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One minute you’re in school, then you’ve got the entry-level job, and then you find yourself paying bills, trying to save a down payment or pay for a big wedding.  Reality has set in, and you really need to revamp your finances. 

With predictions that this generation will have difficulty achieving the same lifestyle their parents enjoy, it makes you wonder what you can do to beat the odds.  Here are two examples of situations with solutions that can help you overcome possible obstacles.

Example 1:  Credit Card Debt


Is your credit card maxed out? It helps to avoid the credit crunch in the first place, but once you’re there, you can’t ignore it.

* Option 1 – The credit card industry is pretty serious about late payments, so be a good customer.  Missing payments can make it impossible to negotiate with them for a better interest rate.  At least pay the minimum on time.

* Option 2 – If possible, establish a Line of Credit with your bank and use it to consolidate your debts at a lower interest rate.  Pay the credit cards off, and don’t use them unless you have the money in the bank to pay the bill off in full each month.  You want to avoid paying more interest.

Example 2:  Saving for a New Home

Accumulating the down payment for a new home requires good budgeting techniques. 

* Compare what you really need to what you want.  Take care of needs first.

* Understand what you can afford, and stick to your limits.  Allocate your gross income by percentage to cover your essentials, like 30% for shelter, 10% for transportation and so on.

* Know how much you spend and what you spend it on.

* Avoid unnecessary fees, penalties and interest by keeping sufficient cash available to pay on time.

* Pay your credit card bills in full each month, or pay the balance off before charging anything else.

* If you buy something using an installment plan or consumer loan financing, calculate the total cost of payments plus interest, then decide if you can wait until you’ve saved enough instead.

* If you have some kind of group registered savings plan at work, and you change jobs, try not to touch those savings.  Leave even a small amount invested, rather than pay tax and fees for cashing it in.

You need to make a real plan and stick to it.  Don’t guess at the best strategy for financial success.  Consult a professional financial advisor for help preparing a financial plan specifically for your situation.

by Janet Baccarani and Jennifer Black
all images by Nikkie To

Janet Baccarani and Jennifer Black are financial advisors operating as Dedicated Financial Solutions with Manulife Securities Incorporated, a Manulife Financial company