When you are in your 20s and fresh out of university, you have no idea how to save money. Little things like automating your savings and cutting down on unnecessary expenses can save you hundreds of dollars every month. Your future self will thank you when it’s time for retirement. These 10 tips will help teach you the basics of saving money.
1. Automate your savings
One of the best ways to save money is to have it automatically transferred into a savings account each month. This way, you never even see the money and it’s less likely that you’ll be tempted to spend it. You can set up an automatic transfer with most banks and credit unions.
2. Reduce unnecessary expenses
Do you really need that Netflix subscription? Or could you get by with just a basic TV package? Take a close look at your monthly expenses and see if there are any areas where you could cut back. Even small changes can add up to big savings over time.
3. Cut down on your daily coffee
If you’re spending $5 a day on coffee, that’s $150 a month! If you can’t give up your daily fix, try making coffee at home or cutting back to one cup a day.
4. Invest in index funds
Investing in index funds is a great way to save for the future. Index funds are low-cost and offer diversification, which means they’re less risky than investing in individual stocks. You can start investing with as little as $50 per month.
5. Leave your money in high-interest savings accounts
If you’ve got extra cash sitting around, don’t let it go to waste in a regular savings account earning 0.1% interest. There are plenty of high-interest savings accounts available, so shop around and find one that best suits your needs.
6. Use prize-linked savings accounts
Prize-linked savings accounts are a great way to earn high interest on your money while also having a chance to win prizes. Accounts like these are offered by credit unions and some banks, such as Ever.ca.
7. Get rid of your debt
If you’re carrying a balance on your credit cards, you’re wasting money on interest charges. Pay off your debt as quickly as you can to free up more cash for saving.
8. Invest in yourself
Investing in yourself is a great way to save money in the long run. Whether it’s taking a course to improve your job prospects or investing in a healthy lifestyle, making changes now will pay off down the road.
9. Save your windfalls
If you get a bonus at work or a tax refund, don’t spend it! Put that money into savings so you can use it for a rainy day or your future goals.
10. Make saving a priority
Saving money should be a priority for young adults. Even if you can only save a small amount each month, it’s important to start building up your savings now. You’ll be glad you did when you need it later on.
Saving money as a young adult can be challenging, but it’s important to start building up your savings now. By following these tips, you can make it easier to save for your future goals.