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How Millennials Save Money 💸

Saving money is a great idea. We all have a dream of having a savings account filled with at least the equivalent of a month’s wages, if not two months. However, actually getting started and being able to put a decent percentage of what you earn every month away can be challenging.

Millennials the world over are known for their apparent wasteful spending and inability to budget correctly. However, it’s this generation and the generation below it that are faced with tougher financial situations, increased house prices, and harder to pay off student loans when compared with generations before.

This isn’t to say millennials shouldn’t be structuring their spending properly, because everyone should be. I’ve compiled a few tips and tricks millennials have learnt in order to have a small, somewhat comfortable savings account behind them. And no, it doesn’t include cutting down on drinking coffee and buying less avocados. In fact, if you follow these tips you’ll be able to buy more of the things articles like to say we spend too much money on.

Plan your month in advance 📅

Planning your month in advance to payday can allow you to really understand what it is that comes out of your bank account, and when. You can use this information to put together budget sheets and plan your bills wisely.

To start planning your month in advance, I’d open a notepad or a Google Sheet and write the dates starting with either the 1st of the month (or, whenever payday happens for you) and list every single bill that comes out of your account, and how much it costs. It might help to go into your banking app on your phone and look at the list of direct debits, standing orders, etc. Don’t forget to look at your PayPal app, and credit cards too.

Above is an example of what mine kind of looks like. I’ve changed numbers for privacy reasons. I’m moving into a flat with my boyfriend, so in order to share bills equally and keep things fair, we’re sharing a budgeting spreadsheet.

You can either keep it as it is, or take it one step further and make it into an actual “calendar”, which is what I like to do. On the second stage calendar, I like to colour code pay days and who’s paying what bill. My boyfriend gets paid weekly, so it was easier for me to visualise all the bills getting paid if I could see it in a monthly calendar format.

How your monthly financial calendar looks is completely up to you. You can personalise it with colour coding like I do, choose your own fonts or simply just have a normal calendar with your payments written on.

From the monthly calendar I can add up individual bills, track what money will be going in and out when, and make a note of what money needs to be transferred. I like to print this out and keep it somewhere I will see it daily, with a pencil nearby so I can add any notes and scribbles should things change.

Separate accounts for “bills” and “spending” 💳

Something I’ve found that really helps me make sure I don’t spend money I shouldn’t, is to separate my bills and spending completely. Previously, I’d find myself accidentally spending money that I was trying to keep for my bills, but it was hard for me to do the maths in store or remember when I’m out what money was to be kept aside.

A good example of keeping bills and spending separate is to use your monthly financial calendar (see above!) to add up all the bills that will come out during the month, and transfer this money into a savings account connected to your current account. You can set reminders on your phone for when bills are going to be coming out, and transfer the amount from your savings into the account it comes out of.

This can be a lot of hassle for some, especially if you work a lot or spend a decent amount of time away from a phone or computer for you to receive the notification. So, I’ve set up a second bank account with another banking provider. I transfer all my spending money into this new bank account, and let all the direct debits and bills do their thing by themselves in my other bank.

Being able to see exactly what I have to spend on food, household items, and treats for myself is good and means I’m less likely to accidentally go into my overdraft and have to ask to borrow a fiver so I don’t get charged a fee.

Round up your bills 📤

This one is pretty simple and can make it so much easier for you to add up all the bills that come out throughout the month and ensure you have enough in your account to cover everything. Not only are you saving without thinking, you also have peace of mind that you’ll have spare money should something ever increase.

Round up the bills! If something is coming out of your account at £14.56, round it up to £15. If something is £27, round it up to £30. Charging yourself a few small extra pounds is easy, and I promise you’ll hardly see the difference.

At the end of the month, you’ll have a couple extra quid in the bank for you to treat yourself with or transfer into a savings account for a rainy day.

Round up your spending 💵

Just like rounding up your bills, you may want to try to round up your spending where possible. If something cost you £1.50, put the extra 50p into a savings account.

Some modern digital bank accounts *cough* Monzo *cough* have features where if you set up a savings pot, you can automatically have the money round up and transfer into a bank account. You’ll never even notice it!

Start a savings challenge 💰

Savings challenges can be a fun and motivational way to put a few extra pounds away every month. Whether you’re putting away a penny-a-day, a pound-a-week, or trying not to spend any money in October, you’ll be able to challenge yourself to think outside of the box when it comes to saving and spending money.

