3 Realistic Ways Millennials Can Save More Money In 2022
You’ve likely heard of the phrase you only live once (YOLO), but have you heard of the term “YOLO Economy”? The so-called “YOLO Economy,” coined by the New York Times (2021), is a phenomenon in which millennials are reimagining their professional lives — some abandoning stable 6-figure jobs to start a new business, others turning a side hustle into a full-time gig or simply taking a break from the urban rat race altogether — and there is absolutely nothing wrong with that. After all, you do only live once.
However, while the financial consequences of this professional reimagining may be insignificant in the short term (due to fattened stay-at-home savings), the absence of a stable monthly paycheck may increase the financial consequences over the longer term. For those millennials who have abandoned their day jobs in pursuit of creative ways to reach the same goals through entrepreneurship with an au revoir to the corporate career treadmill, here are 3 realistic ways to save more money in 2022.
1. Checklist To Reduce Your Expenses With Questions To Ask Yourself
A dollar not spent is a dollar saved. And a dollar saved is a dollar that can be invested to generate more than a dollar in the future. Keep this in mind as you go down this checklist with questions to ask yourself — it will help you analyze your spending habits to find ways to reduce your monthly expenses and keep more of that hard earned millennial money.
· Rent/Mortgage — Rethink your living situation. Are you able to move to a cheaper home or area? What about finding a roommate or moving back home? If you own a home, have you considered refinancing to potentially save on mortgage payments?
· Cell Phone/Internet Bills — With Wi-Fi at home, do you still need that unlimited data? What about the number of minutes on your cell phone? Have you investigated other service providers’ offerings given the competitiveness of the industry?
· Eating Out — Do you always have to dine out when meeting friends? How about eating at home and going out for desserts or coffee instead? Hosting at home with take-outs is always another option if you prefer not to cook.
· Groceries — Most know about buying what’s on sale, making a grocery list and shopping at grocery stores or supermarkets as opposed to convenience stores or small specialty shops, but did you know that more informed grocery shoppers are more likely to buy store-brand items? Store-brand items are just as nutritious and typically cheaper than name-brand items because less is spent on marketing and advertising, which allows store-brands to pass the savings to customers.
· Subscriptions/Memberships — Have you looked at your recurring subscriptions and memberships to see if there are any that you have signed up for and forgotten about? Do you really need all your subscriptions/memberships? For instance, how about working out at home or listening to songs on YouTube?
· Discretionary Expenses — Do you have a cap on your credit card? Do you have a strict budget rule for yourself? If not, there’s a handy budget rule for managing your money like a millionaire, while still being able to splurge — see below.
2. Budget Rule For Managing Your Money Like A Millionaire
Most millionaires are conscientious when it comes to finding ways to save money. Here is a budget rule popularized by U.S. Senator Elizabeth Warren in her book, All Your Worth: The Ultimate Lifetime Money Plan called the “50/30/20 budgeting rule.”
This budgeting rule is simple. Simply divide your after-tax income into three categories:
· 50% towards needs
· 30% towards wants
· 20% towards financial goals, such as savings, debt reduction, and investments
As you can see, this is a budgeting technique that can help you work towards your financial goals, while still being able to treat yourself. This budgeting method is also simple to follow and to stick to, given that you don’t need complex spreadsheets. Moreover, it gives you plenty of room to tweak the budget allocations to fit your financial picture.
3. Live Life For Yourself, Not For Social Media
Lastly, most millennial spending habits are influenced by what they see on social media — the fear of missing out may be the root cause of millennial financial problems. Therefore, the last most realistic way to save more money for millennials in 2022 is really to live a life for yourself. Weighing your self-worth against others through spending can bring about a pattern of splurges on unnecessary experiences or purchases — and that is our most important advice to millennials who want to save money.
This content is provided for general informational purposes only and does not constitute financial, investment, tax, legal or accounting advice nor does it constitute an offer or solicitation to buy or sell any securities referred to. Individual circumstances and current events are critical to sound investment planning; anyone wishing to act on this content should consult with his or her financial partner or advisor.