As a Gen Y’er, I know that passion, drive and a ‘make it happen’ attitude can be a winning formula.
Despite the naysayers it’s pretty awesome that we’re not willing to settle for second best, and that we go after what we want and make things happen.
We’re constantly criticised for our addiction to instant gratification, but it’s not such a bad thing that we travelled to more countries by the age of 21 than our parents had in their lifetimes, is it?
There’s one area though, that our penchant for ‘now, now, now’ has let us down – Money!
We’re getting older Gen Y.
We’ve finished university and have been working for quite a few years now.
However, having never really learnt the art of delayed gratification, many of us have little or nothing to show for it financially.
We’ve never learned to act our ‘wage’.
With easy access to credit, we’ve been travelling the world, running around in designer clothes, attending lavish events and running up astronomical restaurant bills on a far too regular basis.
What created this new ‘normal’? Simple; easy access to credit.
Most of our generation had our first credit card within days of turning 18.
What could be better?
Cue the arrival of social media and all of a sudden ‘keeping up with the Joneses’ took on a whole new life.
We developed a habit of spending everything available to us.
And for the big stuff? Well there’s no real need to save when you can get a loan easily.
Don’t get me wrong, there are plenty of responsible money-smart Gen Y who’ve managed to avoid the trappings of personal debt, however there are plenty who haven’t… and it’s easy to see why.
Rather than spending everything you earn, and then some, here’s how you should be managing your money:
- Live within your means.
- Create a budget to see where your money is going and cut out what you can.
- There has to be something leftover.
- Use your surplus each month to pay down debt and start saving and ultimately investing.
- Once you’ve completed a budget and started building wealth, keep on top of your spending by using a tracking tool like MoneySoft, PocketBook or MoneyBrilliant.
- Use pay rises to get ahead. Instead of just spending more each week when your pay increases, use the additional dollars to reduce debt or increase your savings.
- Give up on keeping up. Blowing all your cash on material items just to make your Instagram followers jealous is a sure way to ensure you have a rocky financial future ahead.
- Say no to credit. Marketers have done a great job of making plastic seem sophisticated but it’s not. It’s better to use actual money to pay for what you want.
And the whole points thing? That’s just part of the marketing spin.
Cut it up, pay it off and build wealth instead.
It’s time to develop a love affair with investing.