rainy day.

saving money has never been an easy thing for me. i hand out my spare change on the street and like to buy pretty things for myself and anyone else i can mail them to. add in a condo, a car, life, etc. and most of the time i feel like two jobs don’t keep my head above water.

this is quite the opposite of my family. dad is a great business man with sound savings techniques that somehow sister inherited. when it comes to genes, i got the recessive one in that gamble.

to be honest, the thought of talking money and savings scares me, but it’s a fear i’ve faced head on this year. i took out every book and book-on-tape from the library i could find, focused on first getting rid of debt, and then i called dad.

TD Bank says many millennials turn to their parents for financial advice. according to their recent survey, the top three pieces of advice millennials have received from parents are: not living beyond their means (55 per cent), saving a percentage of every paycheque (52 per cent) and saving for a rainy day (47 per cent).

dad gave me, and would give you, all of these tips, too. but what do they actually mean? Shirley Malloy from TD Bank explains:

what dad says: “don’t live beyond your means.”

what dad means: “don’t mistake credit for cash.”

my first mistake. as much as i’ve known that credit card debt is the worst kind you could have – it has such high interest rates if you don’t pay them off fully – when you’re strapped for cash and need a couch, sometimes you stretch beyond your means. but stop it there! it’s the frivolous items that don’t need to end up on your credit card. my first move when i decided to get my money act together was to pay off debt. if you’ve seen me wear the same outfits over and over it’s because any extra money went towards debt. i made a budget and used money management apps like Mint and TD’s My Spend to help track expenses and keep essential and discretionary spending in check.

what dad says: “save for a rainy day.”

what dad means: “save for a rainy three to six months.”

Malloy says everyone should aim to set aside three to six months of income to provide a financial buffer against any unexpected life events. this is where my panic sets in. six months?! the issue is that when you look at it as a whole, it’s a really big number. what you need to do is break it up. to start, Mallory suggests to plan to save a two month buffer over the year, and once you’ve reached that goal, increase it to four months. setting up automatic withdrawals or using the Simply Save program are great ways to help build savings.

what dad says: “save a percentage of every paycheque.”

what dad means: “save 10 per cent of every paycheque.”

again, panic! ten per cent? i recently set up a bi-weekly direct withdrawal from my chequing account to my RSP. this is the most grown up thing i have done in my entire life. here’s the thing: it’s not 10 per cent. maybe half? thankfully Malloy suggests that if 10 per cent isn’t realistic, starting smaller is a step in the right direction. she suggests that in a few months you set a meeting with yourself to revisit the budget and see if you can increase this amount.  the challenge is to reach the goal of saving 10 per cent each paycheque over time.

rainy days, vacations, and retirement are all things that i have to consider now when i look at the balance in my bank account. with these three steps and a little practice, i’ll be ahead of the game in no time.

do you follow any of these savings principals?

thank you TD Bank for sponsoring s&s and making this post – and future savings plans – possible.