Once you have kids, it all changes. While we've all heard this, it's not until you have children that you realize that every single aspect of your life changes. It's not just the lack of sleep and the worries that come with the complete responsibility of another human life, 24/7, it changes the way we prioritize as well. Naturally we're going to put our kids first, but the way we spend money will also change.
A recent survey done for Presidents Choice Financial revealed that while only 44 per cent of millennial parents would have considered regular savings on groceries a high priority before kids, 76 per cent of this group agree grocery savings are highly appealing today. But groceries aren't the only thing they're looking to save money on. Ninety-two per cent of them agree that now they have a family to consider, they look for ways to save money on everyday items as well.
Kat Inokai and Heath Horejda, young parents of children aged two and six, were always careful with their budgeting before kids, but agree things change a bit. "Now, we still shop on a monthly budget but we do extensive meal planning and prep and that dictates our purchases. If we can find a coupon code, or catch wind of a sale we're all over it," says Inokai.
But besides everyday purchases, what about a weekend away? Seventy-seven per cent of those surveyed would have considered this appealing before they had kids, but a whopping 94 per cent agree collecting rewards or points on every day purchases is appealing to them today. The mindset and habitual changes aren't easy, and it can be hard to change spending behaviour into saving behaviour.
"Before kids, a weekend away was something that was saved for our anniversaries, friends' weddings, or group travel to a convention or concert with friends- we had tons of time to ourselves," says Inokai. "We collected rewards and points before kids -- what's changed is how we redeem them. I used to love collecting and putting credit card rewards towards travel. Now I'm more likely to put them towards groceries or necessities."
Fifty-two per cent of millennial parents surveyed agree they used to spend wildly in youth on things they couldn't afford, and 71 per cent agree that they'd be in a better financial situation today if they'd saved more money in their youth. While they wouldn't describe themselves as "wild spenders," Horejda and Inokai don't regret the money they did spend. "If we wouldn't have spent that money we'd arguably have more in the bank, but we wouldn't have the experiences or collectables. Quality of life goes a long way."
One of the biggest issues for millennials is getting into the highly priced urban real estate markets in Canada. Nearly half of respondents (48 per cent) agree home ownership would be a source of great financial burden, and nearly four in five millennial respondents (79 per cent) agree they had to compromise on their expectations when purchasing their home.
"We are always looking for ways to save money, even if it's just to increase our immediate cash or liquid assets for a mini vacation or a family night at the movies -- we're very goal driven, and a lot of our goals are experience based," Horejda says. Clearly, the experience of having kids certainly changes the goals for many in this market.
From July 15 to July 18, 2016 an online survey was conducted among 1,011 randomly selected Canadian parents of children aged 12 to 21 who are Angus Reid Forum panelists. The margin of error -- which measures sampling variability - -is +/- 3.1 per cent, 19 times out of 20. The results have been statistically weighted according to gender and region. Discrepancies in or between totals are due to rounding.
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You may feel like saving is impossible with that huge pile of debt sitting on your back, but unless you take care of it first, you won't be able to plan out a clear financial future. "High debt levels will slow down your saving and investing abilities when you start working, so do everything you can do to stay out of debt," says author and financial coach David Campbell Lester. Obviously, this situation isn't ideal for everyone — especially students who take loans during the school year and don't find full-time work right away. Once you graduate, talk to a financial planner to figure out how much you should save each month, and if you're a student, talk to your school's career centre for part-time work or look for grants or scholarships.
This can either be someone who works at your bank or someone you know who is really good with their money. Meet with your mentor once a month and discuss your challenges and successes thus far in terms of your career and finances, Lester says. And although it may be a little embarrassing to share your savings and debt numbers with someone you know, remember, we've all been there at one point.
"When in school, get a part-time job that will complement your career when you graduate, and give you cash to keep out of debt," Lester says. Although getting part-time work can be tough during the school year, try looking at jobs on campus that can work around your schedule, and give you more skills in your preferred field.
If you love your credit card and treat it like a best friend, make sure you're using it for the right things."Build credit by paying your mobile, cable, internet, and other fixed costs on your credit card and then pre-authorize a full payment at the end of the month," he says. Don't make of habit of paying for everything on credit — especially if you can't pay it off. Also, when you are looking for a credit card, choose one (or two) that will benefit you with either points or a cash back feature. Credit can be your friend, as long as you don't create a hole of debt.
If you know you have $100 a week to spend on food, coffee, entertainment, etc. then leave that amount in a "spending account," or take it out in cash every Sunday, Lester says. If you are the type of person who is more likely to spend cash if they see it in their wallet, start with a small amount, like $20 to $40 per week.
Make your own coffee that day, pack your lunch, stay in and watch Netflix, and make your own dinner. Start this challenge by bringing your lunch every day, for example. Turn it up a notch by implementing financial-free weekdays at least three times a week. "Going out only once a week will save you a ton of money," Lester says.
Have your bank transfer 10 to 20 per cent of your paycheque into a savings account every time it goes in. Over time, it will grow and you won't even miss the amount. If you're worried about spending it, try opening up a separate bank account without any fees or invest in a TSFA. Remember, once you get comfortable, you can move up the percentage.
Looking into the future, start thinking about investing in property. "Real estate has gone up in the long run and there isn't a single better investment for retirement than a home that is paid for," Lester says. Although this may seem out of reach for most millennials, start saving early by putting away a certain amount of money each month for a condo or house, live with roommates to decrease your own rent costs, and keep an eye out for new buildings or units in your area.
"I know it seems boring, but once you have a portfolio of investments pumping money into your account, you'll see it as fun too," Lester says. Join an investing group, watch the news for the latest numbers or pick up some investing books from the library.
Take a minute to actually figure out where your money is, including how much money you have in each account, money you owe and money you have invested, if any. "You don't have to cut out expensive coffees, shop with coupons, and live like a hermit to be a money champ. Spend less than you make and save 10 to 20 per cent for your future," Lester says. If your net worth is increasing year after year, you're on the right track.
Follow Kathy Buckworth on Twitter: www.twitter.com/KathyBuckworth