The Worst Money Mistakes Young Americans Make

Editors' pick: Originally published July 29.

Young Americans keep making the same money mistakes, and unfortunately, seem to be adding some new ones to the mix.

Nat Berman, an author and personal finance expert, recently cited 20 unforced financial errors that Millennials routinely make in a post on SheBudgets.com and tells TheStreet there is opportunity in the money mistakes made by others - if you're diligent about cashing in on those opportunities.

"By learning from the mistakes of other Millennials, you can keep yourself from doing the same," he says. "That maximizes your chances of getting young people the financial results they desire."

Berman cites failing to create a budget, failure to have a savings account (both for the long and short term) and failure to address the need for retirement savings at a young age as among the biggest financial mistake young U.S. adults make, but there are many others, as well.

"The biggest mistake Millennials make with money has more to do with our behavior than anything else," says Stephen Rischall, a Millennial and financial planner with 1080 Financial Group in Sherman Oaks, Calif. "Millennials are influenced by their immediacy bias, a tendency to prefer immediate gratification over potentially larger long term benefits."

That's a problem, as Millennials aren't focused on planning or saving for the future, and high levels of debt and stagnant wages exacerbate financial issues for many Millennials, Rischall says. "Millennials want to have rich experiences and they want them now, and this makes it very difficult to save for larger and longer term goals such as purchasing a home or retirement - a word that isn't in our vocabulary," he says.

While you really can't categorize getting a college degree as a financial mistake (study after study shows college grads earn more money over the course of their lives than non-college grads), you can call the way younger Americans finance their college degrees a money mistake with staying power.

"Millions of students are paying too much for college, and the average student loan debt is $28,950," says Adrian Ridner, co-founder of Study.com.

The thing is, you don't have to pay full price for college and take on so much debt, notes Ridner. "By supplementing the traditional college experience with online courses, students can earn the same degree without accumulating a mountain of debt it will take them years to pay off," he notes. Ridner says online competency based courses offer tuition relief to students helping them save an average of $1,000 per course at public schools, and as much as $3,000 per course at private schools. "That can really help college students," Ridner adds. "Also, start early with dual enrollment - high school students can take college courses and start earning credit before they start college."

Immediate gratification - and the strong desire to burn through a paycheck to to get that gratification, is also high on the list of errors Millennials make financially.

"The biggest mistakes Millennials make is that they spend their entire pay check," says Norman Ling, a personal finance blogger with Spreadsheet Productions, LLC. "I think way too many Millennials blow their money away on expensive rent, cars, drinks, eating out and traveling. Even many professionally successful Millennials don't know much about saving for retirement."

"The best thing for Millennials to do is to ask themselves if this purchase adds value to your life, and ask if the purchase increases or decreases your wealth," he adds. "By asking these two questions before making any purchase, you'll be much more responsible with your money."

As Berman points out, not taking the long view, money-wise, may be the most damaging financial mistake a young adult can make.

"As a Millennial, I know it can be a challenge to find a way to max out your 401(k) plan when you're trying to just pay your bills while you're digging out of student debt on a $40,000 starting salary," says Ryan Kwiatkowski, a financial advisor with Retirement Solutions, in Naperville, Ill. "But the number one rule we live by here is pay yourself first. If we work with a Millennial investor and build a plan that ensures that they pay themselves first; we've achieved our first step towards success."

Both in the long and short term, young Americans face enough financial challenges as it is. Compounding those challenges by making multiple financial mistakes is only adding to a burgeoning financial burden that can haunt a Millennial for a lifetime.

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