Saving a decent amount of money into your account each month can seem like a daunting task (trust us we know), but a better understanding of Gen-Y saving and spending habits and a couple of tips to help you hit those savings goals, you’ll find yourself reaping the rewards a lot quicker than you initially planned…
It will come as no surprise that most things today are becoming more and more expensive. With current wages lagging behind the rising cost of living, it can certainly impact your ability and motivation to save.
However, despite the crazy price some may pay for a meal at Dinner by Heston, many Millennials are managing to save. In fact, some studies have shown that Australians aged 25 to 34 are putting away an average of $500* a month!
So, it begs the question …
Are you good with money?
Aside from living expenses, “social spending” is one of the fastest ways to lose track of your money. Frivolous purchases can lead to spending much more than you think on things you don’t really need – a new outfit, the latest gadget, drinks after work. Even smaller purchases add up… A coffee here. A coffee there and before you know it, a few taps with your card could easily rack up over $20 a day, if not more.
If you’re not mindful, your social life can have a huge impact on your savings.
Are you spending more than your mates?
Comparing yourself to others isn’t always advisable, but when it comes to your financial future, it can help to understand how you’re tracking.
While it might seem like others splash out a little too often, you don’t see the sacrifices they do make in their budget. It’s highly likely that those ‘spenders’ are tightening the purse strings in other areas. For example, your friend who is buying a house may forego big annual holidays. Others may sacrifice takeaway dinners so they can shop more.
Depending on a particular savings goal, there is always something that has to give.
So, what does the average Millennial save for?
For the most part, we see experiences being among the most popular aspirations – things like holidays, dining out and shopping.
However, these short-term savings goals are also short-lived. Rewarding yourself with an awesome experience for a job well done can feel great at the time. But it isn’t going to set you up for a strong financial future.
Savings strategies that work.
No matter what you’re currently earning, it is possible to start saving more.
Actually, there are some small things you can start doing today that could have a big impact on your bank balance down the track – and you’ll start seeing the results in a matter of months.
If you’re ready to work towards an investment that could set you up for a secure financial future, read on. Here are some easy ways to start saving more right away:
1. Set out what your saving for upfront and work backwards.
The first and most important step to ensuring your savings flourish, is to define what exactly you are saving for and work backwards from there. Are you saving for a house, a holiday, a new car or a general investment? Once you have worked out what exactly your end goal is, it will be easier to define a monthly savings budget and stay on track and motivated to ensuring that you achieve your end goal.
2. Divide up your pay.
Simply taking the time to create categories within your bank account, can break down your income into much more manageable portions.
For example, you could start dividing money pay into groups (e.g. Bills / Rent / Living Expenses / Spending Money / Savings). It means you’ll know the maximum you can spend on certain things, and you won’t be as tempted to dip into the portion of your pay that’s allocated to savings.
3. Track your cash flow
As we’ve discussed in this article, being more aware of your spending can dramatically improve your savings potential.
Start by tracking your cash flow using a simple tool, such the Neue Black Budgeting app. It’s an easy way to manage your budget and become more accountable for what you spend.
Ready to get started?
When it comes to planning your financial future, the sooner you get started the better. So, if you really want to really kick start your savings, and start getting ahead of the pack, we have the right team and expert strategies in place that can help you reach your goals faster – contact the Neue Black team now.
*Average savings based on information in the following articles: