The younger you are the more frugal you have to be. The prime time for saving and investing are your 20s and 30s: save for an emergency fund, try to figure out your long-term financial goals and start building a portfolio with passive income. Moreover, having a full-time job doesn’t mean that you should not be living below your means. Even to this day, Warren Buffet lives in the same house that he purchased before he became a billionaire. Also, remember that it is never too late to start saving or changing your habits and that you are in charge of increasing your wealth. Here are 5 tips that everyone should follow rigorously.
1) Transfer money automatically from your checking account to your savings account.
Almost every bank offers the option for you to automate your savings, depending on your bank this could be either at the beginning or the end of the month. There is this saying “What you don’t see, you don’t use.”, the same goes for money in your checking account. Thus, the more you see available in your checking account the more likely you think you have to spend. Instead of falling into the spending trap automate your funds. Once you do this it can become quite addicting to see your savings grow.
2) Move-in with friends or move back home after college.
I know it could be tempting to get an apartment, especially if you have a full-time stable job. Still, living with family and friends after college allows you to share the rent or even live for free for a while. I know you may think living below your means is embarrassing, however, remember it is an opportunity to live comfortable sooner. While other people will need more time to pay off their loans and have to live from check to check, you will find financial freedom faster. A lot of my colleagues now in their 40s to 50s have expressed their regret about having to pay their mortgages, not being able to travel frequently with family or that they are unable to pursue a hobby the way they want to. When it comes to financial freedom seek for advice from multiple sources, including those who regret their financial decisions.
3) Take advantage of employee benefits.
More employers start offering workplace perks and benefits to lure towards millennials i.e. by paying for your public transportation pass, giving out food vouchers, or providing discounts for gym memberships. This way they don’t only try to attract employees to stay at the company, but it is also your opportunity to save more. Ask HR about work benefits and offerings. Remember though, just because there are perks it doesn’t automatically mean that you need to sign up or that you need them.
4) Wait at least one week before you make that impulse purchase.
Use this rule for non-basic purchases i.e. home supplies, fast fashion clothes, make-up, books, gadgets, etc. Learn not to fall into a spur of the moment decision. There is a high chance you will forget what you wanted to buy a week later, this way you can distinguish between a real need and an impulse buy. Waiting is not only good for the pocket and your future but it is more sustainable for the environment.
5) Don’t travel during high season.
Not only are plane tickets more expensive but your accommodation will be too. By planning your trip in advance you can save travel expenses and also prevent getting your holiday request refused by your employer. Additionally, if you can, try to live with family or friends at the holiday destination, be a good guest though and return the favor. Moreover, spread your holidays throughout the year, don’t consume your holidays all at once, this way you can divide your expenses and have an overall better work-life balance.
The content in this article is provided for information purposes only and is not a substitute for professional advice and consultation, including financial advice and consultation; it is provided with the understanding that Millennial Warrior is not engaged in the provision or rendering of financial advice or services. You understand and agree that Millennial Warrior shall not be liable for any claim, loss, or damage arising out of the use of, or reliance upon any content or information in the article.