Starting from partying all night to impulsively shopping at malls, the money spending habits of millennials are no doubt crazy. And on top of that, there’s a rising concern about the increasing debts on every millennial’s shoulder. According to the sources, more than 70% of millennials have one long-term debt, and 30% have debt like student loans and personal loans. If you have hefty loans and seeking financial advice for millennials, you have just come to the right place! Feeling sorry for yourself doesn’t help and will not get you the money you need. Savings and investments will!
At this point, you probably feel like barely getting from one paycheck to the next, and saving money is impossible.
Contrary to what you may feel, there are many other people in your situation. Here are the numbers that prove it.
Student Loans Fast Statistics
According to StudentLoanHero statistics:
- No less than 44.2 million Americans currently have student loan debts.
- Their student loan debts are worth $1.48 trillion.
- The delinquency rate on student loans is 11.2%.
- Borrowers between 20 and 30 years of age owe monthly student loan payments of $351.
These statistics prove you are neither alone nor special, at least as far as your finances are concerned.
However, you can stand out from the crowd. You can do it through your actions and what you choose to do to cover your debts.
Are You Considering Refinancing Or Leaving Your Debts Unpaid?
If you are on the fence to replace your old existing debt with a new one and leave your debts unpaid, either of them won’t work. Here’s the reason why they won’t work.
- To reduce your monthly payments through refinancing, you would most likely have to extend your loan period. This actually means more debts over a more extended time.
- Even if some loan offers may have lower interest and seem like a way to save some money, they probably have some fees or commissions that will even the balance and take away any gains.
- Even if they don’t, getting approved will take time and effort to invest in something more productive.
2. Leaving Debts Unpaid
- It does not help either. Even if the lender has no way to recover their money from you, their debt collection agents will drive you crazy and ruin your reputation.
- Moreover, you will ruin your credit score and reduce or destroy your chances of ever getting another loan, a credit card, buying a home, or even renting one.
However, please don’t lose hope as we exactly will discuss ways of saving money for millennials in the next section!
10 Smart Ways For Millennials To Save Money
You probably find this idea absurd since it’s impossible to save money when you can barely make it from one paycheck to the next.
You’re right from the place you’re coming from!
However, some methods work, and they might work for you too if you give them a chance.
1. Set Automatic Deposits on the Same Date as Your Paycheck
The first and foremost crucial step is to automate the process of depositing your money on the same day you receive your paycheck.
It does enable your money transaction automatically to an account without you having to withdraw them manually.
Check with your bank, see if they have such deposits, or create a PayPal account and set automatic transfers. Then, find a way to move some money from your account automatically on the day of your paycheck.
Whether it’s $10, $50, or $100, imagine you didn’t receive it in the first place. You will simply have to get by without it, and I’m sure you will. Within a few months, you’ll have some money set aside to pay off some of your debts or invest in something you really want.
2. Use an Online Tool to Manage Your Budget
Often, we lose track of our expenses, and only when we exhaust all our savings, we question – “Where did all the money go?”
This clearly shows a lack of managing your monthly budget. There are several apps available online to save you from the dread and tension of exhausting your monthly saving.
These apps come in handy and help you to organize and monitor your spending habits as a millennial.
While you can surely do your math without them, they are a great way to see where most of your money goes.
For instance, you can record the money you spend on coffee and grooming in these apps only to realize how this short spending contributes to significant expenses in the long run.
Here are some online apps available to track your monthly budget:
3. Start Cooking and Inviting Friends Over
Millennials and their partying habit go hand in hand.
How often do you eat at the restaurant and go out with your friends and family?
According to CNBC reports, you’d be shocked to know that 49% of millennials spend their money dining out that they save for the future.
And this is an absolute fact if you do the math. You will see that the money you spend on one restaurant meal is enough to let you cook for yourself and your friends or family.
So why not start throwing parties at your home and cook meals to save money.
You can start with simple recipes, like eggs, fries, and pasta, and move on to more complex recipes when you feel ready.
Besides helping you save money, this practice will help you consolidate your relationships, give you a new hobby, and prepare you for family life.
4. Buy in Bulk
It is natural to buy everything in small quantities thinking you don’t need more when you live alone.
Although buying in bulk can lead to wastage, however, doing it in moderation can help you save money.
For instance, many grocery stores provide discounts after reaching a specific bill amount. Perhaps your budget won’t allow you to switch to bulk acquisitions from the beginning, but you can start with one or two items and expand gradually.
5. Use Coupon Codes and Cashback Websites
While we don’t recommend subscribing to coupon and cashback websites as they might act as a temptation to buy unnecessary pieces of stuff. However, using them when you buy things online can save the money of millennials.
Find the website you want to buy from, look up coupon codes online, log in to your cashback shopping account, and get what you need at a discount.
Though the coupon code helps you pay less, the cashback shopping website gives you back a few percentages of the price you paid as money, credit, or vouchers.
