In our most recent episode, we explored the highly talked about topic of millennials and money. By definition, all of us are millennials, but interestingly, we don’t identify with the term as much as you might think.
We also don’t agree with the common misconception that millennials are horrible with their money. In fact, many studies show that the money management skills of millennials are now on the rise.
That’s no surprise given that we’re forced to be creative in finding ways to earn a living. Many of us graduated at a time when jobs were scarce, and with living expenses being so high, we have to find ways to save and earn more to stay ahead financially.
If you’re a 20 or 30-something who’s looking to prove that they can save regardless of sweeping generalizations, then read on for our tips on how millennials can improve money management skills.
Focus on Your Values, Cut the Rest
One of the problems people face (not just millennials!) with money management is simply knowing how to manage it all.
We’re bombarded with advertisements, social media statuses, targeted marketing, and pressure from friends and family on what we should and shouldn’t be spending our money on. It’s exhausting.
A lot of people make the mistake of taking the path of least resistance when it comes to money, which means savings comes last. It’s much easier to give into temptation than it is to say no and prioritize.
That’s why it’s so important to have that list of priorities ready to go – before temptation can even work its way in. One of the best things I did for myself was define my values and spend according to them. Anything that I don’t value doesn’t get my money, or my time.
This makes it super simple to evaluate spending opportunities and say yes or no. Does it involve travel, new experiences, or spending time with loved ones? Then it gets a “yes.” Does it involve TV/movies, expensive restaurants, or shopping? Then it gets a “no.”
Take time to develop a list of your values. Then go through your spending and cut anything that doesn’t fit. To make the most of your money, you need to focus on what makes you happy.
Cancel TV and Avoid Temptations
One of my biggest tips for how millennials can improve money management skills is to cancel their TV subscriptions if they haven’t already.
This may sound like a simplified and over-used tip, but hear me out.
Cancelling TV will not only rid you of that monthly bill so you can put that money toward other things you truly value, but it will also cut down on some of the advertisements that bombard our lives and end up making us feel like we are missing out. This is the breeding ground for “FOMO” and “YOLO”.
I haven’t met many people who truly place a large value on TV, but if that is something you value, then keep your subscription but find other ways to avoid temptations and advertisements. One thing I’ve done is to unsubscribe from advertiser and store emails. I also throw away store ads and catalogs when they come in the mail so I’m not tempted to spend money with one of their “money saving coupons”. The only times these things are worth it is if you truly need something. Then I would encourage you to keep ahold of those ads and coupons for your purchase.
Commit to Living Below your Means and Saving All you Can
When you first move out on your own or land a higher paying job, it’s easy to want to sink into lifestyle inflation and buy more and do more for yourself. It’s important not to fall for this trap though because it will not help set you on the right track to financial success.
When you’re in your 20s and even early 30s it’s a crucial time to practice living below your means and saving and investing the rest. You can build up a large savings buffer and a nice nest egg to rely on later in life when you make these smart moves now. Pay off your debt as quickly as you can, and sock away some money for emergencies so you won’t have to truly struggle doing this when you’re older.
To this day, I’m even still living like a college student and keeping my expenses very low and simple in order to live comfortably and save more. I still have fun and partake in leisure activities, but I do it on a budget so I can meet my other priorities as well. Discounted and free events, happy hours, potlucks, hosting friends are all part of my lifestyle that allows me to still live for the moment while saving a ton of money. My goal is to keep this up for the next 5 years or so, then loosen up the reigns a little bit in my late 20s/early 30s.