If the media reports, editorials, and advice columns are to be believed, millennials can leave a lot to be desired when it comes to saving and spending money wisely. Living in the moment isn’t such a bad idea when those moments are fast running out! However, using ‘treat yourself’ as an excuse to indulge also isn’t all that great for our bank accounts.
With many of us held captive to large student loans and ever-increasing living costs, it isn’t uncommon to find ourselves with $5 left in our bank accounts at the end of the week and with little to show for it. If this sounds all too familiar, chances are you could use a few simple money hacks to help you turn your finances around.
Let’s get started with these money management tips for millennials.
1Look At Your Bank Statements
Do you know where all of your money is going each week? There’s a good chance you don’t. Spending a little here and there may seem harmless — until you’ve spent $500 over the last six months on cute outfits for your dog.
Taking a look at your bank statement might seem scary, but it will help you identify exactly where your spending is going wrong and where you could be saving a little each month. Grab your last few bank statements and a highlighter and start marking everything that isn’t a necessity.
And no, expensive coffees, dining out or going to see live music are not necessities.
Necessities include expenses like groceries, rent, utilities, and fuel. Reduce your highlighted expenses to a few treats a month and save the rest.
2Be Responsible With Installment-Based Payment Plans
Laybuy, Afterpay, and other “Shop now, pay later!” payment options make it all too easy to make spur-of-the-moment purchases. While they’re a fantastic convenience, they also tempt you into buying things you wouldn’t buy usually if you had to pay a lump sum or save up.
Upfront payment is always the best option. As my grandparents used to tell me, “Don’t buy something unless you can pay cash for it”. This can prevent you from spending outside your means.
And if you do choose to use one of these options?
At least be responsible with it and limit the number of items you have on a plan at any given time.
3Keep Track Of Your Subscriptions
There’s no doubt that most of us have signed up for a subscription service and found ourselves hardly using it. Or, for that matter, signed up for one of those super enticing “First 30 Days Free!” offers and forgotten to unsubscribe.
Cancelling any subscriptions that you no longer use is a great way to save a little extra. Not sure if you’re getting your money’s worth?
Take the monthly cost of the service and divide this by the amount of times you use it per month. If the cost-per-use is pretty high, then unsubscribing is a safe bet.
4Write Out Your Financial Goals
It may sound cheesy, but writing out your financial goals can help keep you accountable. It’s a great way to drive you to work towards your goals, whether that’s buying your first home, vehicle or saving for a new piece of technology.
Here are a few examples of how to make saving for large items easy.
- A $20,000 car every 10 years? Save $38 a week.
- A $2,500 laptop every 4 years? Save $12 a week.
- A $1,800 iPhone every 2 years? Save $17 a week.
Setting money aside for big-ticket items you know you’ll need will leave you feeling prepared.
5Accumulate An Emergency Fund
Millennials, listen up. I hate to be the bearer of bad news, but savings and an emergency fund are not the same thing. I only learned this recently myself!
An emergency fund is separate from your savings. It’s mean to be used to cover medical expenses, family responsibilities, or – as is becoming increasingly common – job loss.
Your emergency fund should ideally consist of 3 to 6 months worth of income so that you can keep your head above water during a financial emergency or unforeseen circumstances.
6Save For Retirement
Yeah, I said it.
Whether you are busy saving for a new car, a pair of shoes, or a home, retirement isn’t getting any further away. The best way to tackle retirement savings is to start setting some money aside each month and make the most of any retirement saving schemes offered by your government. They’ll often include added bonuses and contributions to incentivise the savings process.
Building Your Savings Doesn’t Have To Be Difficult
Learning to separate necessities from luxuries is an important step in not only being able to save money, but also to pay off personal and student loans and credit cards while also being able to put money aside for the future.
As a millennial myself, I know the influence of social media. The seemingly perfect lives of Instagram influencers or Facebook friends can leave you feeling like you’re struggling to keep up. But remember, “If you live fake rich now, you’ll live real poor later.”
Start working on these money management tips for millennials and have peace of mind when it comes to your future.