Student loan debt has become a serious issue over the last few years. As of mid-2017, it had reached $1.4 trillion. Over a third of students receiving a Bachelor’s degree in 2015 have at least some student loan debt, with the average student loan debt being $30,100. Unfortunately, these high levels of debts may feel especially large for those whose post-college jobs do not pay well. Despite high student loan debt, there are several things millennials can do now to start saving money.
Entry-level jobs and mountains of student loan debt can make saving and investing a hassle for many young adults. But it’s still smart to start early in life — even in a small way — to foster the habits of saving and investing wisely.
Save (At Least A Little) With Each Paycheck
While it is easy to plan to set aside money for your savings, you cannot spend money and then hope to set aside money for savings later. Spending first and saving later often results in you spending the money you had intended to save. Instead, save before you spend. Have a specific amount of each paycheck, such as 10 percent, automatically deposited into a savings account.
Another suggested option for saving money is to create a piggy bank, whether a literal one or simply a place where you can put your change. When using cash, place your extra change in your piggy bank. Then at the end of the year or when your piggy bank is full, put the money in a savings account.
Here’s some simple advice: Just go ahead and delete these from your phone and replace them with an app to help save money on groceries/track your purchases. It is convenient to go out to lunch at the great diner down the street or go out for dinner after a difficult day at work. Unfortunately, the cost of eating out adds up quickly. Instead, to save money, buy your own groceries, and make food at home.
Share the Expenses
If you are a recent college graduate, you might be sick of roommates, but sharing the cost of rent will likely save you significant money. Even if you are only rooming with one other person, you will be splitting the cost of rent as well as utilities. If you decide to live alone, you could still split the cost of things like a Sam’s Club or Cosco membership with a friend.
Steer Clear of Credit Card Debt
While incurring debt for an education, buying a house, starting a business, or other reasons is sometimes a necessary and wise financial investment, unnecessary credit card debt will cost you in the end. If you cannot afford to buy something, think if the item is necessary. Fashionable clothes, the latest electronic device, and an elaborate vacation purchased on a credit card are likely to cost you more in the end than they are worth.
While a credit card can help to build credit, it should be utilized carefully. Purchase the item or items using the card only if you know you can pay off the balance before you will have to pay interest.
Of course, there are many other ways that millennials can save money, even when they are living on a small budget and carry student loan debt. In general, it is important to think about the future when it comes to spending money. If the expense won’t be worth it a year from now, it’s probably not worth it now.