Author: Zenresume Editorial Team
Updated on March 05, 2021
Have you heard the news?
Millennials are killing breakfast cereals.
They’re making firm handshakes obsolete.
They’re destroying the napkin industry, canned tuna, bar soap, and even fabric softener.
If you believe the headlines, millennials are pretty powerful—except, it seems, when it comes to their finances.
Millennials are drowning in debts.
So, if you’re a millennial yourself and you want to tame your spending splurges, read on—
You’ll get 8 money-saving tips I tested myself to keep my head above water. And they worked.
Here’s a look at the financial picture for millennials:
Yes, those statistics are grim. But it’s not because they’re throwing their money away on avocado toast.
The truth is, coming of age during the 2008 recession has set millennials back.
The employment rate for younger Americans has been slow to recover. Fewer millennials are employed than their parents were at the same age.
And while salaries have stagnated, the cost of education, housing, and health care has skyrocketed. Millennials have 300% more student debt than their parents and are earning lower salaries.
It’s no surprise that millennials are likely to be the first generation to be worse off financially than their parents.
But that doesn’t mean all hope is lost. There are steps you can take right now to improve your finances.
Below, I’ve outlined the 8 steps that I used to save up money to start and grow Transizion, a college and career prep company.
These tips will help you achieve your goals, slowly but surely. It will take time to develop new habits and change aspects of your lifestyles, but these tips are worth it.
Want to increase your wealth, reduce financial stress, and build a more secure future? Sure, we all do. Here’s how:
The first step is to get an accurate picture of your finances. How much money is coming in? How much money is going out? And where exactly is it going?
You can’t start working on your finances until you can accurately answer these questions. It can be scary to finally stare your finances in the face, but it’s exactly what will make developing new habits so much easier.
Consider every expense. For example, how many subscriptions do you currently have? How often are you really using each subscription? Are they worth it?
Luckily, there’s an app for that: Mint. Link your credit and debit cards to Mint, and it’ll categorize your transactions and show you how you’re spending your money. Plus, it’s free!
It can be alarming to see how much you’re spending on categories like fast food, but knowledge is power.
Once you have a clear picture of your finances, create a monthly budget.
Start by listing all your expenses. Begin with the most important (rent and other bills) and end with the least important (categories like entertainment).
Decide how much money you’ll spend on each category. Some expenses, like most bills, will stay the same every month. Others may be one-time expenses, like attending a special event or purchasing a gift. That’s why you have to customize your budget monthly.
You should also budget for savings. Experts recommend saving at least 20% of your income. If that’s not practical for you, decide on another percentage that’s more reasonable. Treat your savings like a required bill that you must pay each month.
Of course, creating a budget is pointless if you don’t stick to it.
Remember that budgeting doesn’t mean you can never treat yourself. It’s simply designed to prevent impulse purchases that you’ll regret later.
If you really want something, add it to the budget for that month. Depending on your financial situation, that may mean sacrificing in other nonessential categories.
If it’s still hard to stick to your budget, try the envelope trick:
Sometimes, it’s helpful to physically see and touch the money assigned to each category, especially if you’re a budget beginner.
Mint isn’t the only helpful personal finance app.
You might also want to try:
Sometimes it feels scary to sit down and look at the big financial picture. But they say if you fail to plan, you plan to fail.
Reverse engineer your future following these steps:
As you map out your future, you may find that major changes are necessary to achieve your goals. Don’t be afraid to switch industries if needed.
Think long-term. If you stay where you are now, where will you be in 5–10 years? Depending on the situation, switching industries may be a minor setback. But, in those 5–10 years, will you be farther along?
You shouldn’t be afraid to move either. If the cost of living is high where you live, try to find a job that pays similarly in an area where the cost of living is lower. Or offer your services remotely from an inexpensive area.
Sometimes, stress leads to reckless spending. And reckless spending leads to more stress, creating a nasty cycle.
Trust me, while I’ve been running Transizion, I’ve faced plenty of stress, anxiety, sleepless nights, and self doubt. I’m sure plenty of you have encountered the same struggles while pursuing your own goals.
Taking action is one thing that will help you alleviate stress.
Manage your stress levels with strategies like:
If you want to move up the ladder (and make more money) in your industry, you have to continuously develop your skills.
Subscribe to blogs and podcasts related to your industry. Keep up with the latest trends and scope out the competition. Read books, take online courses, and get relevant certifications.
You’ll keep improving as an employee, and your boss will appreciate your initiative. When you ask for a raise, be sure to mention your growing list of credentials.
Studies suggest that millennials spend money they don’t have just to keep up with their peers. Images of nice cars, designer clothes, and expensive vacations on social media likely magnify this issue.
Slow down and be conscious of your motivation for spending money. Do you really need the item? Are you trying to impress someone? Are you buying this because it’ll make a great photo on Instagram?
Wanting to keep up with your peers is natural. But living comfortably and without financial stress is worth much more than any number of Instagram likes.
If comparison is a struggle for you, limit social media usage with apps like Offtime, Moment, and Forest.