There’s never been a better time to become more frugal and save some money. No matter your age or stage, no matter if you have a full ride scholarship to a prestigious university or see community college making sense, many signs point to the power of spending less for a while.
The U.S. economy is already in a “sharp, short recession,” and the unemployment rate could hit 12 percent by June. Michigan’s jobless rate could reach 24 percent by then, its highest level on record, according to University of Michigan economists.
The coronavirus outbreak will mean far fewer summer jobs this year and far more unpaid bills. Many families will have huge hospital bills to pay, or loved ones who died or are unable to work for weeks. So while economists and politicians debate how long the economy will be hurting, individuals need to start saving.
Here’s some advice for young people that works well for all people:
Create an emergency fund. The world is unpredictable and honestly, sometimes frightening. So even if you think you will never need it, build a fund for if things do go off track. That promised summer job or commission could evaporate in the economic downturn. Start saving money to cover your basic expenses – mobile phone, Netflix and some food – for at least three months. Bankrate suggests six months and offers many tips on getting there.
Set a clear goal. If you see it, say it, share it and write it down, you may believe it. Know why you’re saving money now – half could be for your emergency savings and half for something brighter and more beautiful. Decide how the extra savings will be valuable to you, whether it’s a new tablet, a huge canvas to paint or a trip to New Orleans or Nigeria, once the world is a safer place.
Do it yourself. With so many Americans sheltering at home, now seems like the perfect time to learn to manicure your nails, wash and press your shirts or make smoothies or coffee as good as the $4.50 cuppajoe you used to buy. Or style your hair yourself, as Laila Ali, daughter of the late legendary boxer Muhammed Ali, does. Laila Ali is a fitness and wellness entrepreneur, yet every week she skips the salon and does her hair and her daughter’s at home. “I don’t have time to drive an hour to a salon and then sit there for a couple more hours getting my hair done. It’s really not that serious or important to me,” she told Kiplinger.com in a
piece on frugal habits of the rich. The piece also has money-saving advice from actress Halle Berry, Hilary Swank and others.
Cultivate frugal habits. Start developing your thrifty mindset now, while there’s fewer temptations and no where to go. Instead of a subscription to Hulu, see if your public library has free access to movies and shows. Skip the takeout food in favor of some pasta cooked at home. Take a three hour break before you buy anything that costs more than say $75, to see if it still seems worthwhile – and to shop around for a bargain price.
Play money games. Yes, you may learn a lot from Monopoly, The Game of Life or Minecraft. Check out online games recommended by The Balance, which says and role playing games such as Dungeons & Dragons may have valuable lessons in managing money and resources. Or create your own at home and start teaching your younger siblings some money basics.
Our next money management piece will share podcasts, blogs and other ways to learn and develop your money management skills and frugal self.
© Vickie Elmer, 2020, for Mint Artists Guild