Millennials (those aged between 25 and 34) know a thing or two about money struggles. Growing up in a period marred by economic instability, job shortages and skyrocketing housing costs, Gen Y has been forced to watch their pennies and make budgeting a part of their repertoire.
Despite their economic hardships, millennials have demonstrated healthy money-saving habits. This may in part be thanks to the fact they grew up with technology – allowing them to be savvy when it comes to cutting costs, spotting the best deals, and finding creative ways to save.
What ways? you ask.
Here are some of the tried and tested ways millennials are saving money:
1. Establishing goals
Establishing long-term goals is the best thing millennials can do in order to budget better and spend smarter.
When a goal is big enough, taking the necessary steps to save for it becomes easier. For most millennials, common financial goals include:
- Paying off student debt
- Saving for a house
- Purchasing a car
- Travel
- Having more savings
Having financial goals to aim for can really set the stage for good money habits and a life of financial stability.
2. Making a budget – and sticking to it
One of the more common money mistakes people make is forgetting to budget.
Budgeting really comes down to being mindful of your spending habits. One of the easiest ways to set and stick to a budget is to monitor your monthly expenses in terms of incoming and outgoing cash.
By being aware of how much you have, how much you owe, and how much you’re spending, you’re making it easier to know exactly what you’re dealing with.
Millennials have been turning to budget apps and online budget planning calculator to keep track of their spending and calculate how much they need to put away into their savings and how much they need to stay on top of monthly bills.
3. Automating finances
Technology plays a huge role in helping millennials save money. If there’s a financial need to be filled, there’s now an app to do it!
Automating your finances is just one of the tech-assisted things you can do to help save money.
From automating deposits into a savings fund to signing up for automatic debits from your bank. This process of pre-planning your finances takes budgeting to the next step and is a clear-cut way of simplifying your bills and adding to your savings. It also gets rid of the temptation to spend your earnings before you budget and save.
4. Saving where possible
Yes, millennials are aware of being dubbed the “smashed avocado generation” as a sarcastic nudge toward their sense of entitlement. Costly coffees, fancy brunch meals, and a penchant for finer things has earned millennials the reputation of being frivolous and often irresponsible with money.
Thankfully, the younger generation are bouncing back and are understanding the seriousness of saving.
In fact, a recent survey by Bank of America found that 73% of millennials are saving more – and more than half (59%) of this generation have $15,000 or more in their savings account.
5. Having a side hustle
A lot of millennials have found creative ways to make more money. One of those is the side hustle.
If you have room in your schedule, or if you’re currently working part-time, think of ways you can source an extra income. Whether it’s selling your crafts on Etsy or pet-sitting of a weekend, having a job on the side keeps your savings healthy and helps you to purposefully utilize your free time.
For millennials who are students or who owe student loans, a side gig can be a great way to cover these school-related debts without having to severely dip into your main savings.
Take the first step to save today
Millennials have had a rough start to their financial journey. However, creative thinking and the aid of technology has helped this generation become more savvy when it comes to spending and saving. Because of this, more young people are finding a sense of financial freedom or in the least, a more optimistic outlook on their financial futures. When it comes to money management for millennials, the key is to find solutions in the way of basic budgeting, tracking spending habits, and cutting costs wherever possible.
Millennials have many advantages in growing their financial habits, especially in the wake of this global pandemic. With more lockdowns, young people are forced to seriously look at where their money is going and realize they are able to cut costs or eliminate expenses in areas they previously splurged on such as going out, taking away, and gym memberships.