Elise – Don’t spend unnecessary money eating out. Cook at home when you can, my friends and I often plan nights where we all bring a dish to share at someone’s house instead of eating out.
This way we don’t feel like we are missing out on social events. Even spending money on takeaway coffee regularly adds up; making coffee at home instead saves a lot of money.
Tara – I read ‘The Barefoot Investor’ by Scott Pape a couple of months ago and in it he talks about setting up four different bank accounts; Everyday Expenses, Splurge, Smile and Fire Extinguisher.
The Everyday Expenses account is the money you use for your bills, rent, groceries and everyday essential items. The Splurge account is for anything else that you want to spend your money on ie. Makeup, clothes, a massage or a fancy restaurant. It is stuff that is nice to have, but you can definitely live without.
The Smile account is for your more long-term savings goals, like a holiday, wedding or property. It is essentially those things that bring a smile to your face when you think about what it is you’re saving for.
Finally, the Fire Extinguisher account is for unexpected or unplanned ‘financial fires’, like you house burning down, medical emergencies or traffic fines. It’s the stuff that you don’t necessarily factor into your budget but will cost money if they unfortunately occur.
Scott Pape recommends divvying up your pay check into these accounts by placing 60% of your pay check into your Everyday Expenses account, 10% into Splurge, 10% into Smile and 20% into the Fire Extinguisher account.
Once the money is in each account you can do whatever you want with it depending on the category. So, if you feel like buying that new activewear set, and you’ve got the money in your Splurge account then go for it – that’s what the money is there for! But when there is nothing left in the account then there is nothing left.
It’s all about living within your means, without the guilt factor of spending money when you’re trying to save.
This method has worked really well for me over the last couple of months and I have already saved thousands.
Rebecca – Be more mindful. I was not mindful at all in my 20s when it came to saving and spent way too much money on going out partying, eating out and drinking. If I wasn’t being social, I wasn’t living. In hindsight, it probably wasn’t the most financially secure way to begin my young adult life in the real world.
It took me a while to realise that going out is great, but the future really is super important. For example, investing really blows my mind, because I wish I had the ability to learn how to do it better.
Though brilliant there are apps like Raiz where you can invest as little as $1 a day and who manage all your investments for you really take the stress out of all of it. But, I do wish I could learn more about it and take more risks to earn more.
Anisha – A great way to save money is to set up an automated transfer every week into a savings account you cannot touch. This was the easiest way for me to save money without really having to do anything. Depending on your bank, you will also earn interest on the account if you don’t withdraw any money over a long period of time.
Montana – I’m trying to be really proactive with my spending/saving now so I don’t hate myself for my money choices in the future. I feel that being in my 20’s there are so many things I can be doing (such as investing) so set myself up really well for later in life so I recommend listening to podcasts, reading books and asking elders for advice. I recommend books and audiobooks such as ‘The Barefoot Investor’ and ‘How To Be A Badass At Making Money’.
Renae: If your parents are wealthy and have made good financial decisions, learn from them. If not, find someone financially savvy and successful who will talk frankly to you about their financial road to success, and their successes as well as failures when it comes to money. Do not be shy to talk about money.
There are money saving apps in the market place which can help you save such as Raiz, an investment app targeting millennials that has various high and low risk portfolios you can choose from. You can also select to have funds taken out of your bank account automatically so you don’t have to think about it – or make time to do it.
This is one of the easiest and quickest ways to start a savings plan.
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