Rumour has it that Millennials are world-class spenders and terrible money savers and according to a survey by CNBC, the rumour might be true. The survey found that 67% of people between the ages of 18 and 24 have savings of less than $1,000. What’s even worse, 33% of them have no savings.
Most of them live by the rule: work hard, play hard. What’s the point of working hard if you can’t enjoy it, right?
While it holds some truth, saving money can make your life better in the long run. If you’re a heavy spender, it’s time to change things up. Here are some of the benefits of saving your money.
The Benefits of Saving Money
1. Sense of Security
Life is unexpected, you never know what will happen next. Saving money will give you a sense of security knowing that you’ll be prepared if something bad happens. So, restrain yourself from buying unnecessary things and save your money in case something bad happens and you have to pay the hospital bills.
If you have enough savings, you can buy most things with cash and avoid being trapped into credit card debt. This way, you don’t need to worry about having to pay your debt every month. And forget about those debt collectors knocking on your door too. This is the kind of freedom that everyone wants, but only money-savers can have.
Saving money gives you the flexibility to live on your terms. You’ve got the extra money to open a side business, invest in stocks, or go on a vacation. Those are the things that are impossible to do when you live paycheck to paycheck.
Saving your hard-earned money every month isn’t easy. If it is, then everyone would be doing it. But the truth is, only a minority of people have financial awareness to save for the future. In this article, we’ll help you become one of those selected few people with these actionable money-saving tips and ideas:
1. Use Cash More
The first money-saving tip is paying with cash, instead of cashless payment methods will make it much easier for you to track your spending because you have to physically count the money every time you buy something. Research from New British has also backed this claim as they found that digital payment methods have caused consumers to overspend.
2. Rent, Don’t Get into Mortgage Yet
Don’t force yourself into buying a house via mortgage when you can’t afford it yet. Only consider a mortgage if the monthly payment isn’t more than 28% of your income and you have no other debt. Otherwise, it’s better to rent. You could also get a roommate to share the cost if you’re comfortable living with another person.
3. Apply for Scholarships
It’s no secret that college fees aren’t cheap. As a result, 71% of students are reportedly caught in student debt. To avoid being stuck in a debt, apply for scholarships to cover the costs of your education. Apply as many as you can to increase your chances.
If you fail and need to take the loan, take the federal loans instead of private ones. The federal loans usually offer more flexibility, like payment deferment and rescheduling options.
4. Sell Your Car and Take the Bus
If you have a car, consider selling it to save on gas, parking, maintenance, and loan interest. You can then use the money to pay off your other debts like student loans. There are a lot of cheaper alternatives to commute. You can take public transportation, share a ride with your colleagues, or even ride a bike.
5. Cut Down Your Electricity Use
Cutting down your electricity use will not only help your finances but also the environment at the same time. Do an energy audit in your home to find areas that you can cut down. Usually, cooling and heating appliances are the biggest energy consumers in a household.
6. Don’t Eat Out Too Often
Eating out with your friends is fun, but doing it too often will damage your financial condition. Instead of going out to a restaurant or cafe, invite your friends to come over to your house. There, you can cook your meals and coffee. It’s a great way to save money while still being able to have fun with your peers.
7. Cancel Unused Memberships and Subscriptions
Cancel all memberships and subscriptions that you don’t need anymore. When was the last time you went to the gym? If you have a gym membership, consider canceling it. Instead, do free workouts like running in a park as well as doing push-ups and sit-ups.
8. Cut Your Cable
With the growing popularity of streaming services like Netflix and video sharing platforms like YouTube, TV cable has become a thing of the past. They cost less than cable, while also giving you the flexibility to choose what content to watch and when to watch it.
9. Learn to Say NO
According to Credit Karma, 40% of Millennials overspend and get caught in debts just to keep up with their friends. Don’t make the same mistake. Learn to say no to your friends if they invite you for a night out when you’re running low on cash.
10. Refrain from Overusing Social Media
Social media can be harmful if you overuse it. Everyone is using social media to brag about their latest trip to Europe, their newest collection of Gucci bags, and anything necessary to make them appear cool and rich.
Limit your social media use to avoid being influenced to buy unnecessary things just to look cool. Just remember that your friends won’t be there when it’s time to pay the credit card debts.
11. Buy Higher-quality Clothing that Lasts Longer
Buying cheap products doesn’t necessarily help you save more money. It’s much cheaper to buy high-quality stuff that costs more but lasts longer than cheap knock-offs that you can only wear 2 or 3 times before it breaks.
For instance, spending $300 on a pair of jeans that you can wear for 3 years is much better than spending $10 on a pair of jeans that you can only wear for a couple of months.
