I recently read an article written by a fellow millennial who stated that any 20-something who has savings is doing something wrong. The article infuriated me, and I certainly wasn’t the only one who felt this way – numerous articles have already been written in response to the original Elite Daily post. After reading the article, I initially was baffled as to how any millennial could view savings in such a negative way.
I then realized that many of the author’s arguments are based off of completely inaccurate assumptions about what it means to live a frugal lifestyle. Unfortunately, many other millennials also believe these misconceptions about frugality. Here are seven myths about frugality that all millennials need to stop believing.
Frugal people don’t have any fun and don’t really “live”.
It’s a common misconception that you have to spend money in order to have fun and to really “live” your life. Some people think that frugal people spend every weekend sitting at home binge watching Netflix and staring at their bank accounts. But saving money and having fun are not mutually exclusive. There are TONS of fun things that can be done for free or a low cost. Need some ideas? Check out 15 Frugal Fall Activities, 20 Free Things to Do This Weekend, Cheap and Fun Date Night Ideas, and 10 Frugal Ways to Get Fit.
Frugal millennials never splurge.
Frugal people don’t necessarily act frugal ALL the time – they may splurge occasionally, but only on things that are actually important to them. When you’re able to skimp on things that aren’t priorities to you, that frees up more money for things that do matter to you. Want to go on a relaxing beach vacation or buy a membership at a yoga studio? If you’re frugal and skilled at saving money, that money will be there when you choose to spend it on something you deem worthwhile. If you always blow through your money as soon as you earn it, you’ll end up broke and you won’t be able to afford those fun things in the future.
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YOLO and your youth is the time to enjoy life.
Some 20-somethings seem to have this crazy idea that everything starts to suck when you hit the big 3-0. Well, guess what? 30 year olds have fun. 50 year olds have fun. 70 year olds have fun. Married couples have fun. Parents have fun. Grandparents have fun. It’s not about your age, or your marital status, or how much money you have. It’s about your attitude.
You could die tomorrow, and you’d regret not truly “living” your life.
You could die, but what if you don’t? If you’re healthy, the odds that you’re going to die in your 20s are pretty slim. It’s much more likely that you will live to be at least 67, and if you’re not putting any money toward retirement, you’re going to be working long after you hit 67. It makes more sense to plan for something that is likely to happen (that you will live and that you will need savings in order to retire) than something that is not likely (that you will die in your 20s).
Even if you do die in your 20s, will you be on your deathbed wishing you had spent more money? Will this thought be running through your mind: “If only I had bought that cute Kate Spade purse I really wanted and spent more time getting drunk in bars!” I doubt it. I can’t imagine that anyone would wish they had spent more money. It’s more likely that they’ll wish they had said “I love you” more often; that they had been kinder, less impatient, and less quick to anger with their significant others; and perhaps that they had repaired certain broken relationships.
Frugal folks are cheap.
Frugality is often associated with negative terms like “cheap”, “miserly”, and “stingy”. Of course, there are some frugal people who fit these unpleasant stereotypes, but there also many frugal folks who are anything but cheap. Some of the most generous people are frugal. Those who have a knack for saving actually have money in the bank when a special occasion rolls around or when a loved one falls on tough times. Those who are big spenders may blow through money so quickly that they end up broke and unable to be generous, even if they would like to give to others.
Saving $200/month doesn’t matter. You need to make more, not save more.
There actually is a little bit of truth to that last part. If you want to pay off 100 grand of student loan debt in one year and you make minimum wage, no amount of scrimping will make that goal possible. Earning more money is important.
However, saving isn’t irrelevant – it helps a lot more than you may think. Let’s assume you invest $200 per month for the next 45 years. It may not seem like much, but thanks to compound interest, it will become over a million dollars (based on an average rate of return).
If you don’t invest your money, and you simply save it – it still matters. Let’s say you have a $2,000 emergency fund. If you get laid off, that money will help you to pay your bills until you find a new job. Even if you only have a few hundred dollars in savings, that money may be what keeps your heat from being turned off on freezing cold winter days.
When you’re older, you’ll regret all of the things you didn’t do.
When you’re older, you’ll regret all that money you didn’t save. You’ll regret not saving for retirement and being forced to work until you die. You’ll regret that you’re at the age when you thought you would’ve finally “made it”… and you’re still broke.