20 Financial Tips for Millennials: How to Save Money for Rent
Tech-savvy, ambitious multitaskers that enjoy creative problem-solving, instant gratification and avocado toast. This is the stereotypical view of millennials - the generation born between 1981 and 1996. Right? Well, when describing Gen Y people often forget that millennials are extremely burdened by student debt, and find themselves in a real estate market where home prices and rents have grown faster than incomes.
However, if you are a true millennial, you are also extremely resourceful, tech-savvy and enjoy creative problem-solving. So use your strengths to improve your situation and save money using our financial tips for millennials. Here is how:
1. Stop living from paycheck to paycheck
If you are used to living from paycheck to paycheck, thinking that you can worry about saving later, it’s time to change that mindset. Your situation won’t improve until you start actively working on improving it. According to the 50/30/20 rule, at least 20% of your income should be allocated towards investments and savings. One dollar that you invest now will eventually be worth more than a dollar you’ll invest later.
2. Look for a job that will allow you to work remotely
Oftentimes job opportunities come at a price. Booming job markets attract more people, driving demand and, subsequently, prices for housing in the area. Moving to a more affordable area and looking for remote jobs in busy job markets can help you save on rent. If your work can be done from home, try looking for remote positions in your industry. Nowadays, many companies look at providing remote opportunities as a way to save money and decrease turnover.
3. Decide what are necessities and what are luxuries
If we could only give one financial tip for millennials, it would be to figure out what are necessities and luxuries. According to the above-mentioned 50/30/20 rule, only 30% of your income can be spent on “wants” or luxuries. Note, if you don’t have money for necessities and haven’t contributed to your savings account in a while, skip the wants altogether - sorry! Luxuries include travels, brunches, store-bought coffee, and the tenth pair of shoes you can only wear on special occasions.
4. Learn to cook
Learning to make your own meals and brown bag your lunches can help you save a lot of money. Think about it. When you eat out, not only do you pay for food, you also have to include a tip, which adds up. Additionally, when you cook your own food, you are more likely to eat healthily. You know exactly which ingredients you use and don’t have to wonder about preservatives, added sugars, and mysterious chemicals.
5. Instead of going out, invite your friends over
Another financial tip for millennials, that might take some getting used to. You might say that going out is part of your social life. However, breaking bread with a friend doesn’t have to equate to eating out. Instead of meeting in an overpriced brunch place or going to a bar, you can always invite your friends over and cook for them. It makes the interaction that much more special. And you don’t have to lose your voice trying to talk in a loud bar.
6. Don’t shop for groceries on an empty stomach and stick to a list
Grocery shopping when hungry or, even worse, hangry can be dangerous. You might end up buying too much food, risking it going bad before you get a chance to eat it. Having a list to stick to can help you save money and prevent food waste.
7. Make your own coffee, kombucha, and avocado toast
Coffee house coffee, kombucha, and avocado toast are one of the most beloved and overpriced millennial staples. It’s hard to justify splurging on a $15 avocado toast when you are struggling to pay rent. However, you don’t need to forego this highly nutritious food item, just make it at home. The same goes for coffee and kombucha. You can easily make those yourself. And no, you don’t need to take an expensive kombucha-making class, just Google it.
8. Get a library card instead of buying books
On top of saving space and money, you also help the environment by borrowing books instead of buying new ones. If you prefer to read on your Kindle, you’ll be happy to learn that 11,000 libraries in the United States offer Public Library Books for Kindle.
9. Adopt a healthy lifestyle
Being healthy doesn’t mean you have to buy the latest detox or go on an expensive silent retreat. Just eat more vegetables and less processed foods, drink water instead of soda, and walk outside. This will help you cut down on pricey habits, as well as reduce the likelihood of expensive medical bills.
10. Skip buying the latest gadgets
Contrary to what ads say, you don’t need the latest iPhone or new AirPods, unless your old ones no longer work. Buying new gadgets is like purchasing a brand new car - they significantly depreciate the moment you walk out of a store, making them a bad investment.
