Yahoo Finance 1 in 3 Gen Zers Want To Save $10,000 in the Next Year: 10 Ways To Actually Do It
Gen Z may be young, but those on the older end are coming of age, going to college and beginning to work. The realities of needing to save money are landing on them, and they’re ready and eager to save.
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According to a recent GOBankingRates survey of 1,037 Americans aged 18 and older, in which participants were asked five key questions about money, about one in three Gen Zers reported that they want to save at least $10,000 in the next year. We asked financial experts to explain some of the best and most realistic ways to do this.
Break It Into Small Steps
Saving $10,000 a year isn’t difficult, but it does require small actionable steps and discipline, according to Jennifer Aube, vice president and a financial advisor with Wironen Aube Wealth Management.
The key to any success is small steps, she said.
Rather than looking at the big goal of $10,000, which can leave you “overwhelmed and unsuccessful,” she suggested breaking it down to a per-day amount.
“If you break it down, $10,000 a year is actually only $27.39 per day,” she said. “Consider the things it is easy for you to spend $27 a day on. Some common discretionary expenses are things like movies, concerts, clothing, snacks, treats and gourmet coffee. Instead of splurging on that latte today, make your coffee at home, stop at the bank on your lunch break and open an account separate from your debit card.
“Title the account in the name of your goal — $10,000 Fund, Kicking Goals, Latte Factor or whatever will motivate you. Then, set up an auto transfer or manually transfer that $27.39 over to that account every day.”
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Additional Ways To Save $27 Per Day
According to James Anderson of Smarter Financial Moves LLC, there are a ton of ways to save the $27 per day that gets you to $10,000 in a year. Here are just a few:
Use an app to compare prices while grocery shopping. Services like mygrocerydeals.com or flip.com will allow you to maximize your savings while shopping for groceries.
If you’re a student or recently out of school, use your student ID to get 10% discounts at numerous restaurants and even some grocery stores.
Use the grocery store’s loyalty card app. You’re able to clip digital coupons that you’d miss out on. For example, many offer $5 off a purchase of $50 with no fine print of combining coupons.
Switch to buying frozen fruit and vegetables. They are frozen at peak ripeness and you avoid the volatility of price swings because of seasonality and avoid your food going bad.
Buy store-brand products. They can be as much as 25% less than the brand name and are typically packed in the same facilities as the brand-name products. Even when a brand is on sale, you’ll typically still get a better deal with the store brand.
Go meatless at least once a week. Meat costs up to four times as much as whole grains and beans.
Use cash-back apps like Ibotta or Fetch. Just load up your receipts to get discounts.
Embrace Budgeting
Gen Zers are already digital natives — it should be no problem for them to utilize apps and other digital tech to help them embrace budgeting.
“Use a budgeting app to track income and expenses. This allows for a clear understanding of where money is spent and where savings can be made,” said Rory Donadio, CEO of Tribeca Capital Group, LLC.
Automate Savings
The easiest way to accumulate money is to automate it, Donadio explained. “Automate a certain percentage of income to go directly to savings. This ‘out of sight, out of mind’ strategy can be incredibly effective.”
Start a Side Hustle
“Gen Z are known for their entrepreneurial spirit,” Donadio said. “Starting a side gig could provide an additional income stream to boost savings.”
Watch Your Expenses — But Not the Way You Think
It’s common advice to watch what you’re spending on rent, food out or other discretionary expenses, but that doesn’t mean you need to do without, according to Katherine Fox, CFP with Sunnybranch Wealth. Fox’s approach is to look for the low-cost or free ways to get the same services or goods you spend money on.
“If you’re in Gen Z and looking to save $10,000 in a year you should live by the mantra ‘rent don’t buy’ for non-housing expenses,” Fox said. “Live in a city and don’t drive much? Sell your car and use a car-sharing or car rental service to net you a large, immediate payout and save hundreds or thousands of dollars a year on insurance, maintenance and gas costs.”
If you’re spending a lot of money on entertainment, she said, “Remember the oldest and best friend of those trying to save money: the library. You can get movies, e-books, audiobooks and more for free.
“Working on home or yard renovation projects? These can be a huge financial sink. Take advantage of local tool libraries, Buy Nothing groups and other community resources to source materials and knowledge that will protect your wallet.”
Take Advantage of Free Money
Additionally, Fox said the fastest way to save $10,000 in a year is to take advantage of opportunities for free or easy money. A pre-tax employer-sponsored retirement savings account like a 401(k) or 403(b) is a great option. Not only are you saving money by deferring taxes that would have been paid on that income, your employer may offer a 401(k) match that can add an additional percentage of your salary into your savings account.
Reduce Debt Payments
If you need to get out of debt before you can free up the money to save, reduce the amount you pay each month by refinancing loans with high interest or credit card debt. The interest savings can be allocated to savings.
Stop Impulse Buys
Minimize buying impulsively by making a list of what to buy before going shopping. Allow yourself time to think about non-essential purchases.
Take Advantage of a High-Yield Savings Account
Traditional savings accounts don’t keep up with the pace of inflation, so in the long run your money isn’t worth as much. According to Anderson, a high-yield savings account is a great way to watch your money build quickly.
Whatever small steps you take, starting sooner than later will ensure you meet your goal.
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This article originally appeared on GOBankingRates.com: 1 in 3 Gen Zers Want To Save $10,000 in the Next Year: 10 Ways To Actually Do It
