Millennials are often stereotyped as being irresponsible spenders, probably as a result of having more disposable incomes than other age groups. The thing is – good advice(especially regarding money) is hard to take, especially for a generation that believes in living in the moment, enjoying the now and having the best time you possibly could. Saving and money management is a boring topic to this demographic. But guess what else is boring? Still having to work as hard as you work now in 40 years. It’s now very important to learn prudent purchasing and money-saving behaviors to ensure that you aren’t wasting hard-earned money.
These article touches on 7 money saving tips millennials- and indeed everyone else – need to stop ignoring.
- You’re never too young to have retirement savings: Studies show that people with retirement plans are better savers. Several young people put off starting retirement savings until they’re older or until they have a larger income. Truth is, if you don’t form a proper money saving habit when you are earning a little, you would still have trouble saving even when you’re earning a lot more. Studies have also shown that the people who have the best returns on their retirement savings are those who get professional help. When you get the advice of an expert, you will know precisely how much you need to have saved up by the time you eventually retire.
- Live like a student: This doesn’t mean you have to live an extremely frugal lifestyle, but you can remember how you cut out irrelevant expenses when you were a student and didn’t have that much to live on. Take a page out of a student’s book and attempt living on half of your salary each month. While this builds character, it also lets you build a healthy savings account with the remaining half of your salary. If you’re not straight out of school and have much more responsibility than a fresh graduate, try saving 10% of your earnings monthly and increase it by 1% each month. If you can keep to this pattern, your money savings will grow steadily with time.
- Trick yourself with mental accounting: This method involves splitting your paycheck into different piles and treating them differently according to what your intentions are for each pile. Several economists say this method of tricking the brain works by making you better at budgeting and money saving. One example of this is the envelope system, where a sum of money is split into different batches – one for each week or budget category. When these envelopes get emptied, you know you’ve spent your entire budget.
- Don’t let your money be idle – Invest it!: If you are working hard for your money, it should in turn work hard for you. Invest a portion of your earnings in something that is sure to generate returns, no matter how small – little drops of water…
- Know your value: When you know your market value or the cost of the value you create at work, you’ll be able to confidently request for a raise when you know it’s due. Also network and form new connections that can help you find a better paying job if push comes to shove or just to keep your options open.
- Keep track of your expenses: When you know where your money is going, it will be all that easier to curb unnecessary spending. Form the habit of documenting your expenses as much as you possibly can, so that when you do analysis, you’ll know where the unecessary expenses are and where to cut from.