Millennials Guide To Saving Money
By: Michael Hernandez
Tags: Saving Money, Millennials, Financial Advice, Finance

Maybe you're still in school spending thousands of dollars on your education, or maybe you decided to jump into the workforce and are finding that it is expensive to live out on your own and you find that you are living paycheck to paycheck.

Well your not alone. Millions of Americans are living paycheck to paycheck. Don’t waste any more time, now is the time that saving money should be on top of your priority list.

I don’t know where or how to start saving money?

I don’t make enough money to be able to add to my savings or 401(k).

Where to start? There are numerous personal finance apps that you can use if you find that will help you. YNAB, MINT. They all can show you where you are spending your money but expense have to be classified correctly for you to be able to see where you are spending your money.

According to a survey by the National Institute on Retirement Security, 65% of Millennial’s age 20 to 32 have nothing saved for retirement or an emergency fund.

Money Management, budgeting, expense tracking, and investing at the beginning of the cycle for financial independence. Remember, that it is never too late to jump on the finance bandwagon and you can’t start too early.

So here are the steps that you need to take to begin your journey to financial freedom.

1. Budget Basics: Every Friday, you log on to your account to see how much money you will bring home. But knowing how much you spend is just as important. Mint and YNAB are two popular apps to help you with a budget. Your budget should list your net income and then deduct your expenses, both fixed and adjustable expenses. An example of a fixed expense would be your rent or your cell phone bill. Something that is the same amount every month. Your adjustable expenses are things like spending money, Food, etc.. These items can change each month. You will always want to plan on the high side of your adjustable spending so you are safe in case you have a bad month.

2. Track your spending: Write down or log every expense you have for multiple months.

. This is the hardest and the easiest way to see what you are spending on a daily/monthly basis. If you are old school, you can begin by writing down all your fixed and variable expenses. You will want to do this every day as it occurs. For example, you spend $10 on lunch then you should write it down. If you are high tech. or like a more modern way, you can use apps like Mint or YNAB. These apps will try to categorize where you are spending your money based on location. It knows a restaurant name and puts it under food. These apps are fairly accurate but not without their flaws so be prepared to spend a little time recategorizing some expenses.

3. Manage your debt

According to ValuePenguin, over 44 million millennials are in crippling debt upwards of $33,000 — mostly from student loans from financial institutions. In fact, most millennials are putting off “life milestones” like starting a family and homeownership because their massive debt is in the way, while some are forced to move back home with their parents just to stay above water. Getting out of debt is not an easy feat though, as income is not high as expected after most finish college.

Smartphone apps like Debt Payoff Planner can help ease your burden with a bird’s eye view of how much money you owe, along with reasonable step-by-step methods and techniques to get out of debt faster. The app can track your debt payments and give you a time frame to financial freedom. This means you can track your progress and feel better about your money situation with a real game plan. The best part about this app is that it’s completely free.

4. Be dedicated to saving money

. This is one of the most important yet difficult things to do as most people do not like to live without the nicer things in life. We live in an era where immediate satisfaction overpowers delayed gratification. Millennials prefer to have things now rather than save for the future.

With this mindset, the best way to save money is to never see it. Most banks have a way to transfer money from 1 account to another. This way, when you check to see how much money you have to work with, you see the amount that already deducts your savings. What you don’t see, you won't miss. Start with a small amount that won’t affect your monthly expenses and increase every few months. If you can’t increase every few months, at a minimum increase your savings when you get a yearly salary increase.

5. Start investing now

Investing is a necessity in today’s environment. With inflation running about 2.5%, a CD or savings account is not enough to keep up with the economy’s growth. Plus if you start investing early enough, compounding interest will grow your savings more than 10 fold over the upcoming years. Now that you’ve managed to save some money, maybe it’s time to invest it and gain some personal capital. If you know next to nothing about investing, Robinhood is a good place to start. This smartphone app gives anyone free access to the stock market. While this is good for beginners, the options are limited for your investments. So if you are really looking for the best long term options, you might want to look into better options like Fidelity or ETrade.

For years, buying and trading stocks were only for the wealthy and people in the know. You had to hire a stockbroker who would have to facilitate any purchases and trades on your behalf, while also taking a slice of the pie as commission.

However, there are numerous options that offer a completely free or low-cost way to enter and get 24/7 access to the stock market game with zero fees and commissions.

6. Build your credit score

Did you know only 33% of adults ages 18 and 29 have at least one credit card? About two-thirds of millennials don’t have a credit card, according to this survey, and are shy about the proposition of adding more debt on top of their student loan debt.

If you’re afraid of getting deeper into the weeds but you want to build credit, you have to get a credit card to make your credit score soar. Once you sign up and are approved, download the Credit Karma app to help you manage your credit. It’s a free app that gives you access to your credit score and credit report, while it can also offer credit monitoring.

Credit Karma can also give you information on how to improve your score, including what factors are contributing to good and bad scores, and what kind of products and services can help you achieve exceptional credit.

Credit Karma is available for iOS and Android.

Follow All of these or follow a couple of them. Either way, you are on your way to increase your savings. Do not underestimate the power of any of these as they are all critical to the success of your financial well being.