This week I was perusing USA Today (trying to find the crossword puzzle) and stumbled upon an article that struck me as, frankly, a bit terrifying. The article screamed HUGE DEBT, NO SAVINGS in my face, warning all of us in “Gen-Y” (that group of seventeen – twenty-somethings) that we’re the only generation unlikely to out-succeed our parents financially. Harrowing stuff, especially since we seem to be in a generation of “buy now, pay later.” And when we do buy, we want the newest and shiniest and don’t settle for less than designer brands…. Not exactly recession-friendly behavior.
The article had me thinking about my own spending habits and the habits of my peers. I certainly have gotten my act together over the past year but still struggle with the little things. I write checks and forget about them until they hit my account. I have days where I spend ten dollars on Starbucks. And then other days when I spend $20. I went through a period where I didn’t pay off my credit card balance every month (never. again.). We all struggle with the economy and our own personal finances. Here are the top 10 ways to be a savvy spender and super recessionista.
10. Keep track of your spending.
Do you know how much you spent all day yesterday, to the dime? Well, you should. Keeping on top of every little expense can save you cash in the future and keep you mindful of where your cashflow is going.
9. If you can’t indulge, don’t indulge.
I’m not saying to give up every indulgence, but if you’re about to spend $200 on a dress that you don’t have, then either wait for it to go on sale or just walk away. The dress will always be there, so wait til the cash is.
8. PAY IT OFF.
If my dad is reading this right now, he’s falling out of his office chair laughing hysterically. It took me a year to pay off my credit card balance and you know what? The only way I could do it was to mail my credit card home and never, ever have it on hand. I’m sure there are people out there who can manage their money and understand that when you receive a credit card bill, you must pay it off every month. I was not one of those people. Fees, charges and overdrafts all affect your credit score and your finances. If you can’t handle it, don’t have it. If you can, pay it off every. single. month.
7. Write down your debt in a place you’ll see it
Paint it on your wall. Write it on your fridge. If you owe 50k in student loans, THINK ABOUT IT every time you spend money. Sure, buying shots for all your friends might seem like a great idea at the time, but that seventy dollars could be going to your loan payments. Do you really want to worry about student loans when you’re ready to take out a mortgage on a house?
6. Cut back on the frills
I love caramel frappucinos, fancy make-up and high-end jeans. But, if I skip the Starbucks and hit the office coffee machine, ditch Sephora for CVS and pass up Saks for the Gap, even just for a month, I’ll save over $400 a month. Trust me, no frapp is yummier than that.
5. Plan, plan, plan
Okay, so you want to go on vacation in two months? Plan all your expenses ahead of time. Flight, hotel, bathing suit, meals, drinks, etc. Once you lay out a budget and know how much you need to set aside, it will keep you saving.
4. Get by with a little help from your friends
Plan free or cheap activities with your girl friends. Spa day at home, baking and picnicking are huge budget boosters over salon mani/pedis, high end cupcakes or fancy dinners.
3. Take advantage of your Tech-savvy
Right, Gen-Y is terrible at saving money. We’re the generation that live in a recession and have more debt than any other generations. Blah. Blah. Blah. We get it. But, what’s that one perk that we have? We’re so tech-savvy. From twitter to iPhones, we know how to work the techy angles. So embrace it. Download finance managing apps for your phone or sign up for Mint.com to see where your money’s going. Be smart and savvy and use the tools available to help!
2. Think of the big picture
If you’re still in school you don’t feel the weight of your loans right now. Even if you don’t have loans, great, but you’re about to have a whole mess of new expenses coming your way. If you plan on ever buying a house, leasing an apartment or buying a car, save now and save often. You never know when life’s going to throw you a curveball and if you don’t have that financial cushion, things can get pretty ugly, fast.
1. Don’t stress.
Yes, thinking about finances sucks. I can’t think of anything that gives me more anxiety (not even the thought of putting on a bikini in less than a month). But don’t let all the statistics terrify you. Just take a deep breath, evaluate your spending (past and present), then plan for your future. Pretty soon you’ll be ballin with a big house and five cars before you know it. Just don’t put it on a credit card!