entirely. Not just the minimum amount. She goes on to explain how credit card companies make money. They make money out of your inability to pay fully by charging exorbitant interest rates on the outstanding amount which accumulated over a period of time can become a huge burden. Erin goes on to offer a few practical tips -to be aware of your monthly credit limit and not use more than 30% of the limit. Use your credit card only to make one or two small purchases every month perhaps for a recurring purchase such as a Netflix subscription. This way by regularly paying off your Credit Card amount in full, will you gradually improve your credit score which in return can open other financial possibilities for you.
How Should you Split the Bill?
This perhaps wins the prize for the most common awkward situation for millennials across the world. We are dining out with our friends(who earn different salaries) and you place an order for a meal after carefully scanning the menu (and your pocket) only to realize that you have been cheated. What was initially meant to be a ₹200 outing for you has suddenly cost you ₹450 just because a few members decided to order an exotic food from Tunisia that they could barely pronounce and cost as much as the GDP of a few tiny islands! To make it worse, they insist on the entire group paying for their adventure. What to do in such situations? Erin offers us practical advice on how to deal with this. We list a few:
- #Be honest and learn to say No when you can't afford a particular outing
- #Suggest Cheaper alternatives while planning
- #Stand up for yourselves in an awkward situation
Investment is Not Gambling
One of the major reasons millennials are so averse to investing is because of their poor knowledge of what Investment really means. This chapter in Erin's book is like a beginner's MasterClass on Investment where she not only dispels some popular misconceptions but also offers a rundown on what are the different ways in which one can Investment their money - no matter what their salary or financial situation is!
Anyone can (and must) invest their money and it is our vision too at GlideInvest where we've done all the hard work for you with our Nobel Prize backed research. All you need to do is trust us, download our app, and with commitment and discipline invest some amount towards your future every month.
Erin has a beautiful way of making a point without sounding preachy and this book definitely makes up for the lack of financial literacy of which most millennials have been a victim. It is a book that will make every millennial across the world financially wiser and a step closer to becoming debt-free and wealthy.
Remember, it's not only the guys wearing fancy suits and following the screen at Dalal Street or Wall Street that deserve to make money. Creating wealth for yourself and your loved ones is your birthright and we at GlideInvest wish you all the success in achieving your full financial potential.