We are millennials, and we are broke. Perpetually. While the media would have us believe that it is because we like avocados and eating in general that we can’t afford houses. Sadly the reality is far less ridiculous. How do we save money when our wages are so low, and our expenses are so high? We run on the hamster wheel of living paycheque to paycheque. As we approach a time when we are going to need savings: retirement.
With state pensions leaving us barely able to cover the essentials. And with work pensions nowhere near as beneficial as they used to (if they’re offered at all), the millennial generation is going to have to collectively win the lottery or rely entirely on our own savings. Probably the last time saving money was this difficult was World War 2. So we are really going to have to pull ourselves up by our bootstraps if we’re going to have any chance of eating by the time we reach 70 years old.
Now, we get a lot of financial advice from people who could afford to own a house and have a family on minimum wage at our age. But things are different now and we can’t save money the way they used to. So in the spirit of irrelevant financial advice, here are three ways NOT to save money.
Whoever decided putting money in a ball of porcelain to later smash it open with a hammer was a good idea must have been rolling in cash. These days, every penny you save in that piggybank would only go to investing in yet another piggy bank. As well as being a ridiculous waste of resources, it’s a waste of money.
What about the piggybanks with the corks in the bottom to get the money out? So glad you asked, they’re still no good and here’s why. The act of saving is enhanced by motivation, and we are motivated to save more when we can see the progress we’re making. The ol’ pink piggybank makes that a little difficult. Sure, you can shake it, but that doesn’t tell us much.
A jar, or a see-through container, and filling it with spare change and notes is a visual reminder of how much we’ve saved and how much we can aspire to save. There’s no guesswork and no smashing, just a simple pot that we feel encouraged to save our money in. Better yet, we’ve given those old jam jars a new purpose in life. Go forth and recycle!
Having One Savings Account
When we save, we’re usually saving for something: retirement, a car, or a holiday, but our savings often have a purpose before we’ve even started putting money aside. Opening a savings account is a great start, but if you’re saving for multiple things and pour all your disposable income into one account, things can get a bit messy.
Firstly, it might be difficult to organise your savings goals if all your money is going into one pot. When you look at your savings balance, you could find yourself re-calculating how much you need to save for your car, your holiday and/or retirement, every month. If everything has its own account, your savings will be much easier to organise.
Secondly, here in the UK, it is possible to get better interest rest and/or government help towards your savings depending on what you’re saving for. If you’re saving to buy a house, the government will contribute to your savings. (T&Cs apply of course) Whereas if you open a regular savings account, you’re on your own. Different accounts might offer different levels of interest depending on what you’re saving for or how much you can afford to pay in per month. In this case, separating your savings into different accounts might make sense.
We get paid monthly, so we should save monthly, right? Nope! While it’s the easiest things to do, it’s not the most efficient way to save. The small change in our jeans pockets and the fiver we forgot was in our wallet gets spent if it’s on your person for so long – especially as long as a month. So, what’s the alternative? Let’s make ourselves a weekly budget.
Smaller budgets are easier to manage. So apportioning our monthly earnings into weekly segments makes keeping control of our money easier. At the end of each week, whatever is left can go to the savings fund. It’s more helpful than buying the odd latte or notebook you don’t need (guilty!) With less cash lying about, and instead safely in your savings fund, you could see your savings take a significant hike.
Finding money to save isn’t easy. However it isn’t impossible for everyone. Using the right era-appropriate techniques, we’ll have enough money to get that car, that holiday, or maybe even one day, retire.
What tips have helped you save money?
Featured image via Photo by bruce mars from Pexels