Millennials: Save up to $5,000 a year with these seven tips

Millennials: Save up to $5,000 a year with these seven tips

I recently consulted on a financial-planning case involving a 28-year-old pharmaceutical sales rep. She is doing well, earning six figures. Recently married, she is considering the purchase of a cash-value life insurance policy to help provide her family with financial protection ($1 million) in the event of her death. The annual premium is $5,000.

I was surprised to find out she can’t afford the premium. She makes a good living, is healthy, lives in an affordable area, has no student loans and drives a Honda Accord. She appears to be living well within her means. Something did not compute.

Here’s what we were missing. As a millennial, she values being socially connected, informed and meeting up with her large social network. Her phone gets a workout with e-invitations, tweets, posts and texts. On average, she goes out three nights a week, consumes a great deal of media content and is an avid reader.

However, an analysis of her monthly budget revealed a continuous outflow of unnecessary fees, up-charges and nickel-dime expenditures. We identified seven financial fixes to free up at least $5,000. The fixes will not impact her lifestyle (other than simplifying it).

1. Cut the cord

Yes, she has cable TV. On average, cable runs $105 a month (source: Fortune magazine). It’s only getting worse because the cable TV inflation rate is up to EIGHT times the consumer inflation rate. There are dozens of affordable internet-based options possibly saving you $50 a month (that’s $600 annually — the miracle of math!)

2. Ditch the tablecloth

Go ahead and eat out. You can save a boatload of cash by following one simple rule: Never eat at a tablecloth restaurant (unless someone else is paying). Over a three-month period, I conducted a survey of the Cincinnati area. My taste buds enjoyed it. Dinner at tablecloth restaurants, not counting adult beverages, averaged $50 a meal (appetizer, entrée and dessert). For “naked table” joints, it was $25 on average. Skip the tablecloth once a week for a year and you may save $1,300. It’s real!

3. Buy a growler

Craft breweries are printing money — one pint at a time. I love visiting local breweries and based on the number of millennials I see, they do too. Instead of spending, as an example, $7 ($6 plus $1 tip) per pint of beer, once a week buy a four-pint growler for $16 ($14 plus $2 tip). And like M&M’s, growlers make friends! One growler per week saves you $624 a year. Drink (financially) responsibly.

4. Stay put

Nightclub cover charges are wallet killers. Consider a modest $5 cover charge. If you pay one cover charge instead of three, you save $10. Do this just once a week and save yourself potentially $520 over the course of a year. You do not have to be a party chaser to have a good time. Meet up with your crew at a pre-designated locale and stay there.

5. Become a card-carrying member

Pick up a library card. Your local library can score nearly every book, eBook, movie or ‘zine. You simply need to organize your priorities and be willing to wait a few days — don’t worry, the words will still be there when your book arrives. If you borrow only one book a week (@ $20 per book on Amazon), it’s $1,040 annually ($260 @$5 each for eBooks).

6. Ironic/vintage T-shirt limit

Nobody loves an ironic T-shirt more than a millennial, but today’s satirical T-shirt is tomorrow’s oil rag. Ask any Gen Xer who coveted a Spuds MacKenzie or “Where’s The Beef?” shirt. Same goes for that “vintage” T-shirt depicting your school’s olde tyme logo. You have my permission to own one, but honestly, it’s one too many if you plan on dating. Take a pass on 10 of these $35 shirts (they are so overpriced) and save $350.

7. Live to ride — ride to save

Skip one Uber/Lyft a week. Just one. Most metropolitan areas have bike-share programs with well-maintained bikes ready for you 24/7/365. And it’s good for you! I live in Cincinnati and we have a thriving bike-share program. I’m confident your area does too (or will soon). An annual bike-share license runs $100, or less. At an average fare of $15, skipping Uber/Lyft once a week saves you a net of $680 annually.

So there you have it. Over $5,000 in “found” money and your life is simplified. And I didn’t admonish you to clip coupons, become an Uber driver, live in your parents’ basement, join loyalty programs, enter drug trials or “stop going to Starbucks” — those tips are played out.

By David Szeremet, Ohio National Second Vice President, Advanced Planning

D-456396 6-19

Insurance products issued by The Ohio National Life Insurance Company and Ohio National Life Assurance Corporation. Guarantees are based upon the claims-paying ability of the issuer. Product, product features and rider availability vary by state. Issuers not licensed to conduct business in NY.