Millennials Face a Change in Mindset as They Build Their Financial FutureDec 15, 2014
Millennials, or Generation Y, are known as independent thinkers, ambitious and eager to succeed in business. When it comes to entering the work place, reports show that Millennials have high expectations. They want to move up fast and get paid well. However, today’s workforce is competitive and finding a well-paying position is not easy. This can make getting ahead financially more difficult. Millennials are entering this workforce already burdened with high debt from their huge student loans. Yet, many young people continue to live in excess, a direct result of the current consumer culture we live in. Like so many, they want more things, spend more money and live beyond their financial means. Without taking the right steps now, they could be facing financial strain and having to seek out debt help in their future.
To get ahead, Millennials need to change their mindset. If this is you, there are actions you can take to ease your debt as you build your financial future. Starting with asking yourself, “do I need it or do I want it?” Once you can recognize the priority of your purchases, you will better understand the link between consumerism and debt.
The next step is to look at ways to simplify your life. For many reasons, people are choosing to live in smaller spaces, own less material objects and live in a thriving city that supports walkability and active transportation. All of these choices contribute to lowering lifestyle expenses. As noted in a recent Globe & Mail article, Millennials are faced with the decision to buy a home and essentially become house poor, or rent until they are in a better financial position. Choosing to rent over buying keeps more money in your wallet now and frees up cash to invest in other ways. As the article suggests, putting money into an RRSP every month would put you in a position in the future to access money for a down payment on your first home, under the federal government’s Home Buyers Plan. While you are paying off your student debt, and any other debt you have built up, renting is a viable option until you can afford all of the costs of owning a home.
Do you need it or want it? It’s time to reduce the amount of stuff, declutter and own less. Become more mindful of your purchases and one way to do this is spend more time thinking about your purchases, research alternatives and cost options. Shopping has become convenient. Everything is easy to find and easy to get online with items are delivered right to your door. Technology rules and we are becoming a cashless society. With this new way to buy, consumers are no longer thinking about the money they are spending and their debt is piling up. A good practice is to set out a proper budget and only use cash to purchase. By only using cash you limit yourself and ideally, only spend on what you need.
Today Millennials need to consider different ideas and approaches to saving money and building a financial future. They need to shift away from the consumer culture of today’s society and focus on lowering their debt and planning for their future. With a few simple changes they can be well on their way to a stress and debt-free way of life.