Millennials' assets exceed $10 trillion, data shows -- 3 tips on how to save more money

Though each generation experiences economy-related obstacles that impact their personal finances, the challenges U.S. millennials face are especially unique. A Federal Reserve report studied the financial health of this generation, defined as those born between 1981 and 1996, doubled their assets to achieve over $10 trillion in value, they also hold over $4 trillion in debt.

Millennials' financial success is burdened by more consumer-related debt and their total asset value -- like from real estate, mutual fund shares, pension entitlements, and private businesses -- is dwarfed by Gen X and Baby Boomers.

Thepandemic has certainly increased millennial financial pressure, particularly for those who are struggling to pay down debt, provide for their growing families, and save for retirement. Thankfully, there are easy ways to save that can improve your personal finances and put you on a path to achieving your financial goals, including:

1. Opening a high-yield savings account
2. Consolidating debt
3. Refinancing your loans

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How to save money as a millennial

1. Open a high-yield savings account

A high-yield savings account is different than a traditional savings account. As with any savings strategy, there are personal finance pros and cons to consider:

Pros

• These savings accounts offer the opportunity to receive a significantly higher savings rate (or annual percentage yield).
• Your savings of up to $250,000 is FDIC insured.
• The value of your savings won’t decrease during inflation as much as a traditional savings account value would.
• You’re able to withdraw money from a high-yield savings account more readily than other investment accounts like CDs.

Cons

• Your interest rate may be reduced after your account reaches a certain value cap.
• Some high-yield savings accounts are only available online, which may make deposits and withdrawals difficult.
• You may be limited in the number of times you can withdraw money from a high-yield savings account.
• There may be other savings and investing strategies available that are more profitable in the long-term.

Because they’re FDIC insured, typically have low fees, and offer the ability to withdraw money, a high-yield savings account is often considered a low-risk strategy for saving money.

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2. Consolidate debt

If you have multiple high-interest credit card debt, for example, you could consider a debt consolidation loan to help you pay down your total balance faster while saving on interest. Here's a snapshot of some benefits and drawbacks of personal loans:

Pros

• You can secure a lower interest rate, which will ultimately lower your interest expense.
• Managing a single personal loan is easier than juggling payments for multiple loans.
• Your personal loan can include a fixed repayment timeline that will make budgeting much easier.

Cons

• If you have a poor credit history or score, you may not be offered a low-interest rate for your personal loan.
• Depending on the lender, you may have to pay high fees, including penalties for paying off this loan early.

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3. Refinance your loans

With student loan refinancing rates continuing to hit record lows, now is a highly advantageous time to refinance your private student loans. Refinancing can help you pay off student loan debt faster by securing a lower interest rate, removing a cosigner from your loan, and potentially having origination fees on the new loan waived.

Along with private student loans, national mortgage rates are also nearing record lows. Refinancing your mortgage loan now could reduce your interest rate, shorten your loan term, and ultimately save you thousands of dollars over the life of the loan.

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