According to an RBC poll, young Canadians place owning a home at the top of their financial lists.
The poll revealed 49 per cent of Canadians between the ages of 18 and 34 believed owning a home was their top financial priority followed by reducing or eliminating debt through regular payments (48%) and general savings for a rainy day fund (39%).
“Establishing financial independence is a marathon not a spring,” said Melissa Jarman, director of student banking at RBC. “Whether the priority is paying down debt or saving for a house, making a few smart changes and speaking with an expert can help you balance competing demands and achieve your financial goals.”
In line with that advice, Jarman offered up five financial tips for the 20 -something crowd; live below your means, fatten your piggy bank, use your emergency fund for emergencies only, “D” is for discipline not debt and rethink your spending.
With living below your means, Jarman suggested leaving some wiggle room so you don’t spend up to or above your limit. “Aim to save between three to 10 per cent of what you earn to ensure your savings grow year over year.”
To fatten your piggy bank, Jarman expressed the importance of saving even if just a little at a time.
“When you’re getting established in your career, paying down student debt and perhaps planning major purchases such as a car or first home saving can be especially difficult. The trick is to incorporate savings into your budget before you get accustomed to spending it every month.”
Jarman explained the rule of thumb for an emergency fund is about three times your monthly expenses if you’re single and double that if you’re married or have children, discipline is important when making payments in order to keep a good credit score and rethinking your spending can mean spending less on daily things such as lunch and preparing one at home instead.