A lot of ideas on how a millennial can build savings in 2023 are available. Indeed, most of these are simple and practical. Yet, there are a few more ways you can increase your income and save extra money in 2023.
Sounds interesting? Read further.
Why Build Savings in 2023?
The answer is simple. Who does not want extra money? As a millennial, you definitely have access to the Internet and latest technology. Regardless of which part of the world you live, it is definitely possible to build both, your income and savings.
Other reasons are more compelling. Cost of everything, from basic food, clothing and shelter to necessities such as healthcare and transportation are on the rise. Your income would cover these. But they are eating into your savings.
Additionally, a millennial would have more wants too, such as expensive smartphones or the music system, branded garments and lots more. To afford these, it is imperative to build your savings.
Quick Ways for a Millennial to Build Savings
Considering you are eyeing some extra income as well as building savings this year, we will discuss how to build savings in 2023 with simple, time-tested, and proven ways that can help you build savings this year.
1. Get Rid of Credit Card Debt
This is the very first and most important way for any millennial to build savings in 2023. The reason is: Credit cards come with a very high Annual Percentage Rate (APR). Should you have availed of a student credit card, it is high time you start lowering the debt and eliminating it altogether.
Upping your repayments by cutting costs is one way to lower credit card debt. We will discuss how to start reducing some unnecessary expenses, and how to increase savings, later in this article.
The money you save can go towards stepping up credit card repayments and build saving on APR. Remember, credit cards come with APR that can run as high as 36 percent to 48 percent per year.
2. Eliminate Unnecessary Subscriptions
Nobody denies your right to entertainment. But cable TV, Netflix, Hulu and Amazon Prime, among others, come at very high costs.
Additionally, there are several other entertainment platforms you would have subscribed but seldom use. This is fairly understandable: no millennial likes to spend time indoors unless necessary.
Should this be your case, eliminate all unnecessary subscriptions to cable TV and other entertainment resources. You will be saving cash in good amount this way.
Also, revisit those subscriptions for online or paper magazines. If you are not a serious reader, it pays to cease their subscriptions immediately.
3. Ride Mass Transit/ Public Transport
Riding mass transit and using public transport can save your commuting costs immensely. The reason? Public transport systems offer passes valid for a day, three days, one week or even longer.
These passes enable you to save on expensive fuel that your personal car guzzles relentlessly. Cutting use of personal vehicle also means you do not take any unnecessary trips.
Mass transit and public transport networks worldwide offer special discounts to millennial travellers, especially students. Avail of these discounts. You may require a school, college or university ID card to avail these discounts. Use your personal vehicle only when absolutely necessary.
4. Shop at Thrift Stores
Salvation Army has a wide network of thrift stores across North America, Europe and parts of Asia. They sell excellent stuff at very low rates. Usually, stuff like readymade garments, vehicles and household appliances are given away to the Salvation Army as donations.
The organization sells these items for cash which is necessary to conduct its charitable activities such as feeding and sheltering the poor.
Indeed, you would be surprised at the range of items you can buy at Salvation Army thrift stores. Often, you may find a designer dress at a fraction of its market price.
Or some useful domestic appliance at throwaway rates. While you are saving money by shopping with the Salvation Army, your money also goes for a worthy cause.
5. Physical & Mental Fitness
Maintaining physical and mental fitness is the surest way to build savings as millennial. You may have faced losing your entire saving & emergency fund amount in medical emergencies.
However, you may have health insurance as you emergency saving funds. Whatsoever, they may not cover the entire spectrum of illnesses that can strike a millennial without warning.
Millennial women and men are also more prone to problems including depression. You can save a colossal amount of money that would otherwise go towards medical expenses simply by maintaining physical and mental wellness.
Medical inflation hovers between five percent and 35 percent, depending upon which part of the world you reside. Hence, any major illness can wreak havoc with your savings and income.
In 2023, medical coverage is expected to cost higher as insurers up their premiums. Also, insurers charge lower premiums from millennial women and men that exhibit excellent health.
