4/29/2024 7:00:00 PM | Money Matters

Want to save money like a millennial? 4 social media trends to try

A heady discussion of how to achieve financial stability and security probably won’t have you jumping out of bed in the morning or chatting up friends and coworkers. But head over to TikTok or Instagram to discover a surprising buzz around money from millennials and even Gen Z.  

Millennials, now 28-43 years old, have witnessed financial impacts from 9/11 to the 2008 market crash, and more recently a worldwide pandemic. This generation often has high student loan and credit card debt.  

Gen Zers, ages 12-27, have learned from prior generations and may be more inclined to avoid high debt. According to a 2022 Investopedia financial literacy survey, more than half of Gen Z adults are already invested, with 26% of that group in the stock market.  

Both generations are actively working to save, invest and plan for their future with a fresh, unabashed approach that may be the ticket to growing wealth. And they’re sharing it on social media.  

Intrigued? Here are four of the latest money-saving trends you may want to try: 

1. FIRE 

Financial Independence, Retire Early has gained a following among those who dream of escaping the 9-to-5 sooner than later. Here’s how it works:

  • Save aggressively: Cut unnecessary expenses, live frugally and funnel a significant portion of your income into savings and investments. This often means saving 50% or more of your income every year. 
  • Set up regular transfers into a savings account to automate your savings.  Umpqua Bank has several account options varying from new savers to those farther along on their wealth building journey.
  • Invest wisely: Diversify your investments, invest in low-cost index funds and reap the rewards of compound interest and tax advantages of an IRA or 401(k).
  • Reach your FIRE number to retire early: Many FIRE followers adhere to the “rule of 25” and the “4% rule,” saving 25 times their annual expenses and withdrawing four percent or less in each year of retirement.  

There are consequences to retiring early, such as a loss of employer-provided health insurance. Work with a financial advisor on a plan for your individual circumstances.  

2. Cash Stuffing 

You may recall your parents or grandparents pulling out an envelope of cash at the grocery store. A time-tested method to stay within a budget, cash stuffing is where each spending category is assigned a dollar amount that goes into an envelope on payday, or once or twice a month. Here’s how to do it: 

  • Set a budget, on paper, on an app or through your bank, like Umpqua Bank’s Financial Tools.
  • Identify your spending categories, especially those where you are more likely to overspend, like groceries, household goods, clothing, dining and entertainment. Label an envelope for each one.
  • Withdraw cash from the bank and stuff the envelopes.
  • When the envelope is empty, you stop spending. Consider using a calculator when you shop to help make sure you stay within your limits. 

Seeing how much cash is left in the envelope makes you less likely to overspend than tapping a debit or credit card. 

3. Loud Budgeting 

This money-saving habit is all about transparency and accountability. When a friend suggests grabbing dinner out or coworkers head for happy hour on Friday, the loud budgeter is empowered to decline and gives the straight answer: I’m not spending money.  

That’s not to say loud budgeters never go out and have fun. They simply have priorities. Sometimes the spending fits and sometimes it doesn’t. Loud budgeting simply removes the stigma of sticking to a budget and helps us strike a balance between enjoying social occasions and saving money. Here’s how to embrace it: 

  • Talk openly about your financial goals and challenges. 
  • Seek out support through online forums or financial groups. Share your budgeting wins and setbacks, find encouragement and learn from others.
  • Be proud of your frugal choices. You may even inspire someone else to save more and spend more mindfully. 

4. Financial Cleanse 

A financial cleanse is a chance to reset your spending habits and reevaluate your relationship with money. 

  • Find a period of time to limit or stop spending. It could be a day, week, month or even year.  Some people give it a name: No-spend Sundays or Frugal February.
  • Set parameters for your cleanse. Typically, spending is limited to essentials only, like housing, food and transportation for work. 
  • Give meaning to a tighter budget. Put money saved toward specific goals. Whether it’s building up an emergency fund, paying off debt or saving for a family vacation, having a “why” makes it easier. Be intentional with every purchase. Ask yourself if it aligns with your long-term objective. If it doesn’t, proudly put it back.  

Finally, whether you follow a trend or forge your own path to financial health, remember that it isn’t just about numbers. It’s about aligning your money with your goals and finding a savings and spending strategy that works for you. 

Reach out to your banker for help selecting the right accounts and advice on how to achieve your financial goals today.