Saving and The Millennial

By Linda Ije

From personal observation, it seems like most young people between the ages 18-30 do not think or plan towards retirement. This is because many of us tend to live in the moment, (living from paycheque to paycheque) while others seems to use up all their income in just a number of days. 
I find that there are a three types of young people or millennials, as we are referred to these days.

• The ones who live well above their means. These kinds of people always never have money but live off borrowed monies to drive the latest cars, clothes and fashion to keep up appearances and maintain their lifestyle. Maybe that sounds a little extreme as people who use their credit cards to buy things they cannot afford, without maxing the card up, fall under this category. This article discuses 5 signs that help you discover if you are living above your means.
• The Just OK GUYS. These are the people whose expenses are equal to their income. They usually have no savings or investments. Although not in debt, this is risky as the future is filled with uncertainties and unplanned expenses or a loss of the source of income can happen  at anytime.
• The ones who live below their means. You probably don’t know how much they earn as they are always saving, no matter how little their income is, and  they stick to their budgets, financial plans and goals. Here are some great tips to help you become this type of person.

It’s a new month and many of us may have started the year struggling with achieving our financial goals or just writing off our financial goals. It’s never to late to work on our financial goals. This article is a little personal as I am still in a learning process. Nonetheless, I still want to share some of the tips I have shared with friends, who found them really helpful.
Ask God for His direction: As a practicing Christian, I believe there is so much power that comes from communicating with God. I’m really not trying to scare anyone by sounding too spiritual but I must say asking God for direction is absolutely important in dealing with financial issues. From personal experience, I would say- have faith and let Him guide you!
Here is a free prayer guide. 
Change your mentality: It is truly unfortunate to see people who live from paycheque to paycheque. Coming from Nigeria and seeing some people, who have not been paid salaries in months, strive to pull through has always made me have a mentality of saving as if my next pay wasn’t guaranteed. By doing this, I have learnt to think of the future. I notice that many make the mistake of living in the present.

Don’t think you are too young to start investing and saving for retirement: Investment is a different topic on its own and should not be done if you haven’t cultivated the habit of saving. However, my simple suggestion would be to find out from your bank what options are available to you and what works for you (If you are really working on your finances, finding one that fits your budget constraint it key). Take advantage of the retirement savings plan options or tax free savings accounts that your bank offers. If your employer’s offer pension matchups, take advantage of that too. Think of this, when your kids grow up, you don’t want to be a liability to them and there’s nothing better than having your own money saved up. You don’t need to have a job to start saving. I find that this is one of the common mistakes students make. Consider your monthly allowance as your income and start saving, no matter how little. The earlier you start saving, the sooner it becomes a habit, the less worries you will have in the future. The simplest way to save is to live life on a budget.
Live life on a Budget: Hmm! where do I start? I think this should be an article on it own. If you don’t know how to control your expenses you would never know where your paycheque goes. First you need to know how much you earn or receive monthly. Then, draw out a plan stating all ur expenses for the month and break them down based on their due dates. That way, you can easily find out what category you fall under (as I mentioned earlier). A negative balance indicates you are living above your means, which means you will need to cut down on some unnecessary cost or find another source of income.
I spoke about this on the blog here. 

Try to have multiple sources of income: Sacrifice now for the future. For some people their other source of income besides their day jobs could be a hobby and for others, it could be an under-qualified job. Nothing is permanent and every experience helps. However, the hours spent working on second or third jobs should be based on how you feel it would benefit your saving plan/ financial goal. On the flip side, if you have a hobby that is profitable, don’t take it for granted. You are young and full of energy, use this time to rightly  invest in the life you want in the future. You don’t want to work two or three jobs in ur 40’s or when you are close to retirement or retired.
Get different bank accounts for different purposes: By this, I don’t mean credit cards. If possible open different accounts with different banks. This is possibly the best way to have your income spaced out. You can have an account you mainly use for your budgeted expenses and a different bank account for your savings (my advice, hide this card). A number of people have one bank account with savings and checking accounts but we all know how easy it is to transfer money within these accounts. It is best to get that excess money (savings) out of sight for less temptation.
I spoke about this on the blog here. 
Remember, you don’t need some fancy degree to know how to take charge of your finances. You also don’t need to earn 6 figures or more to be able to save. Live your life thinking about your future plans and don’t stop aiming for success and greatness. Financial freedom is one of the best gifts you can give to yourself, your future partner, children, grand children and even great grand children – basically your lineage.

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