In just six months, Millennials and Gen Xers have lost confidence in their ability to meet their financial goals. A recent CIBC study saw a 12 per cent drop in both age groups with only 72 percent of millennials and 66 per cent of Gen Xers believing they’ll reach their financial goals in the next 12 months.
This info isn’t terribly surprising considering the fact 98 per cent of millennials have a credit card and spending in the summer tends to increase for most Canadians but it obviously isn’t good news. If we’re struggling to manage our finances in the short-term, how will we ever make it to retirement?
Looking at the current situation
The start of 2016 sucked. The price of oil dropped significantly, jobs were lost, and the overall outlook of the Canadian economy was meh at best. Despite all of this, the TSX and other stock markets around the world rebounded with some pretty decent gains for the year.
These major events tend to have a psychological effect on people. According to the survey, 82 per cent of Baby Boomers feel that they’ll meet their goals.
I’m guessing here, but perhaps the increase in house prices has left many Baby Boomers thinking that they’ll be just fine whereas millennials and Gen Xers are still struggling to become homeowners in Canada.
Worldwide events can also mess with our minds. Brexit, the terrorist attack in Nice, and the coup attempt in Turkey had some effect on the markets but we can’t let those isolated incidents affect our long-term goals.
Boosting your confidence
Invest without emotions – We’re psychologically trained to get emotional about our investments. No one wants to see their portfolios drop but we also like to brag about any gains we’ve made. We shouldn’t let market swings affect our short and long-term goals.
Reaching your goals – If we’re worried about not meeting our goals, we need to ask ourselves if we’re doing enough to reach them. Let’s say our aim is to save $6,000 this year, well that means we need to save $500 a month. To make sure we’re on track we need to cut our spending and set up automatic transactions that go towards our savings.
Setting realistic goals – Having goals is one thing but are they realistic? Sure we might want to save an extra $500 a month but if our budgets are in good shape, then saving that extra cash might be impossible. It makes more sense for us to set realistic goals that we’ll actually reach.
Get advice – Investing has never been easier. Reading a few books on personal finance will help us to become DIY investors but if we prefer a hands off approach, we can enlist the help of a robo-advisor or investment advisor. As long as we invest early and keep our fees down, we’ll be just fine.
If you’re worried about not reaching your financial goals, then you need to do something about it. That could mean updating your budget, cutting back on your spending, or even picking up a side hustle to bring in some additional income. Your goals will only be met if you take a realistic approach to reach them.