Millennials are struggling to save any sort of money due to debt and rising living costs. You know that saving is good for you, but how do you break the cycle?
According to an online survey by investment platform Rplan, only twenty nine percent of young people aged 18-34 are not saving any money month to month. Ah! Scary! There are 3 easy steps to start saving today!
Set Savings Goals
You might be asking yourself what you should be saving for – not sure? What is most important to you? Traveling? Celebrating friends birthdays? Millennials are wanting more experiences these days versus materialistic items. What you should do is assign goals or names to your savings accounts. For example, if you want to go to Europe, choose that as the goal. This will help reinforce the savings plan because you will see “Europe” on that savings account and it will trigger that urge to put your money there, because you really want to travel.
Determine a Timeline
The next step is to work backwards to help you save. What does that mean? Well, if you want to go to Europe and after some research, you know that it it could cost roughly $800 for a plane ticket and maybe another $500 for hotels for a week. Your rough total for the trip would be $1300. Once you decide your timeline, say a year, you just take your total and divide it by the length. Europe is $1300/12 months = $108 a month.
How do you make sure that you keep that savings goal? Well, make it automatic. Every month, set an automatic transfer to your savings account for the amount that you wish. Not only does this make it painless, the money you don’t see in your checking account, you won’t be missing. Plus, if you are ever worrying about it, you can just see your “Europe” account accumulating and growing every month. Personally, I would recommend a savings account that is with an online back that is separate than your usual bank. Banks like Ally or CapitalOne360 have a higher interest rate and banking with them make it more difficult for you if you have a lapse in shopping euphoria.
At the end of your timeline, you should see a good stack of cash ready for you to play with. Of course, you might see your savings growing and decide that you want more money to grow on your behalf. And that’s okay too – the more savings accounts, the merrier, in my book. Additionally, if you are looking to stock some money away for a larger goal like buying a house, you can leverage robo advisors or invest your money so that it can can work you.
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