Money Saving Tips for Millennials

Saving money doesn’t have to be a chore. What would you do with that extra cash?

At the end of 2023, Jenius Bank conducted a survey of 400 millennials about setting financial goals and priorities for the new year. What was the overwhelming response? Let’s save more in 2024!¹

Finding ways to set money aside in addition to covering expenses may be tricky. Here are a few tips to help you start saving more.

Key Takeaways

• Saving doesn’t mean sacrificing things that bring you joy; it’s about finding balance.

• Opening a high-yield savings account may help you grow your wealth faster.

• Planning ahead for big purchases may reduce the need to take on additional debt.

How to Save Money Like a Jenius

Saving money doesn’t mean denying yourself life’s little pleasures. Perhaps you’ve found it difficult to stick with a savings plan if this has been your approach previously.

Instead, try to create a new mindset about spending, and saving, that balances your long-term goals and your short-term enjoyment.

Understand Your Spending Habits

It’s helpful to look at your spending habits before trying to set money aside. Doing so may make it easier to identify how much you’re able to save each month and possible places you could cut back.

Start by recording your income and regular expenses like rent, utilities, cell phone, car payment, and other predictable monthly costs. Then, look at the spending that varies, but is also necessary, like food or gas. Finally, look at the non-essential spending each month like entertainment, dining out, clothing, etc.

As you look at your expenses, be honest about what you’re spending. Remember, this record is for you, not for others. And every charge—even that soda you bought at the gas station—adds up over time.

Create a Budget

Once you know what you’re spending, use that information to create a budget. Your budget outlines projected spending amounts for different categories, such as rent, utilities, groceries, and debt repayment. Start with the essentials first… the expenses you really need to survive.

Once you’ve captured the must-haves, see what is left over and determine how to allocate that money to other areas. Seeing where all the money goes, and how much or little is left over, shows you very clearly how much you could realistically save each month.

Reduce Expenses

Finding ways to cut costs may make it easier to boost your savings.

For example, if you’re carrying a balance on high-interest credit cards, prioritizing paying off that debt may help you save in the long run. Consider a debt consolidation loan to lock in a potentially lower rate and lower payment.

If you’re paying for subscriptions and streaming services, review these regularly. Cancel any that you’re not using and consider adding the money you were spending on those services to your savings.

Don’t be afraid to look for ways to cut your regular monthly bills. For example, taking a defensive driving course could help you lower your car insurance rates and choosing energy-efficient appliances may help you save on electric bills. Some companies offer you discounts if you set up autopay for your bills too.²

Set Saving Goals

Setting clear saving goals may help you stay motivated and encourage you to make progress. These financial goals may be big or small, but it’s helpful to set both long and short-term goals that align with your priorities. For example, if your car is older, you may want to set money aside for a new one. If you’ve found a neighborhood you love, you may want to save for a down payment on a home there.

An emergency fund is another consideration—it may help you cover unexpected expenses without relying on your credit cards or other high-interest debts. Experts recommend saving between three and six months’ worth of living expenses in your emergency fund.

Choose the Right Saving Tools

It may be helpful to create separate savings accounts for each goal you have, especially since different goals lend themselves to different types of savings accounts .

Many people choose retirement accounts like IRAs and 401(k)s for long-term savings—there may be tax benefits depending on your financial and job situation. Term deposit accounts like certificates of deposit (CDs) may also provide higher rates in exchange for a commitment of funds in the account for 12 or 15 months, for example.

For short-term goals, high-yield savings accounts may offer quicker access to funds than CDs, and when rates are stronger, the savings growth could be pretty great too.

Whichever account type you choose, make sure you’re reviewing the account’s rate or market performance regularly to help you get the most out of your savings.

Plan Ahead for Large or Annual Expenses

When you’re making a large purchase, having cash on hand may help you avoid going into debt, or reduce the amount you need to borrow.

If you have a major expenditure in mind, like renovating your home, plan ahead and start building your savings in advance. Also, be sure to account for large annual or semi-annual costs, like insurance premiums. It’s easy to forget about them when the payment isn’t made monthly.

Eliminate Fees

Fees could also slow your ability to set money aside, so try to avoid them where possible.

For your finances, here are some tips:

• Open a bank account at an institution with a large ATM network or one that reimburses out-of-network ATM fees.

• Avoid overdraft fees by signing up for overdraft protection!

• Also, if you have credit card balances, setting up automatic payments could help you avoid late payment fees.

There are a lot of other fees to look out for too—from food delivery to online shipping. Try to live in a fee-free zone!

Consider Impulse Purchases

No matter how dedicated to our goals or diligent we are with spending, we all make impulse buys from time to time.

These purchases happen even when you mean to stick to your budget as closely as possible. Instead of letting them throw your goals off track, incorporate them into your budget. Set money aside for those occasional indulgences in a splurge fund and give yourself permission to treat yourself.

Final Thoughts

Building your savings should be a priority no matter where you are on your financial journey. Looking to step up your savings game? Open a high-yield savings account with Jenius Bank today to help you reach your goals even faster.