Millennials are graduating college with more student loan debt than previous generations, according to a NPR report. This has delayed marriage, having children and the purchase of their first home for some. Before the spread of COVID-19 turned into a pandemic and unemployment surged, the median savings for those under 35 was $2,000. Right now, many young people are in a different financial place than they were in 2019. The financial crisis has left more than 10 percent of the U.S. without jobs. Some have taken temporary pay cuts or have switched to the gig economy for faster cash. This new change of pace has many millennials balancing the lifestyle they want while paying the debt they already have. Here are five ways millennials can cut their monthly expenses to save more now.
Set A Goal
Start with the end goal in mind. Decide how much you want to save before you decide what expenses that you want to cut. Budget usage has improved in recent years with only 20% opting out. Snipping through your budget cold turkey will only leave you resentful in the end. Try this: if you set a goal of saving $5,000 in 12 months, it’s easier to decide how to save $96 a week or $416 a month.
Check Your Auto Payments
Do you need to pay for: Apple Music and Spotify? HBO and Disney+? A gym membership? Subscription services automatically debit your account monthly. Discontinuing some of these services could save you a few hundred dollars over time. If you have student loans, call your student loan provider and request an adjustment on your payment plan. If your income has significantly decreased due to the pandemic, you may be eligible to lock in a lower payment for at least a year.
Give Your Credit Card Issuer A Call
This task may be as tedious as applying for unemployment insurance, but it’s worth a try. Credit cards are offering assistance for customers facing financial difficulties. On a case-by-case basis, credit card issuers can use their discretion to waive fees for skipped payments, defer minimum payments, and possibly waive penalties like APR increases. Customers with good credit history can also work with a customer service representative to find the right credit or charge card. Ask if your card issuer has options that will allow you to transfer balances to a zero or lower-interest rate or if a new card with a lower interest rate is available.
Stop Shopping on Apps
The average Amazon customer spends about $600 a year on Amazon alone and Amazon Prime members spend $1,400 on the service that charges $119 a year to be a member, according to Business Insider. This is not the only place you may be impulse buying. The U.S. Bureau of Labor Statistics reports that Americans spent $3,459 on food away from home. Yes, this includes fast-food, takeout and delivery services like Uber Eats, Seamless and Postmates. Restaurants charge up to 300% more than cost, so it may be worth investing in some cookbooks to help bring your food expenses down or, at least, learn how to make a sandwich.
Decide If It’s Time to Move
Housemates can be more hassle than they’re worth when they don’t pay their bills on time. Accumulating additional charges because a member of the household isn’t pulling their own weight can be a waste of money and a cause of aggravation. It may be time to consider down-sizing. If getting your own apartment seems out of your budget, consider a co-living space. With flexible, individual leases, and a flat-fee that covers utilities such as electricity, water, gas, and internet, there will be no surprises each month. Leases can be as short as three months which allows freelancers, creatives, and recent graduates to take projects in cities you may not want to make your permanent home.
Creating a savings plan does not come easy to some. Identifying actionable steps is the first step to creating a more sustainable budget and a more secure financial future.