The best means of saving money is to of course earn more. Statistics reveal that millennials (those born between the early 1980s and 2000) are placing higher priority on savings to fund their futures. Events like September 9/11 and the 2008 recession have made a huge impact on the millennial mindset, their beliefs and attitudes towards money. However, studies have shown a difference in the spending habits between genders where men have been seen to succumb to peer pressure in terms of material objects while women are considered thriftier. Much of the peer pressure can be attributed to social media where everything is under public scrutiny right from an expensive holiday to that designer handbag or swanky car that you own. Do you belong to the Millennial generation? Do you want financial security? If your answer is in the affirmative then you ought to start saving. Although you may not have much money now you have time on your side. Be good to your future self and start making smart financial decisions. You don't have a choice as times are tough. So, change that Fear of Missing Out (FOMO) mentality and cultivate sound spending habits. Here are 5 things you should do in order to boost your savings.
- Practice thrift: Step up your savings game by practicing a frugal lifestyle. Cutting down unnecessary purchases will enable you to develop good financial habits, you will be able to repay your loans faster and also be able to avoid credit card debt. You need to give precedence to the little things that make you happy and stop wasting money on the things that don't. Besides you can do all this and have fun while you are young without burning a hole in your pocket.
- Invest: Investing can be tricky, but it's one of the best ways to get returns on the money you presently have. Choose certain avenues that you find yourself interested in and focus on investments in those areas. A millennial-friendly factor is that Generation Y excels at navigating technology and can put their skills & knowledge to good use through regular investments. A lot of free education is easily available online for you to read up. Millennials use technology to compare prices, check product info and also make online payments. Plus, you can easily monitor your investments over a smartphone or an online portal and stash away money towards your financial future. Finding a low-fee investment is a good idea for starters. Investing steadily and methodically while keeping expenses low will get you where you need to go.
- Begin a side hustle: Most millennials seem to be discontent with their full-time job and thus can be seen to maintain a side hustle. Sometimes it can be part-time work, or a freelance opportunity, volunteering or even building one's own business. It's always a good idea to have an additional income to supplement your main income. Side hustles also offer the opportunity to develop your skills and passion for your own satisfaction or for switching careers. However, do list out your priorities as time management is crucial once you take on double responsibilities.
- Automate: Automation is essential. It's wise to automate your bills and payments, retirement funds, savings etc. That way you can spend whatever remains in your account and avoid late fee charges as well. After all, you can never spend money that you never see. Have your employer do a payroll deduction and sent straight to your retirement account. Cultivate a habit of increasing your savings regularly, after every 6-12 months or whenever you get a salary hike, bonus etc.
- Don't settle for a substandard salary: The formula to successful savings and investments is to earn a good income. Check out the market compensation for your skills and expertise and make sure that you draw that amount of money or thereabouts. Never be content with a substandard salary. If your current job is not giving you a decent salary and growth, start actively looking for a better position where your education and experience will be appreciated.
Final comments: Contrary to conventional wisdom, millennials are saving but their focus is more on financial freedom than putting off gratification until retirement when they even may not be able to enjoy it. No two people have the exact same situation. So, it's best to figure out what works for you. While it's not easy, young people should take control of their finances and save as much money while they can. Another important factor is as a millennial it's important to have financial literacy along with tech knowledge. It's only then that you can be financially secure- or else the next financial crisis may just be around the corner.