5 Money-Saving Tips for Gen Z
Getting started with money-saving or the “saving habit” is the foundation of all financial success. If you are part of the Generation Z (also known as Internet Generation or “Post-Millennial”), it’s important for you to enjoy your NOW, but also not to ignore the importance of saving for the FUTURE. Whether you are in high school, college, or just entering the workforce, saving money is no excuse.
Here are six practical money-saving tips that could help you develop a simple and realistic money-saving habit for all your financial goals.
Tip #1 Create a budget system
There are plenty of budgeting strategies you can take inspiration with. The most common is the 50-30-20 Strategy, wherein you allocate 50% of your income towards your Needs, 30% to Wants, and 20% to Savings & Investments. By following a monthly budget or spending plan (should commit for at least 3 months), it allows you to track your money and ensures that you will always have enough money for the things you need and are important to you.
Tip #2 Budget for an Emergency Fund
Having an emergency fund is a necessity especially for the young ones. An emergency fund is basically a pool of fund or ready cash in case of an unplanned expense, or a loss of a job. The most-recommended budget allocation of an EF is 6 months worth of your income or 3 month’s worth of your usual monthly expenses.
Tip #3 Find ways to reduce your spending
Simple ways like limiting your time on social media is one of the best ways to reduce FOMO or the “Fear of Missing Out” that makes you splurge or overspend. Another tip is to use cash when buying anything less than a thousand pesos. This will help you avoid spending on less important things and encourage you to live within your means.
Tip #4 Make saving money automatic
This is what they call “paying yourself first.” But how do you do it? Well, there are plenty of ways, like having an automatic savings plan, or a paluwagan system. One simple yet very effective way to automate your money-saving habit is the “50 & 200 Peso bill Challenge”. The rule is simple. If you receive a 50 or 200 pesos bill on hand, that’s considered “unspendable”. Meaning, this goes automatically to your piggy bank. Do this and you’ll be amazed that you’ve reached a 5 digit sum in a span of 6 months.
Tip #5 Set a savings goal and a reward system
Having a goal guides you to focus and helps you to sustain that momentum. Start asking yourself what you might want to save for? Perhaps an international trip, a new gadget, a new home, a retirement plan, or a new business. Then try to figure out how much money you’ll need and how long it might take you to save it. More so, creating a reward system will also motivate you in doing your money-saving task. Make sure that whatever rewards you choose makes you motivated and satisfied.
Generation Z are now in the best position to start planning for the future and develop a habit of saving money while young and able. Life is uncertain, thus saving money is a necessity. Creating a budget system, building an emergency fund, and setting up a sound reward system are some of the few things that work well for starters who want to save money.
If you’re interested to know more, here are some useful tips and guides for you about managing finance, business, and investment. We hope these bits of money saving tips will take you far.