Penny-a-Day

This is a fairly straightforward savings challenge. For 365 days, you aim to put away an additional penny every day.

Day 1: £0.01
Day 2: £0.02
Day 15: £0.15
Day 365: £3.65

So on and so forth. You can save over £600 in a year by completing this challenge, and you’ll barely notice it coming out of your account. Plus, Monzo has a great IFTTT applet that allows this to be completed automatically and put into a pot without you having to think about it.

Pound-a-Week

This has a similar concept to the penny-a-day challenge above, but you only have to deposit money once a week rather than every day.

Week 1: £1
Week 2: £2
Week 5: £5
Week 21: £21
Week 52: £52

This challenge saves you a little more than the penny-a-day challenge, with your bank account being £1,378 richer by the end of the year. Or, if you’re worried about depositing larger amounts around Christmas time, you could just reverse the challenge and count down to 1p/£1 instead.

No Spending!

Challenging yourself to not spend at all is a great way to see where you’re going wrong in terms of unnecessary spending. Can you go without your coffee all week, and put the amount you’d spend away instead?

Do you have loads of face wash you really need to finish off first before you buy a whole new bottle? This can also help you make sure you’ve got plenty of space in your cupboards by using up products you don’t want to chuck away just yet.

One way you can help yourself with this is to take out only what you will need to spend through the week in cash, and put your card away somewhere you can’t get it (and turn off Apple Pay too!).

Snowball your debt! ☃️

Debt snowballing was a concept that took me a while to understand, so no worries if it takes you a hot minute to get your head round too! So, as far as I understand it… (Apologies if I get it completely wrong!), if you do some Googling you may find a better explanation.

Basically, you start by paying the minimum amount off your debts plus an additional amount to the smallest debt to pay it off as quick as possible.

So, say you have 4 debts of £457, £279, £2351, and £190. You pay off equal minimum amounts (if possible) of say £30 and for the smallest debt you pay an additional £100. (Amounts obviously may vary due to your own situation, what you can afford, what your debts are, etc.).

The smallest debt is £190 so you pay £30 plus £100 a month until this is paid off. Then the amount you were paying off from this debt goes towards your next debt, so £130 + £30 for the £279 (which will now be around £200 due to payments of £30 a month for a few months being made).

This additional £160 + £30 then goes towards paying off the next debt, which was the £457 (which will now be a bit smaller again, due to months of £30 payments). And so on.

This means the same amount towards your debt is being taken out of your bank account, so you don’t see any changes yourself except for the amount that you owe. This will decrease and decrease gradually, until your debts are cleared.

I’m going to be taking this approach as soon as I move out, because then my budget will be roughly the same and I can transfer roughly the same amount each month into my spending account. I’ll get used to seeing the same numbers, so I won’t get excited over having additional money until my entire debts are cleared.

Quick-fire additional tips 🔥:

  • Review your direct debits. What can be removed? Are you spending unnecessary money, and can you threaten to leave your bill providers (phone company, etc.) to receive a better deal?
  • Consider Monzo as your “spending” account! Great features to help put money away without thinking about it.
  • What are you subscribed to? Can you find that tool for free or cheaper elsewhere? Or, resubscribe using a significant other’s details or other email address to receive the free trial/new user offers again!
  • Choose the cheaper sandwich. We’re all a sucker for a £3 meal deal. Sometimes, you can be better off buying a few 2 litre bottles of your favourite drink in your monthly shop and filling up smaller bottles throughout the month instead of buying a small drink every day. This can work out cheaper, and it’s better for the planet too. Buy the cheaper £1 sandwich (because, lets face it, they’re all a bit cardboardy anyway), either pack your own snack or buy a cheaper one, which works out to be £2 to £2.50, and pack your own drink.
  • Reusable water bottles. Great for the planet, great for your spending overall.
  • Owe family/friends money? Create a payment plan. Ask if you can pay them off gradually, but don’t offer a ridiculously low amount per month or they will say no.
  • Keep a spare change jar. You’ll thank yourself when you need some money for parking!

Fantastic additional resources…

Following one or two (or all!) of these tips over time can boost your savings to no end. Can saving money make you richer? It certainly can make you feel richer, or at least safer in the long run knowing you have some emergency cash should your car break or medical bills arise.

Good luck saving!

