Millennials have a false reputation of not being savvy with their finances. There seems to be a stereotype regarding money management that has adhered to this generation with no known cause. While millennials are inarguably faced with the largest debt burden compared to previous generations, they are using that drawback to exercise smart spending and saving skills. The fact is that millennials are actually quite creative and knowledgeable when it comes to their finances. They just save and invest in different ways than most other generations are accustomed to. Here are some lessons to take from the millennial generation.
Use Technology
Millennials are one of the most resourceful generations when it comes to using technology. They use technology for ordering food, shopping for items, and getting around. It turns out millennials also utilize the best of technology to get a grip on their finances.
There are many technological, financial tools out there that let you better control your finances. This includes using online and mobile banking to stay on top of your finances. The younger generation even trades stocks online and through their smartphone. You can do the same.
Utilizing technology can help you get financial information faster and manage your finances from virtually any place and at any time. Take a hint from millennials and start using technology to manage your finances better. You can save time, and you just might be able to spot a better financial opportunity for investment as well.
Get In On The Sharing Economy
The sharing economy is a relatively new phenomenon. Millennials have gotten in on it and saved money. They are doing so by using services such as Uber, Airbnb, and Nextdoor to find cheap deals on transportation, accommodations, and tools.
The sharing economy provides massive cost savings opportunities. Instead of having to buy a tool, you can borrow one from your neighbor using Nextdoor. Airbnb could save you hundreds of dollars on your next vacation. Uber is often cheaper than the taxis in the area. The money saved by participating in the sharing economy can be reinvested or put aside. So take a cue from the millennials and start being part of the sharing economy.
Save Money and Be Frugal
Millennials have an interesting spending pattern. This group is extremely frugal when it comes to housing. They choose to downsize and scale back housing costs when things get tight financially. Many also opt to have roommates or remain living with their parents to save money.
The housing expense is often the greatest monthly expense in the form of a rental or mortgage payment. If you can reduce it, then you should be able to free up your budget for more saving or spending. Millennials are also moving away from the past generation’s habit of buying fancy homes and cars. This generation is spending their money on “experiences” instead. This approach is cutting costs and saving them money big time.
Save Like A Millennial
Despite what you may hear and think, millennials are the generation with the strongest saving habits. Millennial parents set aside an average of 10% of their income for retirement. This is more than both Generation X and Baby Boomer generation parents.
Additionally, about 70% of millennials are currently stashing money away in one form or another. Many millennials also admit that they still feel they are not saving enough.
The financial lesson to take from millennials here is that you should start saving significant sums of money as early as possible.
Limit Credit Card Use
Millennials do not like to use credit cards for purchases. They prefer to use cash or a debit card. This is an excellent way to avoid getting deep into debt. This approach ensures that you only buy what you can actually afford. You should try to apply this approach not only at supermarkets and clothing stores but also to larger purchases, such as furniture and electronics.
So, when it comes to managing your finances, take a page out of a millennial’s book. Re-evaluate your spending habits, downsize your lifestyle, and get ready to greet a more financially secure future.