Thrifty Millennials Are Finding Unusual Ways to Save Money

March 7th 2016

Lucy Tiven

Millennials face many economic hurdles their parents did not encounter as young adults, but they've also discovered new ways to be thrifty. Though Millennials are saddled with astronomical student debt and scant job prospects, a 2015 survey by the Consumer Federation of America found that they made more progress saving money than almost any other age group. Here's how some Millennials are pinching pennies.

Millennials Are Saving Big.

In 2014, 56 percent of Millennials saved at least five percent of their paychecks, according to Bloomberg.

Reporter Suzanne Woolley wrote:

"The percentage of 18- to 34-year-olds who saved at least 5 percent of their income increased to 56 percent from 50 percent in 2014, a new report shows. Only the 45-to-54 crowd had a bigger jump on that measure, rising to 53 percent from 45 percent in 2014—also impressive, but they have more money to play with."

Millennials also save money outside of the bank system.

Necessity is the mother invention. So, some Millennials have found creative ways to stash — and save — cash outside of their bank accounts.

"My partner saved up for his band's North American tour using a bucket of change that he took to Coinstar," 25-year-old Zoe Bursztajn-Illingworth, who lives in Portland, told ATTN over email. "In the end, it wasn't that much, but it definitely contributed something to their gas money."

"I keep $100 in everything," 22-year-old writer Rachel Bell told ATTN: over email. She explained:

"When I get paid via Venmo, I keep $100 in there at all times. I keep $100 in PayPal. I use an app called Digit that is essentially an automatic savings account. I keep $100 in there at least. I keep $100 hidden in my house. Then I live my life that way, and when I get stressed out because a big expense is coming up, I throw some of the hidden $100s together and I have new brake pads, or whatever."

Bell also said she's changed her drinking and grocery shopping habits, and that the benefits weren't strictly financial. "I recently have quit drinking hard liquor and have limited myself to two beers a night max," she said. "My body feels better and it's much cheaper. I also have been walking to the grocery store more, because I can only buy what I can carry and I get exercise."

Jack Mankiewicz, a 24-year-old freelance videographer and video editor based in Brooklyn, also took groceries and booze into account. "My best methods for saving money are probably drinking at home and eating a lot of black beans," he explained in an email. He added, "I always figured that if I really needed to, I could just buy a sack of potatoes and live off that for a while. It has not come to that yet."

They're Embracing Tech.

Only eight percent of Millennials trust financial institutions, according to a Facebook study reported by Forbes in 2016. Their troubled relationship with banks may contribute to the emergent field of personal finance tech start-ups, with services ranging from investment, banking, and financial planning to crowdfunding services. Goldman Sachs observes that as digital natives, technology is more thoroughly incorporated into various parts of their lives than those of their parents.

57 percent of Millennials compare prices before they make an in-store purchase, according to a 2012 Aima Inc. survey reported by Goldman Sachs. Many of these young people make use of price comparison websites and apps that monitor discounts and sales, according to U.S. News.

They Share.

Tech services contribute what has been dubbed the sharing economy. Services like Airbnb, RelayRides, and Fon make it possible to rent apartments, cars, and even Wifi. There are also apps like Depop and PoshMark where users can buy and sell used clothing. On Depop, you can also negotiate prices and offer to trade your own goods for those of other sellers.

The Economist noted:

"Such “collaborative consumption” is a good thing for several reasons. Owners make money from underused assets. Airbnb says hosts in San Francisco who rent out their homes do so for an average of 58 nights a year, making $9,300. Car owners who rent their vehicles to others using RelayRides make an average of $250 a month; some make more than $1,000. Renters, meanwhile, pay less than they would if they bought the item themselves, or turned to a traditional provider such as a hotel or car-hire firm."

An Eventbrite survey also found that 78 percent of Millennials were more interested in splurging on events and experiences than items — when you pay for an event or experience, you get an intangible social element in lieu of a luxury good.