Published on October 19, 2015
Millennials are not particularly known for their prudent financial habits. In fact, they are accumulating more debt while earning less money than both baby boomers and generation X, according to a report by CNBC. Learning and practicing savvy financial practices now will make responsible personal finance a lot easier down the road when you have to budget for a house, childcare and retirement. Take a look at a few of these financial tips that will get you on the road to personal financial success.
8 financial tips for millenials
1) Invest in yourself
Where do you want to be in five years? What kind of experiences do you want to have had at 30? One of our financial tips is to make smart investments, like in yourself. There's a big difference in making an investment in your education and experiences, like world travel, rather than in a new car or phone.
2) Get yourself a savings account
Even if it's just US$100 a month, a little saving goes a long way. Make an effort to put away a small amount in your savings account every month and you'll be able to see that money grow over the years as you continue to save and your nest egg builds interest.
3) Establish a monthly budget
If you're going to save up anything, you've got to know how much your spending and find a way to limit that spending. Organize your spending by putting together a list of your monthly expenses. List out each expense and the quantity and look at how much you have leftover at the end of the month. Try to see if you can make small cuts in food and entertainment spending in order to save a little more each month.
4) Be a smart shopper
Having the latest iPhone or expensive workout gear is a fleeting type of happiness. A happiness that only lasts until the new round of products is released. If you must go on a shopping spree, check out sales and off-brands. Also consider things like avoiding dry clean only clothing. You'll end up spending more on dry cleaning in one year than you did on the shirt itself.
5) Try to survive without a car
Not all cities have great public transportation, but if you live somewhere where you could get along without an automobile, it's worth it. No car payment or monthly insurance expenses will cut down your monthly spending a great deal. If you're lucky enough to live somewhere with bike lanes, cycling to the office is not only a smarter financial decision but it also is much healthier and better for the environment.
6) Prioritize spending
When you've got a finite amount of money to spend on all your expenses every month, you have to be wise about what is actually worth splurging on. Think about what really matters to you at the end of the month. Buying those new flats for work or taking that trip to the beach? Eating out on Friday night or hosting a dinner on Saturday? Figure out what is worth spending money on to you, because you just can't do or have it all.
7) Bring your lunch
Instead of spending around $8 a day on eating out for lunch, brown bag it. Opting out of spending upwards of $160 a month eating out will really add up. Cutting your monthly lunch expenses down to say $60 means you'll save about $100 a month. That adds up to yearly savings of $1,200. Bringing your lunch is also usually a healthier option anyway.
8) Live with someone else
Getting yourself a roommate is the best way to cut housing costs. No, it's not ideal if you're a fan of blasting your favorite bad pop music and dancing in the nude. But it could cut your monthly rent in half, which means more money towards savings, travel, education and entertainment.