Guestpost by Cora Gold
Individuals often struggle with the transition from college to early career life. Calculating housing, insurance, food, and transportation costs can be challenging for many inexperienced adults. Twenty-something adults may improve their financial stability by cutting back on unnecessary expenses.
Most young adults struggle with saving because of their limited budgeting skills. Few college courses cover personal finance strategies. Individuals can save on their monthly bills by increasing their economic awareness.
Why 20-Somethings Struggle With Their Savings
20-somethings struggle to save money because their salaries are lower than older employees. Living expenses are also at an all-time high, causing many workers to live paycheck to paycheck. Another saving limitation for 20-somethings is student debt.
Nearly 42.9 million U.S. citizens have student loan debt. Many individuals in their early careers prioritize paying off their loan debt over saving. Young adults often feel misguided when approaching financial decisions, too.
Researchers found about 27% of Millennials don’t understand how to pay off their student debt. Increasing one’s financial education can improve their credit score and savings. The first step to growing your savings account is setting strict internal boundaries.
1. Open a Savings Account With a Different Bank
Financial professionals suggest young adults open savings and checking accounts with different banks. Using two separate banking groups decreases spending urges. Some individuals even lock their savings accounts, so the money is out of sight and out of mind.
Twenty-somethings can transfer a set amount of money to their savings account each month. Individuals should place about 20% of their paychecks in their savings accounts. Young adults can also cut back on unnecessary spending by eating out less frequently.
2. Entertain at Home
Entertaining guests at your house may help you save money on food and drinks. The restaurant industry marks up food by 300% on average. Individuals can purchase wholesale foods and get creative with restaurant-style recipes, creating a fine-dining experience from home.
The pandemic also increased residents’ access to high-quality movies from their living rooms. Renting movies through websites or streaming services is significantly cheaper than visiting the theater. You may also increase savings within your friend group by hosting a potluck.
Individuals can host parties where everyone brings something to contribute to the experience. Many 20-somethings live alone or with a couple of roommates, creating food and financial waste. Potluck gatherings help individuals use their entire family-size serving dishes.
[Jonathan: While I enjoy discovering a new restaurant, homemade food can taste so much better 🙂]
3. Shop Around for Cashback Cards
Another way to expand your savings account is to invest in cashback cards. Individuals can begin looking for cards with high flat-rate cashback rewards. Beneficial cards will help users save about 2% on each purchase.
You may also search for cashback cards with low annual fees. Some banks reel customers in with compelling purchase rewards and charge steep setup costs. Individuals should define their budgets before investing in a new credit card.
Building credit is essential – and if you are unable to pay off your debt, you may face serious consequences. Consulting a financial professional before signing up for a credit card can increase your savings. Young adults may also expand their savings by limiting their monthly subscriptions.
4. Ditch Your Incandescent Light Bulbs
Most residents rely on incandescent bulbs for indoor illumination. The bulbs are energy-intensive and significantly increase residents’ utility costs. Individuals can reduce energy waste by nearly 75% by installing LED bulbs.
LED lights also last about 25 times longer than incandescent versions, reducing landfill waste. Purchasing fewer bulbs over time also improves general cost savings. They also produce more vibrant light and illuminate rooms more efficiently.
[Jonathan: I like it, a simple no-brainer with long-lasting effects on the environment and your wallet!]
5. Install a Smart Thermostat
Another easy way for 20-somethings to save money is by installing smart thermostats. The residential sector uses about 235 billion kilowatt-hours of electricity each year for heating, ventilation, and air conditioning (HVAC). Electricity costs are rising as oil and gas prices surge.
Smart thermostats regulate HVAC systems’ energy waste, helping residents save money. They rely on sensors to divide buildings into different temperature zones. The sensors monitor a room’s occupancy and temperature changes.
Autonomous HVAC extensions also use Wi-Fi connections to collect real-time weather predictions. When indoor and outdoor temperatures match, the thermostat turns HVAC systems off. Residents experience significant cost savings after installing smart thermostats.
6. Measure Your Electricity Consumption
Residents can also save money on their monthly utility bills by installing smart energy monitors. The monitors connect to a building’s energy meter. It autonomously collects power use data from the entire building, residents, and specific appliances.
Individuals can access smart energy monitors’ data through smartphone apps. They may analyze the findings and limit inefficient energy usage. Residents can also save money on their power bills by installing light-emitting diode (LED) bulbs.
7. Choose One Streaming Subscription
Monthly subscriptions help individuals access their favorite media content without limitations. Chase bank conducted a study and found that 71% of customers waste nearly $50 a month on unused subscriptions. Twenty-somethings can improve their savings by sticking to one streaming subscription.
Many individuals invest in Netflix, Hulu, HBO, and Disney+ to increase their content access. Most streaming services rotate their shows and movies. Young adults can view a broad spectrum of content with one reliable service over time.
8. Buy Used Goods
Another way 20-something individuals can save money is by thrifting. Purchasing new clothes, accessories, appliances, and other products may put a dent in individuals’ bank accounts. Alternative shopping sources improve financial savings and the environment.
Thrifting is also a modern consumption trend. You may create an authentic and affordable wardrobe by shopping at second-hand stores. Many 20-somethings also move frequently between rental properties.
They may increase their savings by using hand-me-down furniture. You can also sell your old furniture to reduce financial losses when you move. Many online markets make it easy for individuals to sell their reusable goods.
9. Adopt a Vegetarian Diet
Another cost-saving method targets individuals’ diets. The average cost of lean ground beef in the U.S. is about $6.48 per pound*. Twenty-somethings can improve their savings by minimizing their meat consumption, even just by making the change once or twice a week.
Many vegetarians swap beans for meat as a protein substitute. One can of pinto beans is $0.34 on average. Individuals may also improve their savings by eating raw veggies and other whole foods.
Improving your diet can reduce your risk of illnesses and prevent steep medical costs. Small dietary cost savings can add up over time, helping young adults pay off their debt.
[Jonathan:*For Europe, the prices vary from 13 EUR to 46 EUR/kilo in Switzerland!, see here]
10. Bike Instead of Driving
Another easy way individuals can improve their health and save money is by biking. Gas prices increased significantly since Russia invaded Ukraine. President Biden banned oil and gas imports from Russia two months ago, adversely impacting energy costs.
Currently, the average price of gas is $4.24 in the U.S. If young adults drive passenger vehicles daily, they may waste hundreds of dollars on transportation each month. Biking can significantly reduce individuals’ transportation costs.
Most cities and residential areas have safe bike lanes. Commuting to work by bike helps employees save money and shrink their carbon footprints. It also improves their health, which minimizes their risk of medical conditions.
Individuals can save money when driving by carpooling and splitting gas costs. They may also invest in fuel-efficient vehicles to reduce general fuel requirements.
When Should You Start Saving?
The best time to start saving is now. Growing your savings account can reduce physical and emotional distress. Many 20-somethings experience stress and anxiety when it comes to their finances.
Savings accounts may act as safety nets, providing financial support if individuals lose their jobs. Paying off loan debt also improves individuals’ well-being. Freeing yourself of financial stress can significantly improve your quality of life.
About the Author
Cora Gold is the Editor-in-Chief of women’s lifestyle magazine Revivalist. She has a passion for living life to the fullest and inspiring others to do the same. Follow Cora on Facebook, Twitter, and Pinterest.
I would like to thank Cora once again for her excellent money-saving money tips for 20-year-olds, which could also be helpful for us (me) older folks!
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