How To Save Money as a Millennial
One of the biggest challenges for Millennials (most research groups agree that Millennials were born between the years of 1980 and 1995) is that we face massive amounts of debt. Between the rising cost of tuition, student debt, and high levels of unemployment, a rising percentage of Millennials are living at home with their parents. Luckily, we are the most educated generation in history so we just need to make sure that we are smart in our approach to saving money. Allow me to present my millennial money saving tips:
If you set this up directly through your bank you won’t even notice it missing! This is a great way of setting aside money without the temptation of using it. If you’re lucky, you’ll forget all about it until a rainy day. The main challenge with this method is resisting the urge to dip into the savings. Another smart idea is to have a buddy system. Ask a friend, parent, or partner to help you keep track of the funds so that you won’t break!
This is a good way to make sure that you aren’t spending your money recklessly. Set up a tiered system for how long you have to wait for purchases that are priced over a certain amount. For example, you should wait 24 hours for purchases over $50; 72 hours for purchases over $100; 1 week for purchases over $200; and a month for purchases over $500. Before you purchase that $100 pair of sunglasses that you look so ridiculously good wearing stop and consider if the pair you already have are perfectly good or whether you can actually afford to spend that money. Perhaps you can find a pair that looks similar but is a fraction of the price. The key here is to really consider your purchases.
There are a lot of great apps that can help you keep track of your money and even offer advice on how to manage your money. For example, Mint, by the makers at Intuit, helps you divvy up your money between bills and entertainment and also helps you put some of that money away. The app was designed by the same people that designed the trustworthy TurboTax software. My favourite thing about Mint is that the app links directly to your bank account, taking up-to-date information so that you don’t have to remember to log it. Check out Mint here.
Sometimes as Millennials we can be a little short-sighted. It’s easy to live in the present and leave tomorrow’s worries for our future selves. However, you need to make sure that you’re being mindful that you’re putting money away for when you’re no longer working. The worst thing that you can do is defer responsibility to start saving and tucking money away. Even if it’s $20 a month, start putting money into an RRSP account. If you can, get your work to match that amount!
This is the hardest tip. Even I am accustomed to my almost daily fix of Starbucks but sometimes it’s simply not affordable. Review your purchases for the past month and estimate how much you spend on luxury items in a week. Sometimes simply seeing how much you are spending weekly on these items can be shocking enough to prompt you to cut back. Try to limit yourself on those items by setting a weekly budget that is more affordable and more reasonable and then stick to that budget. Instead of getting coffee at your favourite cafe, consider buying your preferred blend and making a pot of coffee at home. You might have to wake up ten minutes earlier but it is much more economical.
Just remember, we are the most educated generation to date, so we are very capable of thinking through this economic crisis and making sure that we don’t have to work ourselves into the grave.