I’m a millennial. I was born in the early 1990s, and I am still learning about life as an adult. For the past several years, I have been budgeting my money and keeping track of my savings and earnings. However, when you are starting out in life, it can be hard. Budgeting is something I’m still learning, just like everyone else. Below are some budgeting tips for millennials, but they can be useful no matter how old you are.
Make your own food: Yes, it can be time-saving to quickly grab your lunch or favorite drink out, but it isn’t money-saving. Instead, prepare your meals at home either the night before or in the morning. Also, consider preparing your meals for the week during the weekend. Buy unperishable items in bulk and don’t let perishable items expire. Always plan out your meals before hitting the grocery store and stick to your list. Unnecessary items will soon add up, destroying your budget. In addition, preparing your food at home will be healthier than stopping at a fast-food restaurant.
Don’t compare yourself to others: With the world of social media, it can be hard to not compare our lifestyle with others. You might see your friend going on a two-week vacation to the Bahamas and think, “How did they afford that?” Rule of thumb: don’t compare your life to the lives of others. Doing so will lead to unneeded spending. Instead, live within your means and stick to your savings plan. In the long run, you’ll be happy you did.
Start an emergency fund and savings for retirement: It can be tough to set aside money for the future when you are currently struggling financially. However, having an emergency fund helps prevent wiping out an entire month’s paycheck when something unexpected happens. There are a few different ways to create an emergency fund. Start small by collecting your loose cash and change into a jar. Once you have a sizable amount, transfer it into a savings account. Then, continue with allotting an amount of your earnings to go towards the fund. Before you know it, you’ll have money for when emergencies strike. As for retirement, it’s never too early to start thinking about it. There are two avenues to help you begin investing: a 401(k) and an IRA account. A 401(K) is done through an employer. It allows a portion of your paycheck to be taken out before taxes. Taxes are then paid when the money is withdrawn. Talk with your employer about what they offer in regards to retirement savings. As for an IRA account, it is an individual retirement account with many tax advantages. You can choose from either a traditional or Roth IRA.
Use technology to help budget: Speaking of social media, there are also advantages to using these sites, and technology in general. Make budgeting more organized and convenient with using free apps and websites. A few trustworthy apps are Personal Capital, Mint, LearnVest, and Level Money. Personal Capital allows you to link all of your financial accounts into one place. It has tools to help you understand your cash flows, optimize investments, etc. As for Mint, this app tracks all the activity from your bank, credit cards, loan, and investment accounts. In addition, you can create a budget with certain categories and receive notifications for bills when they are due. LearnVest gives you the option to link your accounts and file purchases into category folders, as well as access to informational articles on managing your money. Lastly, Level Money provides a general overview of how much cash you have available for the day, week, and month.
Invest in a low-interest credit card: The term “credit card” can be scary for some. It can bring financial distress, but when used correctly it can build personal credit. You’ll need credit when renting an apartment, buying a car, and more. When looking into a credit card, do your research. Get one that has plenty of rewards and a low-interest rate, that way you can stay on track and pay it off sooner rather than later.
There is no perfect solution to budgeting, and there is no “one size fits all” method. Setting your financial path can be challenging, but when planned correctly and using the tips above, it will become easier.