Why millennials are behind on saving (and what they can do about it)

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Are younger people good savers?

There has been some debate on millennials’ saving habits. Certainly, millennials (those born in the 1980s and 1990s) have had unique hurdles to overcome related to saving and retirement — specifically, mountains of student loan debt.

According to Bankrate.com, Americans now owe $1.2 trillion in student loan debt, and more than 25% of borrowers making payments on their loans are at least a month behind. Millennials were just coming on the employment scene as the economy was shrinking in the 2008/2009 recession, which made it a tough season to find financial stability as a newcomer in the job market.

In addition, 56% of millennials with student loan debt are putting off major life decisions such as getting married, having kids or buying a house. And they don’t like it either — nearly 30% of millennials would sell an organ to get rid to student loan debt!

Are these challenges eating away at millennials’ ability to save? 

Earlier this year, Bankrate also found that more than half of millennials said they were saving 5% or less of their income. A report by Moody’s Analytics cited in the Wall Street Journal showed that Millennials had a negative savings rate in 2014.

2016 saving tips for millennials

But, according to the Fiscal Times, millennial saving is up 6% this year over last year. Though this is a slight improvement, with the job market recovering, let’s hope millennials can pay off that looming mountain of debt and focus on saving even more.

Private sector companies paying off student loans

To help buffer this problem of debt, companies are helping millennials by offering a valuable incentive: student loan repayment programs.

Though not yet very common, according to US News, companies such as ChowNow, Chegg and PricewaterhouseCoopers are offering this benefit in order to attract and keep good talent. About 3% of firms are offering student loan repayment plans right now, but it could very well become a more popular trend in the future.

Read more: 13 smart money moves to make in your 20s

Tips for millennials (or anyone) to save in the New Year

If you’re having trouble saving, you’re not alone! But, ask any financial guru what is the best time to save, and they will say, ‘Now.’  Even starting with just 3% of your income can make a big difference. Here are some tips to help you kick savings into overdrive in the New Year.

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Choose a fee-free bank

Many online banks and credit unions are becoming more popular due to being lower in fees. Check out our favorites here!

Pay yourself first

This is great advice given from many top financial experts. Why? It prevents you from reaching the end of the month and realizing you’ve already spent too much to save.

Use technology to help

There are so many technology solutions that can help you track exactly what you are spending, and even help you save more!

Check out these apps: 

  • Mint: Manage your budget with easy to use personal finance tools and calculators. Track spending and monitor your online banking account.
  • Digit: A new free service that basically promises to use artificial intelligence to pluck extra money from your checking account and stash it away in an FDIC-insured savings account.
  • Level: This app automatically updates you throughout the day on how much spendable cash you have.
  • Unsplurge: Helps you focus on a specific savings goal such as travel, a large purchase or saving for retirement. Upload a picture and watch your progress to make your goals even more real!
  • Acorns: Acorns isn’t just about saving – it helps you invest too! This app uses a clever system called “round-ups” to help you invest your spare change into a diversified portfolio. There is a fee of $12 a year to use the service.

Save for retirement now

You might think retirement is a long way off, but one day you will find it unexpectedly knocking at your door! When it comes to building wealth, there are two things that count: First, living on less than you earn, and second: Investing. If you’re ready to get started, check out Clark’s investment guide here.

Read more: The best banks are not banks at all 

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