Stefan Palios began to treat his credit card like a debit card, using it only for necessary expenses and paying off his balance in full each month. (Photo: The Canadian Press)
With the increasing amount of financial education resources available on social media or during a quick visit to a search engine, it can be difficult to separate relevant advice from click traps, especially for young Canadians.
To find out what advice actually makes a difference for a bank account, The Canadian Press spoke to three millennials who agreed to share the words of wisdom that have worked for them.
Treat credit cards like debit cards
After reading David Bach’s book “The Automatic Millionaire,” Stefan Palios, a 29-year-old freelance writer and freelance coach from Windsor, Nova Scotia, began to treat his credit card like a debit card. using it only for necessary expenses and paying its balance in full each month.
“When you know you have to pay off your credit card in full at the end of the month (or risk 20% compound interest), it becomes a good motivation not to be frivolous. Or at least it was for me, ”he explained.
“I even started paying my rent with my credit card, which not only gave me great rewards, but also a very, very good credit score,” he added, since his balance was settled monthly.
Mr. Palios’ owner started accepting credit card payments on RentMoola in early 2015.
“There was a payment processing fee charged, but my rewards were slightly higher than the fees, so I still took advantage of it. The real payoff for me, however, was flexibility. I didn’t have to make sure the exact amount was in my bank account on the day of the rent for it to be withdrawn. ”
“Also, the flexibility of it all is really underestimated. It’s not just rewards and credit score. It’s the fact that I can buy what I need now and pay for it when my next paycheck comes in. This allowed me to continue to make deposits in my investments and to buy more in bulk, which resulted in significant savings. ”
Mr. Palios makes sure he doesn’t spend too much on his credit card by only using it for certain expenses like groceries, which he knows he’ll be able to pay back on his next check. pay. “For bigger expenses, like travel, I plan ahead to make sure I can pay off the full balance each month.”
Make savings a top priority by setting up automatic withdrawals
For Jack Harding, 29-year-old managing partner at Diner Agency in Toronto, the best advice he has ever received is to treat savings and investments like rent or mortgage – an absolute necessity.
Before receiving this advice, he spent his 20s figuring out exactly what he could and couldn’t spend each month, and whatever was left over was a chance to spoil himself.
He changed his mind after spending time following financial education channels on Instagram and YouTube.
“(Their advice) completely changed my approach to finances,” he said. “I consider savings to be non-negotiable and have set up automatic withdrawals to avoid temptation.”
He determines how much to transfer by looking at his income and subtracting rent, food, and other necessities like internet and telephone. “I made sure that my savings were a much larger portion than my money for treats and I treat them as if I had no choice but to make them, hence the automatic withdrawals,” he said. Explain.
Reassess your relationship to material goods
Keagan Perlette, a 28-year-old freelance writer from Calgary, believes self-help author Eckhart Tolle inspired her to find her fulfillment in the beauty and joy that surrounds her, rather than in the material things.
Instead of buying items that promise to improve her life, she’s more aware of the personal value of what she’s buying, she said. This advice was especially helpful to her when she was paying off her student debt and felt like she couldn’t have anything beautiful or frivolous in her life.
“Making discretionary purchases has become a slow and thoughtful process for me and it has really helped me curb impulse buying and (…) cultivate the patience to save for larger purchases or investments that will be well worth their price. She explained.
She is saving to buy better quality items and wonders if her purchases will be worthwhile in the long run.
“To make sure I’m spending my money on things that will bring me long-term joy, I ‘keep’ them somewhere, often on a Pinterest board or in an Instagram folder.”
Ms Perlette has embraced online shopping almost exclusively during the pandemic and is now using those digital spaces to admire beautiful items without taking them home.
“So many lifestyle items that I wish I had – from really beautiful linen sheets to Glossier make-up – really sells a story and an aesthetic,” Ms. Perlette observed. Working in marketing has given her additional insight into how these narratives are crafted, she added.
“Sometimes it’s enough to immerse myself in a brand’s Instagram content enjoying the beauty of the items ‘in store’ and leave them there or find other ways to bring that ambitious vibe into my life for less. cost.”
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