Gen Z’s favourite financial trends
In the last year, a new trend was introduced over social media related to finance, which is known as loud budgeting. This trend was launched on a popular app called TikTok. It was first started as a joke, but later, it reached more than 1.5 million views. Now, let us discuss some trends related to money.
Loud budgeting is a very clever method that helps you to save money. In this method, you have to cut off your expenses, such as instead of going out with your friends on the weekend, you have to save that money.
This method focuses on the present and urges you to save for your present instead of saving for your future. This method does not put much stress on saving for the future. This method is a soft approach to looking at your mental and emotional needs along with managing your finances.
In this method, you can save your money in a fun way in the form of a game, which makes it easy to save money. You have to number envelopes from one to a hundred and put money in each envelope. This will help you to save money.
Social media, which we use very frequently, has a negative impact on us. It makes us feel as if we are not rich enough or we do not have enough money to fulfil our expenses.
New generation, old money trends rebranded?
The old financial advice suggests that you should spend your money wisely, work hard and save diligently. You can get to know about new savings trends from social media. The idea of saving cash in envelopes is a very old trend. In order to save cash, dysmorphia is a good option.
The financial trends that we discussed like soft saving and loud budgeting, tell us about what is happening in society and the economy. Most people prefer quality of life instead of saving for the future. This means that soft saving is not very new to Gen Z people.
Advantages of social media financial trends
These trends are being discussed openly on social media.Thus, the concept of money is changing now. Also, social media trends cause people to pay more attention to these topics.
Tried and true savings strategies?
Firstly, you have to look at your expenses and understand them. After that, you have to set goals that you can fulfill. You should not set such goals which you cannot fulfil. You have to make a list of all your monthly bills and, after that, subtract your monthly expenses from your monthly income.
The remaining money is your monthly savings. Also, it would help if you cut off your extra expenses. You should set small, realistic goals first, and once you become able to fulfil those small goals, set larger goals and try to fulfil them as well.
The unexpected need for money can come at times. You might need money urgently to tackle emergencies. Thus, you should have saved money to meet your emergency needs. The best way to save money for such needs is by building an emergency fund.
You should have money in your bank account, which can be directly used when required instead of taking money from credit cards, which charge you very high interest. The best high-yield savings account earns an annual percentage yield up to 5.35%.
Most experts suggest that the savings in your emergency funds account must be equal to the savings of six months. This is a generalised statement. The amount in the emergency funds varies from person to person and depends on the individual’s circumstances.
The main thing that you must avoid is that you should not buy money from lenders who charge high interest. Also, you should not borrow money from credit cards because they also have a very high-interest rate.
You should automate the process of transferring money from your direct account to your savings account. This helps you to save more money each month because if you transfer money manually to your savings account, then you might skip it sometimes. But if the process is automated, then your money will definitely be transferred to your savings account every month.
Earning your bank’s best savings rate
Don’t take rates at face value
There are various factors that impact the rates. The first factor to consider is that the savings rate is variable, and the rate you’re offered may change anytime. You should not choose an account just because it offers you a high APY.
Your savings account may be of different types at the same bank, or they may ask you to meet certain criteria and requirements in order to earn that particular amount. If you think that you’re earning less than the highest rate that the bank is offering, then you can ask them to increase the rate.
There is no compulsion on the bank to increase your rate, but there is no harm in asking them about increasing the rate. There might be another account in your bank that offers a higher rate, and you can shift to that account, too.
This helps you know about the amount that you earn on your balance every year. You can earn more on your savings if the bank compounds the interest more frequently.
Keeping a high-yield savings account
If the savings rates fall or decrease at a particular time during the year, then you should not withdraw your savings. It would help if you kept your savings in your high-yield savings account. This is because savings accounts help you to meet all kinds of emergency requirements. The other reason to keep your savings account is that you have access to your money anytime, which is penalty-free.
If you want to earn the best possible rates on your savings, then you should not stick to big national banks. This is because the larger banks don’t have to compete for the customers, so they provide below-average rates to the customers on savings accounts. So it’s better to choose other banks, such as online banks.
Ways to think differently about savings
There are several reasons why people want to save money, such as for a future downpayment on a house, a vacation, or paying off a student loan. Adopting better spending and saving habits will help to save money. You must set a goal for a specific date and follow it. The spending habits generally differ depending on the person’s comfort level and economic status.
Firstly, you should set such an attainable goal. It would help if you chose the least portion of your money to save in the starting. But as you start saving, you should gradually increase your savings.
In order to improve your money IQ, you must read personal finance books. These podcasts also help you to increase your money IQ. Also, there is an additional benefit of podcasts that you can listen to while doing other activities such as driving, cooking, walking, etc. Thus, you can choose a podcast depending on your goal.
There are so many podcasts about finance which help you to improve your IQ. They help you to tackle different obstacles. Once you have set your goal, you should start finding a podcast that is helpful for you in many ways.
You should engage in social media feeds and discussions with the finance experts either online or in person. This is a very good way to increase your knowledge about finance. The influencers that teach about finance share their own success stories with the people. This helps people to know about their journey in more detail.
You should take advice from a professional advisor rather than from online influencers. The online influencers only assists you in getting connected to the people who themselves are undergoing such conditions.
If you find yourself unable to save money, then you should motivate yourself to save money with money-saving challenges. These challenges make money-saving more interesting. Some of the challenges to consider are
In this challenge, you have to deposit money in your savings account each week, and every next week, you have to deposit more money than you deposited last week. This plan is for the whole year and will help you to save money.
In this challenge, you have to resist spending and see how long you can stay without spending money on non-essential items.
If you have cash on hand, then you become more conscious and spend less money as compared to when you make online transactions. Thus, this also helps you save money.
In this challenge, you have to make your meals at home instead of eating out. For this, you should make a list of meals that you’ll make every day and stop eating outside food.
Try a different budgeting method
You must try a different budgeting method if your previous method does not work well. You should not take any loan from credit cards because they charge high interest rates; instead, you should look for a low-interest option.
Conclusion
In this article, we looked at Gen Z’s favourite financial trends, such as loud budgeting, soft saving, etc. All these trends help to save money. There are some people who focus more on the quality of life rather than focusing on saving for the future.
The pros of social media financial trends are also discussed. After this, we looked at how to earn the bank’s best savings rates such as by choosing a right bank and right savings account in that bank we can earn a good amount. And lastly,different ways to save money are listed, such as setting a goal, joining social media feeds, trying a different budgeting method etc.