12. Avoid Impulsive Buying
Living in an era of online shops and social media, Millennials are under constant threat of impulsive buying. With eCommerce sites like Amazon all over the web, purchasing something online has never been easier. Not to mention those Instagram ads that know exactly what kind of shoes or watch you like.
To avoid impulsive buying, it’s necessary to create a monthly budget and stick to it no matter what happens. It may be hard, but saving money is all about being disciplined and having a strong commitment.
13. Use a 30-day Rule
To avoid impulsive buying, you need to practice the 30-day rule of shopping. The rule of the game is simple: if you want to buy something really bad, wait for 30 days. After 30 days, you’ll realize where the urge of shopping comes from. Do you need the item? Or is it just your appetite? Most of the time, it’s the latter.
14. Eat First Before Shopping for Groceries
Never shop for groceries while you’re hungry. When you’re hungry, every food will look extra delicious and you might end up buying too much food that you don’t need. Creating a grocery list before you go shopping will certainly help you stay on track. And also, don’t forget to eat first.
15. Make Extra Money
Cutting down life expenses can be difficult to pull out at times. No matter how hard you try, there’s just not enough money to save at the end of the month. Especially when you’re married and have kids. If that’s the case, making extra money is the most reasonable route to go.
There are many ways to make extra money depending on your skills. You can do freelance jobs, start your own online business, teach online courses, or even offer house cleaning services for your neighbors.
16. Borrow, Instead of Buying
Don’t ever buy what you can borrow, it’s a waste of money. Things that you must borrow are those that you need for the time being, but not for a long time. Things like books, movies, lawnmowers, ladders, chainsaws, carpet cleaners, tables and chairs for events, as well as tents when you decide to go camping.
17. Don’t Let FOMO Get the Better of You
FOMO is an acronym that stands for Fear of Missing Out. This is a social anxiety that’s commonly found in Millennials. It’s a feeling of wanting to catch up to what your friends do, whether it’s having fun with friends, going on a luxurious vacation, or buying the latest gadgets.
Instead of buying something you need, you’ll buy something because other people do the same. And you want to look cool. It’s in human nature to crave acceptance and not wanting to be left behind. But if you let FOMO control your life, you won’t ever be successful.
18. Buy Used Furniture and Items for Your House Decoration
Your house is the place you spend time with your family and rest after an exhausting day. Of course, it needs to be comfortable and nicely decorated. Who wants to go home to a place that looks like a dump, right?
Nicely decorated doesn’t always mean expensive taste. You can buy used furniture at a garage sale, flea market, second-hand store, or even a shop of a charitable organization. You can also recycle unused junk into beautiful home decor items with some creativity.
19. Purchase Something That’s on Sale
If you can, avoid paying the full price when you purchase something. Instead, wait for the sale season to begin before going on a spree. Big holidays like Christmas and New Year certainly offer a lot of discounts. Also, look for the occasion. Purchasing winter boots and coats during summer will usually be much cheaper than during winter.
20. Don’t Get a Pet Just Yet
Adopting a pet might seem like a fun idea until the bills come in. The average yearly cost to raise a small dog is around $2,674, and it grows as the dog gets bigger. Medium dogs will cost $2,889 and large dogs will cost $3,239 yearly. And don’t forget about those medical emergencies that can cost you thousands of dollars!
In the last few years, Millennials have been heavily criticized for their lack of ability and willingness to save money. Yes, studies have confirmed that Millennials indeed have a lower savings rate than both Gen X and Boomers but, it’s not entirely their fault.
Today, everything is significantly more expensive than it was back in the day. Education costs are much higher, forcing students to take up student loans. Not to mention credit card debt, car loan, and mortgage on top of it. Millennials spend most of their income to pay off their debts until there’s barely enough to save.
However, that doesn’t mean you can’t cut down on your expenses and start saving.
Here are some actionable money-saving tips that you can try right away:
- Use cash instead of cashless payments.
- Don’t get into a house mortgage when you can’t afford it, rent instead.
- Apply for scholarships to help finance your study.
- Sell your car and take public transportation to commute.
- Cut down your electricity use.
- Don’t eat out too often, cook your meals.
- Cancel all memberships and subscriptions that you no longer use.
- Switch from TV cable to Netflix or Hulu.
- Don’t get easily influenced by your friends and social media posts.
- Buy high-quality fashion items that last longer, as opposed to cheaper knock-offs.
- Use a 30-day rule before purchasing something.
- Borrow what you can, and only buy items when it’s on sale.
- Don’t go shopping for groceries while being hungry.
- Do side hustles to earn extra pennies.
- Buy second-hand furniture, or make one from unused junk in your home.
- Don’t get a pet when you’re still in debt.