7 Crucial Steps for Young Adults to Secure Their Future


If you’re a young person in the process of finishing school, getting your first job, or somewhere in between, financial stress is the last thing you want to experience, right?

Now is the time that you could start securing your financial future, and here are seven big steps (and a bunch of baby steps) to get you moving in the right direction.

Step 1) Educate yourself

In many ways, financial success is more about knowing what to do with your money than it is about having money.

Baby steps:

  • Learn about the Canadian tax system and how you can maximize your tax returns
  • Do your research before making large purchases

Step 2) Set a budget

If you’ve never used a budget before, setting one can start with looking at your current expenses. You’d be surprised to see how cutting back on takeout can have the same impact as getting a raise in salary.

Baby steps:

  • Keep track of your spending and review your expenses regularly
  • Identify your fixed and variable monthly costs to see where you can save more money
  • Set up an automatic withdrawal to your savings account

Step 3) Spend a little

Spending wisely starts with understanding the difference between want and need. That’s not to say you can’t treat yourself from time to time, but make sure you can afford all the things you need before you start spending money on the things you want.

Baby steps:

  • Based on your budget, give yourself a weekly “allowance” to spend on entertainment and wants and stick with it
  • Avoid impulse buying and always shop with a list
  • Shop around for the best prices online or in store

Step 4) Save a lot

Starting to save money diligently when you’re young will go a long way to maintaining a savings mindset as you go through the many stages of life.

Baby steps:

  • Set realistic short- and long-term savings goals for large purchases, such as a new cell phone or a down payment on a new car
  • Start an emergency fund by setting aside at least 10 per cent of your monthly income, with the goal of having a minimum of three months’ living expenses on-hand in case of emergency
  • Though it may seem impossible to imagine, it’s never too early to start thinking about your retirement. Start with a small monthly contribution to a long-term savings account that you can increase over time

Step 5) Establish good credit

Your credit history is important when it comes time to make large purchases, such as getting a mortgage for your first house.

Baby steps:

  • Get a low-limit credit card that you can use for small purchases
  • Pay off the balance right away
  • Always pay your utility bills on time

Step 6) Manage your debts

This goes hand-in-hand with #5 above. Once you start to accumulate debt, it can be very difficult to catch up. Having credit doesn’t mean you can afford it, so don’t spend money you don’t have.

Baby steps:

  • Save up your money for large purchases
  • Don’t put anything on your credit card that you can’t pay off within a month
  • Always pay at least the minimum monthly payments on “good debts” such as student loans and mortgages

Step 7) Protect your personal information

Your bank account and credit card information should always be protected and only shared when you are confident that the person or site is legitimate.

Baby steps:

  • Memorize passwords and PINs and change them once in a while
  • Be cautious about giving information out over the phone
  • If you bank online, always sign out of your account and then close the browser

 Bonus step) Talk to your parents

Whether they’ve done things well or not, your parents’ financial experiences and advice can be helpful. Ask them about their savings plans, retirement plans, how they’ve managed debt, what they’d recommend or how they’d do it all differently if they could.