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If millennials can save money, you can, too

Millennials, here's how to stash your cash

You could learn a thing or two from millennials when it comes to saving. The generation most often characterized by a huge debt burden actually leads the pack when it comes to saving money.

In fact, 62 percent of those ages 18 to 29 are saving more than 5 percent of their income, on average, compared with only half of those over the age of 30, according to a recent study.

"Establishing the habit of saving is really important, and we're seeing millennials starting that at an early age," said Greg McBride, chief financial analyst for

Realizing the importance of saving is key for millennials since they are facing rising health-care costs, longer lifespans and the uncertain future of Social Security, McBride said.

For those who have successfully socked some money aside, or strive to, here are some tips to save even more cash and make it grow.

A good way to start saving is by paying yourself first. That means that as soon as you get your paycheck, take out a set amount before you do anything else with the money.

Setting up direct deposit to a separate savings account will help you begin and maintain the habit. Build up to at least three to six months' worth of living expenses as an emergency fund. That way, an unexpected expense won't derail your savings efforts.

Apps like Goodbudget, Wally or Mint can help you track all of your accounts. Take advantage of being part of a particularly tech-savvy generation and use a data-driven approach to saving, said certified financial planner Dave Yeske of Yeske Buie.

Not only does this let millennials "know where their money is going — opening up the possibility of changing spending behavior — but also allows them to be aware in real time when surpluses appear that can be swept into a savings or investment account," he said.

Sharon Pruitt | Getty Images

Then, put some of that savings toward retirement.

"People should be saving close to 18 percent of their income for retirement; most don't come close to that figure," said Artie Green, a certified financial planner at Cognizant Wealth Advisors in Palo Alto, California.

At the very least, max out your contributions on your employer-sponsored 401(k) plan to take advantage of the dollar-for-dollar employer match (if one is offered). If you can't do that, contribute as much as you can. Every little bit will compound over the next 20 to 30 years, making a big difference for your growing pile of cash.

Those without an employer plan should set up an individual retirement account. With a Roth IRA, you can make after-tax contributions up to $5,500 a year and earnings grow tax free. People self-employed can make tax-deductible contributions to a Simplified Employee Pension account.

If you aren't sure how to invest or what your asset allocation should be and don't want to hire a financial planner, you can try a low-cost broker like Charles Schwab, TD Ameritrade or Fidelity. They offer low-fee funds that can help you diversify by investing in target-date funds, mutual funds or exchange-traded funds.

There are also low-cost automated investment services, or "robo-advisors," like Wealthfront, Betterment or Acorns that build a portfolio based on your risk profile, often for a fee of less than 1 percent per year.

Either way, "follow an investment strategy based on expected long-term returns and not on chasing the latest hot stocks," Green said. That will build the groundwork to "maximize the likelihood that they will be able to do everything they've hoped for during their retirement years," he said.

As a generation that already has pretty good saving habits, keep it up so you stay on the upside of your financial future.

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