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Young people can feel hopeless about saving money as living costs keep rising.
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A financial advisor says it’s tough out there, but there are small changes you can make.
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Kate Norris recommends budgeting and paying yourself first to feel more financially secure.
It’s a tough world right now for young people trying to save money. Grocery prices and rents keep rising, and even fairly financially stable Gen Zers can feel hopeless and worse off than they truly are, thanks to “money dysmorphia.”
Many are “just trying to keep their head above water,” Kate Norris, a certified financial planner at Sun Life, told Business Insider.
“Sometimes at the end of the month, you’ve paid all the bills, the groceries, and there’s not a lot left over,” she said. “It is tough, I get it.”
Norris said there is a widespread lack of financial literacy among all generations, and not just Gen Z.
When it comes to young people figuring out their future, she has these four key pieces of advice.
Norris said her first piece of advice is to set up automatic payments to a savings account at the start of each month.
“Once it’s out of the account, you’re less tempted to spend those surpluses,” she said.
“Don’t overthink it — just get the money somewhere. You might need it in an emergency sooner than later.”
Norris said people of all ages can lose track of the money inflows and outflows to their accounts, which is why budgeting is essential.
“You’re like, oh, I budget $500 for groceries, and then it turns out it’s $800, well, then we can’t really do any cashflow planning or budgeting to know what’s left over,” she said.
Many banks have services to help you budget, Norris said, and categorize your expenses, which can help you feel more in control.
“Taking time to actually look at those three to six months of expenses and saying, Where is the money going? What am I spending?” Norris said. “Once you’ve created that habit early on, I think it sticks with you.”
Norris said it’s a good idea to be very aware of consumer debt rather than just seeing it as a number you’re disconnected from.
People are drowning in car debt, for example, not realizing how much interest they are paying over time.
“It’s not just about your monthly payment — what is the debt? What does that debt mean for your net worth?” Norris said. “If you actually break it down, you could be spending $10,000 in that time period on interest.”
