Millennials are often labeled as materialistic, saddled, and spoiled with a sense of entitlement. But in reality, many Millennials feel that they will not be able to accomplish material goals like buying a house, landing up in their dream job, or retiring until much later in their lives than the previous generations. It has become increasingly difficult to pay off student loan debt for millennials struggling with low-paying jobs and even unemployment. Making millennials aware of the investment strategies and saving tips is the key. Here are some realistic and straightforward strategies for millennials to adapt to save money for short and long-term savings goals.
Build an emergency fund:
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The pandemic was a wake-up call for many Millennials who discovered how important it is to have an emergency fund handy. Many Millennials realized how little money they had saved was in a lurch due to jobs lost and had to start thinking strategically. The most thoughtful way to create an emergency fund is to start small and save up for a month’s worth of expense. Another effortless and great way to build an emergency fund is using an online chit fund platform.
Chit fund is a very convenient product that offers both savings and borrowing benefits and is very useful for emergency lending. The emergency fund is built by putting aside a part of your income to tackle unexpected expenses without disrupting your financial goals and straining your cash flow.
Save money on unnecessary expenses:
Many millennials laugh at being advised to stop buying Starbucks and the like, but when you calculate how much those types of things cost, it can be enlightening. Another great way to save some money is by taking food made at home for lunch, making your food rather than ordering takeout or going out to restaurants. You may indulge in many DIYs, which save a considerable amount of money—splitting Netflix/ Amazon subscriptions with roommates or friends, switching off appliances, packing snacks from home. In contrast, traveling saves up a lot of money.
Save on housing costs:
It is crucial to consider how millennials spend on housing as, typically, this is the most significant expense usually people have. Although the idea of living independently is fascinating, it is not always feasible financially. Instead of letting housing consume all your earnings, it is better to look for a place with a roommate or two or in areas where the rest is affordable. This will further help save on utilities such as the internet and electricity.
Compare transportation options:
Transportation costs include vehicle purchase, maintenance, insurance, and also public transport costs. Transportation expenditure varies significantly across generations. If taken into account, as a percentage of annual spending, transportation spending goes lower with older age groups – from 17.8% for millennials to 15.9% for baby boomers – the range across generations is much smaller here, at less than 2% than the content of healthcare spending, which spans more than 4%.
Avoid accumulating credit card debt:
Although credit cards are valuable and help you built a strong credit score when using correctly. A strong credit score comes in handy when buying real estate, big-ticket items, or even during travel. However, there are also risks associated with credit cards, mainly when they continuously use them to spend more than they earn. Furthermore, they spend even more money than they would with cash due to the interest on the credit cards. This has the potential to put millennials in debt. It is always recommended to choose credit cards with a low-interest rate.
Explore cheap and fun ways to have fun:
It is natural for millennials to spend more on entertainment and fun. However, when trying to save, they can look for activities that require less spending. Hosting fun game nights at home instead of going out and playing games online is a great way to save on going out for weekly game nights. Another option is by canceling cable subscriptions and subscribing to streaming services. There are numerable ways to have fun when you think about your hobbies and how you can keep them cost-effective.
Millennials are hopeful of emphasizing an investment philosophy that augments themselves and the world around them. Millennials’ ability to succeed financially depends on many factors, including economic and political conditions, and whether they can overcome the discerning sense of entitlement that society has imposed on them. Financial planning may not be easy, but using these financial tips and trying to cut back whenever possible is an intelligent way to start saving.