It’s no real shocker that millennials aren’t the best money savers. CNBC reports that studies show some of the common and break-worthy habits among millennials are overspending, undersaving and accumulating credit card debt.
USA Today and Bank of America took a Better Money Habits poll and found that one in five millennials hasn’t started saving and three in 10 don’t even have savings accounts. A Fidelity survey in 2014 discovered that over half of millennials still have not started saving for retirement. The same survey also revealed that four in 10 millennials admitted to worrying at least once a week about their financial future.
Stacey Tisdale, financial expert and author of The True Cost of Happiness: The Real Story Behind Managing Your Money, tells BlackEnterprise.com, “While factors like high student loan debt, stagnant wages, and childcare, weigh heavily on millennials – making many more concerned about financial security than investing – they should also embrace the advantage their age gives them when it comes investing, particularly in stocks.” CNBC identifies a few other ways in which young adults can better their financial status and lighten the pressures of financial security.
Track Your Spending
Data from a Consumer Financial Protection Bureau report reveals that one in 10 millennials overdraft more than 10 times a year, which can total $350 or more in overdraft fees. To avoid thinking your account balance is higher than what it is and spending money that you don’t have, closely track what you spend.
Note that weekend purchases on your debit card may not post to your account until Monday. Charles Sachs, a certified financial planner and accountant in Miami, suggests taking advantage of the Building Wealth online guide. The tool, created by the Federal Reserve Bank of Dallas, features a spending log and other aids to help track your spending and manage your budget.
Plan Ahead for Big Expenses
Even if you’re confident you can pay it off, experts say charging big expenses like vacations to your credit card may be a risky move. The interest quickly adds up and if an unexpected emergency results in a late credit card payment, you may suffer penalty fees and a higher interest rate on the owed balance. “Sachs recommends adding a line to your budget for big upcoming expenses like vacations,” according to CNBC. You can automatically transfer funds from your checking account into your savings account, or directly from your paycheck if your employer allows it.
Set Up an Emergency Fund
Save for a rainy day, or for a few rainy months. Typically, money gurus suggest setting aside enough to cover nondiscretionary living expenses like rent, utility bills and car payments for three to six months. This will give you a little cushion if you lose your job. Saving money will also help regulate a habit of saving for the future. The more you save, CNBC reports, the easier it is to stay clear of old bad habits.