What Generation Y Should Do Now to Save More Money

This is part 2/3 on our series about Generation Y and retirement, click here for part 1.

May 29, 2013

By Annie Cromwell, America Saves Communications Associate

As I mentioned in my last post, Americans ages 18 – 65+ name “not having enough money for retirement” their top financial concern. Many Generation Y workers may believe that saving small amounts for retirement right now is not important enough to warrant skimping and saving on their present day-to-day needs; since many are busy paying off student loans and saving up for more immediate purchases like cars or houses.

Although retirement can seem like an eternity away when you've only just entered the job market, it’s important not to neglect your retirement savings. Know that it's okay to start small, and that saving even the smallest amount every paycheck is better than saving nothing at all. If you free up some funds in your budget, and make a plan to increase savings as time goes on and your salary increases, you can look forward to a very comfortable retirement!

These tips will help free up some funds in your budget, and allow you to reallocate money to your retirement fund.

Purchase fewer luxuries Ask yourself, “is the most recent smart phone that much different than the one I already have?” If you’re really honest with yourself, you’ll probably realize that it’s not. Keep the electronics/car upgrades and designer purchases to a minimum. And, if there is something that you really want, take 24 hours to consider if you really have the funds for this purchase. It will help you avoid impulse spending.

  • Cut back on your day-to-day expenses America Saves has a list of 54 ways to save money in your day-to-day life. This includes ways to cut expenses on everything from food and medication, to entertainment and heating and cooling your home. You can also check out some tips from real savers in the “Quarter Saved…Is a Quarter Earned” section in our quarterly newsletters that can be found here
  • Track your expenses No one has the time to balance their checkbook after a month’s worth of purchases anymore, but that doesn't mean you shouldn't keep track of how much you’re earning versus how much you’re spending. That’s why it's so important to monitor your spending habits daily. Whether that means you sign up for online banking to monitor your daily purchases and income, or you keep a running list of purchases that you check against your receipts throughout the week, or even by downloading one of many expense tracking applications that allow you tobreak down your purchases by category, to give you a better idea of where your money is truly going. The moment you realize you’re spending close to $200 on lunch and coffee every month, you may start bringing your lunch from home and investing in some instant coffee instead.
  • Work longer hours It may seem intuitive, but if you have the opportunity while you are young and have slightly fewer responsibilities (children, home maintenance, etc.) to work longer hours at your job, take it! Putting in extra time will help you gain valuable work experience, and put some extra cash in your pocket.  

Next post, we will discuss more retirement-prep advice for Generation Y workers. In the meantime, is your goal to save for retirement? Take the America Saves Pledge today.

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