This post is part of a series, where we ask some of Canada’s top personal finance bloggers to weigh in on topics that matter to Canadians.
What is THE most important thing Millennials should be doing to improve their financial situation?
Examine why you make the money decisions you make. If the reason is “I dunno” or “it was the default option”, start thinking about making different decisions.
Sandi Martin, Spring Personal Finance
There are some obvious steps to take that include tracking spending, budgeting for short-and-long term goals, paying off debts quickly, and not being too quick to buy a home or expensive vehicle without considering the previous steps. But I think the true difference maker for Millennials is going to be about developing skills outside of their everyday 9-5. Building websites, photography, blogging, or design work, for example, are all skills that are in high demand and honing those skills in their downtime can pay huge dividends in their future career and earnings prospects.
Robb Engen, Boomer&Echo
In my opinion, the easiest way to improve your financial situation (no matter your age), is to learn how to save money. Not only will saving money improve your financial situation, it will help you build wealth. For young people just starting their careers, I would focus on saving money, and using savings to pay down debt aggressively.
When we first started, we had tens of thousands in student debt, a new car loan, a new mortgage, and an upcoming wedding. With some discipline (and without super high paying jobs) , we were able to pay down all of our student and consumer debt in a few years. After debt is paid off, start to look into investing for the long term. Try to avoid starting by picking home run stocks, learn to build a long term, broad based (indexed) portfolio that grows over time.
More on this here: Completing the Million Dollar Journey
The most important thing that Millennials should be doing to improve their financial situation is to use a budget. I can’t stress enough how important it is to know your numbers and set boundaries when it comes to expenses. It will make a world of difference when debt goes down and savings go up.
Getting informed about their finances is the best thing anyone can do to improve their financial situation. Simply being aware of all the easy ways there are to earn and save extra money can make a huge difference. Take my list of 14 Ways To Claim Your Free Money for example – just doing a few of those things can put thousands of extra dollars in your pocket.
Stephen Weyman, How to Save Money
Make a plan. It’s so simple, but when I talk to Millennials who feel like their financial situation is spiralling out of control, it’s because they don’t have a plan. In that plan it should of course include a budget, a way to track their spending, net worth and debt-repayment, but it should also focus on their goals. Do they want to travel, buy a home, start a family, have enough to retire on? Their plan should include actionable ways to achieve these important goals.
It’s so simple, but so effective: tracking your spending. If you know where your money is going, you have all the information you need to identify if you’re spending money on things you value – and cut back on things you don’t, which frees up money for your financial goals. I learned so much in the first year I tracked my spending that I’ll never go back!
Desirae Odjick, Half Banked
I believe Millennials should start investing and saving as soon as possible. There are many new apps and services to help them with this, and the earlier they can start, the better off they’ll be in the future.
Tom Drake, Canadian Finance Blog
Let’s forget the “b” word for a moment (budget). The most important thing for Millennials to do to improve their financial situation actually takes little effort. Track your expenses. Track your expenses every week and every month, for three months. This will tell you where all your money goes – and that’s very important. After those three months are up you’ll be able to answer questions like:
- What do I spend my money on?
- Where do I spend my money? How often?
Like any improvement process you cannot improve unless you know where you are starting from. Find out where you are today. Track your expenses and spending habits. Write them down. Review them. This takes maybe a minute a day, maybe a few minutes per week if you procrastinate. You can even use an app to track your expenses. Track your expenses and I think many Millennials would be shocked when they see the math. You can start a budget process after that.
Mark Seed, My Own Advisor
It doesn’t matter how old you are if you spend less than you make; you’ll be on the right track. These days we have the ability to buy anything we want even when we don’t have the money for it if. It’s important not to let temptation or credit get to us, otherwise we could easily fall into a spiral of debt.
Barry Choi, Money We Have