Saving money is important at every stage of life; however, it could be argued that it’s most important to save when young. The cliche “time is money” holds most true when it comes to your personal savings. The longer you put money in, the longer that money has to compound and grow on top of itself. Strategies such as learning how to pay off your loans efficiently or choosing a no-fee bank (such as Chime) are all steps you can easily take when you start saving. However, without any idea of what you’re saving this money up for, it can sometimes be hard to motivate yourself to put forth the effort required. Here are several reasons why millennials shouldn’t wait to begin their savings.
It’s no secret that weddings can tend to get a bit expensive, with many couples now even considering taking on debt to pay for their own wedding. Even though millennials may get a bad rap nowadays about “not wanting to marry,” it may definitely be something you want to consider saving for down the line. But don’t fret, considering the median age for marriage is up about 7 years, you have more time now than ever to start saving! Your future spouse will thank you down the line.
Owning property is a dream for many Americans; a home to call your own, to do whatever you want with. Although, it should be noted that this is no cheap feat. It is estimated the average cost of owning a house is around $834/month per $100,000 of value. Meaning if the home is valued at around $200,000, you should expect to pay $1,668 (2x834) a month. But while it may seem like a lofty goal, it is by no means unattainable. With proper money saving strategies and a bit of time, that dream can easily become a reality. The more you have saved up for a down payment, the cheaper those monthly payments will be.
After the house, you might plan on raising a family. If a family is in your future, you can expect to pay an upwards of $233,610 to raise a single child to the age of 18. After that, there’s the consideration of higher education, if they do so choose. As a parent, you will want to be able to assist with this as much as possible to prevent them from taking out too much debt themselves. Taking a step back to really understand the effort and resources needed to raise children is crucial in giving them and you the best futures possible, and having that money saved up well beforehand can really help.
People love to be spoiled. But what’s even better is being able to spoil yourself in your retirement. New clothes, appliances, or whatever else your heart fancies can be yours. After all those years of hard work, earning, and saving, you deserve to treat yourself to a little extra. However, it is important not to get too carried away as that money you worked so hard to make can disappear much faster than it accumulated.
Some people receive more gratification with an experience–rather than physical goods; concert tickets or travel experiences are what these people prefer to spend their hard-earned money on. It is important to note that budgeting is just as important with these kinds of expenditures as well. A worst-case scenario would be spending too much on frequent vacations only to find out you don’t have enough to pay for everyday expenses like your insurance or bills.
People save because they can’t predict the future. All sorts of unexpected expenditures can pop-up throughout your lifetime. Things like medical emergencies can really hurt your financial situation, and with the constantly rising cost of healthcare, a properly set up emergency fund can really help aid you in getting the care you deserve. Not only you, but those you love can also be affected by these unforeseen circumstances, so you should always have a fund to essentially, “watch over” you and those who you care about.
As a millennial, you should also consider the possibility that you may not be able to receive the benefits of things like Social Security. It is projected that the program will “run out of money” by 2035, so budgeting for your future with that in mind could be crucial. While it may seem unfair paying into a program you don’t expect to receive any benefits from, it is something to consider as a serious possibility of your future. In the best-case scenario, where you do end up getting your Social Security benefits, you can use the extra money you saved on something else!
Saving money as a millennial is extremely important, and it can only help put you in a better financial situation in the future. Although it is true that money can, in no way, buy happiness, it can buy temporary satisfaction, as well as safety, security, and opportunities. So, instead of making the argument of “money vs. happiness,” instead, why don’t we tell ourselves, “why not both?”
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