What Millennials Need to Know About Saving and Money Management
UK Millennials (those who reached adulthood in the 2000s) have long been cast as disillusioned 20-30-somethings.
They have seen the economy collapse, felt the results of the Government’s cuts, and have watched as grandparents struggled to stretch hard-earned pensions.
It is therefore no wonder that UK millennials have become a generation of spenders, rather than savers. With interest rates almost prohibitive of investment, many millennials are of the opinion that it is better to spend and enjoy now, come what may further down the line.
Unfortunately, if this generation don’t begin saving and managing money in the near future, the futures are at best uncertain, at worst bleak.
While this is a potentially unsettling future, what follows are some tips that could help you get your finances in order. Following these steps can deliver positive results in the short- to medium-term, and establish a framework for a stronger financial future.
Cut Up Those Credit Cards
Many millennials talk of credit cards being reserved “for emergencies only”, however they can also be a temptation to use for non-essentials too.
Saving up for the luxuries you want is a less risky way to go about treating yourself, while putting a little cash aside each month for unexpected financial pressures covers the need for these “emergency” cards, which if unchecked can produce high-interest rates and sneaky charges.
If you are set on using credit cards, however, be sure to pay all balances in full each month. To factor this into your outgoings, it may be useful to…
Account for Every Penny
Draw up a budget at the beginning of each month, and stick to it. This way, you can ensure your spending is within realistic bounds. It is also a great way to see where you could be making small savings.
For example, that weekly trip to Starbucks might seem like a small treat, but it adds up over the course of the month, and that could be money used better elsewhere. Of course, if it is your only treat, and you can easily accommodate into your budget, then enjoy!
Budgets also help to identify potential economies, breaking down essential costs to highlight where your total outgoings can be trimmed or rationalised.
Using comparison websites helps to show if you could be switching utility providers to get better deals on your gas, electric, phone bills etc. If you know exactly what you are spending, you can easily see where savings can be made.
Remember to Save
It doesn’t matter how much you save every month, but make sure you put aside something. Include it as a non-negotiable cost in your budget so that it is accounted for, and then open up a high-interest savings account.
This is a contingency provision for covering any unforeseen costs. All the better, if you never need to dip into it, this can develop into a nest egg, your deposit on a new house, or the beginning of your retirement fund.
Despite the fact that the economy is showing signs of a slowly and fragile recovery, it seems that millennials still prefer living in the moment over planning for the future. If you put these few tips in place, however, you should be laying the foundations of a more secure and financially stable future.
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