As a millennial personal finance writer, I sometimes find myself aghast at the ways my fellow millennials are spending money. One only has to look at this Refinery 29 ‘Money Diary’ from a 26-year-old to see what I’m talking about. She’s unemployed, yet she pays for cable TV, Netflix, Spotify, a gym membership, and an expensive smartphone plan. Her retirement savings? $0.

At least she can take comfort knowing that her spending isn’t all that different from most people her age. Only about a third (34%) of millennials are saving anything at all for retirement, according to the National Institute for Retirement Security.

A separate Fidelity survey found that millennials who do save for retirement are socking away an average of 7.5% of their salary. The median income for Americans age 25 to 34 (roughly the heart of the millennial cohort) is $794 a week, or $41,288 a year, according to the Bureau of Labor Statistics. So that 7.5% works out to an average of $3,096 in annual retirement contributions among savers.

Average it all out — one-third of millennials saving about $3,096 a year, two thirds of them saving zero — and our very back-of-the-envelope math shows the average millennial saving a little more than $1,000 a year for retirement.

All this got me thinking about the many areas in which millennial spending outpaces retirement savings. I dug into the data to find spending categories where some relatively simple cutbacks could save the average millennial quite a bit of money — extra dollars that could potentially be put toward retirement accounts or other financial goals.

Coffee

The average 25- to 34-year-old reported spending $2,008 per year at coffee shops, and according to a survey by the money app Acorns, 41% of millenials admitted to spending more on coffee in the past year than they had invested in their retirement accounts.

I love my morning brew as much as the next person, but those stats are alarming. Those who want to save money but can’t bear to cut back on their caffeine intake should look into brewing their own coffee at home. You can then enjoy great tasting coffee for a fraction of what you will pay at a coffee shop.

Health and Wellness

Millennials spend about $1,800 per year on health and wellness, with a large chunk of that going toward expensive monthly gym memberships.

To be clear, I’m a major proponent of getting enough physical activity every day and living a healthy lifestyle. I just think you can accomplish a lot on the cheap with things like body weight exercises, and there are many resources that can help you get a top-notch workout in for no money at all.

Restaurants

All that Instagramming of fancy meals doesn’t come cheap. A recent Bankrate survey showed that millennials are dropping an average of $2,800 per year on restaurants. Eating out a lot isn’t unique to millennials: Americans now spend more at restaurants than at grocery stores. But millennials do order out more often than other generations.

In my opinion, this is the easiest area where we millennials can see some serious savings. For one thing, it’s simpler than ever to create tasty, low-cost, nutritious meals in your home. If you focus on learning some basic kitchen skills and cooking for yourself, you can save so much money — and you’ll probably be healthier to boot.

A key area to look at is preparing your meals in advance, or what is often called batch meal prep. This is when you create a bunch of delicious meals all at once on a lazy weekend day, and then eat them throughout the week or freeze them for a quick reheat on other busy occasions. If the average millennial gets into the habit of doing a meal prep Sunday and then eating those at lunch instead of eating out, they should save at least a thousand dollars per year.

Cell Phone Plans

Millenials were the first smartphone generation, and it shows in the way we spend on our cell phone plans. That Bankrate survey found the plans we buy to keep up with our mobile phone addictions are costing us $2,000 per year.

That number might seem ridiculously high to regular readers, as I know it did to me. But the numbers don’t lie. It appears not everyone is optimizing their cell phone plan. Luckily, there are many cheap cell phone plan options that will instantly provide relief for those stuck paying high monthly bills. You might not be able to stream YouTube all day long anymore, but that’s a small price to pay for having extra cash to save for retirement.

There’s also the high cost of buying fancy smartphones in general, something that 76% of millennials admit they’re guilty of doing. The newest phones can be over $1,000 a pop, which puts a serious dent in any budget. Such a purchase can cost a lot more in the long term than one might think, and it’s very much worth looking at cheaper alternatives.

Gas

Millennials are coughing up more than $3,000 per year on gasoline for their cars, or about $250 a month. While many of us rely on cars to get to and from work, that’s still an awful lot of money. There are quite a few ways to spend less on fuel, whether it’s researching the cheapest gas stations in your area, switching to a more fuel efficient vehicle, using public transportation whenever possible, cutting back on weekend driving, or even moving closer to your job.

Summing Up

Retirement can seem a long way off in your 20s — but the earlier you can start saving for it, the less you’ll actually have to sock away, thanks to the magic of compound growth. Every dollar you invest now instead of spending will work on your behalf for years to come.

And it’s not just about retirement: Nearly half of Americans, of any age, cannot cover a $400 unplanned expense. Anywhere you’re able to cut back on spending can help put you on firmer financial footing — and for millennials, one or more of the above categories might be a good place to start.

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