When it comes to money management, everyone has a different style.
After talking to a handful of millennials across the U.S. about how they earn, save and spend their money, CNBC Make It rounded up the mindsets and strategies that have helped them pay down debt, spend within their means and save thousands of dollars.
Here's what works for five young people featured in CNBC Make It's "Millennial Money" series.
After talking to a handful of millennials across the U.S. about how they earn, save and spend their money, CNBC Make It rounded up the mindsets and strategies that have helped them pay down debt, spend within their means and save thousands of dollars.
Here's what works for five young people featured in CNBC Make It's "Millennial Money" series.
1. Treat your savings and debt like bills
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| © Provided by CNBC Christine Hopkins in Berkeley, California. |
"I have more in savings than I've ever had in my life," says Hopkins, who used to have $33,700 in debt and lived paycheck to paycheck. In 2018, she started working with a financial advisor, who encouraged her to take a hard look at her spending. It wasn't until she actually went through her expenses that she realized she had "all this money that I was just letting go." Now, she pays herself first to prevent herself from spending it mindlessly.
As of July 2019, she earned $88,000 a year as a marketing manager in the Bay Area and saved nearly $2,000 a month. She also put about $1,000 toward paying down her student loans and credit card debt each month.
2. Align your spending with your values
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| © Provided by CNBC Leah Warwick outside her home in Sunnyside, Queens. |
For example, she likes to buy from places that are "run for women, by women," she says. If you support companies that take into account the betterment of society, and not just profit, "it creates a better world, a better environment, a better future," says Warwick.
Thinking about her purchases through this lens helps ensure her that "the money I spend is well spent," she says.
3. Before buying something, think about the time you spent working for that money
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| © Provided by CNBC Alex Sanchez outside his home in West Chicago. |
His mindset is what helps him save so much. "Money to me represents your time," says the Chicago-based overhead lineman and real estate investor, who makes more than $200,000 a year. "Every time I see a dollar, I see that dollar as my time, and time is the most important thing to me. The reason I don't spend money on dumb things is because if I throw money away, I'm throwing my time, my life away — and it's just something I'm never going to get back."
If he's going to splurge, it's going to be on something meaningful, like the tattoo he got in honor of one of his best friends, who died in 2018. It cost close to $1,500, but it's a purchase he can justify. "It's something that means a lot to me," he says. "I'm not going to penny pinch on something that's really important to me."
4. Track your finances
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| © Provided by CNBC Bukola Ayodele. |
She believes that in order to reach your goals, it's important to monitor your progress. "I'm actually obsessed with tracking things, I track my calories, I track my workouts and I also track my money," says Ayodele, who uses You Need a Budget to keep track of her spending, and Personal Capital as a way to measure her net worth and long-term goals. "I believe in this philosophy of what doesn't get measured, doesn't get managed."
Her strategy has worked so far: Since graduating from Columbia University in 2016, she's paid off $7,000 worth of student loan debt and is working toward her goal of earning enough off of her investments that all of her monthly costs are covered.
5. Make everything automatic
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| © Provided by CNBC Elena Haskins graduated from Ithaca College in 2018 |
She's able to set aside so much thanks to a simple strategy: She's automated everything. As soon as her paycheck hits her bank account, a percentage of it goes straight to savings before she even sees it. "I like to live my life with the least amount of money available to me," says Haskins. "I put it away in savings automatically so I don't have access to it."
What Haskins likes about automating her savings is that it eliminates the temptation to spend now. "It's out of sight, out of mind," she says. "I don't feel like I have all this money to spend because I look at my [checking] account and think, I don't have a lot of money. And then I spend less."
See more at: CNBC
