How The #YOLO Mindset Can Help You Achieve Financial Wellness

***This is a Guest Post. <3 from the Dames***

The YOLO (You Only Live Once) mindset greatly affects almost every millennial’s spending habits. One look at all social media platforms and you will see how much premium this generation has put into living YOLO that sadly, many are willing to go into debt just to pay for those “once in a lifetime” experiences. This is why YOLO is being tagged as one of the top reasons why thousands of millennials are now caught under the crushing weight of debt.

YOLO may have earned a bad reputation as the perennial excuse for impulsive behavior towards money, but it can also be a great mindset when it comes to achieving financial security. Here are some simple yet savvy ways on how you can #YOLO your way to financial wellness:

1. Do a lifestyle check.

One of the major pitfalls of living YOLO is that it encourages people to experience life’s fleeting thrills and pleasures now, even if it means breaking the bank and going into debt. One may argue that it’s alright to incur debt as long as you can handle the minimum monthly payments. Debt, after all, is necessary to build one’s credit, but this dangerous perspective can eventually deal a catastrophic blow over your finances in the future.

According to an NBC News/GenForward survey conducted during the second quarter of this year, 3 out of 4 millennials, those aged 18-34 years, carry some form of debt of up to $30,000, 11% have debts of over $100,000, and only 22% are debt-free.

Statistics also show that a majority of millennials are putting off major life goals such as getting married, buying a new home, and even building up their net worth, mainly because they are saddled with debt. In a report by the National Institute on Retirement Security, 66% of people between the ages of 21 and 32 have no retirement savings at all. Another survey shows that 40% of Americans couldn’t even afford a $400 emergency expense, hence the need to take out a loan just to cover for it.

Despite the numbers, there are still a lot of people who would willingly go into debt just to fund a lifestyle they can’t afford. Sure you want to live your life to the fullest while you were still young, but at what cost?

If your little adventures are causing you to spend more than what you earn and use credit to make ends meet, then it’s about time for you to reassess your priorities and do a lifestyle check. Here are some questions you need to ask yourself:

How much debt do you have? How long do you think it will take you to pay it all off?
How much is your net worth at this point? Do you see an increase in your net worth in the next five or ten years?
Have you started building your nest egg?
Do you have an emergency fund? Are you prepared in the event you face a financial crisis?
Do you see yourself debt-free and living comfortably in retirement?

Doing a lifestyle check is a good starting point to see whether you need to make any changes in your spending habits or not. If you see that you still have a good grip on your finances and your savings are on track, then there is nothing wrong with indulging yourself occasionally. Otherwise, it’s time for you to do some penny pinching and get your finances back in order.

2. Conquer your FOMO.

In a new study conducted by CreditKarma.com on 1,045 Americans aged 18-34 years old, 40% of millennials go into debt over their fear of missing out.

FOMO spending happens when you go splurge on something you can’t afford just to keep up with your peers because you are scared to miss out on the experience. You just can’t go on living a lifestyle you can’t afford. Soon, this will become evident to the people around you. And when that happens, you might find yourself buried deep in debt.

If you only live once, then why spend your precious time on money trying to keep up when you can invest it all on yourself?

Living YOLO means you only have one shot in life to plan, invest, and save for your own future. Learn to curb your FOMO spending by being honest with yourself and your peers that you just can’t afford those things at the moment. It’s okay to miss out on those special events or that great big sale if it means keeping yourself from racking up more liabilities than you can handle.

3. Avoid racking up credit card debt.

Credit card debt plays a bigger part in this debt problem millennials face than student loans and other consumer-type loans combined because credit cards give cardholders access to money they don’t have. As you continue to use your credit cards, you also continue to accumulate debt that will only increase over time due to interest. Soon you’ll find yourself in a debt trap, especially when your debt goes beyond your capacity to pay for it.

To avoid the infamous credit card debt trap, here’s what you can do:

Use your credit cards only when you can pay more than the minimum payment required each month, if not pay it in full.
Have a separate pool of funds that you can easily tap in case of emergency.
Leave your credit cards at home and bring cash or your debit card instead. This way, you’ll be less tempted to use your credit card on a purchase that you can pay for in cash.

4. Don’t let financial setbacks get in the way of living YOLO.

Millions of graduates are already saddled with debt before they can even begin their respective careers. Yet this doesn’t seem to stop some millennials from living life in the now without giving consideration about their future. With little to no retirement savings or emergency fund and mountains of debt to deal with, money easily becomes a problem in the twilight years of one’s life.

If you have consumer debt that’s only a few hundred dollars, and you are capable of paying it off in full, then don’t let yourself get stuck making minimum monthly payments, where a huge chunk of your payment goes towards the loan interest. Pay it off in full. If you can’t pay it in one go, then pay more than the required minimum amount. Remember, a debt paid in full is one problem off your back.

Unlike consumer loans, student loans cannot be discharged in bankruptcy, which means you have to find a way to deal with it on your own. Don’t wait until you graduate to start paying off your student loans! Whether you have subsidized or unsubsidized student loans, start making payments towards the interest while you are still in school. You’ll be surprised by how much you’ll be able to save by making early payments!

If your debt has become too burdensome, then you might want to sign up for a debt relief program or refinance (for student loans). Debt relief programs, as the name implies, offer a measure of relief to anyone who is in debt, which may come as either partial or full forgiveness of debt. What’s good about both of these programs is that they offer a better option for debtors who are considering bankruptcy just to get rid of all their debt.

To know which program is right for you, consult a debt counselor from a reputable debt relief organization. Most debt relief companies offer a free consultation which means you don’t have to spend a dime to get sound professional advice on how to get your finances back on track.

Final Word

Life isn’t about who was able to keep up with the latest trends or how you lived for the moment in your youth. You only live once. Your life is the biggest adventure that you will ever have, and it is best enjoyed when you are financially secure in all of its seasons.

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Rebecca is an aspiring personal finance writer. When not working on her writing portfolio, she spends most of her time being a homemaker. She enjoys reading, gardening, exploring new restaurants, and taking long afternoon walks by the beach. She lives in Hollywood, Florida with her two-year-old daughter and a cat named Mary Moon.