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15 Comments

  • Reply Kim

    Thank you for featuring my post. 🙂 These are some great tips and some I hadn’t though of, like snowballing your debt. I’ve always paid off the same set amount off each month over each debt, but this seems like a better approach.

    September 19, 2019 at 11:13 am
    • Reply Lucy Kate Burton

      No problem! Thank you! It can be! You can get more motivated this way as you see more of a success! 🙂

      September 19, 2019 at 4:18 pm
  • Reply Lauren Turner

    Great post well done! I’m definitely going to set myself a savings challenge now x

    September 19, 2019 at 2:02 pm
  • Reply Laura

    Brilliant post! There’s so much detailed, good advice! I definitely want to try the pound week challenge as they look like an effective way of force saving. I do a lot of no spend days and they’re great, forces you to be a bit more inventive and planning ahead… L

    September 19, 2019 at 4:15 pm
    • Reply Lucy Kate Burton

      Thank you! I have to admit my no spend days have sometimes not worked out as planned, but they do! You have to plan and use up what you’ve already got! 🙂

      September 19, 2019 at 4:17 pm
  • Reply Ellie

    I love reading post like this as we all have such different ideas on how to save money. I moved all my bills to a separate account and as soon as i get paid I transfer enough to cover everything and the scheduled payments go out whenever in the month, leaving me to work with my own spending separate for the month. I like to also save at the begining of the month than the end b/c it’s easier in terms of budgeting for me. Any money I have from my “daily allowance” I also put in my savings at the end of the week! Every little helps! X

    September 19, 2019 at 4:57 pm
    • Reply Lucy Kate Burton

      Yes! Everyone has their methods which work for them! Having separate accounts for bills and spending has made my life so much easier! Also, rounding up my bills & putting whatever is left over in savings/towards the next grocery shop is great too!

      September 20, 2019 at 8:15 pm
  • Reply ThatAutisticFitChick

    The “best” way to snowball is to look at the debt with the highest interest rate and put additional payments to that one first, and then ladder down the interest rates.
    But psychologically it can make a huge impact to see a card being cleared in which case hitting a small debt first can be useful and spur you on to keep on clearing more debt.

    I liked the 1% method for clearing debt as well, where you work out 1% of one of your debts (the one you’re snowballing) and then you make the extra to clear 1% at a time – selling clothes on ebay, overtime, surveys, etc and you do a sticker chart to tick each time you clear 1%, because you don’t include the minimum payments in the 1% then every few months you recalculate and find that you’ve paid off a few more % than you realise.

    September 20, 2019 at 8:56 am
    • Reply Lucy Kate Burton

      Yes – that can help with clearing it with the least interest! If I could do that kind of maths that would be brilliant!

      September 20, 2019 at 8:16 pm
  • Reply Molly @ Transatlantic Notes

    Some really great tips even for non-millennials as these are things we should all be incorporating.

    Great post — thanks for sharing!

    September 23, 2019 at 11:21 am
  • Reply Yaya

    Really helpful and highly informative post!! Thanks for sharing it.

    September 25, 2019 at 12:11 pm
  • Reply Sabina

    Good tips and this is always a good topic to write about, if you have the knowledge. It’s not just millennials who don’t know how to handle money – it’s almost everyone! 🙂

    September 25, 2019 at 1:21 pm
  • Reply Sahara

    Saving money is always a great idea! I feel that millennials are always thought of to be wasteful, as you mentioned we do have a lot on our plate, but I think we’re also good at managing our money a bit better than the older generation think.

    Planning a month in advance, even though bullet journaling is the best way to stay on top of everything and to stay organized – at the end of the month tally up your spending and then you can see where your money went rather than wondering at the end of the month where all your money went.

    I’ve heard a lot of great things about Monzo! And definitely seeing what you’re subscribed to and if it’s worth it is necessary, I think there’s a lot of streaming services and sometimes we can lose count on what we’ve paid for and which one we always watch on!

    Super awesome of you to include additional resources – eager to check them out!

    September 30, 2019 at 12:53 am
    • Reply Lucy Kate Burton

      Thank you for your comment! Yes, it’s amazing how easy it is to lose count on what we’re subscribed to. I fully recommend Monzo! They’ve even introduced new Bill Pots so you can keep your bills/spending money separated which is FANTASTIC! They’re becoming increasingly closer to becoming my main current account!

      September 30, 2019 at 9:35 am

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