Young adults in America are currently saving more money than before based on recent information provided by financial institutions like America Saves. However, almost half of young adults that range from the ages of 18 to 35 are not saving money. This urgent issue must be addressed since the earliest that a person starts to save money, the better quality of life he or she will have later in life. It’s never too late to start saving and here are some strategies to help attain that financial goal.
1. Sign up for automatic savings by setting up monthly transfers from your checking account to your saving accounts to generate higher interests. Certain banks offer rewards for these transfers. For example, maintenance fees are usually waived when this is set up. Directly transfer a portion of a paycheck, if employed, to a savings account by previously authorizing the employer to do so. Money placed in a bank account reduces the temptation to splurge.
2. Overestimate expenses. Anyone makes mistakes without decades of experience in money management. Setting high expectations for expenses allow for extra cash available in the long term. Make an overestimated budget that places unspent money into a savings venue. For example, just saving $50 per month for a year creates a $600 savings amount plus interest.
3. Use cash. Credit card usage should be limited or not used at all. A system should be set to only have a specific amount of money available on a weekly basis by setting a strict budget to follow. Categorize all expenses to know exactly where all the money goes. Check for any alternatives to pay recurring services or leisure activities. In addition, cash payments provide hard and instant evidence of the amount of money that is readily available. By prioritizing needs, money is saved by only spending on necessary items. For example, save gas money by setting up a car pool to go to work or college.
4. Get a college education. Even if a profession that doesn’t require a college degree is considered, college enrollment is recommended. Although, going to college is a major investment, statistics show that college degree holders earn on average more money than the rest of the population. Young adults can get degrees easier since there are fewer obligations. For example, young people have fewer or no mortgages, loans, and kids to take care of.
There are many options out there for a young adult to save money, most of them at their fingertips. It is imperative to follow a determined plan to save money for the future. Making extra sacrifices to save money now will bring buying power and open many options to be able to live a better life in the future.