Adulting: Take Control Of Your Spending

December 19, 2016 | Tim Osiecki

As the cost of living steadily increases across the United States, some millennials are turning to creative solutions, like living in a wooden box, to make essentials such as food, healthcare and rent more affordable.

And they’re doing this for a good cause. According to a recent TD Ameritrade survey, nearly half of millennials (47 percent) are anxious about debt.

“Rent is getting more and more expensive each year,” says Christopher, 26, one of many millennials living in Brooklyn, N.Y., once a cheap alternative to Manhattan, and now one of the most expensive places to live in the country.

Instead of moving into a wooden box like his San Franciscan peer, Christopher turned to technology to improve and control his spending habits, hoping to minimize the impact of soaring costs of living on his desired lifestyle.

“Awareness is the first step to effectively control your spending,” he claims. “Once you know how much you are spending, you become more careful with how you use your hard-earned money.”

Increasingly popular mobile apps that track spending, allowing users to create custom alerts and help set financial goals, may help with bringing more attention to one’s spending habits. Becoming more aware of where the paycheck really goes may be a wake-up call for some, possibly causing them to entirely rethink their financial future.

“Using the rule of 72 and assuming a 7 percent real return, invested money approximately doubles in value every 10 years. So saving one dollar today would be equivalent to $16 by the time a millennial retires*,” according to Elizabeth Sabin, director of guidance strategy and product development at TD Ameritrade. “Being aware of this, people might think again before buying that expensive cup of coffee in the morning.”

Technology can indeed come in handy, as according to Sabin, it can help automate people’s finances, helping to control spending and boost savings along the way.

“It is very hard to be disciplined when it comes to manually taking out a certain amount of money from a paycheck. A more consistent way to save is like with a 401(k), when you set it up once and you forget about the paycheck deduction,” she said. As a way to proactively save or invest, Sabin explains that using automated deductions from paychecks go straight to a savings or investment account.

Another step to take control of one’s finances, is by using TD Ameritrade’s retirement calculator.

According to Sabin, “a lot of millennials may think that retirement is really far away, but a lot of work needs to happen between now and then. Most of us want to not work one day, and tool like this and others show why it is important to start saving now.”

Controlling your spending and saving money should not feel like a punishment. Despite increasing costs of living, today’s financial technology offers numerous tools to help track and plan spending, making it easier than ever to save for the future and stay on the right path for financial security.

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