Millennials like instant gratification. We like to be recognized for our achievements in order to feel satisfied.
We want our bosses to compliment our hard work, and our significant others to recognize what we bring to our relationships.
And on top of all this recognition, we like to reward ourselves. Job promotion? New shoes. New boyfriend? Dinner with the besties.
It’s astounding what we will buy because we think we need it. We crave that immediate satisfaction.
Millennials have a serious problem with need and want. And when it comes to buying things we think we need, there is no one to keep us accountable but ourselves.
My boyfriend needed (wanted) a new hockey stick last season, but since he’s dating someone in finance, he was put on a rigorous debt cancellation and savings plan. His spending money was limited.
Despite his plan, he went and bought the hockey stick – and a new helmet. This put him in the red.
“But Vaness! I needed it!”
Did he need it? Or did he want it? He should have waited until his next payday or borrowed equipment from one of his teammates. Now, when he does get paid the following week, he’s already behind and playing catchup. If he has set bills that come out that week, he has already hindered himself by having less money on the day he gets paid.
This was an impulse purchase. And this is what screws the millennial.
We have no idea how to decipher between need and want. We all suffer from too much impulse purchasing.
The fact of the matter is, if you have to buy something and it puts your bank account in the negative, you can’t afford it. So nip it in the bud before it nips you.
If you have an overdraft attached to your chequing account, make sure it’s under $500. This is not your money. It is borrowed money from the bank and at the end of each month, if you’re in the red, you’re probably paying for it. Keeping your overdraft in check only protects you and saves you from constantly living in the red.
If you have a savings account that’s accessible with your chequing account, get rid of it. You’re probably transferring money from your savings into your chequing and back and forth. So how much are you really saving?
If you haven’t already, set up a tax-free savings account outside of your bank that isn’t accessible online. Pay a portion of your paycheque to yourself each payday and treat your savings like a bill. You will save much more this way and will have larger chunks of money at a time to buy things like that new laptop you need/want, or that vacation to Mexico that all your friends are going on.
And to avoid the impulse purchase altogether, leave your credit and debit cards at home. Withdraw your spending money for the week and keep the cash on you. Once it’s gone, it’s gone – don’t reach for your card.
Vanessa Kunderman writes every month on money issues facing millennials. Email her at [email protected].