Saving money is a good habit to develop as a young adult. Learning how to save your money is one of the most important steps you can take in order to be financially stable throughout your life. During your high school and college years, utilize these money saving secrets in order to stay on the path toward financial stability.
Set saving goals. By setting short-term and long-term goals, you will be inspired to keep track of your savings and will spend your money more wisely. For instance, you will be less likely to spend your money on frivolous items if you have a goal to save $5,000 so you can purchase a used car. Focus on the prize!
Deposit gift money into savings. Anytime you receive gift money, such as birthday or graduation cash, deposit it into your savings account. Since this is money that you weren’t really counting on, you know you can get by without it. So instead of spending it right away, put the money in a savings account and let it accrue interest.
Try to save half of your income. As a young adult, you are at the age where you probably have a part-time job but don’t have that many bills. Use this special time in your life to your advantage and build up a substantial savings fund.
Plan ahead. From flat tires to medical bills, you will be sure to encounter unexpected expenses throughout your life. Learning how to plan ahead for these unexpected expenses will help you avoid going into any debt. Begin building up an emergency fund or reserve part of your savings account for emergencies.
Don’t try to keep up with everyone else. If your friends always seem to buy the latest gaming system or designer clothing, you may be tempted to spend your money on similar items. However, keeping up with others is a never-ending battle as someone will always have something newer, faster, and shinier than you. Make the most of what you do have and save your money.
Avoid shopping malls. This saving secret will be hard for you if shopping is one of your hobbies. But keep in mind that shopping malls are designed with one objective – to make you spend money. To be financially savvy, you should find other ways to spend your leisure time, such as free concerts, sporting events, and art museums.
Reduce monthly expenses. Revamp your spending habits and deposit that extra money into your savings account. Here are a few ways to reduce your monthly expenses:
- Limit vending machine purchases
- Pack your lunch for school
- Reduce drive-thru visits
- Go to a matinee movie instead of an evening show
- Check out books and magazines from the library instead of buying them
- Avoid cell phone data overages by limiting your usage or upgrading your data plan
Don’t count on credit. Credit cards can be a great tool for handling unexpected expenses and to build a good credit rating (if used correctly). However, you should avoid using your credit card for everyday purchases or to pay for an item or event that you really can’t afford. Using your credit card for frivolous purchases will only cost you more money in the long run.
For more ideas on saving money during school, check out the articles in the College Budgets 101 section of this website.