If you're a millenial, statistics show that you might need more of a guide to saving money.
Why? Here’s a rather unsettling millennial fact to add to the day: it turns out, according to the Australian credit bureau and data insights company, Experian – that young Australians have become the most ‘in-debited’ group in the country
with many willing to take on strikingly high levels of debt. These findings came out about one and a half years ago in late 2016; so, things must have improved since, right?
Sadly, it seems like these statistics haven’t budged much from their bleak circumstances. A recent study
published by ABC News reveals the disturbing likelihood of Australian millennials facing poverty come retirement age.
The research showed factors such as a lack of super investment, little to no savings, and pension-dependence as major causes of such an affliction; negative habits that can be alleviated with the right money-saving smarts.
Luckily, at SkillsTalk, we’ve compiled a guide of some of the best tips that you, as a millennial, can adopt into your daily lifestyle – so as to avoid a disastrous financial future.
Learn to track your spending
One of the most crucial and obvious ways of saving your funds is learning how to effectively track what comes in and out of the bank.
Go through the previous 3 or 6 months in your bank statements
and observe where your money’s been going. Has most of it been put towards necessary expenses? If you’re like most other millennials who have difficulty saving, the likely answer to that is a ‘no’. Chances are, you’d find that much of your finances have been going towards needless costs where a cheaper or ‘free’ option would have sufficed.
For example, you may find it more cost-efficient to bring lunch or snacks to work instead of spending money on takeaway meals. Perhaps taking the bus
and enduring an additional 10-minute walk home is worth saving that extra $10 on an Uber (plus, you get the added benefit of physical exercise!).
Try reducing these wallet-drainers from your weekly or monthly expenses, or ridding of them completely. Then, maintain the habit of logging your everyday debits
to ensure you’re putting your funds towards purchases that are absolutely worth it or necessary.
If it helps, you can even try out a personal finance app or two
to aid in your daily money management.
Scout for ‘bargain’ or ‘cheap’ (yet quality) options
Instead of opting for all the best, fancy brands on the market – it may be best for you to consider the more ‘budget’ alternatives available out there. Do you really need that designer handbag, when one from a local (albeit, less prestigious) brand can do the job just as well? Instead of doing your daily grocery shopping at Woolworths or Coles, why not pop into Aldi
for a more discounted selection? The same can go for household items, gadgets, and even medications.
It doesn’t end with the ‘no-name’ options, however – looking into what vouchers or coupon deals
are available can also help save a ton on your purchases. Websites like Groupon
, or browser extensions like Honey
can all help in finding you that magic online code to shoulder a considerable chunk of your purchase.
If you’re a student, you get the wonderful privilege of student discounts!
Transportation, cinemas, and even a handful of retail stores can provide you with significantly reduced costs if you’re engaged in full-time study. You may even find that there are several government funding options available for your course – or options that allow you to take up a flexible payment plan.
For example; here at Upskilled, we provide our students with a myriad of financial assistance options
, including the eligibility for Centrelink support payments
, flexible plans such as our Zip Money scheme,
and various government funding options
depending on your state.
Budget, budget, budget!
Another crucial (yet, frequently hard-to-master) element of saving money would be to budget your expenses. Know what your financial priorities are, then save and spend accordingly.
In her finance article for The Sydney Morning Herald, a 28-year old Georgia Leaker describes how she keeps three separate bank accounts – one for savings, rent, and additional expenses such as food and entertainment.
“I spend my savings on travel, because I enjoy it and I have no desire to enter the property market,” she states.
This ensures that she consistently has money allocated for her most important needs, while still having enough of a budget to maintain an active social lifestyle.
She emphasises that this practice isn’t about giving up one’s favorite things, but rather securing all necessary payments; then ensuring that whatever’s left is used for activities or purchases that you truly
desire or enjoy.
Invest in your superannuation
Among millennials, one of the most common financial faux pas is the failure to substantially invest in one’s superannuation fund. You’d want enough to live comfortably in retirement, so the earlier your start, the better
. Getting yourself into the habit of this ‘forced’ – yet, absolutely essential – saving will increase your chances of compounding a lot of money over the next 30 to 40 years.
Don’t just rely on your employer, either; it’s best to take an active approach to these savings and calculating just how much you need to save or salary-sacrifice in order to reach your financial goals.
According to the Association of Superannuation Funds of Australia’s Retirement Standard
, the standard of a ‘comfortable retirement’ for a couple would be about $60,000 a year, and $43,000 a year for a single person. The tax concessions on superannuation can also be quite generous, giving millennials all the more reason to invest in such a fund.
“If you put $25,000 a year into super over the next 40 years as a couple, that’s $1 million. You are potentially saving up to 32% tax on that amount, which is $325,000,” states Adrian Rafterty
, associate professor at Deakin University and course director of financial planning.
“Ask a 60-year-old what would they do differently about money and most of them will say, ‘I wish I had put more money into super, knowing that money makes money’.”
Living as a millennial in these economic times can be financially intimidating; but it doesn’t have to be a crippling struggle. With the right amount of spending, saving, and investing, you’ll find yourself looking forward to the wonderful, stress-free world of retirement.
Love budgets, spreadsheets and finding savings?
Then would you make an awesome Accountant
or BAS Agent
? Check out Upskilled's Accounting and Finance Job Role pages
for information on salary expectations. For more financial advice, be sure to check out our other related articles
here at SkillsTalk.