Millennials have more disposable income than ever. However, they tend to spend their money irresponsibly. It's now more important than ever to learn prudent purchasing and money-saving behaviors to ensure that you aren't foolishly wasting your hard-earned cash.
Thankfully, there are some basic money-saving techniques that will still allow you to live your life and leave you with cash leftover that can go directly into your savings account.
1. Be strategic with your credit card interest rates
If you have multiple credit cards, then it's likely those cards come with different interest rates. Perhaps you're still carrying a balance on a card that you applied for when your credit was relatively unestablished and that card has significantly higher interest charges than your newer options. Or maybe you opted for that high-interest card because of the travel perks.
In any case, it pays to be smart about paying off your high-interest balances as soon as possible. If you're carrying a balance on different cards consider only making the minimum payment for a while on the lower-rate cards and paying off the more expensive debt first.
2. Scrutinize your subscription services
When was the last time you went to that expensive gym you paid for? Have you watched anything on your premium Hulu subscription recently, or are you too overwhelmed trying to catch up on Netflix and Amazon shows? Still paying for that car sharing service you've only used once in the last year?
Our lives have become inundated with subscription services and many of us keep paying for them without taking advantage of any of the benefits. I've known couples who have moved in together and continued to pay for two Netflix accounts for an entire year! Check your credit card and bank statements and make a list of each subscription service you're paying for. If you haven't used it in the past three months, look for the cancellation page. You can always sign up again, and you might even get promotional deals designed to entice returning customers.
3. Find a cell phone plan that fits your needs
The structure of cell phone plans has changed dramatically in the past ten years. Whereas once you only had to worry about call minutes and text messages, now companies offer capped data plans, plans that offer unlimited data for certain streaming services, plans that throttle your speed after a certain threshold, and so on. It's worth examining your monthly data usage to ensure you aren't paying for more bandwidth than you need. Alternatively, if you're constantly going over your limit and are forced to purchase additional GB at a higher rate, you may save more in the long term by upgrading your plan.
4. Inquire about what your cable and Internet company can offer you
With the recent trend towards consolidation in the telecommunications industry, many people assume they're at the mercy of the cable and Internet giants. It's true that most of us are paying for cable channels we don't watch due to the agreements networks make with providers, but that doesn't mean there aren't savings to be found in your cable and Internet bill.
This is especially true if you're a longtime customer and have a good history of prompt payments. It doesn't hurt to call customer service and ask for discounts, stressing your continued loyalty to the company and even threatening to leave if they can't lower their prices. All the big telecom companies employ customer retention specialists who are authorized to extend deals to account holders in order to keep them around.
5. Cut out the daily trip to your favorite coffee shop
Yes, brewing your coffee at home requires a bit more planning than grabbing a cup from your favorite barista on your way to the office, but the cost savings can be considerable. Studies have shown that, depending on where you live, if you took the cost savings from brewing your coffee at home and put them in a mutual fund with a 6.5% compound interest rate, you'd accrue $7,614.80 over a decade. This even accounts for the cost of premium store-bought coffee beans, like those sold by Starbucks.
It's even more substantial if you're the type of person who thinks they can't live without a $6.00 latte every morning. Just brew a concentrated amount of coffee and invest in an inexpensive manual milk frother. Also, don't assume that trendy K-cups are the answer; they're scarcely more economical than your daily trip to the coffee shop.
6. Use innovative tools to save on retail purchases
Curbing your shopping habit is hard, however, saving money does not have to be. Tech companies are increasingly developing solutions to help shoppers save on every retail purchase they make. Apps such as Honey, an extension for Google Chrome, automatically search for applicable coupons for online orders, while mobile solutions such as Flipp let you browse grocery circulars in your local area and add items to your shopping list. There are even tools like Paribus.co which can check to see if a store has lowered the price of an item you've already purchased to retroactively secure you a refund for a difference.
7. Be especially vigilant about "lifestyle creep"
We all love the feeling of having extra spending money on hand, whether it's courtesy of a raise, a bonus, or a tax refund. The problem is that as soon as we are flush with cash, most of us tend to increase our spending accordingly, falling into the pattern of "lifestyle creep." Just because you got that promotion doesn't mean you have to update your lifestyle significantly. An increase in pay doesn't justify moving to a bigger apartment, or purchasing a better TV or a new car. Work on developing a comprehensive monthly budget based on your current income and try to stay as close to it as possible even when your take-home pay increases.
That way, you'll be able to responsibly save money for that trip you always wanted to take, that house you plan to buy one day, and for dire emergencies because there is nothing more embarrassing than being an adult and having to ask your parents for a bail out.
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Danny Wong is the co-founder of Blank Label, an award-winning luxury menswear company. He also does marketing at Receiptful (a platform to supercharge all customer interactions for eCommerce stores), Tenfold (a seamless click-to-dial solution for high-performance sales teams) and Truebill (the easiest way to manage your paid subscriptions) . To connect, tweet him @dannywong1190 or message him on LinkedIn. For more of his clips, visit his portfolio.