10 Things Millennials Need to Do With Their Money ASAP

DesiraeBudgets, Lessons Learned, Resources16 Comments

The 10 things millennials need to do with their money

Guys, this week is my birthday and I’m old af, so I want to share some of my Wisdom About Money with you. Specifically, the ten things every millennial should do with their money, ASAP – before they’re too old for people to consider them a “real” millennial anymore.

(Which can I just say, millennials as an age group range from 22 to 35, so every generalization about my generation can go die? I know millennials who make bank and have three kids in the suburbs. We’re all real millennials.)

In all seriousness, and all ranting about my generation aside, these ten things are the only ten I feel comfortable recommending to literally everyone, based on my personal experience.

When I’m actually an old lady, I will pull up this list in the VR chip embedded in my brain, complain about newfangled technology, and nod approvingly that I gave those young folk some good advice while I was still one of them.

Cause seriously, I’m not that old yet. How old did you think I was?!

Sorry. Birthdays. Here’s the list!

Start an online bank account.

I don’t care if you move everything over to an online bank to avoid bank fees (although I did that and I’m never going back you can’t make me) but you need at least one online bank account.

Why? Interest rates.

Your day to day bank is going to try to pitch you that 0.1% counts as a high interest savings account, and that is 100% bananas. You can get rates anywhere from 0.8% to 2.0% using online banks. Your savings deserves better than 0.1%. (I use Tangerine and EQ Bank, if you’re looking for options.)

DIY your taxes

(caveat: as long as you’re not self-employed, that shit is complex and you can use an accountant if you’re into that.)

OK, don’t panic, because this is so not as hard as people think it is. I’ve been DIY-ing my taxes for 5 years now, and it’s hands-down the best way to get a handle on what really happened last year with your money. On top of that, there are a ton of software options that can help make filing your taxes a breeze, and will make sure you get all the deductions that are coming your way.

I personally use SimpleTax, so if you’re a tax nerd like me and you want to get started, you can kick-start your taxes now (in Canada, anyways).

Start investing.

If you’re like Desirae, we JUST opened an online bank account and did our taxes, can you freaking cool it with jumping feet-first into all these entirely new things?

No, no I can’t, because not investing your money when you’re young is a house-on-fire personal finance emergency.

You’ll almost never have the opportunity to invest money and then leave it in the market for 40 years again, and those 40 years are going to make you rich. For real. There are options that range from super-duper-beginner-friendly all the way to advanced-investors-only-plz, but there’s definitely one that’s right for you, and you need to find it, stat. (Start with this free five-day email primer on wtf is investing, even.)

Start, or keep growing, your emergency fund.

I know there are people who are all “a line of credit is a great emergency fund!” but hi, I am not one of them.

If I lose my job, or have a major appliance break down, I don’t want to make it even worse by taking on debt. That’s where my emergency fund comes in, and starting one is as easy as opening one additional savings account and set up an automatic contribution – which you can do with as little as $5, by the way.

When you end up needing it, you’ll be so glad it’s there.

Figure out the whole “insurance thing.”

Do you know how much insurance you have? And what kinds? And how much it covers? Have you compared your insurance rates recently?

You’re probably either closing this browser tab as we speak, or weeping. Sorry, that was a lot.

The thing is, insurance is basically your first and only line of defence between your current life and total economic disaster, so while it’s not especially fun to think about, you so need to. Think of it like grown-up homework: you don’t have to love it, but you do have to do it.

Here’s a fun look at all of the things I learned when I sat down to actually read my insurance policies. “That Desirae always has such fun ideas of things to do!” said literally no one ever, but it’s still important and you should do it too.

Get a handle on your credit.

If you’re in debt, you should know how much debt you have, what the interest rates are, and have a rough plan for how you’re handling it (ahem, please note I didn’t say getting rid of it. Make the right choice for your situation, friend.)

If you’re debt-free, that doesn’t mean you’re off the hook for this one, either. If you don’t know your credit score, you need to, and there’s no excuse because you can get it for free in Canada (finally). Grab it from Borrowell or RateHub now – it won’t impact your score to check it.

Spend money on things that matter – but not too much money.

If you’ve made it this far, TREAT YO’SELF.

No, actually.

Treat yoself

There is definitely such a thing as saving too much money, since money is just a tool we use to make our lives great. Which purchases, big or small, make your life better? You need a plan to make sure you can afford those things, within reason, because life is too damn short.

Save money for the things you want to do – but not too much money.

If your list of things that make your life great includes some big ticket items, you’ll probably need to save up for them alongside the things that will make Future You’s life great too (ahem, being able to stop working one day, aka retirement).

Figuring out how to use your limited savings money to achieve all those different things is tricky, but no trickier than balancing your spending money to cover your wants and needs. You got this. (Here’s a step-by-step plan to balancing your big money-and-life goals that I use and love.)

Make a plan for your money (aka, a budget.)

Ok, after all the hard work of figuring out how you want to spend your money, and how you want to save your money, this step should be easy.

Put those two things together, and presto manifesto, you’ve got a budget (surprise!) If something’s not quite adding up, try tracking your spending for a month to see where your money is really going, or just take 60 seconds to build a One Minute Budget.

Figure out all of those acronyms you’ve been avoiding.

Alphabet Soup was so much more fun and delicious than Alphabet Money, which is what the financial media feels like some days. ETF, RRSP, TFSA, CPP, EI…. omg. The thing is, those acronyms are all super important to understand at a basic level if you want to rock your money. (Here’s a millennial’s guide to the TFSA and the RRSP to get you started.)

I have to do all that? Halp.

These are all things that I’ve actually done over the past few years, and the things I want to help you do this year. That’s why I opened up the Half Banked resources library, because I plan on building a whole heck of a lot more guides this year, to help you do exactly these things – and more.

