Whether you’re preparing for major expenses, saving for a rainy day or just getting your monthly spending under control, managing your money can be a big source of anxiety.
If you’re feeling this way, you’re far from alone: Most Millennials and Gen Z adults stress over money, according to a recent Interac study — clear evidence that we all need to be mindful of the impact our finances can have on our overall happiness and well-being.
Thankfully, you can get better at managing your money by building healthier money habits. It doesn’t take any particular skills — mostly determination and consistency. Here’s a few ways to live your best life (and be ready for hard times) by taking control of your finances.
1. Use digital tools to track your spending
There are now countless ways to make sure your budget is in balance. The simplest is an oldie but a goodie: keeping track via your banking app.
That approach goes hand-in-hand with another familiar tool: debit. “Our research reveals that younger Canadians value digital payments for the insight they provide into their spending habits, and are turning to debit payments as a money management tool,” says William Keliehor, Chief Commercial Officer for Interac Corp.
Interac Debit, as well as Interac e-Transfer, make it easy to do this, as all your expenses are in one place: By spending the money you already have in your bank account and watching your balance in real time via your online or mobile banking, you end up with fewer surprises at the end of the month.
2. Make a budget and stick to it
This same Interac study found that 50 per cent of Millennials and 47 per cent of Gen Z adults worry about getting in over their heads, money-wise. Staying within budget is challenging, but not impossible, and it’s never too late to start budgeting. Here are some things you can do to avoid overextending yourself.
First, keep track of your income every month: If you know how much money is coming in, you can budget accordingly for your bills and expenses.
Second, when planning out your monthly budget, make sure to build in an emergency fund that you add to each month. Saving doesn’t happen all at once, but over time, so planning it will make it easier. Remember a little bit can go a long way.
You’ll thank yourself later when you’ve got surprise expenses, as well as when you’re planning bigger purchases, such as furniture or a new car. Plan those big expenses a few months ahead when possible and set a part of your savings to go towards paying it. That way, when the time comes to make that purchase, there are no surprises.
Third, remember that getting your finances under control will help you get more out of life and know when – and how much – you can splurge. Start off by sticking to the basics whenever you can and taking care of your needs before your wants. Most people know this, and 58 per cent of Millennials and Gen Z spent more on essentials and less on discretionary items than they did pre-pandemic. For any spending that falls outside of regular bills, give yourself a weekly, or monthly, allowance. You’ll know when to hit the brakes if you set a spending limit ahead of time for a night out or an unplanned purchase (or just grabbing coffee or takeout on the go — it all adds up!).
3. Be mindful of the toll your finances take on your mental health
Although we can avoid taking on extra debt, sometimes our financial situation changes unexpectedly. It’s normal to feel sad or angry when living through financial hardship, and you shouldn’t just ignore those feelings. So give yourself some space to process the change — it’s an important part of moving on and picking yourself up (here’s a great resource about managing financial stress from the Mental Health Commission of Canada).
Don’t be scared of talking about your financial situation with someone you trust, like a family member or close friend, to share your emotions or ask for guidance or advice.
4. Build overall financial resilience
Looking to the future, 63 per cent of Millennials would like to make their finances more resilient.
Once again, saving up an emergency fund is a great idea. Don’t forget to keep adding to your emergency fund, even while you’re paying down debt, to avoid incurring even more debt if ever you fall on hard times.
You should also be cultivating strong relationships in your community. Your social network could help provide solutions to a range of problems: finding a new job, getting a deal on something you need, and other forms of help.
A strong community can also help you with your mental health, if you have dependable people to lean on when necessary.
Finally, there’s a lot to be said for developing some thrifty skills like learning to cook on a budget and finding good deals in stores — by saving up where you can, you can save up money for the future, or just have a bit extra to treat yourself at the end of the month. You never know when a rainy day will come, but you can prepare today without sacrificing the things you love.