28 Sep 2022 | 5 mins

Alright, I am no Barefoot Investor (although I am an avid follower) but I do believe that I have nailed down a savings tactic that works. It’s also one that I don’t withdraw from everytime I’m at the front of the line at a bar.

I’ve been through it all - lived from paycheck to paycheck, I’ve borrowed money from my sister, I’ve not been able to pay for an Uber home because I spent my last $20 on drinks. I moved back in with my 'rents because I couldn’t afford rent.

I’ve also made some pretty dumb money mistakes growing up that I fully regret. I’ve spent my last $50 on a high-end foundation. I bought Doc Martens, full-priced (!?!?). I spent $700 on a bike I never ride. I’d spend $100 every time I went to the pokies. I bought a new iPhone every year there was a release. I have five sets of 1000 TC sheets. Nobody bloody needs that many sheet sets. Did I regret it then? No. Did I look silly justifying my purchases looking back on them now? Yes. But hey, without making those mistakes, I would’ve never learnt how to truly save.

But as of recent, I just bought my first block of land at 22-years-old (no flex, still trying to find money for my lunches) but in saying that, I’ve now got an enormous debt on my shoulders and live with the crippling fear of never being able to afford holidays or spontaneous trips ever again. I have come to the realisation that I can’t have it all and this big of a commitment does require me to strictly manage my money. 

This still applies if you’ve got a smaller scale goal in mind, like saving for a new laptop, car, puppy (I know I am). My five-week holiday got canned due to our sis Corona and in return, I was able to use the money I saved as part of a house deposit (talk about a blessing in disguise), so as long as you’ve got something in mind, you’ll be able to set your mind and savings plan accordingly. Here’s my millennial guide on how to start saving without cheapskating it completely!

1. Set a savings goal

Think about what you want to save for, how long it’ll take you to have the funds and when you’ll need it, but also think realistically. You’re not going to be able to save for a new car whilst paying for lunches and public transport within three months so set aside some cash based on your calculations each week you get paid. You’ll get used to seeing the money go straight in there, so there is no loss to your everyday play money.

2. Work out a budget

This is key in making sure you stick to a savings plan. Work out a budget based on what you earn. When I was a casual employee working in retail, I would normally calculate how much I earned as a minimum + anything extra was put straight into my long-term savings. Say if I was earning $1000 a fortnight, I would split up my earnings into separate accounts:

30% - money on whatever the heck I wanted (see, you can still have fun)

20% - expenses including phone bill, gym membership, petrol

20% - short-term, bigger expenses (getting the car serviced, rego, birthday presents)

30% - long-term savings

These vary according to your expenses + long-term savings goals so take some time to work out what’s best for you!

3. Pay off some debt

Got a car loan you’re itching to pay off? Struggling to pay your Afterpay installments? Got credit card debt? Honestly, financial freedom comes when you pay off all your smaller, interest gathered debts. Cars depreciate. Things get out of fashion real quick. As soon as you start paying off your debt, you will be 100 times happier and will be able set out savings goals without anything burdening ya! My advice is: if you really want something, start paying for it in full!

4. Be prepared for emergencies

The amount of times my car has broken down and I’ve had to fork out $300 on a new part has become suuuuper frustrating. Keep this account separate from your everyday spending. Literally, don’t even look at it. I normally keep $2000 in mine, with a different bank, just sitting there and I replenish it after I get back on my feet.

5. Don’t skimp out on things you enjoy doing

Write down the things you absolutely love spending your time doing. For example, if yoga is non-negotiable, work your budget around that. Love catching up with your friends every Saturday morning for brunch? Set aside some money for it. You don’t have to give up everything you love doing because if you don’t give yourself some play money first, you’re just going to feel like you’re working for nothing.

Taking control of your personal finances is big king and queen energy. This does not have to be boring. Set yourself up for success, start a savings plan and I promise that future you will thank you for it!