6. Open Online Savings Account
Instead of opening a savings account at some brick-and-mortar bank, open one online. They come with zero minimum balance requirement, and zero maintenance fees and offer immense benefits.
Some benefits that can help you build saving in 2023 as a millennial include higher interest rates on your deposit, cashback schemes on certain debit cards and checks as well as loyalty points that can be redeemed for freebies like shopping vouchers. This is the best way to save money and earn interest.
An online savings account works almost similar to a regular one at physical banks. Only, all transactions are generally online. Another advantage of an online savings account is transaction speeds.
You can credit and send money within seconds by simply using an app downloadable on your smartphone. This is the solution for people who are looking for how to save money each month as you can set some specific amount to get transferred to your own saving accounts on a monthly basis.
7. Employer-Sponsored Retirement Plans
In the US, we have 401(k), in India, there is a Provident Fund while Australia has Superannuation. All these are employer-sponsored retirement plans.
Now you may wonder, why should a millennial think of retirement so early in life? Because the more you contribute towards an employer-sponsored retirement plan, the better your pension in those imminent golden years.
Also, subscribing towards an employer-sponsored retirement plan helps build up your credit score. This is particularly useful if you are planning on taking a home mortgage or other loans through financial institutions for any fruitful purpose.
8. Invest in Real Estate
Again, this sounds crazy, right? Not really. You do not need to buy a house or plot of land to invest in real estate. There are other ways to invest in the booming real estate industry worldwide.
These include Mutual Funds that specialize in the real estate sector, Exchange Traded Funds made by bundling stocks of real estate companies, Real Estate Investment Trusts and others.
A lot of these options allow entry-level participation by millennial women and men. This means you can contribute some amount every month towards these investments.
Returns are very high, depending upon where you invest. Real estate is one of the best ways to build savings in 2023 for millennial people as prices around the world are on the upswing.
9. Systematic Investment Plans
Systematic Investment Plans (SIPs) rank among the best ways to build wealth for any millennial.
Regardless of where you live, it is always possible to set aside a little money and take advantage of the stock market boom. This is considered as one of the best ways to save money on a tight budget.
Of course, stock market investments can prove risky. But SIPs are available in various options that include debt funds, hybrid and liquid funds too.
Most Asset Management Companies offer entry-level SIPs at very low rates if you’re wondering about how to save money on a budget.
The amount will be debited directly from your bank account every month. In fact, you will not even miss the money you invest in a SIP.
However, over the years, the value of your investment grows in two ways: the amount you have invested and the appreciation of the scheme in which you have put the money.
This is a reliable way that increases the probability of maximizing money and helps you to build up savings.
10. Staying Off Addictions
World Health Organization (WHO) and countries around the globe are witnessing increased substance abuse among the millennial generation. There are several reasons for drug and alcohol addiction among a millennial.
They include weaker family ties, loneliness and boredom, surplus cash, depression and many others. In fact, research proves that millennial generation is at higher risk of substance addictions worldwide.
Substance addictions can ruin you financially and socially. They have devastating effects on physical and mental health. You can get socially ostracized for an addiction. In 2023, you can build savings as a millennial by staying off any addictions.
Thankfully, several free online and offline resources are available for a millennial to shield against addiction. If you are millennial battling addiction, seek professional help to build savings.
When you start saving as a millennial, you pave way for a financially secure future. It also helps you build a great fund to meet any eventualities that may emerge as you grow in age.
For any millennial, having a good savings portfolio helps boost self-confidence. Therefore, you got nothing to worry about how to save up money? Where to save money?
Savings become a healthy habit over the years. It imparts great life skills like astute budgeting, staying off debts, countering emergencies that need cash, and lots more.
So, what to do with savings? Thankfully, 2023 holds lots of opportunities for every millennial to build savings. The best way to build savings is from an early age. As a millennial, the right age is right now. The above ways will definitely help you build savings in 2023 and pave way for a great future.