When we’re younger, it feels like we can put off saving for later. We have all of the time in the world to make up for any youthful financial mistakes we might make in our late teens and even mid-late twenties. It’s easy to fall into the trap of feeling financially invincible. This is why it is important to be vigilant.
Trust us: better to be lame and frugal now than to not be able to retire because you have to spend your later years paying for all of the mistakes you made when you were young. Plus, frugal living and saving responsibly doesn’t necessarily have to be about staying home and eating ramen every night. There are a lot of practical ways to dramatically reduce your spending that won’t have a huge effect on your lifestyle. Check it out.
You might think that spending all day at work and most nights out with friends is already helping you save power. In a way, you’re right. But there are a bunch of ways that power consumption can sneak up on us. For example, do you leave your stuff plugged in all day? Even if your devices are turned off, leaving them plugged in will cause them to leech power from the grid.
Are you paying as little as possible? Call the power company and talk to them about all of the service charges and taxes you see on your bill. You can likely get many of them removed. If you live in a deregulated energy market, spend some time shopping around for the best rates. Deregulation gives you the power to choose which companies provide which kinds of energy. Take advantage of that to get a lower rate!
Dumpster diving carries very little of the stigma that it used to carry. When your parents were teens and twenty-somethings, thrifting was cool but dumpster diving was considered “low rent” and socially frowned upon. These days, thanks to all of the great new supplies and expanded access to tutorials, nobody will ever be able to tell that you didn’t buy all of your furnishings and decor brand new.
You know you can do more with a waffle maker than just make waffles, right? Waffle makers can also be used to make panini sandwiches, quesadillas, and a bunch of other stuff. Take some time to surf the web looking for ways to turn single-use kitchen gadgets (the kind everyone insists on giving you for your first place even though you’ve never successfully cooked a meal in your life) into multipurpose devices. Another good example is the slow cooker. Use it as a breadmaker as well as a dinner helper!
Of course, a simple Google search will turn up thousands of ways to save money on what you spend. If you really want to protect your financial future, you’ll save your credit. Financial pitfalls have a way of sticking around on credit reports and dogging you long after you’ve cleaned up your spending habits. So, instead of taking out a card with the biggest credit limit possible and then maxing it out, start with a secured card and a small credit limit. This will help you get used to using credit responsibly and paying your bills on time. Use the credit card to pay your Netflix bill and other small recurring expenses and then pay it off entirely every month. Use cash for everything else. You’ll build up a great credit score and history that will make it much easier to qualify for “big kid” credit like mortgages, etc. later on.
Out of Sight Out of Mind
Most employers offer direct deposits these days. Have yours set up to distribute your paycheck into two accounts. 10% of your paycheck should be tucked away into a savings account (the highest-yielding account you can get). Having it deposited directly into savings will dramatically reduce the urge to spend it before you can make the transfer yourself.
Another good idea is to start investing using little amounts. Use apps like Stash or Acorns to invest a few dollars each week into an investment portfolio. This will give you real-time experience in tracking investments without the hefty financial risk that comes from the type of investing that comes along when you get a little bit older and start really building your portfolio.
Remember: you don’t have to live like a friendless pauper to ensure your financial future. You do, though, have to be as responsible as possible now so that you won’t have to worry about whether or not you’ll be able to retire when that time comes.
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