Share

A millennial's guide to saving - and useful apps that could help you do it

In the current economic climate South African millennials are having a hard time saving, according to a personal finance guru.

While many of the ways in which our world has changed are for the better, financial security is one aspect of life with which many 20-somethings struggle, says Kayla Sloan.

According to Sloan unemployment, high student debt, lack of financial knowledge, the struggle to keep appearances and the struggle to accomplish financial independence are the reasons why millennials are battling to have a healthy budget.

"Saving, investing, budgeting, and even cutting back can seem ridiculous when you struggle to simply pay for basic necessities. Budgeting can be crucial to one's financial future. But for millennials, budgeting can feel like an impossible feat," says Sloan.

Graham Orber a financial advisor at Nerd Wallet says millennials need to look at the bigger picture. "If you find you're not bringing in enough money from work - or if you need to find a job - start the hunt for something better," he says.

"Millennials need to take advantage of professional networking sites such as LinkedIn to connect with people who may have opportunities.

"If the job market in your area is particularly limited, consider relocating to a city with better prospects and give 100% to even the most mundane tasks to stand out and advance within your company.”

In Orber's view creating a budget also allows you to live comfortably within your means with enough left over to save for long-term goals. Millennials should start by adding up all sources of income, then they should tally up monthly expenses. This includes debt, and other living expenses such as rent, transportation, food and entertainment, among other things. "A budget worksheet will ensure that no expenses are omitted," he advises.

The expenses should be subtracted from income, to help millennials visualise what they have to work with monthly.

"You can then set goals and decide how the surplus should be invested. If your expenses exceed your income, you'll need to figure out how to cut expenses, perhaps by scaling down to a smaller home or car, or increase income by picking up additional hours or a better job.

"Tracking small daily expenses can help you see which can be reduced or eliminated," he says.

After acquiring basic numbers, "refine your plan", says Orber.

"Pay yourself first and deposit something each month to savings once that is taken care of pay basic living expenses and pay down any debt before spending on entertainment."

Saving apps

The use of technology can also be beneficial and convenient when organising your budget. Using free apps could save you on data and time, he adds.

Personal Capital: This app can be used on an iPhone, iPad or your computer, it is helpful to understand your cash flows, optimise investments and see all your money in an easy way.

Mint: This app can be used on Androids and Windows phones. You can link to your credit, loan and investment accounts to track activity.

LearnVest: This app links to accounts and files purchases into category folders. Users also get access to lots of relevant articles and information, which is particularly helpful to those new to managing finances.

Level Money: This app for Android and iOs lets you know how much available cash you've got for the day, the week and the entire month.

Sticking to a budget

"Having a great budget is worthless unless you stick with it," says Orber.

There are strategies to stay on track with a budget.

Put your financial goals in writing to maintain focus.

Keep track of your credit score.

Establish a separate email account for financial correspondence, bills and alerts.

Set up an automatic savings plan for at least 10% of your income.

Don't worry about keeping up with your friends; make lifestyle choices you truly can afford.

Explore student loan forgiveness programs and consider debt consolidation. When possible, pay extra on your debt to reduce the amount of interest you will pay.

Orber says if you slip, "forgive yourself" and get right back on budget. Even with some inevitable mistakes, a budget is the first step toward home ownership, a comfortable retirement and other major financial goals, he says.

We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.00
-0.5%
Rand - Pound
24.02
-0.5%
Rand - Euro
20.51
-0.2%
Rand - Aus dollar
12.35
-0.0%
Rand - Yen
0.13
-0.6%
Platinum
900.15
+0.4%
Palladium
1,000.00
-0.2%
Gold
2,210.45
+0.7%
Silver
24.60
-0.2%
Brent Crude
86.09
-0.2%
Top 40
68,142
+0.7%
All Share
74,329
+0.6%
Resource 10
56,957
+2.3%
Industrial 25
103,635
+0.4%
Financial 15
16,485
-0.2%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders