In The Bank: Successful Savings Tips for Millennials
The stakes are high for millennials looking at saving for – well anything really – but particularly for millennials (aged 18 to 34) who have enough foresight to think of what comes AFTER today’s oh so pervasive “rise & grind” game. Fallout from this generation’s economic hiccups has delayed entry into the career (read career, not job) market for many, and dwarfed the salary bracket for even more in comparison to the rising costs of living and the daunting shadow of student loan obligations.
But this is also coincidentally the time in life when most millennials will need to make the biggest purchases they’ll likely ever make in their lives. New life stages mean purchases like vehicles, homes, and events like weddings and child birth. So while saving for the mythical “retirement” seems pretty low on a priority list that includes such necessities as food and bus fare, having a dedicated savings game plan in place is so, so important.
A game plan is just that. A PLAN. A specific, measurable, honest to God plan.
“A game plan is just that. A plan. A specific, measurable, honest to God plan.”
1. Be specific.
Dreams are vague. Goals are specific. Carve out some time, get out your laptop, pull up that Excel spreadsheet, and start putting some numbers down, because we use numbers to count money, not fancy sentimental words and resolutions. Right?
What are you saving for? And don’t be afraid to get detailed here too. If you’re saving for a house, what colour is the door? If you’re saving for a wedding, what’s your venue? What’s the date?
How much exactly do you plan to save this year?
What does that big number mean for this quarter? This month? This week?
How do you intend to save this money? Will you be minimizing expenses? Will you be adding another revenue stream?
Where will you be saving this money? Will it be in a savings account? An investment account?
Do you need this saved money to be accessible whenever you need it? Do you want to limit its accessibility?
Think through the details, and then focus on your end goal.
2. Get a plan.
And sometimes, that plan can mean acknowledging your weaknesses. Remember when you asked yourself whether or not you wanted that money to be accessible whenever you need it? Do you find yourself often NEEDING that new pair of shoes or that $3000 handbag? Then no, you don’t want that money to be accessible whenever you need it.
Put a system in place that works for you. I’ll tell you what works for me. I have pre-authorized payments set up to go into my son’s trust account on the 15th of every month from my chequing account. I have pre-authorized payments set up to go into two other investment vehicles for both myself and my son from my chequing account on the 1st of every month. And then my bank does this cute thing where every time I use my debit card, no matter the amount, $10 automatically gets transferred into my savings account. To say my schedule is often hectic is an understatement. I will not remember to save. Or pay bills for that matter. So automated payments are my friend.
Develop and implement a system that works for you, and commit to that system for the duration.
3. Measure your success.
I always know the answer to three questions about myself: my shoe size, my goal weight, and my net worth. And my net worth is probably accurate to the hour.
Track your progress as you work towards your goal. Set aside whatever time you need to be able to measure and call an audible when you need to make a shift to accommodate for that pesky little thing called life. Set aside 30 minutes to review your financials weekly, monthly, and quarterly. I’d recommend looking at ALL of these figures, as they present a more accurate indication of where you are in terms of your progress. This is especially true if your expenses or your income fluctuates (ex, in the case of a business owner with high and low seasons).
Paint a real time picture of where you are and what that means for where you’re going, and keep that top of mind as you work towards your savings goals.
This is a big deal. This is your future. Take responsibility, yes – but take control too.