5 Top Budgeting Tips for Millennials
Many experts agree that young adults have a different approach to spending than the generations that came before them. For instance, the millennial generation is more likely to spend cash on an experience, like a music festival or a trip with friends, than a product. However, just like any other generation, young adults are also facing a growing need to be more cautious with the way they spend their cash.
If you’ve begun to notice a greater need for a stronger savings strategy, then you’ve come to the right place. We’ve put together some beginner budgeting tips for you young adults out there who can’t afford to ignore the power of savvy spending.
1. Always Think About the Future
Many young adults live their lives with a focus on the present, enjoying the experiences that they’re having right now. While this is a wonderful way to live, it’s also important to think carefully about the future, and how you plan to continue paying for the things you need several years from now. Studies have shown that nearly half of all young adults don’t actually think ahead about things like retirement and pensions.
To make sure that you have something comfortable to fall back on when you’re a little older, start putting money away into a pensions fund as early as possible. Consider starting a savings account alongside your pension fund too, as this will help you to save money for short and long-term goals that aren’t related to retirement.
2. Build an Emergency Fund
As well as putting money away for the future, it’s also worth thinking about what you’re going to do if something goes wrong and you need a little extra cash to get yourself out of a tight spot. For instance, if your boiler suddenly broke down tomorrow, would you have the money to pay for a repair, or would you need to take out another loan, or tap into your savings fund?
Putting a little bit of money away each day into an “emergency” fund for rainy days will help to protect you from these unexpected issues that can happen from time to time. Start by putting perhaps £20 away from your salary each month, or whatever you can afford without eating into your bill and saving money.
3. Be Careful with your Debts
Most young adults already know that they shouldn’t simply be getting into debt for no reason. However, it’s worth noting that most people do end up needing to borrow money at some point during their lives. Whether it’s a personal loan to help with something like house repairs and decorations, or a student loan to pay for educational costs, the most important thing you can do is make sure that you’re not paying more for your loan than you need to.
Take some time to compare your loan options in advance and make sure that you’re getting the best deal on your APR. The less you have to pay on interest; the less your loan will cost you in the long term.
4. Cut Out Luxuries Wherever You Can
While it might be hard to imagine a world where you live without your favourite latte every Monday morning, sometimes it’s important to cut back on the things you don’t really need. If you want to save for a goal like putting a deposit on a house or paying for a new car, then you’ll need to cut down on other expenses. Most of the time, this means getting rid of extra luxuries first. Look at your daily spending habits and figure out what you can live without.
Remember, you don’t necessarily have to cut everything you love out of your routine. However, it’s important to think carefully about every penny you spend if you want to reach your savings goals quickly.
5. Learn to Haggle
To some people in the millennial generation, haggling seems like an old-fashioned concept. However, the truth is that it can actually help you to save a lot of money in the long-term. For instance, if you compare the cost of your broadband bill online and find out that you can get a cheaper price from another provider, you can call your current internet company and let them know you’re thinking of changing. Most customer service reps will be trained to do everything they can to convince you to stay with the company. This means that they may give you an exclusive discount. If they don’t, you can simply switch to the other, cheaper provider.
**This is a collaborative post.