The average millennial aged between 18 and 36 spends over $2,300 more on bills and groceries in an average year than those over the age of 37. What’s more, is that according to Forbes, millennials are earning 20% less than the previous generation. Therefore, with increased spending and lower incomes, this imbalance leaves them with little to no room for savings.
However, small efforts can be made in terms of saving and being more money conscious. So here at MoneyStrands we have put together 5 top tips to help you become more responsible with your spending.
Let’s get down to business.
1. Knowledge is power
The same rule applies to budgeting. If you don’t have your outgoing costs clearly organized along with your income, you won’t know what is a reasonable amount to spend.
It is essential that you know what your budget is, so that you can break it down and allocate certain amounts to certain categories.
2. What you are spending too much on
As mentioned above, if you break down your spending into certain categories, you will find out where you may be overspending.
You can control this by setting a budget for each category, so that your spending is proportionally spread out. This will help deter from emotional spending and make you more aware of where your money is going.
3. Food and groceries
This is one category which millennials in particular spend vast amounts on.
Eating at home can be cheap, tasty, and quick; and it doesn’t have to become a daily chore. Instead, cook in bulk and have meals prepared for when you return home.
This will help you save time and money.
Cutting down unnecessary costs of eating out all the time can help you meet your budgets and help you utilize that money elsewhere. It doesn’t just apply to meals either, coffees on the way to work, or drinks after, can be cut down and made more as a treat, rather than a daily necessity.
Save your favorite snack or drink for friday as a reward for working hard all week.
4. Do your research
Many people pay exaggerated prices for phone, internet and other subscription services. Instead, do some research and find the best offers available and cut down your costs.
Competition is fierce, and many companies offer lower prices in the form of introductory or loyalty discounts.
Another factor to consider is how much you are really using what you are paying for. Is it worth paying for a TV subscription if you only ever watch Netflix? Is that gym membership really worth it if you only go once every 10 days?
5. Don’t fall victim to the “lifestyle creep”
Just because you may receive a pay raise, it doesn’t mean you should start living more lavishly.
Continue with your current spending, and treat yourself now and again. Then, put your extra hard-earned cash into a savings account. This can be used for a rainy day or for further investment, if you know what you are doing.
In conclusion, to save you need to be organized and responsible with your money. Know how much you have and how much you want to spend while keeping to a tight budget. That way you can set yourself achievable goals and will be on your way to saving up for that amazing holiday you’ve been planning.
Fun fact: take some inspiration from pro saver Benjamin Franklin, who in 1790 put aside $2000 into a savings account – but with one condition – it could not be touched for 200 years. Today it is worth over $6.5 million. So what are you waiting for?