A Memoir: What Am I Doing With My Money? She Asks, While Having A Mental Break Down

You’re probably just like every other 20-something in the world. You know that being financially savvy isn’t always a common find among your peers. For the most part, you feel completely normal because your friends are in the same boat. Just like you, they struggle to get out of student loan debt, live paycheque to paycheque and bear the expense of a lifestyle far outside of their income.

For one, you probably don’t know how to feel.

Should you:
A) Feel resentful towards a society that preaches student loans are good for your future?
B) Be spiteful to the government who has allowed wages to sit stagnant?
C) Be sad because you’ll never be able to afford the lifestyle that your parents had at your age?
D) Or should you just move on with the realization that there isn’t much we can do to change our financial situation right now other than to take matters into our own hands?

In our hearts, we already know the answer is all of the above. Welcome, we boast, to the life of a millennial. The generation who is for the most part, deeply in debt, pushed out of the housing market, and far removed from the ability to reach financial security at an early age.

What the hell are we doing with our money?

It’s hard not to inflate your lifestyle in 2019. There are so many new products, fancy gadgets, crazy events and unique travel opportunities that never used to exist. However, that doesn’t mean your retirement fund will wait for you to catch up. The bank isn’t going to put time on hold so that you can go into debt for a Spring Break vacation to Cabo. Actually, I guess we all go to Sayulita now. Thanks, Bachelor in Paradise.

For the most part, we are doing well. A recent survey showed that 7 in 10 of us believe we are savers as opposed to spenders and only 15% of us have no financial goals. However, the majority of millennials don’t plan to start saving for retirement until they’re 36 — and that’s a statistic I never thought I’d see.

What the hell should we be doing with our money?

Here are some suggestions on ways you can accelerate your financial game, without being pushed too far outside of your comfort zone.

1. Form good money habits

If you’re thinking, Oh wow, thanks for the life changing tip, Alyssa. I know. It seems too simple to mention. However, by saving consistently, creating a free-flowing budget and becoming aware of your income and expenses, you can drastically change your habits. Once you change those habits, you’ll be able to start working on the goals that actually show you results.

2. Build your dream lifestyle, but understand you don’t start your dream lifestyle from day 1

Take time to map out every part of your life that makes you happy and comfortable. If your lifestyle requires a larger clothing budget, or a larger grocery budget, that’s okay. The key is finding a way to build your financial priorities to better suit your dream lifestyle. However, this lifestyle won’t be in your hands the moment you write it down. It takes understanding what you need to begin the journey of creating an income that correlates with those needs.

3. Find out what your earning potential is, and create a realistic timeline

In your line of work, in your industry and in your organization, there will be salary indicators that can provide a look into what your earning potential is. How much can you increase your income by and is there room for growth in the organization? Once you find those numbers, try to set a realistic timeline to hit them.

4. Spread the wealth across multiple accounts

Let’s assume that right now you have your checking and savings account. Seems good enough, right? Wrong. Once you start earning a consistent income or salary it’s wise to keep your money saved in multiple accounts. This way, you’ll gain a clearer picture of where you stand with each individual financial goal. The same goes with investments. Keeping your retirement fund in one account is fine, but spreading your investments into a few funds can (just slightly) protect you from market fluctuations and can help you reach long-term financial goals with less risk.

5. Emergency fund – I said it once and I’ll say it again

What happens if a mass layoff occurs? What happens if you injure yourself at recreational basketball and cannot walk? What happens if a family member suddenly falls ill and it’s your responsibility to be their full-time provider? Although grim, these scenarios are a serious part of life. The uncontrollable parts of our day-to-day are what tend to be the largest financial pitfalls. By saving a fund that can cover at least 3 to 6 months of your living expenses, you’ll be in a good spot in case of any emergency. Yes, this includes an unexpected bill.

6. Be prepared for the unknown

Much like the emergency fund, it’s time to cover your ass when things go south. Renting? Own a home? Travel regularly? There’s insurance for that. Take the time to ensure that you’re covered in all aspects of life. Once you do your research, you’ll find the policy that best reflects your needs. Just make sure that you always read the fine print.

7. Take your hobbies seriously

There is nothing wrong with your desire to spend money on spin class, travel to a new country every year, or buy the latest iPhone as soon as it comes out. We all have our wants, we all have expensive hobbies, and we all need to enjoy life. But if you know that you’re going to spend this money regardless of your financial situation, make sure that your financial situation can allow for these expenses. Work these costs into your budget. Personally, budgeting isn’t an Excel spreadsheet anymore. I live by a free-flowing budget that doesn’t restrict too much. I can do this because I’m aware of what my income is and I’m aware of my fixed expenses and savings goals. The rest of my money is for these “hobbies” that end up costing me probably a lot more than I’d care to admit.

8. Please (for the love of god) start saving for retirement!

If you’re not already, now is the time. “I’ll just wait until I’m in a more “secure” position,” is something I used to tell myself I would do. But in reality, I was just finding excuses to buy time so that I could avoid giving up a portion of my paycheque. In the end, the joke was on me. Buying time was actually costing me more money. The later you start, the larger your monthly contributions will need to be to make up for lost time. Open up an RRSP, TFSA or 401k and start to put money away each month. You’ll thank me later.

Paying off your debt will eventually come to an end

It’s extremely hard to graduate from post-secondary with student loans and consumer debt. I’ve been there. When you’re so hyper-focused on paying that debt down, you oftentimes forget that there is eventually going to be an end to this difficult time. When you forget, you stop planning and preparing for what you’ll do with all of that leftover money come the day you finally reach debt freedom. That’s where these steps come in handy. Start to look at what you will be able to do with your money and start to plan what type of life you’ll want to live. Anything is possible when you start caring about your money early enough to make an impact.

Here’s my story: