How This Millennial Paid off over $45,000 in Debt in 10 Months! 5 Tips to Saving Money
Here is a sad fact…The median savings account balance for millennials 35 and under is $1,500. And if you think that’s something, according to an article written in CNBC make it, Bankrate financial security index survey showed that only 39% of Americans have enough savings to cover a $1,000 emergency.
To make sure you are apart of that 39%m I’ll be sharing 5 tips to save more money.
Tip 1: Calculate your monthly expenses
How much money do you spend a month? How much money do you actually need to live?
You must start recording your finances, whether it’s with a budget sheet or book keeping. A budget sheet is a great tool to use to allocate your money and keep track on how much you’re spending and where you can cut back on expenses.
Tip 2: Set a budget
Budget is like the word diet, no one really likes it. You start off strong and slowly drift back into bad habits. The key is to set an achievable budget and live below it. This will allow you to not only save money but save money faster and you’ll create a habit.
When I was paying of my debt, I ate pasta for a year straight. I set a budget of $20 every two weeks. Yes, that sounds crazy but it was a budget I knew I could stick to and would help me achieve my financial goals faster.
Tip 3: Save a percentage of each pay check or other source of income…in other words, pay yourself first
I feel 20% is a good amount to start off with to begin the habit of saving money. If you can do more, go for it! When I saved my first 6 figures, I would save almost 70% of my income every month. In the book, “The Richest Man in Babylon”, it talks about saving 10% of your earnings to invest in something greater later on in life.
If you are a person who can't remember to save a percentage of your income, don't worry. Banks and jobs offer services where they can automatically transfer a percentage, of your choice, into a savings account. It’s all about creating that habit.
Tip 4: Remove your credit cards from your online shopping accounts
It’s easier to spend money nowadays when you have your card information stored in your accounts. Just click and buy or tap and go. The best way to break this habit is to delete your card information from your account. This forces you to spend the time finding your card, putting in the card information, and really think about why you’re spending this money and if it's worth it. Trust me, when I first started this process, I hated it. But since then, I ask myself is this a good investment and sit in my thoughts for 2 days before continuing to purchase.
Trust me, I get it. You're trying to catch that shoe release or a special sale online. Don’t want to miss out on those deals! But as a community, we must build up our skill of delayed gratification which will help you save more money.
Tip 5: Realize you don't need everything you want.
Everyone wants and deserves nice things. You worked hard on the job or running a business and you want to reward yourself, who doesn't feel that way? But, how can you tell your hard work is paying off when you are spending it all on temporary things. During my debt freedom journey, I’ve become a minimalist. I use to have in my closet 2 pairs of jeans, black and blue and a pack of black and white t-shirts. Yes I wasn’t the flyest person that day but I had a pocket full of money.
You have to discipline yourself. I encourage you to sit down and write out the things you want. Once you have that list, go back and circle all the things you actually need and will benefit you in the long run.
Hey, I know it's tough, but I wouldn't tell you to do anything I wouldn't do or haven't done so already, I love my money! Money doesn't grown on trees! Though there are a lot more tips on saving money, here are a few basics.
Follow Devon Horace on social media at @d.horace and visit his website: www.consultinghorace.com for more money saving tips and consulting!