Smart Savings Hacks for Millennials and Gen Z

Today's younger generations face a challenging landscape with regard to savings. While in some respects they have greater opportunities than the preceding generations did, there are also a variety of complications in the financial landscape that young people need to look out for. Having access to technology can help, but it needs to be used the right way.

This article will provide ideas for how today's youth can invest wisely, and look at some smart savings hacks that can help keep spending under control. In the end, it is up to each individual to decide on his or her own plan. Nonetheless, useful guidelines can help point people in the right direction.

Understanding the Generational Financial Landscape

Both Millennials and Gen Z are facing financial issues more complex than those of their parents. While the conditions that Millennials and Gen Z face are not identical, there is enough overlap that one could make generalizations about them. Among the issues that young people have to deal with these days are the following:

Crushing Student Loan Debt

The cost of college is going up all the time. The amount of student loan debt that Millennials have is so overwhelming that it is causing – many think rightly – members of Gen Z to even wonder if college is worth it. It used to be the case that only a select portion of the population went to college, and this is what helped them stand out and subsequently land good jobs. Now, seemingly everyone is getting a tertiary education, and the costs are going up every year.

The Instability Of The Economy And Many Potential Investments

Anyone who lived through COVID-19 can see how volatile the economy can be. Even beyond this, instability can come about as a result of many different factors – geopolitical, climate-related, etc. – so it is best to be prepared.

The Unreliability of Social Security

Today's young people know that Social Security's future solvency is questionable. And even if it is still available by the time Gen Z retires, payments are likely to be insufficient to meet people's needs.

Smart Savings Hacks for Millennials and Gen Z

There are a number of things that young people can do to increase their savings. Even if you have a low income, you can learn how to set aside money by budgeting wisely. Among the things that you can start doing now are the following:

• Learn how to make a budget and stick to it. Being diligent about creating and following a budget is more challenging than you might think. It is easy to create a rough budget, but if you really want to track – and potentially save some of – your money, you should make an effort to include every type of expense you make in your budget. You should also set aside a certain amount each month to put away. With modern banking tools, you can have this done automatically from your account.

• Be careful about your debts. Debts can seem overwhelming, for sure, but you should do your best to keep credit card debt minimal and try to pay off whatever debts you have that accrue particularly large interest. Also, don't skip payments as this will cause your debts to snowball.

• Pay your bills on time. You should be conscientious about paying your bills on time. Late payments will also cause the amount that you owe to go up. Have your payments automated to whatever extent possible so that you have one less thing to think about.

The Importance of Diversification in Investment

It is also important to start investing early. The longer you have your investments, the more they will have the opportunity to grow. Waiting will cause you to risk not having sufficient funds for your retirement.

Some of the things that you should invest in while you are young include the following:

• IRAs. As mentioned above, Social Security faces an uncertain future. Even if you do receive standard payments, they might not provide you with sufficient money for your retirement. A good complement to Social Security is an IRA. If you invest in a gold IRA, for example, it can be a wise choice as gold is a stable hedge against inflation and other factors that cause the economy to become unstable.

• Stocks, mutual funds, and ETFs. Investing in the stock market early can also be an effective way to start saving. If you invest in mutual funds or ETFs, you can combine different types of stocks in a single package, and thereby create a balance of stability and potential for growth.

• Crypto. Many young people are investing in crypto as it comes back following the "crypto winter" from last year. Both currencies themselves, as well as a variety of NFTs, are becoming popular as people look to alternate sources of investment. Many young people are looking to make money through NFTs and gaming, for example.

Risks and Considerations

There are always risks involved in any financial undertaking. Keep in mind the following considerations as you go about creating your financial plan:

• Savings and investment takes work. We are lucky to be living in an age where many things are automated. While this is a great benefit, you shouldn't rely on tools alone to create a savings plan for you. You should be constantly aware of changes in the market and in your own personal situation, and be prepared to adjust your plan when necessary.

• Be wary of "get rich quick" schemes. Anything that promises you big money in a flash is probably a hoax. While it may be possible that you can make investments that will eventually rise to great value, you should always be diligent about researching your investment choices and investigating what other people think about them.

• There is value in stability. Always remember to keep a balance in your savings and investment plans. While certain assets are not as flashy as others, it's always good to have some stable stocks or other kinds of assets that will retain their value if the economy gets rough.

Final Thoughts

Getting started early on saving and investing is critical for putting yourself in good financial shape for the future. You should both think about ways that you can save and budget your existing money more wisely, and also start investing so that you can build up additional savings for when you need it. Many people don't take the time to do this early, and they find themselves in a difficult situation later on. If you act wisely, you'll find yourself ahead of the rest when you need money the most.