Millennials are, financially speaking, less fortunate compared to the several generations before them. What was once the achievable “American dream” of settling down, buying a house, and starting a family by the age of thirty is now a seemingly impossible goal for the younger generation. But not all hope is lost.
The average American millennial has less than $5,000 in their savings account. With overwhelming student-loan debts that seem to never go away, an unrealistically high monthly rent (forget about a mortgage), and pay rates that barely keep up with our bills, it’s easy to see how we've found ourselves in this predicament. The idea of a healthy savings account feels totally unrealistic to many millennials, never mind ever owning a house or being able to afford children any time in the near future.
Granted, life was easier in many ways for the generations before us. Buying a home was far cheaper, going to college wasn’t as much of a setback, and decent jobs were easier to come by. So what can we do with what we have?
Here are six ways we millennials can start saving money now:
1. Set a strict goal for yourself.
How many times have we thought to ourselves, “This is the month I’m going to start saving!” only to forget all about it when we see a really good brunch deal for only $30? Setting a goal for ourselves, rather than nebulously declaring our ambitions to save, is key. We’re far more likely to achieve something when we give ourselves a specific deadline.
We’re far more likely to achieve something when we give ourselves a specific deadline.
For example: If I want to have saved an extra $1,000 by June 30th, this means I have three months during which the goal is to put away at least $300 each month, which averages out to $75 per week. When we set a rigid time limit by which to accomplish a goal, and we know the exact amount we need to save each week, we’ll be able to hold ourselves accountable if we don’t reach it.
2. Every penny counts.
Depending on the job we have, we may be paid partly in cash. This is a wonderful opportunity to save without really realizing it. I once had a coworker at my old bartending gig tell me that every night when he got home, he’d throw all his $1 bills from his tips in a jar, without counting. A few months later, he realized he’d saved over $1,000 without even knowing it. The same is possible with those pesky coins jingling around in our wallets—all that’s needed is a place to store them, a few months to pass, and before we know it, we’ll have a nice chunk of change to dump into our savings account.
3. Get a credit card, but be wise with it.
Good credit is really important these days—but credit cards can also lead us down a very slippery slope. The tricky thing about them is that they give us a sense of having endless funds when we really don’t. It’s too easy to say, “I’ll just put it on the credit card and pay it off slowly.” The best way to deal with this issue is by putting a cap on our credit card spending allowance each month and paying all debt off every single month, without fail. This way, we’ll be gaining credit and ensuring we have a good score while keeping ourselves in check.
4. Take a moment before you go to checkout.
With online shopping at our fingertips every moment of the day, it’s unfortunately quite easy to blow a bunch of money on cute clothes and overpriced makeup in beautiful packaging. As the self-proclaimed queen of online shopping, I believe it my duty to insist that we hold off on heading to checkout. Like, hold off for an entire week (that’s the rule I’ve given myself).
As the self-proclaimed queen of online shopping, I believe it my duty to insist that we hold off on heading to checkout. Like, hold off for an entire week.
Online shopping can often lead to impulse buying, our worst enemy. I can’t count how many times I’ve sworn I needed yet another sweater, only to have forgotten all about it in the week I forced myself to wait before buying it. But if we’re still daydreaming about it a week later, it’s probably a good buy.
5. Be smart about eating out.
Confession: I’d eat out every day if I could. I enjoy trying new foods, the experience of a restaurant, and having a plate of steaming hot food magically appear in front of me without any effort on my part. But unfortunately, this is where a lot of extra spending can be cut down. Just cooking one meal a week at home instead of eating out can save us $832 a year, making a trip to the grocery store and looking up simple recipes really worth it. Plus, it’s actually kind of fun to play chef and come up with our own twist on an otherwise boring dish!
6. Buy second-hand when you can.
Buying everything brand new, while super easy, isn’t cost-effective. Second-handing it isn’t always an option (like with shoes…don’t buy second-hand shoes), but it’s easier than it seems. While it definitely takes some digging, I’ve found really cute, lightly used clothes at Goodwill for hardly any money. And now with Facebook Marketplace, it’s easier than ever to find used furniture, electronics, and home decor with affordable price tags as well—just make sure you take a friend with you to pick anything up because safety first!
Saving a significant amount of money will take a much longer time than any of us want. But with small sacrifices like these, having a sizable savings account can become a reality.