Now, I can’t say we have done things the “right” way according to experts, lord knows we have made a few major “whoopsies” along the way, even though for “right now” we are doing pretty good in life.
A lot of the reasons why we made the change we did three years ago was because of the stuff we DID WRONG when we first started “adulting” and living in real life.
Life has surprises, and even though we prepare for those big moments to happen, sometimes the preparation just isn’t enough, or the surprise is just “too surprising” for us to manage.
So, where did we screw up along the way?
For starters, and I think this is probably EVERY persons regret, I wish we had saved more, and done it earlier. There is NO going back, and the minor sacrifices we would have made “back then” would have made a huge impact on our life now. We spent money on stupid stuff, and granted we DIDN’T spend a lot of money in comparison with a lot of other people, but in the end, saving more would have been smarter.
Now, we did make a few good decisions, having a small wedding (trust me, this is NOT the BEST day of your life) and investing early into purchasing a home, but we can always do MORE.
We tended to rely on our credit cards for “surprises” and while we were great at paying them off (eventually) the monthly costs associated with them were just TOO high. We should have been aggressive with our “emergency” account so it was there when we needed it.
Our ‘growing” period happened during that depressing investment hit where suddenly the RRSP’s that we had been so sure of were reduced to a quarter of their value. We became investment “shy” because of this, and having had property prove its worth to us, we pulled our investment dollars at put them into real estate. Now granted this wasn’t a BAD decision, but I still wish we had kept MORE into RRSP’s (don’t worry, we have some) and worked with a financial advisor we trusted to conquer our fears and find the right strategy for our family.
A recent TD Bank survey says that only one-quarter (24 per cent) of Millennials and one-third (33 per cent) of Gen X Canadians say they have properly budgeted or are properly budgeting for retirement, and I would agree that we are in that category.
I do NOT feel we have FULLY embraced the concept of retirement or what that is going to mean. Much like it is hard to imagine the change a baby is going to have on your child free life, it is hard to imagine just WHAT retirement means.. and how that is going to massively affect your bottom line.
Back in MY parents day you finished school, got married, bought a house and had kids. Life followed a plan, and so investment strategy was easier to prepare for. According to the TD Survey, these days only 58% of Canadians do it the “old fashioned” way, and less Millennials are following this well worth path of their grandparents and parents. This just means you need to put MORE thought into preparing for the big moments, and adjust your strategy and the conversation with your Financial Advisor to manage the financial impact of these significant moments when they occur.
One thing I do know though, is it is NEVER too late to start. Small amounts add up and while it is fabulous to “Live for the Moment” the reality is that stability over a longer term is a better option for me.
What we do know is Canadians currently are NOT budgeting for life’s big moments. According to TD, only one quarter of Millenials are budgeting for their first child, and less than that are preparing for retirement. Us GenXers are almost as bad, with only one THIRD of us preparing for retirement (and trust me folks, it is coming up FAST)
We know that stuff happens to throw off your plan. People change directions more frequently now, and with every big investment there are added costs that we can’t prepare for. I know from experience that everything costs MORE than you think, and we need to start preparing for that and relying less and less on loans and credits.
So, how do we do it?
Decide WHAT is coming up in your life and start saving for it. Make less impulsive purchases, especially when they relate to these big moments. Do you really need the newest stroller for the baby? Or the super expensive flowers for the wedding? Make smart choices ALL the time and look at the big picture of your life, not just the snapshot.
Find a financial advisor you can TRUST and as uncomfortable as it is, make a plan and stick to it. Acknowledge that time is passing and there is stuff coming up that you need to prepare for (yes, even you millenials need to think about this) and that you will be in a better place (perhaps the envy of your friends) if you do. Before your meeting, TD recommends asking yourself these important questions, so you can get the advice you NEED.
•How do I handle multiple milestones occurring at the same time?
•Is it smarter to plan a wedding or buy a home first?
•What costs should I factor in when contemplating buying a home?
•How much do I need to save to comfortably enjoy a parental leave?
•How do I know if I’m on track to save enough for retirement?
I have made it through a bunch of different phases already. Dating, newly married, first time home buyer, first time parent (and second and third) and now, neck deep in “school aged kids) I know that “university parent” is coming, as is “kids wedding” and “grandkids” and I have some amazing plans for that “empty nester” stage that is coming in on the horizon in the next 15 years! I want to be sure to make the most of EACH stage, not just the one I am in, so I am preparing now for what is coming.
How about you?