I fall into the upper age bracket of the millennial category so I always find it fascinating when I see money reports about this age demographic. I wish I book marked all the different reports but I remember one headline saying that millennials aren’t saving as much as boomers did, while another said that they aren’t spending as much money.
These kind of reports always contradict each other so I don’t think too much about them, but they’re still important since it can give you some sense of how a certain demographic feels. One thing that I believe though is that smart money habits should be easier for millennials. The technology, tools, and resources available right now have never been better, so there’s no excuse for us to not take control of our finances.
Smart money habits for the new year
Start saving more – Prioritizing our savings is one of the easiest ways to reach our financial goals. What this means is that after all our fixed bills are paid, we set aside a set amount for savings. To take this one step further, we should automate our savings. Set up some auto-withdrawals to time with when we get paid, this way we won’t get tempted to spend the money since we’ve already put it aside for savings.
Track our spending – Many people have a hard time saving because they always seem to be out of money. To get this under control, I recommend tracking our spending for a month. Literally write down everything we spend on money on. Now that we know where all our money is going, we can make adjustments to our savings.
Create a budget – Now that we’ve tracked our spending, it should be pretty easy to set up a realistic budget. We can even apply the pay yourself first rule by making savings part of our budget. Keep in mind that budgets change all the time, so if we need to make adjustments, don’t feel too bad about it. Also there are many things that we forget to budget for since they’re not reoccurring expenses, so make sure to keep those in mind too.
Reduce spending – This should be obvious, but if we cut our spending, we end up saving more money. The good thing is if you’ve already started to track your spending, then it should be pretty easy to figure out where you need to cut back on your spending. It’s not just the big expenses we need to cut back on, think about those smaller things like magazines, do we really need them?
Read a book – Figuring out our finances isn’t easy, that’s why we need to read a book to put us on the right path. If we read just one book on personal finance, we would easily have more knowledge than the majority of the population. Check out my list of the top personal finance books for Canadians to get started now.
Start investing – Saving is great, but considering high interest savings accounts aren’t paying more than 1.5% interest, we need to start investing. If you read one of the books I mentioned above, you’ll realize that investing really isn’t that complicated. If you prefer you can go DIY like I did, or a new option that millennials are attracted to is working with robo-advisors.
Use apps – FinTech has blown up over the years and now there are so many different ways you can manage your money simply by using your phone or computer. Looking to save, invest, or borrow? There’s an app for everything these days. Keep in mind that every company is different so due your due diligence when deciding who you want to work with