8 Tricks Millennials Can Learn Save Money

9:32 AM

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It is normal for the younger generation to not have much savings on hand yet, due to their relatively young age. As many millennials know, saving money is more often easier said than done, especially when earning a starting salary. After taking out rent, utilities, Internet, groceries, student debts and all other expenses, an exciting paycheck can turn into a pathetic fraction of its former self. We’ve all been there: the feeling of starting out is not the greatest in the world. Ergo, millennials need to come up with various ingenious ways to save money while on a tight budget. In this guide, we’ve compiled 5 tips and tricks that you as a millennial can pick up from all generations before you to save money and built long-term wealth.

1. Take advantage of technology 

Technology is not foreign to millennials. In fact, they grew up with it. The right apps can sometimes help you scout out good deals. A plethora of apps exist that can help you save money on things ranging from food to clothing. For example, apps such as FAVE can help you enjoy the best deals and discounts for a wide range of purchases including dining, travel, fitness and more.

2. Set financial goals

The key to any successful savings plan is to set achievable financial goals. Having a goal in mind gives you a clear reason to put your money away diligently. Make both short-term and long-term goals for yourself. For example, an achievable short-term goal would be to set aside 10% of your income from your next 5 paychecks. Do keep in mind that you need to have long-term goals as well, for example, owning a piece of johor land.

3. Know what you’re working with 

Keep track of your finances well. Get yourself into the habit of creating and sticking to budgets. It doesn’t matter the method of keeping track – whether it is an app, an excel spreadsheet, or a traditional accounting ledger – figure out the best way that works for you. You need to know exactly how much you are making, how much you are spending, and where exactly your money is going. Ignorance may be bliss, but you can’t afford to turn a blind eye to your finances. You need to be aware of your financial situation and capability in order for you to maximize your savings and minimize overspending.

4. Don’t follow the herd 

Millennials are all afraid of FOMO, or the Fear of Missing Out. This can be a very pervasive apprehension in terms of social and peer pressure. The advent of social media has pressure the younger generation to do what their peers are doing, to be in the know about, and to be in possession of more or something better than them. It is, however, inevitable that you need to combat this uneasy feeling in the journey of learning to be more financially responsible. Going out often equals paying more for food and drinks. Chasing the latest fashion trends may mean spending a fortune on your Adidas Yeezys or NMDs. The ability to decline invitation and to steel yourself from giving in to FOMO can be an amazing way to save up some money. Try hanging at home for a change.

5. Understand your money pitfalls 

It’s not just FOMO that you should be aware of. It is important for you to understand all of the possible pitfalls when it comes to your finances. Keep track of your spending habits. Are you shopping too emotionally? Do you spend a lot of money to keep up with the latest tech gadgets? Whatever your own pitfalls are, it is vital that you develop strategies to manage them.

If you need your daily cup of coffee, think about making your own at home instead of buying one at a Starbucks every morning. Likewise, learn to use up the whole lifespan of your gadgets and electronics.

6. Save money where you can’t see it 

Many of the younger generation successfully start saving a small amount of money, only to be hit by a large expense that forces them to dip into their savings. This is a hard habit to break. Instead of saving your money into one savings account, separate your money to different accounts according to their different purposes. Keep a bank account for daily expenses, and a separate one for long-term savings. It is better if the money your account for savings is not as easily accessed.

For example, consider a fixed deposit with a year-long maturity date. Or consider investing with the extra money you have saved. You can look towards mutual funds, or even real estate investments, to not only fully put your savings to work, but also grow your financial mountain at the same time.

7. Get organized 

Keep track of all your debt and payments. Pay of your debts on time, whether it is your rent, Internet bills, utilities, or any other bill you’re responsible for. Keep in mind that a single slip of your memory can get you ending up with late fees that are more than a little outrageous. If you find yourself to be absent-minded, or too busy to be keeping tabs of your payments day to day, think about setting up automatic payments with your bank or with your service providers. Not only will you avoid late fees and save money, you’ll avoid all the stress as well.

8. Start thinking about retirement 

You may think you are still young, but it’s never too early to start thinking about your own retirement. Think about it this way, the sooner you start planning savings and investments, the sooner you will achieve your goal of financial freedom.

Last advice

Saving money does not mean that you have to skimp and save by only paying for the bare essentials. You just have to be smart about your spending. Of course, when you have the extra money, and you have achieved most of your short-term financial goals, reward yourself with some of the creature comforts you love.

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