Millennials, old or young, now have trouble putting finger on some basic finances like payment of taxes and investments. While it might be early to start investments, it could be one of the liberating ways to save money. We will get to that later in our article.
You must be fretting now since you are pursuing or done graduating and your “independent wings” are ready to take off into the forest of the unknown adulthood. Keeping your ears open for all the financial advice that seems to flit over your head while you gulp down the grim reality of rent, utilities, high cost of living, low-income jobs, college debts, transportation and food can be a daunting task at your age.
You might have no clue as to how to save money when you are earning peanuts. What is inevitable is the need to save money which should not be avoided at all costs. At least 10% of your salary, if you have started earning, should be saved and not used unless emergency demands. Since all the trigonometry and salt analysis studied back in school days does not help you out to save on your taxes and deal with money matters, we have compiled a list of 8 creative ways of saving money for millennial.
1. Formulate a Budget
You may realise later what an effect budgeting does especially when your salary is in a disappointing number. Inculcate a budgeting habit- it will go a long way in your life. It does not matter how you do it- in a notepad, a spreadsheet or an app. Note down where your money goes- how much you receive, how much money you spend on groceries, night-outs, cloths, other bills, etc.
This will give you an insight into your spending habits and make you less likely to overspend. There are plenty of good budgeting apps like Mint, everydollar, etc that are free of cost and help you manage your bills easier.
2. Learn to say “NO”
Yes, FOMO (fear of missing out) hits everyone hard, especially when you scroll miles down the feed of your social media sites. Maybe its time you stop comparing yourself with lives of others, including your friends. It can also be unhealthy from a financial perspective especially when you cannot refuse to go out for the 5th time in a week. Do not feel pressurised into saying “YES” to your friends every time.
Instead of going out to restaurants and bars which can cause a serious hole in your pockets, conduct your meet-outs and eat-outs at your home itself. You may not realise this but this saves a lot of money.
3. Send your Paycheck Directly into Savings
Imagine your entire salary to be saved and not spent. Then, when you start spending, your salary reduces from being 100% saved to, say 50% saved. This perspective can help you to spend less money on unnecessary items and make you think twice before getting anything. Make this idea concrete by sending your paycheck directly into your savings account rather than the checking account. It’s is a good way to inculcate mindful spending habits as consistency is the key to savings.
4. Stitch the Holes Forming in your Pocket
Find out the nonessentials frivolous splurging which you can cut back on. See if you need the monthly mobile data plan or you can use Wi-Fi. Cut back on expensive restaurants. Skip the Starbucks. Assess your monthly spending and cut back on those entertainment and dining-out costs that just empty your wallets at once.
Some facilities and services renew automatically using your credit cards. Check if you need them (yes, we are talking about Netflix). But if you like Netflix too much, then share an account with your friend(s) so that you will pay only half (or less) of it. Cancel out other subscriptions and memberships that you can live without. If you are tempted to buy something costly, control the temptation and wait for a few days. You will save up a lot of money and will thank yourself later.
Find yourself some hobbies and get your mind and body moving. Doing hobbies will only do good to you- it makes you busy in a better and productive way. This will take some screen-time off your schedule and give you a beauty sleep. They are relaxing, de-stressing and therapeutic. You can also earn extra cash as side biz by selling your artworks!
If you chose something like dance or yoga, you get your body moving and feel better. Moreover, once you start working out, you will eat mindfully. Speaking of mindful eating, stop going to restaurants or buying take-aways. Instead, start cooking by yourself. Cooking is an essential skill that can be very helpful. Call your friends over and cook for them rather than going to a fancy restaurant!
6. Set Short-term and Long-term Goals
Short term goals include saving up for emergencies, vacation and fun outing etc. Getting a Certificate of Deposit (CD) locks your money for a short time but gives you back with an interest higher than a savings account. Long-term goals are saving up for your own house, investments and mutual funds, education cost and retirement.
Plan out thoroughly, you needn’t take up all of them at once. See what suits you better. Set your priorities. For a psychological boost, set small and achievable short-term goals like going for a long trip with friends, getting a new smartphone, buying holiday gifts for family and friends etc.
7. Switch off your Light now
No, seriously, switch them off. This might seem ridiculously simple advice. Check which utility service provider gives you the cheapest rates. Gas, internet, electricity, water- use them judiciously. Do not leave the heater or air cooler on for the whole day. Make it a habit to save on these utilities and switch them off as you are done. Then set up automatic payment and never worry about them again
8. Use a Low-interest Credit Card
Credit cards are an important financial tool. Use them mindfully to increase your credit score. You might be tempted to buy the cards that are rewards-based and offer points for more you spend.
They not only require a diligent usage but also come with a heavy annual fee. Buying a credit card with a low-interest rate and lower limits will let you buy needful. Look out for 0% APR period, zero annual fee and credit score services that are free instead.
So these are the 8 creative ways of saving money for younger millennial.