7 tips to get ‘money-savvy’ with millennials

You may be forgiven for thinking of the millennial generation as financially frivolous given all the headlines on ‘smashed avocado’ – spending money on café breakfasts. Contrary to popular belief, this generation can teach parents and older generations a few money savvy tips.

Follow these tips and the banks will love you:

If your finances just aren’t what they should be, follow these 7 money savvy tips BEFORE you plan to buy a home.

Reduce your reliance on Credit Cards1. Reduce your reliance on credit cards
In some cases, responsible use of credit cards can allow us to be rewarded with some of the finer things in life. BUT, on the other hand, unhealthy credit usage can lead to debt and poor credit ratings.

If you already have a (or some!) credit card(s)…

• STOP using your credit cards
• Pay off the highest interest rate card first
• Make consistent, full payments on time

Finally, if you can’t afford it, don’t buy it. Don’t be tempted back into bad credit usage habits.

2. Do your research before you spend
Aussies love a good sale – think Boxing Day bargains, Black Friday (which is growing in popularity in Australia) and EOFY sales. The fear of missing out on a bargain drives up impulse buying.

Put the brakes on your spending

• Is your purchase a want or a need?
• Shop with a plan. Make a shopping list of items you need – if it’s not on the list, do you really need to buy it?
• If you need to spend, compare prices, DO YOUR RESEARCH – especially on big ticket items
• Give it 24 hours – wait overnight before you purchase
• OR….. spend like a millennial – on experiences, not things

Cut back on discretionary spending3. Cut back on discretionary spending to save
Back to the ‘smashed avocado’ debate of frivolous spending – reigning in on your discretionary spending can reap BIG rewards.

For example, calculate just how much you could save if you cut back on one brunch and a few coffees a week.

Say you cut back on one $25 brunch and three coffees a week – that could save you approximately $2,080 a year. That’s the cost of a good holiday! There’s no reason you can’t afford a holiday, a new television or house furnishings.

4. Use new technology to manage your finances
Almost one in three millennials use online tools to track their spending1. Most banks offer online tools linked to your savings and transaction accounts to help manage your expenses.

There are other apps and online tools readily available such as Pocketbook and TrackMy Spend, that, once linked to your accounts, automatically total your spend by category. Some even have ‘safely spend’ limits and alerts. There is no excuse for not knowing where you money goes!

Say you cut back on one $25 brunch and three coffees a week – that could save you approximately $2,080 a year. That’s the cost of a good holiday!

5. Own your money situation
Millennials are increasingly taking control and responsibility over their finances. They are possessive of their data and more eager to be involved in their finances than past generations2.

Take the lead from this generation and make time in your life for your finances.

Drop some time in your diary each month to do a quick check of your account transactions, fees and charges. Make sure your debt is reducing and your savings/offset account is increasing because if it isn’t, then you are not getting ahead financially.

Create Side hustle6. Create a side-hustle to accumulate additional wealth
The basic law of getting ahead financially states “you either have to make more money or spend less”. You don’t have to do one without the other – DO BOTH – and you’ll get even further ahead.

A recent Aussie survey3 indicates that millennials are joining the FIRE moment – Financially Independent Retire Early – and creating side-hustles to accumulate wealth.

Do you have skills or interests that could earn you extra income?

7. Spend on experiences, not on ‘things’
For those of us who are a little older, when you think back to your childhood, you are more likely to remember those family weekends away camping or balmy beachy holidays than the bike you got for your birthday.

Instead of impulse spending or online shopping, reward your improved money management techniques with an experience.

Some strategists quote 75% of millennials prefer to spend money on desirable experiences, education or a ‘shared’ good rather than on material possessions4.

Think like a millennial and focus on experiences rather than spending on material goods that will date, be replaced or depreciate over time…. instead spend on experiences you will remember for a lifetime.

Becoming ‘saving-and-finance’ savvy can take time and requires changing bad habits. We are here for you. Don’t be shy to touch base with us if you need financial help or your circumstances change.

Call (07) 5452 7979 or email me [email protected].

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