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 Vice President, Advanced Planning

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.