I’m a Frugal Member of Gen Z: Here’s How I Stay Committed to Saving Money
While Gen Z might be on the younger side, age is no barrier for this generation — ranging from age 12 to 27 — when it comes to personal finance.
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In the face of a consumer-driven culture, this generation displays significant financial restraint and savvy saving strategies amidst the constant spending temptations. Although young Americans’ decisions to say no to morning coffee runs and pricey social outings might not seem like major savings, these small sacrifices are displaying their commitment to achieving their long-term financial goals.
Whether you are already frugal a Gen Zer — or aspiring to become one — here is a guide to adopting the money-saving tactics this generation loves to keep more money in their wallets.
Declare It Out Loud
Accountability is key when it comes to pursuing financial goals. With the strong allure of online shopping and impulse spending, it’s important to have accountability partners and friends to help stay aligned with your goals as temptations arise.
“I don’t think about ‘FOMO’ and loudly declare what I can afford and what not,” said Md Faruk Khan, Gen Zer and CEO at MdFarukKhan.com, a digital marketing company. “So, I don’t need to expend additionally to keep pace with others, even if I don’t have the budget. It saves me from unnecessary expenses only meant to showoff.”
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Redirect Activities
Adopting a more frugal lifestyle doesn’t mean missing out on fun with friends. By simply suggesting a more economical option for social activities, you can keep your friendships strong without compromising your financial well-being.
“Striking a balance between socializing and saving can be challenging, but I’ve found that being creative and open-minded goes a long way,” said Abid Salahi, co-founder of FinlyWealth. “I often suggest free or low-cost activities with friends, such as hiking, picnicking in the park or hosting game nights at home. These experiences not only strengthened our bonds but also aligned with my frugal lifestyle.”
Prioritize Needs vs. Wants
Living in a digital world, young Americans are bombarded with advertisements urging them to buy products they “need,” making saving money feel like an uphill battle. However, taking the time to determine for yourself what your genuine needs and wants are is crucial in resisting the wants that are disguised as needs and boosting your savings.
“Every month, I create two lists of my needs and wants. In the ‘need list,’ I include rent, groceries and transportation, etc.,” Khan said. “In the ‘want’ list, I include restaurant expenses and so on. I usually focus on the need list and rarely would have a budget for the want list. With it, I combat my impulse for buying and spending unthoughtfully.”
Embrace ‘No Thank You’
Saving money is practically impossible if you aren’t able to say no to unnecessary expenses. However, in a culture that glorifies instant gratification, this is much easier said than done. While it might take some getting used to, learning to say no empowers you to stay true to your financial objectives.
“I politely decline invitations that don’t fit my budget, such as going to amusement parks or to movies,” Khan said. “Friends who value you will understand, and those who don’t aren’t on my priority list. Board game nights, potlucks and exploring free local events are all budget-friendly ways to connect with friends.”
Shop Smarter
Saving money isn’t just budgeting and saying no to expensive hangouts with friends, but taking advantage of creative ways to spend less on non-negotiable essentials.
“I consider if I can borrow it, buy it second-hand or make it myself before swiping my card,” Khan said.
By exploring other ways to shop, not only are you saving money, but you’re also minimizing your environmental impact, taking care of the planet and your wallet.
The 30-Day Rule
When it comes to determining whether a purchase is worth it or not, Gen Zers are taking advantage of the 30-day rule: A simple, yet powerful, tool for evaluating the necessity and impact of a purchase before tapping a credit card.
“Whenever I want to make a non-essential purchase, I wait for 30 days,” Salahi said. “If the desire persists after a month, I revisit the idea; more often than not, the urge dissipates, and I save that money instead. This approach has helped me differentiate between genuine needs and momentary cravings, enabling me to allocate my resources wisely.”
Track Spending
In the quest for financial independence, saving money is only half of the picture. The other half lies in understanding where every dollar is going. This is equally vital for achieving your future financial goals and making informed spending decisions.
“I recommend using a budgeting app or spreadsheet to track income and expenses meticulously for any Gen Zer looking to start budgeting,” Salahi said. “Identifying areas where you can cut back can reveal surprising opportunities for saving. Remember, small changes can lead to significant long-term gains, and consistency is key.”
Collective Home Ownership
With today’s housing prices being higher than ever, it’s no surprise that Gen Z is rewriting the rules of homeownership and embracing unconventional housing solutions to keep more money in their bank accounts.
“My friends and I are planning to purchase a home together, because the inflated cost of housing and high-interest rates have made homeownership unattainable on our own,” said Cheyenne Hunt, Gen Z policy advocate serving as a big tech accountability advocate with Public Citizen.
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This article originally appeared on GOBankingRates.com: I’m a Frugal Member of Gen Z: Here’s How I Stay Committed to Saving Money
