87% of Gen Z Calls These Purchases Necessary — 4 Ways To Spend Less on Them
What used to be a luxury is now a non-negotiable for many Gen Zers. A study conducted by the Harris Poll on behalf of personal finance firm Intuit Credit Karma revealed 87% of Gen Z respondents considered certain non-essential items and services to be “necessities.”
These purchases include things like streaming services, skincare and beauty products, grocery delivery and eating at restaurants. The survey also showed most of these purchases have been heavily influenced by social media.
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Though this spending might be considered essential, the truth is that it’s not. Unfortunately, it could even start to chip away at your budget. Here’s how financial experts recommended cutting back on spending without having to give up all the little luxuries that make you feel good.
Plan Purchases in Advance
Impulse spending can be a budget killer. Rodney Mason, the CMO at Minty, an AI-powered cashback and rewards app, said planning out your spending and looking for deals can help you save a lot of cash.
“You can use online searches or AI to help you find deals, compare prices or learn more about the products you want to buy," he explained. "Two-thirds of shoppers cite planning purchases in advance as key to their ability to save, so a little foresight goes a long way.”
Stack Savings
Mason recommended using every tool at your disposal to stack deals on deals and get the items you want for, essentially, free.
“Combine offers, cashback and loyalty rewards to maximize value on every purchase. You can also use discounted gift cards or points to pay the final balance or use a rewards credit card to earn points for a future purchase.”
Turn Purchases Into Motivators
Dmitrii Malashkin, founder and CEO of Born To Move, said there’s no need to cut out these little treat purchases altogether. Instead, he said to treat them as a reward for reaching a specific savings goal. That way, you’re being financially savvy while still getting to have the things you want.
“The trick is to keep the cost of the reward under 1% of the savings goal. One of my clients used to buy $6 lattes every day and it was around $180 a month. He had it swapped for a $30 special café or collectible item when he really needed it. Not only did it slash his monthly fun spending by $150, but it also allowed him to enjoy those little luxuries guilt-free since he was more mindful about them.”
Make a 'Squirrel Fund'
One way you can always have money on hand for extra spending is to literally budget it into your monthly earnings. John Ness, a CPA and founder of Know Money, Yes Money, called this a “squirrel fund,” which can be anywhere from 0.5% to 5% of your budget depending on what you can afford. Ness has a rule, though, and said it’s a way to buy the little things you like without going into debt.
“[You take] a small percentage of all pay that comes in (I use 0.5%, but for younger people, can be as high as 5%) that I can spend however I want. “If I don't have it, I can't spend it. Simple as that.”
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.