This post is part of our celebration of Financial Literacy Month this April.
With rising rents and student loan debt through the roof, saving money can be challenging for many Americans. However, a new survey from CK client TD Bank found that nearly half of Americans described themselves as “good savers” and many are feeling confident in their ability to save for the future.
Want to know which generation feels the most confident when it comes to savings? You may be surprised that it’s gen Y! Fifty-six percent of millennials reported that they are “good savers,” compared with 43 percent of gen Xers and 48 percent of baby boomers. As a millennial that graduated a few years ago and is trying to survive in New York City where the average cup of coffee costs $6.14, it’s encouraging to see that so many millennials are making savings a priority.
As Financial Literacy Month wraps up today, I wanted to share a few insights I learned from the TD Bank Saving and Spending survey that can help keep millennials – or anyone, really – on track to achieve whatever financial goals they are looking to achieve:
Limit Impulse Purchases
When Americans were asked where they tend to spend most, restaurants and dining out was the top culprit. Unfortunately for us millennials, we are overspending in all categories including dining out, coffee / lunches, clothing, gadgets / electronics and more. What’s worse is that 69 percent of millennials admit to making impulse purchases.
One quick and easy tip to help you save more money is to limit these impulse purchases. When you are out, make sure you don’t buy anything that’s not on your shopping list. Instead put the money you would have spent on impulse buys into a savings account. You’ll be pleasantly surprised by how much money you have saved up after a few months.
Start an Emergency Fund
According to the survey, the majority of millennials (53 percent) would only be able go 3 months or less without a source of income to live comfortably. Financial experts agree that everyone should have an emergency fund savings account with cash readily accessible to be prepared for any contingency – whether that is unemployment or a medical emergency.
Let’s face it, unexpected things happen in life, so use six months as a benchmark for the amount of savings you should put away for your emergency fund.
Focus on a Retirement Plan
Millennials are more confident in their retirement savings than their older counterparts. And yet, this generation listed retirement as one of their main financial fears.
With this in mind, it’s important to start contributing to a retirement savings plan as soon as possible, whether that’s a 401(k) through your employer or an IRA. Element Financial Group Managing Partner, JoanAnn Natola, encourages people to contribute as much as possible to their 401(k).
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