In your 20s, you first begin to experience financial independence. This can lead to the development of good habits and bad habits; these will stick with you throughout the rest of your life and thus require a serious amount of consideration. Living paycheck-to-paycheck in your 20s may seem like no big deal, but reinforcing money saving habits — even when you don’t seem to have much money at all — is crucial to do (or try to do) while young. Student loans, car loans, or other big financial commitments may cause you to put these money saving habits on the backburner, but if you’re thinking about reconsidering, these three steps will allow you to develop habits that will stick with you the rest of your life.
1. Proactivity
To take money saving seriously, you have to decide to take responsibility for yourself and your future self. Whether or not you’re experiencing financial aid from institutions, family, or other benefactors, being proactive about money saving habits and knowing that you choose your own lifestyle can create a distinct sense of responsibility and lead you to reconsider bad habits you may have picked up.
Steps to take to be proactive in your own financial future:
- Make the first move — finances can be overwhelming, especially if you’re in debt. Pretending debt doesn’t exist won’t make it go away; in fact, it will only make it worse. If you put a foot into your own finances in order to track your daily expenses, recognize how much you owe and how long it will take to pay off, and to understand how much money you really have for personal spending, you’ll get a full 360 view of your situation and be able to handle it more efficiently.
- Explain your situation — other people can help you, whether it be financially, strategically, or even just emotionally. Explaining your desire to budget to friends can help ease the pressure of going out to dinner or to get drinks so often.
- Listen to your own excuses and to the advice of others — each time you tell yourself, well, I can buy this ninety dollar sweater because it’s on sale and then just save next week, ask yourself if that’s a valid excuse. Giving yourself the opportunity to reflect on your decision before acting on it can be a great way to further your money saving habits.
2. Visualizing Your Goals and Establish Priorities
What do you want in life? Travelling, a mortgage, a car — these things require a huge financial commitment. If you can settle on what you want, financially, out of life (even out of retirement), you can easily visualize what’s necessary to get you there. If your goal is to be entirely debt-free, to have a cushy savings account, and to have money set aside for retirement, you can then create a strategy on how to develop money saving habits now in order to reach that goal.
Part of that is learning how to sacrifice things now in order to build a future. Do you spend $5 dollars on coffee during the commute to work or school everyday? Perhaps, instead, you could spare a few minutes of your morning routine to make coffee and carry it along with you in a thermos. Think about it: the ~$100 a month you would save by bringing your own coffee would put $1200 into your savings account by the end of the year. Simple money saving habits like this will create a long-lasting impression that with only a few simple sacrifices you can create a financially-secure life for yourself.
Knowing why you’re sacrificing the small things can make it easier to do so. Visualizing your goal is an essential motivator when it comes to the desire to spend. It’s difficult at first, but once you see your bank balance rise and your debt disappear, it’ll get much, much, easier.
[Read: How Expensive Is New York City?]
3. Thinking Outside of the Box
Sometimes, when you’re on a budget, life can get a bit dull. Especially when you’re young, you want to have fun and experience life without the restrictions of your more frugal self saying, “But what about our plan?!” Thinking outside of the box is one of the many money saving habits that you’ll need to utilize in the long-term.
If something breaks, why not fix it instead of buying a new one? If you need a new article of clothing, why not explore your options and look for a good deal rather than succumbing to high-end retail? If you don’t necessarily need a car, why not just take public transit? There are so many ways to save a few dollars, and though people may make fun of you for it, just politely remind them that Steve Jobs wore $10 tennis shoes for years, even after his financial success.
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