Broke before the month ends? Spent too much on a whim? Then you need this guide on how to save better.
Young millennials want to collect experiences than assets. From travelling to exotic locations to exploring different passions, the youth wants it all. Except how do you fulfil these lavish lifestyle goals when your salary/pocket money runs out before the second week of the month? Here are some ways for the 20-somethings to navigate the gig economy and make better financial decisions in 2019:
Set your 2019 savings goal: What is it that you’re saving for? Is it a trip? Is it for education? Or is it for investing in your future start-up? Once you’ve figured it out, draw out a budget for the new year with a practical macro-savings goal. Then break it down to monthly goals – even per week goals.
Cut down spending, one thing at a time: Monthly savings sound easier said than done, but you don’t have to make major cuts in your lifestyle to reach your target. Make a list of all the things you spend money on in a day, and each month eliminate those commodities that you wouldn’t categorise as a necessity (for example, a cup of barista coffee can be replaced by homemade instant coffee, and an Uber ride can be replaced by public transport). Do allow yourself one or two cheat spends on these indulgent commodities during a month.
Rent what you can: As we progress towards a shared economy, the access to commodities is becoming easier. We’re now able to rent everything, from houses, furniture, equipment to even clothes. If you’re a young adult moving between cities for studying or for your job, try furniture renting services like Furlenco or RentoMojo. You can get single beds worth Rs 5,000-10,000 at a monthly rent of Rs 250-1,000, wardrobes worth Rs 10,000-15,000 at Rs 500-2,000, and sofas in the same range for Rs 1,000 to 2,000. This saves the burden of maintenance and cuts down costs.
Transaction alerts on: As annoying as they get, make sure you have transaction alerts active on every platform to keep a tab on your spending. Emails, text messages and bank apps that notify you when you make a purchase make it harder for you to ignore your bank statement.
Vacation planning: The new year comes with new vacation plans. However, air tickets get more and more expensive as you move closer to the date of departure. So what is the best time to buy air tickets to make sure you save up on the travel expense? During winter, 62 days in advance. During spring, 90 days in advance and during summer, 47 days in advance.
Credit lending apps: Some suggest that only fixed assets should be bought in credit and not liabilities. This means that one should borrow from financial institutions and use it for commodities like cars, real estate or commercial properties. However, sometimes the heart wants what the heart wants, even though the mind knows you shouldn’t indulge in buying that iPhone out of your budget or taking that spontaneous vacation to Goa with friends. In this case, opt for easy credit options being offered by various credit lending apps like Early Salary and Finzy, which offer small and flexible loans at interest rates that start at 1 per cent.
Coupon alerts: If you’re an online shopper like most millennials, make sure you’re making the best out of the deals at online retail stores by availing the right coupons. Websites that display fresh coupons for popular websites regularly, or coupon automating browser extensions like Honey, are ways to ensure that you’re up to date with the freshest deals. Also, if you buy apparel online, you’ll find the best deals on clothes when the seasons are transitioning. This is the time to buy the basics that are available at surprisingly low prices.
Your long-term saving plan will go through its own ups and downs, and may probably change along the way. It’s nothing to be disheartened by, as long as you make sure that you’re saving a set minimum amount by the end of a hard month. And if that doesn’t work out either, there is always birthday and occasions to cash out in the new year.