You're probably cutting the wrong things from your budget

Opting against that latte isn't going to make a huge impact on your pocketbook

Woman driving
(Image credit: (Thinkstock))

Cutting out a latte here or a dinner there makes many of us feel like we're making smart money decisions, but it's the bigger, harder-to-make choices that will result in serious savings. Lifestyle choices like downsizing a home, getting rid of a car, or opting for a less expensive college will have a far more dramatic impact on personal finances.

"It can be difficult to make adjustments to your expenses in order to save more, but the extra cash can really add up over time to make a big impact," Ameriprise's vice president for wealth strategies Suzanna de Baca said in a statement.

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

The survey included responses from Americans ages 25 to 67 who had at least $25,000 in investible assets and access to an employer-sponsored retirement plan. It looked at 18 discretionary expenses, everything from personal care to electronics.

Among the respondents, millennials were more likely than baby boomers or Gen Xers to consciously cut back on all 18 expenses, but they were also more likely to take on debt while trying to balance other financial goals. More than three-quarters of millennials reported that their car payments or credit card bills have made them feel stretched financially.

Despite their cost cutting, just 59 percent of millennials (versus 75 percent of boomers) have a monthly savings plan, and only 57 percent of millennials with access to employer-sponsored retirement plans are contributing enough to take full advantage of their employers' match.

More from The Fiscal Times...