FTC: This post is not sponsored and I am not a financial advisor. Just one millennial giving some tips to the next millennial!
We’re trying to start 2019 off on the right financial foot. That doesn’t mean just budgeting and making sacrifices it also means making better decisions with our money. And with that being said that means there are 7 simple things we are going to commit to in order to continue building financial freedom.
7 Things You Should Never Do If You Want To Save Money
1. Buying A New Car:
I’ve never made this mistake and I want to tell you why you shouldn’t either. The other day on Instagram I shared the difference between “good debt” vs “bad debt”. Financing a car shows up on your credit report as “bad debt” because the value of a car depreciates with every passing day.
If you require a car to get around from point A to point B, then it is a necessity. I suggest that you save up money to either purchase a good used car out right (don’t buy a clunker… that will end up costing you more in the long run as well) or put a large down payment down.
I have owned two cars in my life. They were both used cars, and I paid off the car loan in 2 years (3 years a head of schedule). Both of the cars lasted me a long time (my second one is going on 6 years) and have given me very little trouble besides regular maintenance. Do your research, get a great used car, and minimize the amount of payments/interest you will have to pay in the long run.
2. Buying Useless Items:
What does this mean exactly? What do we classify as useless? Trendy items we see on the internet that you don’t really have need for. OR picking up something at the store because it “looks cute” or “cool” when you didn’t have any plans on purchasing it in the first place. This usually happens the most when you are on a line to check out and pick up the items they have lined up next to you before you leave. DON’T DO IT! If you’ve lived with out it this far chances are you can continue to do so.
3. Impulse Purchases:
This goes right along with #2 but can be even worse for your money saving budget. Impulse purchases aren’t always for useless items. They can be for things you really like and see a “sale” happening. The best way to avoid impulse purchases (besides having the self control of a saint) is to create some “fun” spending money in your budget that allows for you to impulse buy without feeling guilty/ blowing your budget. This means however that once the “fun” money is spent you can not make any impulse purchases until that “fun budget” is replenished.
I also avoid impulse purchases by giving myself a time limit. If I think about the item on three separate occasions over the course of 4-6 weeks then that means I really do want it. I also have given myself some time to set money aside for it. Of course at the time I do decide the item then it is no longer an impulse because I’ve spent time thinking about whether I really want it or not. 8 out of 10 times I don’t end up buying this item that I just HAD to have!
4. Renting Instead Of Buying:
Trust me, I know from personal experience buying sometimes is just not an option. But this doesn’t have to only come to your home. Yes buying a home is often the better route than renting an apartment HOWEVER if buying a home will be more of a financial drain for you than renting… don’t run into it simply because it is the “next” step to achieving the elusive American Dream.
There are other ways you can cut out the renting trap besides home purchases. This can be for products you use often. When we filmed the first season of Millennial In Debt we rented equipment instead of purchasing it because we figured we’d never use it again. The truth is we spent more money renting as opposed to when we purchased a lot of our own equipment for the second season. It was an expensive investment, but we can still continue to use this equipment for future seasons or for other aspects of our brand. We can even rent out the equipment as well.
These are just things to think about when choosing whether you should buy something or rent/borrow it. Sometimes if it is a one and done renting is fiscally wise. Other times it’s best to buckle down make the one time purchase and then make the purchase work for you.
5. Not Using All Cash Back Opportunities:
I’ve been trying to school you guys for weeks now! If you are shopping online or even in store you should capitalize off of all cash back opportunities. Why? Well the obvious answer is you’re getting cash back! I’ve received cash back checks worth hundreds because I wisely used apps that allowed me to earn a percentage back from my necessary purchases.
The money adds up and you have nothing to lose! The two I use in conjunction with each other are DOSH and Ebates. By using both of these I cover 99 percent of the stores I use/shop at. They also give you cash back for referring your friends and family. Don’t get caught spending money during this holiday season (or ever) with out getting some coin put back into your pocket.
6. Only Having One Stream Of Income:
I’m always weary to say this, but it really is one of the better ways to increase your income if your job isn’t handing out raises left and right. Having multiple streams of income prevents you from relying on solely one. This means you will have to usually pick up a side hustle or two (25 Ways To Make More Money This Month) in order to keep money coming in from different avenues.
This can be time consuming, but once you have it set up and set up well it will start work itself out without you having to do too much or over extend yourself. My teaching job is obviously my largest stream of income, but even with that I find ways to do over time at school. Multiple streams of income will also allow for you to build an emergency fund quicker, and have more accessible money for life’s unexpected curve balls.
7. Having One Bank Account:
Last but not least is how many bank accounts you have set up. If you have all of your money going in to one pot (that is scary) you will have trouble managing your money. I am super organized and have 5 bank accounts. (I used to have 6 I recently just closed one that was charging me fees)
The reason you should have more than one bank account is it will make budgeting and saving much easier because you can track what’s coming in and what’s going out. I have a savings account for vacation, a savings for my dog, a savings for paying my student loans, and my emergency fund, plus my regular checking account that I use most often. This way I know how much I’ve spent on certain things and how much I want to save for other things. If I had all of the money in one spot it would make it almost impossible to keep track of my financial goals.
Many banks offer accounts with no monthly fees and 0-5 dollar mimimm balances. So don’t think you have to have a certain amount to open new accounts.
BONUS TIP: Do your research! When you don’t know have a wide depth of knowledge about something that greatly affects your life (especially your financial life) you leave your self open to being taken advantage of. This is how many many years of mistakes occur and keep you from gaining more control over your money. Building financial freedom is not for the faint of heart but it becomes easier when you inform your self! We’ve created a 50 page E-Book to help you do just that! Our Building Financial Freedom e-book gives you information, tips, planning strategies and more in order for you to take control of your money the way you always have wanted to. You can get your copy here! Take a look at the table of contents below so you know what you’re in store for!
Until the next time ,
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Hey there! I’m Melissa, co-founder of Trials n Tresses, natural hair and beauty lover, binge tv watcher and lover of life. When I am not creating content for TNT, I’m busy teaching the future of society.