Saving money for the future is the last thing on many young professionals’ minds.
Don’t worry, we totally get it. When you have student loans to pay off, rent to cover, and all the other expenses that come with being a young adult, your financial priorities tend to be more short-term than long.
That said, there are plenty of quick and simple ways to start building wealth right now regardless of your income or financial knowledge.
To learn about the best finance “hacks” for millennials, National Bank helped us connect with financial expert Alyssa Furtado. As the co-founder of RateHub, a website dedicated to connecting Canadians to the best mortgage rates and credit card deals in the country, she knows a thing or two about mastering personal finance.
Ready to get your money situation on point? Here are Alyssa’s go-to tips:
1. Automate your savings. Once you set up a regular transfer of money into a savings account or investment each time you get paid, you won’t even notice the money is “gone.” Since it’s done automatically, you don’t have to remember to push a button and you can reach your savings goals that much faster. Girls trip to Cuba in December? No problem.
2. Define “special occasion” to avoid overspending. The “treat yourself” mantra can destroy your budget. A $75 dinner out for a friend’s birthday is fine once a month, but not every week. If you decide how often special occasions occur each month – say, once or twice – you can keep your monthly budget under control. In order for me to stick to my personal finance plan, it has to be reasonable. I enjoy dining out, so I’ve made sure I can still do this a few times a month. This way, you don’t feel deprived while saving up for bigger things like a down payment or a new car.
3. Audit yourself. Track your spending on a spreadsheet or look at your bank statement at the end of the month and put a mark beside each purchase. Put a checkmark beside purchases that are essential or make you feel good. If they make you feel bad or guilty, highlight them. I use Excel to track spending across my chequing and credit card accounts, ideally on a weekly basis. There is no replacement for spending time with your finances. A $50 brunch doesn’t taste as sweet when you’re entering it into your budget five days later. Plus, this approach helps you cut the fat in your budget, so to speak, so you can focus your financial priorities on what really matters to you (like saving up for that yoga studio membership).
4. Have one or two “zero spend days” per week. Plan ahead. If you pass on a purchase on a zero spend day, chances are you won’t come back on a normal day to buy it. Zero spend days give my husband I the focus to say no to the $5 latte.
5. Join the sharing economy. Use Uber or Airbnb and build a mini-business around your schedule. My husband and I rented our home out for the first time this summer during weekends we were at the cottage. It was an incredible way to increase our income, giving us the extra funds to put towards landscaping our backyard and purchasing a BBQ.
6. Utilize credit card points. To maximize the return on each dollar you spend, identify the best program for your lifestyle and choose a card accordingly. Love to travel? Look for one that you can redeem for airfare and hotel packages. Some give cash back for all spending while others dole out points and rewards for buying essential items, such as groceries and gas. However, you should only be maximizing rewards if you pay off your balance each month. If that isn’t the case, make sure you move your credit card debt to a low interest credit card or take out an unsecured loan to pay off your balance at a much lower interest rate.
National Bank is inspired by the freedom to decide: Your own styles, actions, and paths. We believe in better alternatives to the norms. This could be your finances, dwellings, careers, travels, any and all undertakings. National Bank’s purpose is to help you power ideas that can change your life and change the world. Check out tips & tricks the alt way here.