With the arrival of the New Year 2017, young adults need to consider ways to refresh their spending from a good starting point.
The news recently bannered how financially stretched millennials are: So many of them are lagging on their savings.
If you are one of those lagging behind, you can take small steps that will change your habits and still create a big impact on your annual expenses, right now.
While they are short-term or tiny adjustments to help you save money for the whole year, they have the potential to help you obtain bigger financial objectives.
Gareth Shaw, top executive of Which? Money online, says: “With all the uncertainties of 2016, it behooves everyone to be more proactive and take control of one’s money instead of postponing it for an indefinite time.
“People can save so much money by just shifting from one energy provider to another or by availing of a prepaid travel money card during a vacation trip. Debt consolidation and having the right Isas and bank accounts could also help you save money in 2017, allowing you to have more money for a longer period.”
We asked Hannah Maundrell, editor-in-chief at www.money.co.uk as well as Lee Murphy, financial adviser at Platform Pandle, an accountancy software firm, to suggest 10 saving tips for 2017.
Consider then these valuable steps to save money the way savings-savvy millennials do:
1) Make a foolproof budget
This is the old faithful way to financial success. So many young adults often fail to even follow a mental budget monthly, not being conscious about the meaning of money available to spend in relation to one’s monthly expenditures.
Hannah Maundrell says: “Calculate the amount of money you have available every month and assign the necessary amount to cover your bills. Whatever money is left, pay your debts fully as fast as you can or begin a personal savings program.”
2) Be creative in handling available money
Oftentimes, many young adults get into the practice of buying something new; so, why not try to be practical and creative with your spending habits and consider ways you can set aside some money, according to Lee Murphy.
Murphy adds, “Before you realize it, expenses already add up to neck level. Hence, find ways to reduce your costs. If you have TV/cable now but rarely use it, you might end up saving a significant amount by shifting to a Netflix account and a wi-fi connection. Consider how you can do away with things you never use or do not really need.”
3) Avoid emotional buying
Buying or spending out of emotional compulsion ends in owning something you do not need or, sometimes, do not even want. This happens when you let certain emotional triggers lead you to buy on a whim, especially when you feel depressed or bored and going to the mall is the only solution you can think of to escape the situation.
“Somehow, you will have to do something about your habit of getting into overcharging on your card as well as emotional buying when you have the blues. Escape the pattern by diverting yourself with back-to-back episodes of Game of Thrones instead of getting another guitar worth £250,” Ms. Maundrell said.
4) Find the best deals before buying things
Many young adults can rack up hundreds of pounds every year on practically anything, from gifts to groceries and outings with friends – if they only look hard enough for the best deals from eBay or Lazada or hunt for the best shop bargains.
“It can be as exciting to hunt for good bargains online as it is to go to the mall; and you save the effort and transport cost. Before doing your groceries, check out the flyers to look for items available at lower prices. Saving pennies now and then can add up to so many pounds eventually,” Mr Murphy says.
5) Reduce your entertainment cost
This refers to such things as Friday or Saturday bar hops or a fast-food treat after a morning jog.
“Your indulgence for preparing organic juicing every day may be a healthful necessity to you; but considering how much you are spending, doing it twice or at most thrice a week might help you save a lot each month,” Ms Maundrell suggests.
6) Never neglect your finances
Never ignore obvious signs that tell you that your finances need a revamp, especially if you are in your early 20s.
Although it can be a scary thing to know, find out whether you are running out of money. When you realize your cash is about to say goodbye – shape up and do something about it as soon as you can. That beats having to wake up one morning and finding out you have zero balance.
7) Maximize the use of your savings
The savings you now have can be made to work to your advantage.
Ms Maundrell suggests that you put them in an account paying a minimum of 1.2 % interest to make sure they can balance out the effects of inflation. “Not doing so will practically reduce your money’s worth,” she says.
8) Consider how you move around
Do you live in a city? Avail of a monthly or yearly season ticket for your use (preferably, one that is on interest-free loan from your company). Living in London, for instance, allows you to use the night tube to reach almost any point without paying for high cab fares.
9) Avail of cashback deals
Cashback can be enjoyed almost anywhere now.
“Whether for insurance or for a new pair of shoes, find out how you can get back some money. Save these funds for a time that you need it most, especially for medical care,” Ms Maundrell says.
10) Think of buying investment products
You may not be an investment expert, or personal finance pro, or a member of a wealthy family, or adept at using complex economic terms; but you can be a novice investor.
“Buying an item that you will eventually neglect or discard for being old or useless is essentially an unwise practice. Why not put your money into something that will become a profitable investment? Are you spending your money on things that provide fleeting satisfaction or on something that will bring you long-term and continuing benefits?” Mr Murphy asks.