3 Worst Money Habits of Millennials — And What To Do Instead

Yahoo

04-07-2025

Let's be real — money can feel like a never-ending puzzle, especially for millennials juggling student loans, rent and that constant urge to treat themselves. Some money habits sneak up on us without us even realizing it, and before you know it, you're stuck in a cycle that's tough to break.
But don't worry, you're not alone. And the good news is, there are smarter, easier ways to take control of your cash.
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'Millennials face unique money struggles, but some of their worst financial habits are based on well-meaning but misplaced moves,' said Kevin Huffman, owner of Kriminil Trading.
Here are some of the worst money habits millennials tend to fall into, and more importantly, what you can do instead to build a healthier financial future.
According to Huffman, one of the big traps for millennials is the masquerade of lifestyle inflation as 'self-care.'
While it might feel self-affirming to spend $200 on a yoga retreat or daily $7 matcha lattes, but when you haven't budgeted for it, it can be chipping away at your savings quietly.
Instead, Huffman recommended budgeting for self-care that's actually going to reduce future stress such as a 401(k) match, or a much-needed emergency fund.
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Jason Pack, chief revenue officer at Freedom Debt Relief, said millennials have really normalized paying a premium for convenience compared to generations before them, often with the easy swipe of a credit card or Buy Now, Pay Later (BNPL) service.
'Some people have a constant stream of Uber Eats and impulse buys from Amazon with same-day shipping, using services like Afterpay to finance every purchase,' Pack remarked.
He explained that these services cost more, which isn't always bad. Sometimes, convenience is worth the premium, so long as your other financial priorities are taken care of.
'But too many people have convenience spending so engrained in their daily habits, they're unaware of the full impact on their finances,' Pack said.
When you sit down and add up all those purchases over a month, he said most people are shocked at the numbers.
Before worrying about building a restrictive budget, go through your last 60 days of credit card and bank statements. Tally up the delivery fees, the tips, the service charges, and the BNPL payments.
From there, create a conscious spending plan. Automate your savings, your retirement contributions and your bill payments first. Then, decide on a specific, reasonable amount for a monthly convenience fund.
'That's your guilt-free money to spend however you like, because you know all your important financial goals have already been taken care of.'
'Millennials carry a heavy psychological weight from their student loans and are determined to pay them off as fast as possible,' said Pack.
According to CNBC, millennials are the generation with the fastest growing debt load. While it's responsible to pay down debt, you should do the math before you throw every spare dollar there.
If you have a government student loan with a 4% interest rate, Pack said it might make sense to make minimum payments as you build a proper emergency fund or invest for your future.
The trick is to prioritize all your financial priorities and fund them in a balanced way rather than taking an all-or-nothing approach.
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This article originally appeared on GOBankingRates.com: 3 Worst Money Habits of Millennials — And What To Do Instead