What Millennials Don’t Understand About Money

The fact that the millennial generation along with the next generation is becoming more financially aware, is absolutely wonderful, glorious, incredible. A significant chunk of millennials is able to save a hefty amount for themselves as money that they won’t be using for the next 10 years. In actuality, it is absolutely normal that millennials don’t understand these things about money, because most people don’t usually pick up on these either. As much as saving is an incredible habit that should be adopted by each individual, not using that money for the next 10 years and letting it be simply saved up. What millennials don’t understand about money, is that this can be quite the risk. Nothing to worry about, though. We’re here to educate you about how you can be saved.

What you do, matters

While having your money saved in the bank can cause you a whole lot of reassurance, it is not really the solution to your financial problems. If your money is simply sitting there in a regular savings account, you will be getting 0 returns from it. You’re not getting any money back in return for your saving, and you are probably also saving the money to buy something you might need.

Most of us do just that. Our savings are geared towards a goal where our money is simply drowned into the expense and we never get anything out of it. This could be a car, a vacation, a gadget that you’ve always wanted – basically anything that takes money away from you. What you do with the money, matters.

Invest, invest, invest. Those are the three magic words. Several people who have invested are now enjoying the joy of generating regular income through their investments. Learning to spend money on things that can provide us with something in return can be somewhat tedious and involve a lot of thinking. However, once you get into the mindset of it, it is much easier to think of it that way.

Money has a dynamic value

So, let’s say that you’ve been saving money for a while. Scratch that, let me tell you my own story. So, ever since I was little, my family has been saving up money for me in a separate account. This was so that I don’t find issues with funding my higher education when I’m older. Honestly? It was probably a great idea, considering how little my family knows about finances, but the story of what happened after I grew up was a completely different story. 

By the time that I reached the higher education level, prices had doubled. Not only in terms of education but the state of everything else on the market. 

Read More: 6 ways to raise financially intelligent children

The dynamics

Every year, the Federal Reserve Bank prints new notes, making the value of money drop significantly. That means that things grow more expensive every year. On average, prices grow 3% every year. Although this doesn’t seem like a big deal, in 20 years, you can definitely say that prices become double. This means that if you have saved money with the intention that you will be able to use it on a certain goal after 20 years — at the end of the line, you may not be able to afford them anymore.

The value of money is ever-changing, the money that you have saved, might not be able to catch up with this change. 

Time is important

I won’t be unrealistic and say that it is absolutely easy to earn returns from investments. Actually, it takes a decent amount of time and discipline for your money to make money. As a millennial, it is so important to be investing in goals rather than consumer expense. You should aim to be ahead of time because time brings changes to the value of money. The things that millennials don’t understand about money are quite simple, easy to make amends. Thus, if you are ahead, you will have more room for your goals and your money will continue to grow, rather than staying stagnant, causing you to not be able to afford things in the future.

In simple words

Regular savings + inflation (prices growing higher due to the value of consumer goods dropping) + spending savings on consumer expenses = You running out of money, eventually going into the risk of being broke.


Regular savings + regular investments + inflation + spending within your means on consumer expenses = Allows your money to grow and gives you more room to spend and invest as well.

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