There is a good chance a few millennials reading this are still living at home. If you have a good relationship with your parents, why shouldn’t you? With ever-increasing debt and income that does not keep up with inflation, it only makes sense to move back in to save money and it gives you easy access to their life experiences to learn more about money.
That is why it is important to talk it out.
Your family and friends know you well. They know your spending habits. They know where you work and have a good idea of how much you make. Hopefully, they encourage and support you and call you out when you need to be brought back to reality.
Your loved ones have another beneficial perspective for you. They have been dealing with their personal finances their whole lives. They maintain their car payments, mortgage, and taxes. They paid for their kid’s budding hockey career and kept the fridge and toilet paper stocked. When you first move out, all these little costs come up that you never had to think about before leaving.
Your parents have picked up a few lessons along the way, and we can learn from their experiences. Take the time to ask people you know and trust about their money, spending, and saving habits. ANYTHING you can learn because the school system failed to teach us much about personal finances. Find a safe environment and start talking about subjects you are comfortable with.
In many relationships, money can become a primary source of conflict. While conversations about money can be difficult to plan and harder to execute, they are so important. People need to find common ground in their saving and spending habits. If you do most of the cooking and cleaning in your home, over time you may become resentful of your partner and the same is true for spending. If you are the primary saver while your partner is the primary spender, it can take its toll on the relationship.
Conversations about your household money can ensure you and your spouse are on the same page. It encourages each person to share their goals and create a plan for their income. Not to mention, your kids will learn the money is not just sitting there to be spent or inherited. They will learn to appreciate your goals as they get older and support your work toward that vision.
So sit down, brew some tea, and talk about money with your friends and family. I do not care about how much you make, we can focus on that later.
How do you set and stick to your saving goals?
How do you learn to spend wisely?
How did you approach the conversation and what would you have done differently?
Once you have the conversation with your family, pick 2 ideas to implement. This can be a habit you want to start or a bad habit you want to stop. Remember, we WANT you to accomplish this goal so make it something you know you can achieve. They say it takes 60 days to create a habit, so focus on those 2 goals for 60 days.
Were you able to commit to your goals? Check-in and adjust them accordingly so they work better for you because we adjust them to suit your goals and make sure you can implement them into your life.
We encourage everyone to pay themselves first, so try saving 10% of every paycheck. Set it up so it will automatically be withdrawn on your payday, and you do not have to think about it. It goes into a separate account – TFSA, RRSP, high-interest savings, or to a separate chequing account that you do not touch. It does not matter where it goes, it is about paying yourself in the future before you spend it on something else today.
When you have automated your savings, when you have an emergency, you will be relieved not to use a high-interest credit card. It will allow you to make better decisions, simply by not stressing about every penny. Once you are past the emergency, you can start rebuilding your rainy-day slush fund again and it will not cost you 20% interest while you do it.
Be honest and open about your finances, and as always, share any tips or tricks you may have.