For millennials, there is no better time to start saving money than now. Like most habits, becoming money-savvy is best learnt while you are still young. While saving money might seem like a tall order considering your starting salary, bills and spending habits; the truth is that the habit of saving can be inculcated in any situation. Long-term benefits of savings unfold as you move forward in life as it builds the very foundation of your future financial stability. Easier said than done, but there are a few tips that will help you get the ball rolling.
Know your finances
This is the first step towards saving. Based on your income and spends, make a budget and stick to it. To do this, analyze your expenditure in a month. How much are you spending on food? How much does an average night out cost you? Add the extras to the essential costs such as rent, utilities and transport. Once you know how much you’re spending, ask yourself – How much can I save realistically? Set a monthly goal for yourself and create a budget accordingly. Knowing your finances is half the job done.
Don’t fear missing out
Yes. FOMO (Fear of missing out) is a living mantra of millennials; but don’t be afraid to say no. You do not have to accept every invitation. You do not need to buy every single newest gadget on the market. You do not need to get in on the latest investment trend. Of course, you don’t need to lock yourself out of the world around you; but practicing some control and discipline is essential for moving into a saving state.
Use what you know
You already know how to live on a budget. Remember having none to very little money in college? And how you made the best use of the little you had to have a pretty good time. Use this acquired skill in your life and you’ll be surprised, once again, with how much you can do with little money. We know that getting paid once you enter the professional world is exciting, but do not go all out.
Put it away…far away
The money that you save should be put into an account that you have limited access to. When you’re young, dipping into your savings for futile expenses doesn’t seem like that big of a deal. In-fact, it is a slippery slope that leads to nowhere. To address sudden expenses, start working on an emergency fund, which should be approximately 3-6 months of your living costs. Try your best to not turn to your savings for unforeseen circumstances.
As human beings, we work best when we know what we’re working towards. Set short-term and long-term goals. Short term goals can be about achieving something you desire, and long-term goals can be your big dreams. So, you’ve wanted that ridiculously expensive handbag for ages; well the heart wants what the heart wants. Make that your short-term goal; and at the same time set aside money for your long-term goals such as buying a car, a house, or starting your own business.
Stay clear from debt
Your credit card shouldn’t be the wings to your every desire. Falling into a debt trap while you’re young can really demoralize you and hurt you financially in the long run. Use your credit card very carefully, only when absolutely necessary.
Organize your payments
Each month you are faced with a pile of bills to be paid. Make sure that all your bills are paid on time as late charges can be high and a total waste of money. Using a planner app can be very useful in keeping up with timely bill payments.
Saving may seem like a daunting task at first but as you progress with this habit, you will find comfort and stability with a sizeable chunk of money saved in the bank. It is this feeling that will encourage you to save further. While it is important to live in the present, it is equally prudent to plan for the future.