It’s no secret that millennials have a difficult time when it comes to getting ahead financially. Student loans, the ever-rising cost of living, credit card debt and underpaying jobs are just a few obstacles the younger generation has to deal with. That said, it’s still possible for millennials (and all other generations feeling the financial squeeze) to sock money away for those inevitable emergencies.
Look at the Past Three Months of Spending To Cut Costs
Rather than simply cutting future costs, it’s a good idea to look to the past to make those cuts effective. Pull up your credit card and bank statements for the past three or six months to see where your money has been going. Do you see any recurring costs that can be sliced from your budget? If so, that’s money you can put into your emergency fund. Rather than spending money on eating out, you can instead feed your peace of mind.
Get Into the Habit of Paying Yourself First
What’s the first thing you do when you get paid? Before depositing the money in your checking account and sending it to bill collectors, pay yourself first. Figure out what percentage of your check you can put back into savings and still have enough to cover all your other financial obligations. You’re sure to find it’s easier to pay yourself first rather than wait to see what dollars you can scrape together at the end of the month.
Think Twice About How You Spend Unexpected Cash Flows
Who doesn’t love getting a bonus check, tax refund or late birthday gift in the form of money? At least a percentage of that money can be tucked away into your savings account before you do anything else with it. Even if you plan on using that money responsibly to pay off debt, get repairs done on your car or buy something you actually need, don’t forget to plan for future unexpected costs.
Not everyone is as well-organized as they wish they could be. If you’re among that number, you may find it easier to automate your savings rather than try to remember to put money back into your account. Pick a date when you know you’ll have money in your checking account that can be transferred to your savings account. It’s a good idea to set the automatic transfer date after the due dates of all your monthly bills. That way, there’s less chance of you being hit with an overdraft fee should you forget to account for the transfer when you’re low on funds. Your bank is likely to reject the transfer, which is preferable to risking your bills going unpaid and being hit with a late or returned check fee.
Pick Up a Side Hustle
It’s easier than ever to make money on the side when you’re off the clock from your main employer. While there are plenty of ridesharing services, you may not like the idea of putting too many extra miles on your car or having other people in your car. Not to worry, there are plenty of other ways to make extra money. No matter which you choose, the extra money you make can quickly and easily boost your savings account.
Sit Down With a Professional
There are plenty of online resources and tutorials with money-saving tips, but there’s nothing like having personalized strategies and information. Insights from investment managers can let you know how healthy your current spending habits are and specific steps you can take to improve your financial well being. Experienced investment managers can provide valuable tips and concrete direction based on an individual’s specific situation. Even a short meeting with a financial adviser can give you a detailed plan that can drastically improve your financial situation while maximizing your ability to save.
While it may be difficult, putting money into an emergency savings account doesn’t have to be impossible for millennials. Financial emergencies are an unfortunate part of life for everyone, but they don’t have to serve as major setbacks that ruin your financial future.