With the phenomenal rate of technological growth and development, it has become imperative now more than ever for millennials to learn how to save money. The increasing rate of medical and environmental issues has us face the blatant truth that nothing is getting cheaper. But not all hope is lost as we help you navigate your way with some easy tips to get you started on saving money without too much hassle.
Bonuses from the workspaces need to be treated as extra money. Money without which you were getting by with just fine. It is a common phenomenon for individuals to reward themselves with the bonus amount they receive by splurging on luxury items. Instead, we suggest spending a small amount of extra money to treat yourself just to satisfy the urge and direct the majority of the sum towards savings.
Name it separately
Barring expenses for your monthly needs, set aside some amounts of money and label them according to your goal for saving it up, think “Dream Vacation Italy” or “Porsche”. Once you start accumulating money towards a certain goal, you form an association with that money and the reason it was named after. This will reduce the want of taking money from that particular fund for frivolous use elsewhere.
Bring back the Change Jar
More often than not, we hardly pay heed to loose change. Bring back the piggy bank or the penny jar and commit to putting loose change into a jar. You’d be surprised to see just how much loose change can amount to in the span of a year. If you’re not one to use a lot of loose change, deposit the amount into your account and stand a chance to avail interest.
According to this rule, your after-tax income should be spent in divisions. This is to say that 50% of your after-tax income should be spent on needs, like groceries, health insurance, rent etc. 30% of the after-tax income should be spent on wants. Wants would here be classified as things which you forego, would cause you a minor inconvenience. For example, a gas bill for your car could be a want as you could instead use public transport like a bus or the tube. Or even cable bills. The balance 20 % is allotted for debt repayments and savings, which is essential in your retirement funds and emergency plans.
Enforce a waiting rule
Have you ever seen something expensive in a store and just instantly wanted to buy it just because you knew you could? More often than not, impulsive decisions leave buyers regretful of the money they could have saved, had they taken some time to objectively think about the purchase. Our advice? Try waiting for a period of time, say a week, before you buy the product. This time will allow you to ruminate your need for the product, research about it and the weigh-in the pros and cons. If by the end of the waiting period, if you feel like it is something that you need to purchase, then you’ll have the satisfaction of knowing that you thought it through.
In the end, it’s not your salary that makes you rich, but really your saving habits.