Great Saving Strategies For Gen Xers and Millenials
If you’re looking to save more money in the new year — you’ll need a plan. The best saving strategy for you depends on what stage of life you’re in, as each phase carries its own particular financial responsibilities.
There’s no one-size-fits-all advice for saving, but here are a few generation-specific suggestions for getting the ball rolling.
Gen Xers (36-50)
Most Generation X members, born between 1965 and 1979, are busy trying to advance their careers and raise families. Some are also caring for aging parents.
Managing cashflow, especially at this stage, is particularly challenging. After all, these are the most expensive years of your life. (Do you have any idea how much kids cost?)
Get into the habit of paying yourself first. Set aside a portion of your income the day you get paid, before you spend any discretionary money. The best strategy is to have someone else save for you, with your employer or your bank automatically taking money off the top of your paycheck for your retirement plan or other savings goals.
And avoid buying more home than you can afford. A big mortgage is a bad idea.
Millennials, born between 1980 and 1996, actually tend to be a bit better than Gen Xers at day-to-day money management. However, they often live in the moment when it comes to financial decisions, and fail to prioritize long-term concerns — like retirement, for example. This group is the least likely to contribute to their employer’s retirement plan.
As for managing costs, let’s start with the big one: rent. Avoid paying it altogether, and live at home instead. After all, this is going to be your biggest expense. In many markets, rent eats up more than 30 percent of one’s monthly income.
When it comes to student debt, ridding yourself of this burden should be a top priority. Consider an income-based loan repayment plan.
To keep your discretionary spending in check, give yourself a weekly or monthly allowance, or you’ll end up splurging more often than not.
Technology can be a big help in better managing your money. Try a budgeting app like Mint to set goals and track spending.
And keep an eye on your credit score. If you want to buy a home someday, your score will feature prominently in the mortgage rate you’ll qualify for, and hence how much home you can afford.