6. Convince Your Friends or Family to Accept Joint Subscriptions
In 2015, the Deloitte survey predicted that the US and Canadian millennials would spend over $62 billion money on media content.
This would mean shelling out more money from every millennial’s pocket, ultimately leading to a disruption in their monthly spending habits.
However, there’s one legit way to save money while subscribing to online streaming services like Netflix, Amazon Prime, etc.
You all need Netflix, the Internet, and other subscriptions available with shared or group packages as well. Instead of signing separate contracts and paying their full price, why not share contracts and save a lot of money?
7. Seek Free Entertainment
No doubt the entertainment industry is at its peak.
You probably love going to the movies and fancy clubs, but there are ways to have fun without paying an entry fee.
Instead, invite your friends to a run or a football game in the park, go to street festivals and outdoor concerts, and take turns at throwing parties. Look up free social events online and attend them. Nothing beats free entertainment!
8. Trade Cab Rides for Public Transportation or Rideshare Services
While taking the cab is easier and more comfortable than taking the sub or the tram, however, the price difference is overwhelming.
In contrast, you can save even more by getting a subscription for the routes you cover often.
If you can’t take the sub or the tram, Uber or Lyft could still put some money back into your pocket and get you to your destination.
9. Stay Away From Credit Cards
Although credit cards seem safe and useful, a gateway to getting what you want when you can’t afford something, they will only add to your already considerable financial burden and get you into even more trouble.
If you’ve already got credit cards and you can’t cancel them or pay them off, cut them as Rachel did in the F.R.I.E.D.S show.
10. Change Your Thinking
At this point, you’re probably trying to cover everything you need and want from the money you have at every paycheck. It’s not enough, and the conclusion is frustrating, depressing, and makes you want to spend even more money.
Instead of accommodating your paychecks to a list, you should build the list around your salary.
Start with the basics, the things you desperately need, and add the things you can afford according to their importance. You will no longer be cutting stuff off your list but adding them, and you will indeed feel better.
What Are Some Financial Planning Advice For Millennials To Save Money?
Now that we know the ways to save money, let’s quickly glance over some practical financial planning advice millennials can implement in the process.
1. Invest in Cryptocurrency
Clearly, Cryptocurrency is the next big thing. Investing a meager amount of money consistently in crypto can yield returns 10x or 100x in the next few years.
Some of the trusted websites where you can trade crypto are:
2. Invest in Mutual Funds
Millennials have difficulty in financial planning because of a lack of knowledge in investment.
While investing money in stocks can be risky if one doesn’t know the nitty-gritty part of it, mutual funds and SIP plans are much less risky.
This simple process effectively helps you build wealth in the long run. You can set aside a tiny amount from your salary and invest it in SIP mutual funds every month.
3. Recurring Bank Deposit
Another way millennials can up-level their financial planning is by opening a bank RD. A fixed amount gets deducted from your saving account every month and gets deposited in the RD by opening an RD account. You even get a nominal rate of interest on maturity.
I know: you haven’t saved enough money to pay off your debt and change your life forever. However, you did get by and put some money aside, which is a great start.
Even if your savings only pay for a new outfit, a birthday party with your friends, or a gift for your loved one this time, they’re paying for something you couldn’t afford before, something that matters to you.
Every dollar you save is a step forward, a reason to stick to these methods, try new ones, and keep saving. Who knows, one day, you may actually be able to say you’re debt-free and you’re saving for something big, like your home, a new car, or even a yacht.
Until that happens, I would love to hear what saving methods worked for you, what you save for, and if you’ve managed to pay off your debts, so don’t hesitate to share your story!
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Key Takeaways on Millennials and Money
- Sources suggest that more than 70% of millennials have long-term debt.
- Millennials have a hard time planning their financial goals and manage their money.
- Refinancing and leaving debts unpaid is not a wise way to pay off your pending debts.
- However, there are some practical ways to save money for millennials.
- Automating the process of depositing money from your bank every month can help you pay off debt quickly.
- Furthermore, utilize online tools to manage your monthly budget accurately. This will also enable millennials to keep a check on their spending habits.
- Instead of dining out, start inviting friends and family to your place.
- Also, buying products in bulk but in moderation can make you eligible for discounts, ultimately saving money.
- Furthermore, use coupons and discount codes whenever you’re purchasing online.
- Convince your friends and family to share subscription packs.
- Try to go for public transportation or shared rides instead of private transportation.
- Lastly, refrain from using credit cards as much as you can.
What are some practical tips to save money for millennials?
- Invest in Cryptocurrency.
- Invest in Mutual Funds.
- Open a Recurring Bank Deposit.
What are some lifestyle changes millennials can practice to save money?
- Use online apps to manage your monthly budget.
- Cook homemade food instead of dining out.
- Throw home parties with friends and family.
- Buy clothes from a thrift store instead of big malls.
- Share the subscription plan with others.