It's never too late to start saving for a rainy day (or a new pair of Louboutains). But believe me, it's hard to start saving in your twenties. Maybe you're just starting your career or maybe you have student debt. Maybe the system has conned you into an unpaid internship like it did to me. No matter what financial obstacles are in your way, there's almost always a way to save, even if it's just a little bit. I've put together a few tips to help you put some pennies away. These have all worked for me but I'd also love to hear your thoughts and advice in the comments!
1. Open A Retirement Fund And Automate Contributions - The number one piece of financial advice I was given when I graduated university was to start saving for retirement in your twenties. The truth is that more and more of us millennials are entrepreneurs, self-employed, or working for companies that don't offer pension plans. It's incredibly difficult to think about retirement when you're 22 so I opened an RRSP the summer after I graduated and automated my contributions. This way I'm putting a little bit of money aside every month without having to think about it. Even if you can only afford $10 or $20 per month that money will grow if you start early and automated contributions mean you don't have to spend one second thinking about it after you've set it up. Another bonus of an RRSP in Canada is that you can use the money for a downpayment if you're a first-time home-buyer or for life-long learning if you decide to go back to school. This was as important factor for me in case I need some extra cash before I turn sixty-five.
2. Set A Monthly Savings Goal - Hands-down, this has been the best money-saving thing I've done so far. I started by calculating my average monthly income. From that number, I subtracted my monthly bills and expenses plus another little amount of cash for social activities and enjoying life. After I saw what was left-over I was able to establish a reasonably achievable monthly savings goal for myself. Having a goal motivates me and I always feel so good at the end of the month when I've accomplished it. This works really well for me since I'm a goal oriented person to begin with. After three years of doing this I was able to afford to go grad school and once I'm done with that I plan on doing some travelling with some of my hard-earned savings. The basic lesson here is simple: spend less than you earn and save the rest.
3. Hire A Pro - The one major gap in my education is personal finance. I can still remember how to do quadratic functions but I have no idea how the stock market works or what makes a GIC different from a Mutual Fund. (Is there even a difference?) My approach to investments is that I want the bank to take my money, keep it safe, and give more of it back to me later on when I want it. At first it seemed like an unnecessary expense, but hiring a pro to help with your finances is worth every penny. I have a financial advisor who handles my investments and the money he has made me has more than paid his fee. I also get my taxes done by a professional who also saves me money every year which covers his fee and more.
Do you have any money-saving tips? I'd love to hear them in the comments!