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Millennials Shouldn't Save Their Money

TheStoryteller
Posts: 2
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10/15/2015 2:23:55 AM
Posted: 1 year ago
The old adage of "a penny saved is a penny earned" isn't necessarily a phrase to live by, especially in your twenties. Think about it: if you don't spend the money that you earn now, what makes you think you will spend it in the future? Sure, saving is well and good but there needs to be a plan for that money, not just "in case I need it". Taking up that mantel will cause fear of not being financially secure, fear of the future, fear of something that hasn't happened yet. Saving in your twenties forces you to worry about the future instead of the present.

Let's say that a friend will want you to come out for the night, to have a good time. You definitely have the money to do so, right? After all, you have been saving every single penny you have earned working at a part-time job while balancing school and sleep (maybe). You deserve a little something good! Treat yourself! But then you hear that voice in your head (at least I do) that says, "If you spend money now, you won't have any later!" which prompts you to tell your friend, "No, it's okay. I'll go some other time." But there won't be another time, will there? If you constantly fret about saving your money, having this fear of the future, save your money, you will feel guilty about any and all spending you will do in your thirties, forties, and so on.

What's funny is that a lot of financial experts say that saving in your twenties will benefit in the long run, but "[m]illennials, on the other hand, meaning adults who are 35 and under, have a personal savings rate of negative 2%. Between high student loan debt and stagnating wages, saving anything at all proves to be impossible for many of them". (Lake, 2015) So perhaps saving everything isn't the best course of action for a millennial, but an easier alternative could be smart spending. Use money earned to invest in worthwhile experiences that will benefit you as a person rather than material objects that would gather dust in your room in a matter of weeks. I went to Spain over the summer and I learned about the Spanish culture, language, and even myself " the whole month was priceless. But if a need arises for material things, such as clothes or electronics, try finding them secondhand at thrift stores or get earlier models for a hefty discount. If you're still in school, use bigwords.com to search for used textbooks at fraction of the cost. I have spent no more than $350 each semester in college for books thanks to this website. A penny spent is a penny earned. When you spend money, spend it wisely. Don't let it sit in your bank account.

(quote from https://www.creditdonkey.com...)
SM2
Posts: 546
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10/15/2015 5:52:46 AM
Posted: 1 year ago
How to budget:

1. Fixed costs (rent, bills, etc.) - these are "fixed" in the sense that they are mandatory.

2. Essentials (food, healthcare, transportation, etc.) - meet these first.

3. Secondary (textbooks for school, uniform for work, replacement laptop, etc.) - pay only when needed.

4. Backup savings - enough to see you through when unemployment hits.

5. Investments (e.g. shares or term deposits) - invest this money to get more money.

6. Goal savings (e.g. car, house, or retirement) - channel your surplus money here.

7. Spending money (hobbies, cafes, movie nights, etc.) - do sparingly, and pick the cheapest option available.
JMcKinley
Posts: 314
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10/15/2015 6:17:13 PM
Posted: 1 year ago
Like most things, the key is balance. Save what you can while maintaining a life that you still enjoy.

The key thing for young people to focus on is debt reduction. I have a retirement plan through my work and so I save for the long term with that. But i don't save much else because I use the rest to cover living expenses, recreation and to pay down debt. Why would I invest an extra $500 in a savings account or mutual fund that will give me a 0.5-10% return, when I can put that money down on debt and get a 15-20% return in the form of reduced debt payments and interest?

If you can get your debt under control before you leave your 20's then you will set yourself up quite well for the future.
Greyparrot
Posts: 14,325
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10/15/2015 7:42:12 PM
Posted: 1 year ago
It's far easier to save when you are younger and you (hopefully), have very few dependents.
Worrying and stressing about your future while you are younger is generally a good thing, because your opportunities to better yourself, and develop your purpose in the world, will never be more abundant than in your youthful years.

Just sayin.
patdelasol
Posts: 2
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10/20/2015 3:32:29 PM
Posted: 1 year ago
While it is unhealthy to never spend any money and never go out and do things, indulging in each and every opportunity to do so leads to reckless behavior. You might say, "I am not indulging in every opportunity." And I would say that you might be right. However, getting in the habit of giving in is dangerous. It is a slippery slope which many people that I know have slid down. It might start with going out once a week or even less, but it is very easy for that to landslide into constantly going out. That outlook on life is bad for your health and your wallet.

Also, there is really no way to responsibly be irresponsible with your money. The downturn of the economical climate for young people is a reason why we should be more responsible with our money. Since it is difficult to find a job and likely that we'll be in debt for much (if not all) of our young adult life, we should have a better economic foundation. And since trust funds are granted to the privileged few, it is up to the young individual to provide that foundation for his or her self.