Financial experts advise young people to steer clear of these 3 typical money blunders in order to think long-term.

According to a recent survey from CNBC and Generation Lab, a significant number of young Americans are not investing, with 24% preferring to keep their money in cash and 42% not saving or investing at all.

The young age of the respondents could account for the 42% who do not save or invest. Many of them are Gen Z, born between 1997 and 2012, and are still in school or recently graduated, meaning it may take years before the youngest members of the cohort enter the workforce and begin saving. Additionally, those who are already working may still be figuring out their financial footing.

The reluctance of 24% of young people to invest their money may be due to a feeling of financial vulnerability, as Kamila Elliott, a certified financial planner and co-founder and CEO of Collective Wealth Partners, explains. With rising prices of essentials like housing and food, people are anxious to invest their money and have immediate access to it, she says.

To alleviate concerns about accessing cash, she recommends saving at least six months' worth of emergency funds. After that, it's wise to consider investing.

"Elliot emphasizes the importance of being involved in the market to achieve investment or asset goals. He advises young people to think long term."

Here are three mistakes certified financial planners warn young people to avoid.

1. Not participating in the market at all

Investing is the key to achieving long-term financial goals, according to Douglas Boneparth, CFP and founder of Bone Fide Wealth.

In fact, Boneparth calls investing "the key to growing wealth."

If you initially invested $1,000 at a 7% annual return and made monthly deposits of $100, your total would exceed $19,000 in 10 years and $130,000 in 30 years.

A simple method to begin investing for retirement is through an employer-sponsored 401(K) plan, which enables you to contribute pre-tax earnings. Additionally, many organizations provide matching contributions of up to a specified percentage of your salary.

Another option for retirement savings is a Roth individual retirement account (IRA). With a Roth IRA, you pay taxes on your contributions upfront, so your withdrawals in retirement are tax-free. However, if you need cash soon, you can always withdraw the money you've deposited, but you generally can't withdraw any of your earnings before age 59½ without penalty.

2. Only investing in individual stocks

Out of the 1,093 young Americans surveyed, 24% indicated their preference for investing in individual stocks over bonds, ETFs, and cryptocurrencies.

Younger investors may prefer investing in individual stocks, particularly in the "Magnificent 7" companies - Apple, Alphabet, Amazon, Meta, Microsoft, Nvidia, and Tesla - due to their impressive performance in recent years, according to Elliott.

Investing in a limited number of stocks can be risky because your portfolio's success depends on the performance of those companies. Even if you invest in one of the Magnificent 7, it doesn't guarantee continued outperformance.

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Elliott and Boneparth suggest diversifying your portfolio with bonds or exchange-traded funds, such as an ETF that tracks the S&P 500, which is a low-cost way to gain exposure to hundreds of large companies, including Apple and Alphabet.

Diversifying your portfolio can help you be more consistent and disciplined, as advised by Boneparth.

3. Thinking short-term

Don't let short-term thinking lead you to make hasty changes to your portfolio based on recent market behavior. Instead, make changes if your financial goals shift, Elliott advises.

Instead of constantly monitoring your investments, let them rest. Invest, then forget, says Elliott.

"People are nervous when they see the volatility of money, right?" she says. "People dislike seeing money fluctuate. If you stop checking it frequently, it can help curb the human urge to make changes."

Boneparth emphasizes that achieving financial goals is within your control, as long as you maintain consistency and discipline in your investment choices, regardless of the tools used.

"Elliott advises against dwelling on the present and instead encourages focusing on future returns 30 years from now."

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