How do I save more money? How do I get ahead? Where do I start? These are questions on the minds of many of us – especially millennials, who are in a particularly interesting position when it comes to spending and consumerism.
How well millennials are doing financially kind of depends on who you talk to, but generally millennials are considered one of the world’s most powerful consumer group (many say the most powerful) – their wants, needs, and spending habits influence consumer trends around the world and they’re a major target audience for many marketers.
And while some reports say millennials’ purchasing power is increasing, others say millennials are poorer than previous generations. Indeed, many millennials are facing crippling debt, with a recent report finding one in five millennials with debt expects they won’t be able to pay it off before they die.
Statistics like that are scary – in fact, money in general can be a scary thing to talk about for many people. But the key to doing better with money is to talk about it in the first place. Consumer and money-saving expert Andrea Woroch talks about money all the time, and she has some advice to help millennials spend smarter and save more.
1. Build better spending habits
“Spending smart isn’t about buying cheap food and home goods,” Woroch says. “Instead, smart shopping has to do with learning the sale cycles, knowing where to find extra savings, and cultivating some impulse control. For example, buying fresh produce when it’s on sale and in season means eating healthy without spending a fortune – or you can save on frozen fruits and veggies and always have some on hand when a last minute recipe calls for it.”
Woroch also recommends using apps to help find deals. She suggests Flipp, which provides store ads and deals all in one place, and also recommends using Facebook Marketplace to find gently used items in your community. For more money-saving apps to try, click here.
2. Track your spending
“People who don’t track their spending often waste money and don’t realize the savings opportunities in their budget,” says Woroch.
She recommends starting by tracking your spending for the next couple of months to get a baseline understanding of “how much goes toward essentials like mortgage or rent, insurance, food, transportation, and utilities and how much goes toward the extra stuff you could ultimately live without.”
Then, she says, figure out which ones you need or truly value, and which ones you could eliminate from your budget.
“For instance, if you don’t use the gym membership, opt for [an] outdoor sweat session for free instead when you do feel like getting a workout in. Or what about your premium cable package? If you’re paying for video streaming services like Netflix or Hulu, chances are you don’t need that many channels, so figure out which one can go and put your savings to work for you,” Woroch says.
3. Limit lifestyle inflation
“It’s easy to justify new purchases every time you get a raise or bonus, or if you land a new job that pays more,” she says. “However, spending more doesn’t lead to a healthy financial future. Stick to your same budget and stash the extra cash into a savings account toward whatever goals you’ve set for yourself.”
And if you haven’t set goals, Woroch says, take the time to do so.
“When you have a goal to work towards, it makes saving more rewarding and you will be more motivated to cut spending!”