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A millennial’s quick guide to saving money

Here's how millennials should save their dollars. (Source: Getty)

When it comes to saving money, millennials are often dubbed clueless.

But, they’re busting the myth that they can’t save: recent research by PureProfile commissioned by Spaceship shows this demographic save more of their cash than any other demographic.

Not only are millennials active savers, their familiarity with technology means they’re saving in new ways – all without giving up too much of their lifestyle, either.

“We believe millennials have found it’s really easy to save and invest while also making the most of their lives,” Spaceship CEO Andrew Moore told Yahoo Finance.

“Thanks to the technology they have in their pockets, they are a generation that can go about their day and truly mix business with pleasure.”

Millennials are also conscious of where they’re putting their money, and are known to be particular about investing their money according to their values.

Technology is also used by millennials to find themselves the best deals, Moore added.

“And when it comes to other financial goals, such as reducing living expenses or growing their savings, they’ve figured out how to optimise the technology available to them and use it to shop around for the best deal or spend less on discretionary items.”

Here’s a quick guide for millennials on how to save money:

1. Do a spring clean of your subscriptions

Speaking to Yahoo Finance, non-aligned financial adviser James Gerrard said most people have multiple monthly subscriptions, from music or video streaming services to software to gym memberships.

But are you really using all of them?

“It is easy to forget about them and even though you might not use the service anymore, you're still being charged each month for it,” Gerrard said.

“A drastic way to reboot your subscription spending is to change credit cards or bank accounts which will cut off all automatic monthly payments. Then consciously only add back the things that you need.”

2. Check deal or bargain websites to get the most bang for your buck

If you’re a bit of an online shopping fiend, you’d be getting more out of your money with websites like Catch.com.au, ozbargain.com.au and even Finder, which posts when online retailers are having sales that can help you save hundreds of dollars a year.

“Deals on things such as phone plans, food items and electronics are posted by members so if you're patient, you might be able to buy what you need but when it's on sale, saving a significant amount of money,” said Gerrard.

However, he cautioned Aussies about the temptation of buying things needlessly just because items are on sale.

3. Break large financial goals down into bite-sized pieces

Saving $5,000 for a holiday sounds more daunting than saving $100 a week. Do this by sorting into a separate bank account, Gerrard advised.

“Before you know it you'll be well on the way to the $5,000 target. The easier you can make it psychologically for yourself to save, the better it will work out financially!”

4. Resist lifestyle creep

With a pay rise or a promotion comes the temptation to spend a little bit more here and there – but this hike in expenses, along with a hike in income, is called ‘lifestyle creep’ – and you should watch out for it.

“We recommend being mindful of this when your pay rise comes around, and ideally, considering whether you’d rather put that extra money towards your savings goals,” said Moore.

5. Take away the temptation

If you’re tempted to spend money when you see it in your account, set yourself up for success, not failure.

“We like the adage “out of mind, out of sight” when it comes to savings. Where possible, consider setting up an automatic transfer to your savings account, ideally on pay day,” said the Spaceship CEO.

6. Dump the fees

What unnecessary fees are you coughing up for? For example, if you’ve lost tabs on how many super funds you’re in, you’re losing money in fees without even realising.

“There are many free and low-cost ways to save and invest your money. Instead of paying more than you need to, steer those spare dollars into savings instead,” said Moore.

“Don’t let fees eat into your hard fought savings.”

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