Ian Herrera, UCONN Senior, First County Bank Credit Analyst Intern
On Money Saving Tips: A Millennial’s Perspective
Ever dream of being a millionaire, driving a Lamborghini, owning a yacht, and having the mansion the size of a football stadium? I sure know I have. I can tell you from experience that the first thing you shouldn’t do is go out and spend $500 in 4 days. That will only lead to trouble, especially when that $500 was from your mom.
Instead here are 5 tips on how to reach this millionaire goal and not have to worry about money anymore.
First you must…
Plan for the future
I set up a budget based on what I have planned in any given week. Anything from ordering take-out, hanging out with friends, or a random item I want to buy (because it was on sale) is subject to my weekly budget. I also take into account bills such as cell phone, car payment, and credit card debt. Extra money that is left over from the week, I split between my savings and checking account.
Next you need to…
Allocate the needed funds, with savings in mind
Personally, I begin by distributing 40% of my paycheck into my savings account and the remaining 60% into my checking account. Depending on your personal expenses, the percentages may be different. You should always try to save as much as possible. These savings should be only used in emergencies. The checking account is used to pay for necessities, bills, and other items that you have budgeted for. Lastly, don’t forget to have an emergency reserve; an amount of $1,000 would be good, in case you ever need it.
Always be aware when…
Socializing with your crew
Going out with friends is great but be careful; you’d be amazed at how much you can spend going to the movies, out to eat, or shopping. Instead, I try to find other inexpensive activities, such as hiking or going to the park when hanging out with friends. It saves money and at the same time you get to exercise. However, there are times when you do need to relax and have a nice time out. Before doing so I advise that you set up a budget to determine how much you plan to spend. Keep to that amount!
Build your future by…
Credit cards can be scary if you don’t know how to properly use one. You can get into serious debt, which can hurt you in the future. Otherwise, they can be a great tool to help you increase your credit score and establish a credit history. For example, I like to use my credit card minimally to buy gas. When the bill comes, I pay the amount in full and have nothing to worry about.
A penny saved is a penny earned
I wasn’t used to saving money in the past. Once I had it, I spent it and I noticed that I never had any money for emergencies or other activities that I wanted to do because I splurged and spent it all. I decided to begin saving little by little. If I found a penny, nickel, dime, or quarter I would pick it up and put it into my crayon bank. Whenever I drank a water bottle I would keep it to recycle it later and get a nickel. You’ll be amazed at how the little things add up. Within one month I had saved over $200. Projecting this out to a year that figure would be $2,400, which could be a down payment for a car or a trip to Europe! Never underestimate the value of little things, they may seem pointless at first, but in the long run they’re the most helpful.
Following these tips will ensure that you are financially secure and on your way to being a Millionaire Millennial. Remember not to spend unwisely because the goal is a mansion, yacht, and Lamborghini! Who knows what other luxuries the millions of dollars you’ll have can bring in.