Gen Y- Start Today To Grow Your Money
The other day, a young man I’ll call Chris wanted to pick my brain. Chris is a 25 year old first year teacher in northern Alberta and a good friend of my son’s. He is full of excitement, energy and enthusiasm for life and his new career in teaching. Chatting over a few drinks, Chris asked me what financial tips I could give him to help him be smart with money.
My son Jeff rolled his eyes and said to his buddy “Please don’t get Mom started on money…she may never stop”. He’s right; I love talking about money, especially with young adults. A great chance to share years of wisdom, experience and mistakes with hope that the next generation will do better than us. I’m rooting for Chris and the rest of Generation Y. With time on their side and easy access to knowledge, it’s an opportunity to do so many things right with their money. Unlike many fellow boomers who are frantically trying to get their retirement house in order.
Here’s what I told Chris.
“Know what you want and don’t want in life. Save early and regularly- even small amounts count. Start now; don’t wait until you think you can afford to save or have a bigger salary. Keep your lifestyle in check- your income must rise faster than your lifestyle. Make sure you’re taking full advantage of your employer’s benefits package. Be smart and cautious with debt- only use it for things that will increase in value. Once you have debt, make it your first priority to pay it off. If you need it, find help to manage your finances or investments.”
Chris was disappointed. “What else? Everybody knows that stuff” he said. “Are you already doing these things?” I asked gently. Chris shifted uncomfortably in his chair and I could see his face turn a light shade of red. “Well, maybe not yet, but I know I should. What I really want is to get rich fast.” he admitted.
Perhaps Chris was looking for a secret formula he could use to turn dollars into thousands or a few hot stock tips he could jump on before everyone else. The reality is that it’s important to get the basics right first, especially when you’re just starting out. Earn before you spend, save before you invest, tell your money where to go not the other way around. Once Chris has these habits and behaviours in place, like “automatic” savings, he can move to the next level. I know Chris is fascinated with the stock market but has no idea how or where to start. I’d love to have that discussion with him but I’m saving it for another day.
I hope we’ll have more chances to talk (if I haven’t turned him off already!). I’ll need to bring some meaty advice to the table next time. Maybe one day, Chris will thank me. If not, that’s ok. If he follows through on just a few of my suggestions, he’ll be well on his way to building wealth one step at a time.
Photo courtesy of nationalgeographic.com