8 Unconventional Ways Millennials Are Saving for Down Payments
How the Younger Generation Puts Away Money for a Home
It’s no secret that baby boomers (and to a lesser degree, their Gen X children) find much of the attitudes and behavior of millennials to be baffling. But for all that boomers can find to criticize about the younger generation, criticizing their saving habits isn’t on the menu.
In many ways, millennials are showing the older folks just how savings should be done by reinventing the idea of “saving” for improved relevance in the contemporary world. With that in mind, here are eight unconventional ways that millennials are socking away money for a down payment on their first home.
1 – Netflix and Chill (Staying In to Save Money)
Rather than spending exorbitant amounts of money on date nights out — restaurant, plus drinks, plus entertainment — millennials are finding ways to stay in, cook their own meals, and turn to streaming entertainment for a more affordable way of chilling out.
2 – Automatic Saving
Because they grew up with technology, Millennials are far more comfortable with automated services than their older counterparts. This comfort with automation has led many millennials to practice “hands-off” money management, setting up their accounts to automatically sock away money in savings without them having to think about it.
3 – Cohabitating
Millennials are also far more likely to cohabitate than their older counterparts were during their twenties and even into their thirties. Millennials save money by splitting the cost of housing and utilities, sharing these costs with their romantic partners and other roommates.
4 – Leveraging Their Education to Earn More at an Early Age
This may not seem like a saving strategy in the traditional sense, but millennials have a greater level of education than any generation to come before them. This level of education, while costly in and of itself, has put them in a position to earn more at a young age than any generation before.
5 – Ditching the Plastic
Millennials are also eschewing credit cards and other high-interest rates to a greater degree than their older counterparts. No credit card debt means greater savings potential, and a savings in terms of all the fees associated with managing debt.
6 – Using Retirement Savings
Millennials are also doing something that many people in the older generations would find unthinkable. Either they are not saving for retirement at all, choosing to save for a down payment instead, or leveraging their retirement savings as a home down payment.
7 – Freelancing a Second or Third Job
Because of their higher educational levels and ease with technology, many millennials are finding ways to take on freelance work, or even second and third jobs that allow them to complete work for additional pay during their flexible “downtime.” If you think you worked hard as a young one, you should check out the side hustle these guys have going on!
8 – The Other Kind of Staying Home
Lastly, many millennials are choosing to stay home — as in home at their parent’s houses — well into their twenties. This can be a great way to save money while giving them the opportunity to help their parents and even their boomer grandparents out with day-to-day chores and errands, in trade.
Millennials Are Saving to Buy Homes
Regardless of what you may have heard about millennials choosing not to buy homes due to the challenges of saving money while carrying student loan debt, many millennials are indeed coming up with creative ways to sock away funds for a down payment.
They may be buying their first homes later in life when compared with their Gen-X parents or boomer grandparents, but that’s understandable. After all, they have much more schooling to get through before they enter the job market — and eventually, the housing market.