Did you know that Millenials are the world’s most populous generation? Unfortunately, they’re hardly the most prosperous. And, it’s not because of overspending or impulse buying issues. Amid rising unemployment numbers and an economic downturn, it’s hard for millennials to save money. Add crushing debt and a public health crisis to the mix, and there seems to be no way out of the financial mess.
However, all is not lost. With some wise moves, you can lower your cost of living and save for a more secure future. It’s not all about saving every penny — which can seem impossible on a low income. It also involves working around the high cost of living and buying items at the right time. Read on to see how to ensure financial security.
Set a Strict Budget
Sure, this seems like the first thing everyone does when they earn any amount of money. However, it’s surprising how few people stick to a monthly budget. With credit cards and installment options available for most purchases, it’s tempting to overspend. And, it can happen before you realize it. So, the first thing (and most crucial) to do is to set a strict budget and make sure nothing distracts you from it.
Spend at the Right time
Some purchases are essential, so you can’t eliminate them. It’s a good idea to curb any wasteful spending. For example, think carefully about whether you need that new dress or a new appliance for your kitchen. Even at a sale price, it can cut into your budget. If you decide that you need to update your closet, or that your bathroom needs a little redecorating, consider when to buy it. Shopping at the right time can help you get the right price.
The first thing to consider is whether you need the item right now. If you can wait, you can find a good deal to buy it for less money than usual. Also, consider the season you buy it in. Christmas decorations sell for less money in January. Plus, fall dresses for women are much cheaper in the winter. Buy items on clearance or at a final sale price. Look for free shipping options to keep your spending as low as possible when you shop online.
Consider investments and insurance
Don’t wait till you earn more to start investing. With a steady income, you can start investing right away even you make a low income. So, if you have a full-time job, start with a small amount and work your way up. Investing doesn’t require too much money at the beginning. Open a retirement fund, or contribute to a 401(k). Ask a financial advisor to help you start an investment portfolio. The more you invest now, the more financial security you will have in the future.
Also, consider your insurance options. It may not seem feasible to spend more on things like an income protection plan. However, you can save so much money with the right insurance. Proper healthcare can help you avoid out-of-pocket medical costs. The importance of income protection insurance is that it eases the stress of relying on your income. If you can’t work because of an ailment or injury, it will help ensure you’re not left penniless.
Avoid take-out Options
It’s a good idea to curb your take-out habits — for your finances and your health. It’s tempting to get take out, especially if you have a full-time job and are too busy to cook. However, spending a little time making your meals can save you a lot of money. So, what’s the best way to balance a full-time job and meal preparation? Start with some preparation. Use one day of the week to make meals and freeze them. It will seem like a lot of work at first, but as time goes by, you will see how much money you’re saving.
Budget with Debt in Mind
It’s always a good idea to avoid all forms of debt in the first place. However, some debts are unavoidable. If like most Millenials, you pay the full purchase price for most items, you may have to pay in instalments. You may also have to pay off student loans or make car payments. It’s a good idea to keep these debts in mind when you spend in the future. Create a debt fund and add a little money into it to pay off your debts every month.
Even if you haven’t started paying for a loan yet, start a savings account to save this money. If you account for all your debts in your monthly purchase plan, you will stand a better chance of paying them off. It’s also important to try not to go into any further debt as far as possible.
Make Wise Selling Decisions
Not all sales make the right amount of money. Are you making foolish decisions that cost you financially? For example, if you’re a homeowner and need to sell your house, spend a lot of time thinking about whether you need a real estate agent. It can seem like a good idea to get the best real estate agent to handle the sale process. After all, you won’t have to deal with prospective buyer issues, a home inspection, or all that paperwork.
However, some real estate transactions can end up making you less money as a home seller. If your real estate broker isn’t trustworthy, they can cheat you out of the actual value of your home. With proper research, you can find an excellent real estate agent who will charge a flat fee that includes everything from a listing service to help with real estate contracts.
If you’re thinking of selling your home yourself, make sure you know your home’s value before speaking with a prospective buyer. You can use a listing service, or hold an open house to entice people to buy your home. It’s a good idea to ditch traditional real estate companies and pick an online service. It can help you with everything from a home inspection and asking price to the closing costs and listing photos.
Stop Paying Rent
Unfortunately, most Millenials are not homeowners. With the price of rent skyrocketing and income declining, it can seem like you never will be. Not everyone has the option to stop paying rent. However, if your parents live in the same area, it may be in your best interest to move back with them. Instead of seeing this as a failure, think of it as a smart financial decision. And it doesn’t have to be forever. Even just a year will help you save thousands of dollars.
If you can’t stop paying rent altogether, ensure you pay as little as possible. Avoid expensive areas and ask a listing agent to show you homes within your budget. It isn’t easy to adjust to a less-than-ideal living situation. However, you can put all the money you save on cheap rent in a savings account. It may help you save enough to afford the downpayment on your own house in the future.