So this is another doozy that 20 and 30 somethings face. Cuz if ya wanna get educated, it’s gonna cost ya! Thanks to student loans, savings, and maybe some help from family, a lot of folks pull it off. It can be easy to ignore the cost of school when you’re in the thick of it, but the second you put that cap on, you get a fat bill and a large dose of reality. My sister just graduated the other day and said that the students who still owed money to the university didn’t get their degree in the lovely dark blue, embellished folder that you receive when you walk across the stage. No, these students just opened the folder to find a letter of notice stating the money they owed. I thought this was hilarious! What a way to dampen the day.
So of course you want to pay back the debt you have, whether it be school related or not, but what about putting some money away for future use? Like, I don’t know, maybe a house or retirement or a big trip? This can seem impossible when you’ve got a deficit on your hands. Having been through it and succeeded in paying back my OSAP in one year, I came up with a few tips to make you and your bank account a little happier while your soul still belongs to the devil. Oh and use these tips whether you have debt or not!
This is SO crucial. If you don’t know what’s coming in, going out, being saved, then you won’t have a clue on what you’re able to reasonably spend each month or how much you can actually afford to put away. Make sure that you add an expense line for your monthly loan payment – this is money that you should consider to not even be yours. It comes in and goes right out. Don’t forget your phone bill or transportation expenses or all of the rounds of drinks you tend to buy for your friends. Creating an accurate budget is tricky the first month so I advise that you create one with some guess-timate totals and then track what you spend in that first month so you can alter those numbers to something more realistic or make changes to your spending habits on things that are not fixed costs. Now you’ll have a clear picture of what you can put into your piggy bank each month!
Oh and just because I adore you, I’m giving you access to a FREE Budget Template. This is exactly the one I use – the formulas are all set up for you so that the totals will auto-generate when you enter your deets. Thank me later!!! I like it because it allows me to change things up throughout the year if need be. For instance, I know I spend less on transportation in the spring and summer because I ride my bike to get around instead of taking public transportation – so I don’t budget for as much in that expense line during those seasons.
So this is something that I wish I had done earlier. Essentially if numbers and banking confuse you, which it still kind of confuses me too (I’m no expert), just GO see a financial advisor at your bank. They gush over the thought of a young investor and will give you all the advice you need. It’s a space where you can ask all of the questions that are leaving you baffled about this whole investment situation. Putting your savings into a tax free savings account (TFSA) is a stellar idea so that you don’t get taxed on it and you get small tax benefits just from storing your money there. I would also suggest discussing some kind of investment for your savings. You can select an option that will keep your money accessible to you at anytime.
I invest in mutual funds and I love it for two reasons. 1. I see my savings grow a little bit here and there when the economy is doing well (I know that we’re in a slump right now but investing also takes patience so try and trust it) and 2. Because there is a bit of a process to accessing my funds. I actually have to book an appointment and authorize taking some of the money out of the investments. THIS is huge incentive to just leave the money where it is and keep saving because hey, I don’t want to go into the bank and sign papers and stuff unless it’s for something that I absolutely NEED. So set up a couple barriers in front of your savings and invest a little, it’ll do ya good and you’ll learn something too.
Okay so you can ask anyone who knows me and they’ll say I’m ‘cheap’ or if they’re being polite, maybe ‘frugal’. I’ll admit that sometimes I take saving money to the extreme so don’t feel like you have to go crazy about it too, but try to implement a few money saving habits here and there. Here’s a list of ways to spend a little less:
1. Grocery shop with intention and somewhere that fits within your budget. Why are you shopping at a high end grocery store when you only have $250 for groceries a month? And why are you just buying a bunch of stuff that you can’t actually form into a meal? Pick a grocery store that is reasonably priced and make a list of food based on actual meals that you can prep and eat throughout the week. This way nothing is wasted. I like to buy my produce from little storefront markets since I find that grocery stores’ produce is way overpriced.
2. Make and bring your lunch to work and set a rule. If you’re buying lunch everyday, that’s easily around $10 to $15 a day that you could have saved. That’s around $240.00 a month! Ahhhh I feel ill. And you’re buying groceries on top of that. Use the food you buy and if you must treat yourself, make a rule that you buy lunch just ONCE a week.
3. Walk, bike, take public transit. Check in on how you’re getting around – I know for some folks, a car is a must just based on where they live or how far away they work. But if your routine could allow you to walk or bike, you should invest in some wheels and get around that way. And guess what!? You’ll be getting exercise and reducing your carbon footprint at the same time! Go you.
4. Set limits when you socialize. Okay this is the hardest one, I know. I can totally relate to being firm with myself before I go out with friends: “Brittany, you’re only spending $40 tonight. One thing to eat and a couple drinks. No late night falafel or caving and taking more cash out at the bar.” And then that same voice when I’m at the bar: “You only live once Britt! Do it, who cares? Have fun, you’re young, you’re free, you deserve that drink, aw get one for your bestie too, what’s $5 more for that falafel!?” And then you look in your wallet the next day and cry. Okay dramatic I know, but you get it. SO here’s a trick: Decide what you’re spending that night and take that money out in cash. When you pack your wallet for the bar, do not bring your debit or credit card with you, leave them at home. Some may say this is dangerous – what if you need emergency money, etc. I say it’s a necessary self-intervention. Take it or leave it.
5. Wash all laundry together on cold. Laundry seems like a small expense but can add up over the month especially if you’re drying everything and separating your whites, colours, and darks like mother dearest taught you. Well I’m here to say that I’ve been combining all of my clothes together and washing it all on cold for 8 years now and have never had a laundry blunder! It’s revolutionary! If you have delicate items just put them in those little nifty garment bags that you throw right into the wash – they’ll stay separate and beautiful. Buy a nice drying rack and skip the dryer too!
So as you can probably guess, I have many more ‘spend less’ tips but I’ll spare you the novel blog post which this is close to becoming.
I hope your bank account is abundant and full of them dollas!
You are worthy and beautiful.