Millennials often get a bad name in the media and around the workplace. They’re frequently stereotyped as both arrogant and naïve. But maybe it’s time boomers and Gen Xers not only start giving Gen Y credit, but also following some of their financial habits. Learning about living on a budget the way millennials do might help you find cash to save for retirement.
Many millennials have taken to living frugally with the aim of stretching their paychecks. This helps them spend money on things they want and put a little aside for their futures.
“When you’re planning to retire, you’ll pretty much find yourself in the same position as millennials who are just starting out and require budgeting to make sure they get it right,” says Marcus Johnson, a writer for EliteAssignmentHelp.
Here are a few things many millennials do that you might put into practice, too:
Work From Home
Millennials know it’s become increasingly possible to earn a full-time wage simply by using a laptop connected to the internet. This can then save you the cost of commuting, a work wardrobe and restaurant lunches.
Avoid Taking Out Loans
Millennials, of course, are often stuck trying to pay off enormous student loans. Consequently, they’re leery of taking on new debt. You’ll want to steer free of taking out loans when you plan to stop working full-time, too.
“If you’re not earning money, but you’re taking out bank loans, the chances are that this is going to stay with you until the day you die. They are simply best avoided at all costs,” says Sarah White, a financial writer for State of Writing.
Avoid Using Credit Cards, Too
Millennials also tend not to use credit cards, except for emergencies or if they know they can pay off their cards in full at month’s end. Just one in three millennials has a credit card, according to a Bankrate.com survey. In most cases, they prefer debit cards or prepaid cards. By contrast, 70 percent of those over 65 use plastic.
Boomers and Gen Xers might want to reduce or eliminate their credit card usage, too. The money that would have been needed to pay interest could instead go towards saving for the future.
Ditch the Car
Millennials are up to speed on knowing that cars are extremely expensive to own. Aside from the steep purchase price and possible monthly car payments, there’s gasoline, insurance, parking, tolls, maintenance and periodic repairs.
Many millennials have opted not to buy or lease cars and instead get around by using ride-sharing platforms such as Uber and Lyft (not to mention walking and taking public transportation). You might want to think about selling your car or one of your cars and instead getting lifts through your smartphone app.
Cut the Monthly Luxuries
Think about how much you pay monthly for things like landline phones, cellphones, cable TV, streaming services and delivery. Millennials frequently save money by combining multiple services into one monthly bundle.
Few millennial households have landlines; their cellphones are their only phones. And rather than pay steep cable charges for channels they won’t watch, they pay for more affordable streaming services online. (If you cut the cable, however, you may be restricted for watching local television broadcasts on TV, but you may be able to see them online.)
But you’ll want to avoid signing up for too many services. If you pay for Netflix, Hulu, Amazon Prime, HBO, Sling, Crackle, as well as an entertainment console service such as PlayStation, Vue or Xbox Live, you could easily spend up to $1,200 annually. And this doesn’t even include music streaming services like Spotify or other dedicated sports, television, movie or music services.
So think hard about which services you’d most want and which you could live without. Signing up for just Netflix and Amazon Prime might cost you only $192 a year.
Originally published NextAvenue.org May 2018