Save to Become Rich Millennial
6 months ago JCprojectfreedom 0
Many millennial lack the financial planning know-how and indulge in self-gratification, funding their hobbies instead of saving for retirement. Young working adults are spending on overseas travel, latest gadgets, fashion and luxurious accessories. Many are facing an uncontrollable debt at an earlier age.
Instead of shoring up savings, some millennial are drawing down from their savings to sustain their lifestyles. Increasing cost of living coupled with meagre salary means little leftover to build up for their savings.
Ways to Get Rich
Record Your Expenses for 6 months or more
Recently, I am reading this book “The Power of Habit” by Charles Duhigg, it is about how habit is formed by cue, routine and reward. There was an experiment which involved twenty nine people for a four month money management program. They set saving goals and asked participants to deny themselves luxuries, dinning out and movies. They need to keep detailed logs of all their purchases which seem troublesome at first. They became more self-discipline to note every purchase and their finances improve. With more self-discipline, they can strengthen their willpower muscles and improve other aspects of their lives. You can start recording all your purchase everyday in a small notebook. For instance, record $2 for the train, $3.30 for the mixed vegetables rice, $1.10 for the coffee. Over 3 to 6 months, you will become more conscious of where your money goes to and what expenses you can reduce on. When you start to review and reduce your expenses, you will increase your savings. I have been recording my expenses since 2014 and it works for me.
Tax yourself 20% first
I wanted to name this subsection title “Pay yourself first” but think it will be more appropriate to coin it as “Tax yourself first”. In the past when I was still single, I used to transfer 50% of my net salary to brokerage account first. This is my method of “taxing” myself. With the remaining money, I will spend it on my daily expenses, some self-pampering and into savings for emergency fund. You can open up another bank account and do an auto-transfer from the main bank account at the end of every month when the salary comes in.
Bring Less Cash
I feel there is a psychological effect when my wallet has a lot of money and I will feel rich. When I feel rich, I will want to spend the money. Now, I will usually bring $50 with me at the start of the week and see how much I can save by Friday. If there is a need to entertain, I will use credit card.
Utilize Shopback and Cashback from Credit Cards
I do not have any affiliate link with Shopback but I use it to book my flights, hotel, buy groceries from NTUC/ Giant and books from bookdepository. The cashback takes months but you can get around $20 every few months. The money can buy 2 Starbucks coffee for date night or another book from bookdepository.
I have used Stanchart Unlimited Credit Card for cash back but recently I am trying out HSBC Advance and UOB ONE Credit card for cash back. Maybe I can share a post on this experience in the near future.
Start a Side Hustle
You can start a side business or gig after work and take all the money you make from this and deposit them. Do not spend any of the side hustle income. I taught tuition since 18 years old till 28 years old despite holding on to a day job when I was 25 – 28 years old. With technology, you can do Foodpanda, Grabfood, Grabtaxi, start an ecommerce shop on Shopify, trade old stuff on eBay, Carousell and build a digital marketing business on the side. Just remember not to spend the side income on vices. Don’t touch the money.
Time for me to sleep and continue to save hard. You cannot control the market returns but you can control your savings.