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The Young Person’s Go-To Finance Guide

A while ago I asked y’all on the gram what you wanted to read about and a TON of you asked about finances and money, as well as the best ways to save. SO, I thought what better time than now to give you what you wanted?

Now I will start off by saying that I am in no way a financial guru AT ALL. I’ve just had some good experiences from being broke AF and grinding to pay off a credit card, to being in a really good place and even investing in my future. I also asked some money-savvy friends their thoughts on money, so they helped me out with some tips too. I’m going to give a breakdown of what I have done and has worked for me as well as things that I think would be awesome to try.

Make your money action plan actionable.

Okay, this is a big one. A lot of people set these MASSIVE goals to pay off all of their debt by the end of the year or saving some number they dreamt up in their head. That doesn’t work. I’ve tried to do this before and it just becomes overwhelming and it doesn’t end up happening. Instead, take small steps each week or month (whatever works for you) to ensure that goal becomes a reality.

What makes this even better is when you decide what your goal is actually for (get into the nitty-gritty with this one). Whether that’s for a house, or a wedding or a trip, or retirement, having a goal will allow you to know what you need to save and keep you on track.

PS. if it’s for retirement, the earlier you start putting money away for this the better. Take advantage of that compounding interest.

I’ve actually been putting money away into my RRSP for a few years now and I’m so so happy I did (your girl wants to travel and retire early you know?)

Find a budget that works for you.

Okay, let’s talk budgets. My friends and I actually have differing opinions on budgets. And that’s okay! Because really, what works for someone else might not work for you.

I personally like having more structure in my bank account. Speaking from experience, it just helps me save better. And what I mean by that is that I give myself a certain amount of money for certain things every single month.

SO picture this. I have my chequing and savings account (like most people right?), but I also have like 10 other online savings accounts that I never touch (just move money around in). Next, I’ll give them names like groceries, rent, car, play, etc and I stick within those accounts. I decide what I need to save each month for rent and bills, investments, etc, and then give myself a certain amount for other things. If my play account, for example, is low, then I know that I should watch my spending and maybe not buy too many clothes.

This keeps me sane. I can’t work from one checking account and see one number. That stresses me out. On the other hand, one of my friends gives the following advice:

Track your spending for a month or two. Budgets I find are constraining. I don’t follow a budget, but knowing how much you’re spending on restaurants or groceries or alcohol in a month and seeing that number will allow you to try and change it.

SO, you could go either way. Whatever works for YOU. You can try out the accounts method as I do, or simply track your spending for a month or two and see where you’re spending too much and where you have more room to play.

A man jumps into a pool of money

Before you start those savings goals, tackle your debt.

Now here’s a big, big one that ties into your actionable goal that we started with at the top. You really shouldn’t be saving for a trip per se if you have ignored high-interest debt like credit cards. You 100% want to be eliminating your debt.

Now that doesn’t mean that you can’t be saving at the same time, but make sure you’re paying towards your debt every. single. month. AND on time too AND pay off the full balance on those credit cards. I get it, we all have debt. I have car payments and I still have student debt, but that’s something you should already have money set aside for every month, which isn’t crippling like a credit card.

Before investing or saving towards a major goal, try to pay down your debt as fast as you can. And when I say as fast as you can, I don’t mean go ham on all of your debt at once. That’s scary and stressful. Just come up with a plan and stick with it. Don’t borrow from the money you save to pay down debt to go out to dinner or on a trip with friends.

Recognize lifestyle creep.

This one really speaks to me.

Lifestyle creep can be one of the biggest saboteurs to your financial goals because it happens in such small increments it can be hard to notice. Last year I took a look at how much I ordered out and it was INSANE. The amount of money I could have saved if I had meal prepped better or just not been lazy was mouth gaping. Think about how many Ubers you’re taking or how many coffees you’re buying throughout the week (mind you if coffee makes you happy and gets you closer to your goal then you do you, but coffee is gross).

I totally get that social media also plays a huge role in this (yes, it definitely affects me). I want the cutest new swimwear or that new skincare brand that everyone is raving about, but something I started doing was sitting back and actually thinking “do I need this?” Usually, my answer right away is ‘YES’ because I love shopping, but in all seriousness, if it doesn’t bring me joy or bring me closer to my goals, it’s not worth it. But let’s be honest, good skincare is always worth it right?

And I want to point out that I’m allllll about living your life and doing what you want, but it has to be within your means to a degree. While I want to save right now and put it towards my end goals, if your girl wants wine, I’m getting wine. Balance right?

Let your support system know your money goals.

I think this one is important. We tend to shy away from talking about money with our friends and family for some reason. While being private about this kind of thing is the way I tend to lean, I’ve realized that the people who love and support us most in all other areas of our lives, can’t support us with these goals if we don’t tell them.

Now, I’m not saying you need to share your plans/goals with the world here, but maybe telling them that you’re working extra hard on paying down debt or you’re saving towards a home isn’t such a bad idea. Let the people around you support and cheer you on! Your people will also remind you if it’s time to stop buying so much wine because hey, you have a goal you’re working towards!

And, if it means just looping in your mom, for the time being, that’s a win! I recently had a whole talk about finance with 2 of my best friends and it was awesome. I felt so grown up!

Pay your savings first.

All this means is that you’re doing just that. You have a direct deposit set up on payday, so you never see the money or have the opportunity to spend it. I do this with my TFSA and RRSP. While I’m aware that I have money set aside each month for these, it’s nice having it come out right away. We all know how tempting it is to keep money in our bank and use it for other things, right?

You should be doing this with bills as well so you don’t get behind on them. If that’s not your style, just make sure that on payday you’re transferring it to the correct bills and getting them paid on time or before!

Get to know investments/RRSP’s.

While I’m not a pro by any means when it comes to investing, I do think it’s important for us young folk to get going.

Something I think you should be taking advantage of is seeing if the company that you work for has RRSP matching. Take this offer!! You are throwing out free money by not taking advantage of this opportunity.

If you’re new to investing and putting money away into an RRSP or TFSA, I think a great place to start is Wealthsimple (not sponsored, just done a ton of research and think they’re awesome). I think it’s a great place for us young individuals to start. Fees are super low compared to standard investment advisors and their customer service is great (I’ve already had a few phone calls with them).

One other thing I wanted to add to this once you do start investing is, when you come into a bit more money, say for example you get a raise or you no longer have to make a payment for something anymore, think about where that money is going.

Our minds naturally go to the place where we think about what we can spend that on, but try to think about using that money towards your investments. Even if it’s an extra $50 bucks a month towards your RRSP, that will take you farther in the long run than those black boots you’ve been eyeing. (I know, I’m shocking myself by saying this as well).

Stop fearing finance.

I think the worst thing you could do when it comes to your financials is to fear and ignore them. They are there and not going anywhere my friends. You have to address it and come up with a plan. Will it be hard work at first and maybe require a little bit of brainpower? YES! But how good will it feel when you’re the one in control and know where your money is going?

I can remember a time back when this gal was in University and used to ignore any bank statements or credit card bills that came in. That was plain stupidity and only hurt me.

Get in front of your finances and take charge. Baby steps and you’re cruising.

So there you have it! A not so small, but a fun (right?) guide on saving/investing and money in general. I know this topic can appear to be daunting and scary, it’s really not! If you guys had ANY questions at all about any of this, please reach out. I’m here to answer your questions if you have them.

As always, love you guys so much!!

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