As Gen Y, our passion, drive and ‘make it happen’ attitudes serve us well. Despite the naysayers I think it’s pretty damn awesome that we’re not willing to settle for second best, and that we go after what we want and make things happen far quicker, in many cases, than previous generations ever did.
We’re constantly criticised for our addiction to instant gratification, but it’s not such a bad thing that we’d 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 many of us down.
We’re getting older Gen Y, and as much as it sucks the oldest of us turn 37 this year (f*ck… 40 is just around the corner!!!) , and the youngest of us is now 22. For the most part we’ve finished university and have been working and earning an income 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, and have also 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 restaurants bills on a far too regular basis.
What’s created this new ‘normal’?
Easy access to credit. Put simply, most of our generation had our first credit card (for emergencies only of course… pfffft!) in our hot little hands within days of turning 18.
So there we were, no formal financial education and packing plastic. Free money. What could be better? The temptation to spend at that stage was at an all time high and there were a million and one things to spend it on.
Cue the arrival of social media and all of a sudden ‘keeping up with the Joneses’ took on a whole new life.
Many of us lived at home a lot longer than previous generations, and so between our credit cards, payday, and no real commitments, we started adult life free to spend money on all the good stuff.
This is where the problem began…
We developed a behaviour of spending everything available to us on lifestyle, plus for anything big we’ve needed to purchase (like a car) there’s been a myriad of financing options available. There’s no real need to save when you can get the item now even if you don’t have the money.
So for many Gen Y, we never developed a good savings habit, and instead of living within our means, every payrise just meant more money to spend living large.
Are you acting your ‘wage’?
Don’t get me wrong, there are of course 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 we earn, and then some (via debt), here’s how we should be managing our money:
- Live within your means. Use our budgeting tool to see where your money is going now 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.
- Know where your dollars are going. Knowledge is power as they say. Once you’ve completed a budget and starting building wealth, keep ontop of your spending on an ongoing basis by using a tracking tool like MoneySoft, PocketBook or MoneyBrilliant.
- Use payrises to get ahead. Instead of just spending more each week with your recent pay increase, use the additional dollars to reduce debt or increase your savings.
- Give up on keeping up. Reality check is that blowing all your cash on material items just to make your Instagram followers jealous is a sure way to ensure you have a sh*tty financial future ahead. Be prouder of the fact you’ve got an investment property and a share portfolio, than the best wardrobe on the planet.
- Say no to credit. Marketers have done a great job of making paying on plastic seem sophisticated and successful. F*ck that. You’d rather have your own actual money to pay for what you want, than need to put it on credit… wouldn’t you? Oh, and the whole points thing? That’s just part of the marketing spin. Cut it up, pay it off and build wealth instead.
- Develop a love affair with investing. Once you start investing, it’s hard to stop. Seeing your portfolio tick up each month is a pretty great feeling and you’re not going to want to spend any of that money (as opposed to having cash in a savings account).
If you’re ready to start acting your ‘wage’ and actually becoming wealth rather than just looking wealthy, book in for a Financial Kickstart session today. No cost, and no obligation other than your time (it’ll be the best hour you ever spend, promise!).
Disclaimer: all information contained within this article is of a general nature and should not be relied upon when making financial decisions. Please consult a professional financial advisor or planner (like us!) before acting.