According to a recent report by Money Talks News, half of young adults these days say they don’t consciously save money. The survey was conducted by Wells Fargo to 1,400 adults between the ages of 22 and 32. Just over half of them reported that they don’t save money, saying they plan on doing so when they hit about thirty. Considering that many of these young adults are currently overwhelmed in student loans, this poses some scary prospects for the future.
Wells Fargo’s study uncovered that just over four in ten of these young adults would describe their debt was “overwhelming.” With the price of college these days, how can anyone get an education and not feel overwhelmed at the end of the day?
There Are Two Real Options
With thousands of dollars of debt hanging over a graduate’s head they have two options. First, they can go back to school to get a higher degree (stacking tens of thousands of extra dollars on their mountain of undergraduate loans). Or, they can head out into the workplace and have to start the decade long process of paying off student loan debt within six to twelve months of graduation. The choice is theirs. Get into more debt or start removing the mountain of money a shovel-full at a time.
Wouldn’t it be nice to start saving money for that fateful day as soon as possible? Especially considering the uncertainty of finding a job right out of college? What if an emergency creeps up and you need $1,000 extra dollars to see you through? Considering that just over half of young adults aren’t even saving money to begin with, many seem to be banking on prayers and luck to see them through those rough times.
That can get incredibly stressful though. A savings account (no matter how small), could help reduce that stress though. The following are a few tips to help you readjust your budget to save, even when you are suffering under an increasingly heavy burden of financial debt.
Get Your Spending Under Control
First, filter down and control your unnecessary expenses. Unnecessary expenses include that new shirt you had to buy because it was cute, eating out all the time, an incredibly expensive data plan, etc. These are the luxuries that you like to live with, but really could survive without. Many students spend a lot of money on unnecessary things without ever holding themselves accountable for it. Just as long as money is in their account, they don’t want to think about it.
That’s a dangerous line of thought. Many a savings account has been robbed to the sporadic late night adventure on the town.
That’s not to say that all unnecessary expenses are bad. In fact you should definitely set aside money in your budget for those midnight parties, movies, or shirts. The key is limiting yourself to a set budget that leaves room to save money. Cut yourself down to just one movie in the theater a month, or eating out with a maximum budget of $8 once a week. Set a numerical limit of how much discretionary money you have and stick to that total every month. It may not be as “fun” of a way to live your life, but you’ll learn lifesaving lessons about finances and self-control.
Set Aside Money
Second, just as you set aside a certain amount of money for discretionary use every month, set aside a set amount from your paycheck for savings that week too. Even if all you can afford to put in is $20, set that as a goal and make it one of the first things you do with your paycheck.
This is easiest to accomplish when you set a high goal for yourself. Say that at the end of your college career you want to have $5,000 saved in your account to get you through the first year or so of life after college. Find out how many months remain until graduation and determine how much you would have to save each month to make that goal a reality. Then see if that monthly amount is plausible with what you’re currently making. Can you readjust some of your expenses to make it possible? Is there a side job you could do each week that would make up the difference? If so, jump on these opportunities and make your saving’s goal a priority.
You’ll see blessings all along the way to help you make ends meet. Not only that, but you’ll get in the habit of saving for things bigger than yourself, like that burden of student loan debt building up behind you.