To make sure it’s helpful for literally you, I put together another round of the survey I did last summer, which lead to posts like how to make sure you don’t raid your savings account, and how to plan for irregular expenses, to help you guys with the actual, real-life stuff you’re trying to do with your money.

I want to do more of that! (The helping, not the doing the money stuff. Please don’t send me the login to your bank with a “help me” gif. I’ll laugh, but like, you can’t just throw that login stuff around like confetti. It’s not safe.)

So take the survey and keep that bank account login info safe and sound.

Have you run into any challenges doing anything on this list? Or is there anything you’d add to the list as a must-do for your millennial money? Let me know in the comments!

16 Comments on “10 Things Millennials Need to Do With Their Money ASAP”

  1. Colin @rebelwithaplan

    For U.S. stuff, I use Turbo Tax for filing my taxes since it’s FREEEE! Assuming you don’t have a mortgage, kids, and work as an employee, the free version is perfectly good. For online savings account, Ally Banks is super popular. They pay 1.00% APY on all balance amounts. It certainly is a nice bonus that they have a wonderful user interface! For investing, if you’re into robo-advisors, use Betterment or Wealthfront or for an even better lower-fee hands-off option, use Vanguard’s Target Date Retirement Funds. They have a 0.16% total expense ratio!!

    1. Desirae

      Yes yes yes! Dear US friends, this is exactly what I would write if I lived there and used your (in all ways more available and competitive) fintech tools.

      Gah, I cover apps for a client and my fintech jealousy is SO REAL. Give me Acorns, dammit. Give it to me right now. Or Digit! BOTH WOULD BE FINE WITH ME. I just… I wants it.

      Hahaha awesome comment, Colin, thank you!

  2. Penny @ She Picks Up Pennies

    And if your taxes *are* more complicated, have them done one year through paid software or H&R Block (or wherever), and use that as your blueprint for future DIY until your finances/life changes considerably. That served Mr. P and I really well for the first three years of married life. Then, I had to go mess things up again this year and actually make money writing and through my blog. After I meet with a professional this year (again), I hope to DIY the following years.

    The only thing I would add to this list is to figure out how to give away your money. You don’t have to throw it around like Bill Gates, but you also shouldn’t be comfortable giving $20 a month to a cause you believe in and spending $150 a month on coffee. Sacrifice a little so when you’re rich af you’ll already have those giving muscles built.

    AND HAPPY BIRTHDAYYYYYYYYYYYYYYYYYYYYYYYYYYYYYY!

    1. Desirae

      Oh those are both such good suggestions! I couldn’t agree more on the working with a professional when it makes sense angle – I feel like there’s going to be a time in the not so distant future when I do exactly that!

      And omg yes to the giving thing. Give away your money! No matter how much or how little makes sense!

      (And belated thank you!)

  3. Kate

    I love this! I am a fellow Millenial doing just about everything on this list (ahem though some only very recently I must admit). A couple tough ones for me were that whole insurance thing and starting to invest – both can seem so scary and overwhelming! It took me years before I just sat down and figured out why disability insurance is a thing and that oh yea, I should have some…sigh. Thanks for this great recap to know if you’re on the right track. P.S. I stumbled across your blog not too long ago and can I just say – I am serially reading all of your archives. Like I just can’t get enough. It’s so awesome to have a Canadian resource too so huge thanks!

    1. Desirae

      Oh my gosh Kate I am so sorry for the delayed reply, but THANK YOU! I’m so glad we connected, and uh, so much yes to the insurance thing. No one EVER teaches you how to navigate it, and it feels so complex and weird and intimidating! PS. Checked out your blog and it’s so good! Keep it up!

      1. Kate

        Ahh sorry didn’t get/see the notification about your comment, just stumbled on this wayyy late haha. Thank you so much, that means a lot coming from you! So glad to be part of this community!

  4. Stephen

    Taxes are a no brainer for most people to do. There’s so much free software to help you out too. Unless you have self employment income or a lot of income streams it’s pretty basic stuff.

    1. Desirae

      Totally! I honestly want to do a video of how simple it is if all you need to put in is retirement contributions, a paycheque and some donations. Ten minutes, tops.

  5. Barb

    You use the example of feeling overwhelmed by all of the supplies you “have” to have before starting a recipe in your email. This list is great but could be just as paralyzing. Perhaps someone just starting to get a grip on their finances could just pick one and tackle one thing at a time.

    I think it was the late Arthur Ashe who had the best advise and it can apply to lots of different situations from cooking, learning a language or getting in control of your finances. He said, “Start where you are, use what you have, do what you can”. Brilliant.

  6. Mad Money Monster

    I would add to the list to calculate the power of compounding interest. Time is the biggest asset for any millennial. Once it’s gone, the amount of dollars that needs to be invested to get the same outcome easily doubles, triples, and quadruples, depending on just how long investing was pushed to the back burner.

    Mrs. Mad Money Monster

    1. Desirae

      Oooooooh yes, that is so key! It’s honestly the first thing I make sure people know when they’re all, “But why invest, though?!” because it’s legit the biggest reason.

  7. Making Your Money Matter

    Love, love this. You have a great way of making it sound simple (which it really is!). I’m tired of hearing about how the millennial generation is doomed financially with the student loan debt, yada yada (of course in the U.S. we hear it about the Social Security system for our non-retirement ever because we didn’t save enough). Millennials are awesome-so many of us are doing great and we’re figuring it out! 🙂

    1. Desirae

      Thank you so so so much! My whole goal is to help people get through the whole “Finance is super complex!” thing, because on the other side of that, it’s actually so simple! (And oh god we get the “social programs will be bankrupt / bankrupt us all” stuff here in Canada too, lol.)

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