How do millennials manage money?
We ask 5 Financially Fearless millennials for their top money tips.
Last Updated: 1 January 2003
As millennials, we’ve grown up in a time of great change. From a recent global pandemic to an ongoing cost-of-living crisis, this has created a landscape of financial uncertainty.
Research indicates that millennials born in the late 1980s, on average, earned 8% less at the age of 30 compared to their Generation X counterparts at the same age.
And this gap widens for women.
Currently, women below the age of 40 who are in full time employment experience a gender pay gap of 4.7%. Unfortunately, factors such as the motherhood penalty and the responsibilities of being a “sandwich carer” are set to make this gap worse as our generation ages.
There are big things we can do financially to close these gaps, but we want to talk about the little things we can do in our everyday lives. So, we’ve asked 5 Financially Fearless women who are tackling the cost-of-living crisis head on to tell us their top financial tip.
Just remember this article isn’t personal advice, if you’re not sure if a course of action is right for you, ask for financial advice.
Being thrifty is fun
If you love buying new clothes, a great way to save money (and the environment) is by buying them via reselling apps. I’ve found some right bargains over the years including my perfect hen do outfit!
Sophie, 31
Data shows that in 2022 the average household spent on average £17.60 per week on clothes and footwear. This is over £900 a year.
While it’s often a necessity to buy new clothes, reselling apps are a great way to get the brands you love, at a lower cost.
If you’re feeling extra thrifty you can try selling items you don’t use anymore. This is a win-win for both the environment and your wallet.
Cook your way to financial success
Some can sing, some can dance, but I can cook food out of nothing! Which is why I prefer to cook everything from scratch. This helps save a lot of money that we would have otherwise spent on takeaways and eating out.
My husband and I go food shopping twice a month and make sure it lasts for at least two weeks. Perishables first week followed by tinned/canned items the next.
I mostly cook Indian food, so I have a well-stocked pantry with massive packs of different herbs and spices that need replenishing a couple of times a year only.
The most cost-effective dish I’ve ever cooked was using just 5 ingredients – oil, salt, nigella seeds, a pinch of turmeric and potatoes. And voila! You have a healthy, delicious, cheap and cheerful potato curry.
Devleena, 38
Some can sing, some can dance, but I can cook food out of nothing! Which is why I prefer to cook everything from scratch. This helps save a lot of money that we would have otherwise spent on takeaways and eating out.
My husband and I go food shopping twice a month and make sure it lasts for at least two weeks. Perishables first week followed by tinned/canned items the next.
I mostly cook Indian food, so I have a well-stocked pantry with massive packs of different herbs and spices that need replenishing a couple of times a year only.
The most cost-effective dish I’ve ever cooked was using just 5 ingredients – oil, salt, nigella seeds, a pinch of turmeric and potatoes. And voila! You have a healthy, delicious, cheap and cheerful potato curry.
Devleena, 38
Who doesn’t love a delicious curry?
But a recipe we love at Financially Fearless is our recipe for financial success. It’s sprinkled with fun and a lot of precision – perfect for these cold winter months.
Regular Saving is key
Someone once told me to set up a monthly transfer into a dedicated savings account for Christmas. Over time, this has become routine, and really helps now that I am a proud parent to my son (and my fur baby, Hendricks)!
Natalie, 32
Regular savings aren’t just for Christmas, saving little and often allows you to build a safety net for your future expenses, as well as any unplanned financial needs like a broken boiler or a failed MOT.
Just make sure you’re getting the best interest rate for your money. It pays to shop around and even a small increase in rate can make a big difference to your savings over time.
The benefits of a Lifetime ISA
When buying your first home make sure you're making the most out of your money.
I used a Help to Buy ISA back in 2018 to buy mine, and the government topped up my savings by 25%. That was a massive help towards my deposit.
The Help to Buy ISA is now closed to new investors, but a Lifetime ISA does the same thing (with a bigger bonus).
Ellie, 29
When buying your first home make sure you're making the most out of your money.
I used a Help to Buy ISA back in 2018 to buy mine, and the government topped up my savings by 25%. That was a massive help towards my deposit.
The Help to Buy ISA is now closed to new investors, but a Lifetime ISA does the same thing (with a bigger bonus).
Ellie, 29
A Lifetime ISA (LISA) is a great, and tax efficient, way to save for your first home (up to the price of £450,000) or later life. You can put in up to £4,000 into a LISA each tax year, and the government will pay you a 25% bonus up to £1,000.
You can open one if you’re between 18 and 39 years old, and you can either open a Cash LISA or Stocks and Shares LISA.
A Cash Lifetime ISA works like a cash savings account in that you earn interest on any money in the account. Whereas in a Stocks and Shares Lifetime ISA you invest your money. Investing your money can offer the potential for higher returns, but you should only invest for the long term (5 years or more). And it’s important to remember that investments can go down as well as up in value, so you could get back less than you put in.
You can withdraw money free of charge from a Lifetime ISA to make an eligible property purchase, or from age 60. Other withdrawals will usually mean a 25% government charge, so you could get back less than you put in. Tax rules can change and their benefits depend on your circumstances.
Pay your pension some attention
If you want to start putting cash away for a short-term savings goal, it's tempting to reduce your pension payments.
When I was saving to go travelling, I was planning to pause or opt out of my workplace pension for a year, I’m so glad I didn’t as I would have missed out on free contributions from my employer. It's understandable when it's such a large expense coming out of your pay each month and you aren't able to access the money in your pension until at least age 55 (57 from 2028).
Belle, 30
A pension funds the longest holiday of your life, and with more people living to the age of 100, even the smallest reduction can make a big difference.
If you do plan on taking a career break or sabbatical in a year or two, it’s worth considering saving your money in a high interest easy access savings account. This means your money is working harder for you, and you can access it with ease if you need it.
HL’s Active Savings could be a great option, as you get access to competitive rates from one easy to use online account.
Thank you to all our fearless contributors. All these comments show that even a small change can make a big difference to your finances.
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