11. Invest in quality clothes and shoes, learn how to take care of them
Some millennials might find this financial tip a bit controversial. Contrary to popular belief, buying cheap clothes doesn’t necessarily help you save money. Due to the poor quality of fabrics and seams, “fast fashion” items rarely look good after a couple of washes. They will last one or two seasons, making you continue buying new clothes. Not only does it harm the environment, but it also adds up. For the price of those cheap garments, you could buy one high-quality timeless piece that would keep its shape for years to come.
12. Make purchases “off-season”
The best time to shop for gifts and decorations is right after the respective holiday when everything goes on sale. The same goes for updating your wardrobe. Winter boots and coats are best purchased in January, bathing suits go on clearance in June-July.
13. Buy used furniture
Furniture and decor are things you can always save on. If you are budget conscious, it doesn’t mean you have to sacrifice living in a comfortable and nicely decorated home. You can go thrifting or shop at outlets of well-known furniture brands - there are a ton of options out there. And the best part - you don’t have to compromise on the quality.
14. Avoid impulse purchases
This financial tip might be one of the hardest one to follow for millennials. Living in an era of instant gratification and Amazon Prime, it’s easy to buy things on a whim. Smart online targeting doesn’t make it easier to resist impulse purchases. Those Instagram ads seem to know you better than your own mother, and know exactly what clothes and furniture you like. In fact, according to a survey, 9 out of 10 millennials confessed to impulsive spending. To avoid falling into that trap, use a 30-day rule when you want to buy something. Let’s say an ad on your social media newsfeed suggested you purchase a trendy t-shirt with a funny Game of Thrones pun. Promise yourself to wait 30 days before adding it to your shopping cart. In all likelihood, it won’t seem like such a good idea by the end of that term.
15. Don’t get a pet unless you can afford to take care of one
Because of the increasing housing costs and insurmountable student debt, many millennials delay traditional milestones such as starting a family. Instead, people get pets, or so-called “fur-babies”. In fact, according to a research, 57% of millennials own a cat or a dog, and another 20% report they are planning to get one. However, not all of them realize how expensive it can be to own a pet. According to the American Kennel Club, the average cost for the first year of raising a small dog is $2,674, and it grows with the size of the dog. And this doesn’t factor in potential medical emergencies that can cost thousands of dollars. While it’s still cheaper than raising a kid, it can be a lot of money for someone struggling to afford rent.
16. Cancel unnecessary subscriptions
Signed up for a free trial and forgot to cancel it? It happens to everyone! If you only got HBO to watch the last and, arguably, the most disappointing season of Game of Thrones, set yourself a reminder to cancel it. Ten dollars here, two dollars there, and you end up unknowingly spending $30 a month on apps you never use. If you struggle to remember all the services you are paying for, try using budgeting apps like Truebill, perfect for millennials trying to save money. This useful app will help you find and cancel unnecessary subscriptions and negotiate bills for services you want to keep. In return, you pay 40% of the savings it helped to secure. If it can’t lower your bill, you don’t pay anything.
17. Find cheaper alternatives to cable
If you are subscribed to hundreds of channels you don’t watch, it might be time to decide whether paying for cable is worth it for you. Luckily, there are a ton of affordable alternatives.
18. Save on electricity
Help both the environment and yourself. There are a ton of small things that you can do to make your apartment more energy-efficient. Switching to compact fluorescent light bulbs or CFLs can help you save $45/year. Cleaning coils in your twice a year will improve its efficiency by around 40%.
19. Get a low-pressure side gig
If you are a millennial, you probably already take advantage of the sharing economy by using Uber and Airbnb. Maybe, it’s time for you to consider contributing as a provider of services. You can make an extra buck by puppy sitting or walking dogs with Rover or by helping people put together IKEA furniture with TaskRabbit. The best part? You get to choose your own schedule.
20. Get free tickets to fun events buy lending a hand
Who said you have to pay for entertainment? Volunteer at local events and festivals to get free tickets. You’ll get to see those events on the inside, be a part of something big while enjoying free performances.
We could continue adding more financial tips for millennials, but you got the gist, right? To sum up, the key to your financial freedom is to be mindful about your expenses as they add up. It might seem like a hassle, but small sacrifices now can lead you to a comfortable debt-free life in the future.