Millennials are often given a bad name for being irresponsible or lazy. But not everything you read is true. A recent study from Bankrate found that millennials are actually doing a better job at saving for their future than older generations.
Just about 50 percent of working Americans age 30 and older are saving 5 percent of their income or more. Meanwhile, more than 60 percent of working millennials are saving 5 percent or more, and almost 30 percent of millennials are saving 10 percent or more.
How are these young adults managing to sock away so much cash?
If there’s one thing seemingly all millennials have in common, it’s their love of technology. They can integrate it into almost every aspect of their daily lives, and that’s true of managing money, too.
Forbes contributor Kate Ashford collected savings strategies from millennials across the country to see what works for them, and many pointed to apps and automation as ways to keep their savings on track.
“Having a side hustle is an excellent way to bring in additional income.”
“A buddy of mine told me about this app called Acorns and I haven’t looked back since,” explained one responder, a recording artist, writer and speaker named Kyle McMahon. “With Acorns, it links to your checking account and it rounds up your transactions and invests that in the market. For instance, if I buy a Starbucks latte for $3.70, it takes that 30 cents and invests it. It’s awesome.”
Another millennial, a Houston marketing coordinator named Katie Butler, said she has set up automatic transfers from her checking account into several savings accounts that are specific to her savings goals. For instance, she has one account for travel and one for her future home.
They Got Started Young
My Money Wizard, a personal finance blogger, recently shared his story about how he reached a net worth of more than $100,000 by the time he turned 25. The first rule he said that helped him to get to that point was starting early.
“In 2006, at age 16, I made my first investment, a high interest rate bank CD – a 5% risk free interest rate,” he wrote. He continued to say that he purchased his first stock the following year and has been active in the stock market ever since.
Bryan Clayton, the CEO of GreenPal in Nashville, Tennessee, told Ashford that he also began learning the basics of good personal finance at a young age, too.
“In high school I read a classic book called The Richest Man in Babylon.” he said. “The book talks about the concept of paying yourself the first 10% to 20% of each month’s earnings before you pay any of your bills. I’m so glad that I absorbed this book at a young age, because I practiced its teachings over the course of 15 years and have now acquired 12 paid-for rental homes.”
Having a side hustle is an excellent way to bring in additional income. My Money Wizard explained that he has never stopped finding his own side hustles that work for him – from selling baseball cards and lemonade as a kid to starting his own blog as an adult. He said that not only does it help to pad his income, but it also gives him a sense of accomplishment.
Side hustles aren’t hard to find. All that matters is finding something that people need and you can and want to do. For example, Ashford relayed Ben Pagel’s experience turning a Craigslist purchase into a small online side business.
“A few years ago, I met the woman I was going to marry and had no way to buy her a ring,” Pagel explained. “As a way to supplement my income, I purchased 57 Rubbermaid tubs full of old books off of Craigslist and opened an online bookstore. … By adding a new revenue stream that never goes towards monthly expenses like mortgage, food, or utilities, I was able to save for the things that really matter.”