Millennials are often much maligned by older generations. We’re seen as wasteful, financially irresponsible and frivolous by baby boomers and Gen Xers. They would have us believe that the reason we don’t put enough into our savings, or that we’re not even close to thinking about saving for retirement and that for most of us, owning a home is just a pipe dream… is because we just can’t get enough avocado toast.
Yup, it’s safe to say that millennials face a constant battle against other people’s preconceptions.
The reason so many of us struggle to set money aside in our savings, even though we know we should, is because we spend such a huge proportion of our income on rent. That’s the trouble with growing into adulthood in a post-crisis economy. We are being crushed by student loan debt, which makes people not want to take on more debt with a mortgage, and rents have skyrocketed in accordance with demand.
Between the ages of 22 and 30, the median total that millennials will spend on rent is $92,600, according to a report from real-estate website RentCafe. Let’s compare that to what our baby-boomer parents spent. Even if we adjust for inflation that’s still $10,400 more than members of Generation X paid at the same age and a shocking $21,600 more than was spent by Baby Boomers. The cost of living is way higher too, especially when we consider that most millennials will spend off the majority of their working lives paying off student loans that are gargantuan compared to what their parents paid.
We have less disposable income than ever… So we’ve gotta make it count
There’s no denying that the economic deck is stacked against the millennial generation, but that doesn’t mean that we’re powerless. We just have way less margin for financial error than previous generations. With less disposable income than the boomers and Gen Xers, we need to make every penny count!
Budget, budget, budget
According to The Motley Fool, the achilles heel of the millennial generation is unplanned purchases. Costs like entertainment, spontaneous meals out or take out, drinks with friends and (dare we say it) the odd slice of avocado toast. Now, it’s not that we can’t do these things, it’s just that we tend to fail to budget for them. Little expenses like heading out for a burger at lunchtime with your work coworkers or picking up a seasonal latte from Starbucks on the way to work can all add up to a great deal by the end of the month.
A household budget may not be fun or sexy but it’s the biggest component in making your disposable income count. Any of these budget templates will help you reign in the little costs and free up more of your money.
Too little, too latte
We may as well admit it. We’re a generation of coffee lovers. According to Value Penguin, the average 25-34-year-old reported spending $2,008 per year in coffee outlets. The same site reports that according to a survey by the money app Acorns, 41% of millennials admit to spending more on coffee in a year than they had invested in their retirement. So… more than $0 for many of us. Personally, I blame all those years growing up spent watching Friends. Seriously, that show gave us some incredibly unrealistic expectations of adulthood. Still, while that latte we collect from our favorite cafe can take the sting out of a Monday morning, we can still get great coffee in the morning without the expense. Skip your Starbucks for 5 months and you can save around $300!
Stop paying more for your utilities!
There are some things that are absolutely essential. Things like electricity, gas, water and hey let’s throw broadband in there too. Most of the time we just stick with whoever our landlord elected to provide our services when we moved in. While it may be a good idea to inform your landlord as a matter of courtesy, few will object to your changing your provider… And doing so can save you hundreds every year. Given that the millennial generation tends to be more ethical consumers than their forebears you may be relieved to know that you may be able to save money while also helping the environment by choosing a more ethical supplier.
Broadband is an essential for most millennials whether it’s helping us enjoy a quiet night in with some HD streaming or helping us to work from home. As such, good broadband is worth investing in. Check out the deals available at i3broadband.com. You’ll find some great deals on broadband speed up to 1GB.
Does your savings account suck?
We all know that we should be paying more into our savings but it can be really hard to find the motivation to do so when our savings accounts offer us anemic yields nowhere near 1% (in fact, most interest rates on high street savings accounts are less than 0.1%). You may find that online savings accounts offer you higher yields as they have fewer overhead costs than your average high street bank. Here are some good ones for 2019.
Of course, for a savings account to work you should pay something (anything) into it each and every month. Even if you can’t pay in the recommended 10% of your paycheck, you should deposit something into it every month. Drop the percentage when times are hard but be sure to bring it back up when your finances get better or you can do automated deposits, so you don’t even have to think about it.
Make thrift shopping your new best friend
Another common criticism of millennials is that we spend too much trying to keep up with our friends and the people we follow on social media by spending a fortune on nice clothes, shoes and beauty treatments. And while shopping can be a pleasurable experience, a lot of millennials are savvy to the fact that you don’t have to head straight for the big expensive labels to look good. Thrift shopping can be a great way to look amazing while saving a small fortune.
In an era where both public opinion and the economy are against us, it’s up to millennials everywhere to pull ourselves up by our bootstraps and show previous generations that even in the face of overwhelming odds we can reign in our finances.