Seven Savings Tips for Millennials

Financial planning requirements are different for different stages of life. For instance, the financial situation of somebody approaching retirement is much different that that for someone just starting out in their career. With this in mind, the following are seven steps that millenials can take to improve their financial health.

1. Keep it simple

Banks love clients with four or five accounts—and the $15 per month service fee they charge their clients for each. For the most part, it’s not necessary to deal with too many different banks. Most banks offer similar products and services with similar fees, costs and products. Location convenience is usually important as well as a good rapport with one of their personal bankers (hopefully, someone who will be there for some time).

2. Where are you today?

You need to start somewhere. Calculate your net worth by adding up how much you have in terms of assets less your liabilities, which becomes your yardstick to measure against next year.

3. Set goals

 What do you want to accomplish in the next year? In the next one to five years, or longer term? Perhaps it’s paying off debt or maximizing RRSP or TFSA contributions? Setting goals is a great way to accomplish things important to you.

4. Prioritize your goals

What do you value most? Being debt-free, maximizing your RRSP contributions annually, saving for your children’s education or buying a cottage? Tackle your goals in the order of importance to you.

5. Have some fun after accomplishing a goal

After achieving your savings goals for the year, maybe it’s time to go out for a nice dinner or attend a concert or sporting event. Goal accomplishment is a good reason to celebrate.

6. As your career grows, so should your income and savings

Most people hit their peak earning years in their 40s, 50s or 60s. As you earn more, consider saving more. It will be easier to save more as debts are paid off and children become independent.

7. Live within your means and re-examine annually

You’re always going to strive for earning more (after tax) than it costs for you to live your lifestyle. Try to save the excess.