In 2014, a new census was released for the USA. Its results included the fact that one in five millenials, the population currently aged 18-34, is living in poverty. That’s 13.5 million people in the USA. This is despite the fact that that 22% of millenials now have at least one college degree, although it makes much more sense knowing that 35% of millenials are unemployed.
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Given the current situation, many millenials are actively trying to save money in their daily lives. Unfortunately, what can seem like a smart financial decision in the moment can actually cost much more money in the long run. Avoid these 4 common errors by spending now to save later:
Don’t Spend Less to Get Less
Buying in bulk doesn’t always make sense; getting 20 apples for $5 will probably just lead to rotting, uneaten fruit. However, if you have the space to store non-perishables, buying in bulk can help you save a lot of money.
- Buy a Membership: Wholesale and Discount stores like Costco or Sam’s Club typically require their customers to have a membership to benefit from their low prices. Although the price of a membership card can be daunting, paying that money up front will be worth it when you get to save a much larger combined amount as a result.
- Buy Intelligently: There are certain things that make a lot of sense to buy in bulk. Toilet paper, paper towels, toothpaste, tissues, sandwich baggies – all of these are intelligent investments because you know that there will always be a need for them, and you also know that the products will age well, and as a result you will save money.
Don’t Avoid Routine Maintenance Because of Sticker Shock
Getting a bill for tire replacement or a car inspection can make you physically ill, but avoiding the gut reaction can actually lead to far worse consequences.
- Little Problems Grow: Ignoring the little maintenance light is easy, but that doesn’t mean it’s smart. Little problems can grow into bigger, more expensive problems unless you deal with them from the get-go. According to the Car Care Council, 84% of vehicles inspected need service or parts due to neglect. A car is a huge investment, and saving money often means spending a little on your car’s well-being.
- And They Can Be Deadly: Ignoring your car’s little aches and pains doesn’t just hurt your wallet – it can also hurt you and the drivers around you. Car Care Council determined that in 2004, cars whose drivers had neglected to maintain them caused over $2 billion worth of damage in accidents.
Don’t Buy Cheap and Expect Quality
When it comes to clothing, it’s easy to fall into the trap of buying inexpensive pieces. However, once you have stopped growing, this habit can rapidly rack up bills and become a costly mistake.
- Don’t Just Ask “How Much?”: When it comes to buying clothing, the initial price isn’t the only factor you should take into consideration. To save money, you also need questions like, “How often will I wear this? How long will this piece last? Do I need this, or do I already have a similar item? Does this actually fit me, or will I need it tailored?”
- It Might Not Just Cost Money: Buying ill-fitting or poor quality clothing can have adverse effects on your health, not just your budget. The University of Maryland Medical Center reports that, in the USA, 75% of people report foot pain at some point in their lives, and that “most foot pain is caused by shoes that do not fit properly”. Buying good shoes today will help you save money on doctor’s bills and orthotics in the future.
Don’t Avoid the Lump Sum Payment
Interest rates are a silent killer. Although your wallet might shudder at the thought of paying for that new laptop all at once or doubling your monthly student loan payments, those are actually the best ways to save money.
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- Fragmented Pricing Is Not Your Friend: When an infomercial promises to change your life to make you (a) smarter, (b) thinner, or (c) cooler for the low, low price of just $14.99 per month, it’s probably lying to you – but not in the way you think. Their product might just work, but emphasizing monthly payments is the modern magician’s assistant encouraging you to pay no mind to the man behind the curtain: the overall, usually very high, price.
- No Interest in Interest: Along with your low, low monthly installment, you will be paying an interest rate. Even if it seems low, it still increasingly adds to the amount of money you’ll have to pay back to the merchant or loaning agent, and the more you pay to them, the less you get to save.