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When the cost of nearly everything is on the rise it can be difficult for young Canadians to imagine putting money aside for wants, rather than solely for needs.
However, spending on the ‘fun’ things in life isn’t an impossible reach for Millennials and Gen Z, say experts — it might just require sacrifice and a new outlook.
“What we’re used to in the past is completely different from what we’re seeing today,” said Barry Choi, a personal finance, travel and millennial and generation Z money expert at moneywehave.com.
“Being able to travel and eat out while affording life comfortably is becoming harder and harder, and combined with the FOMO a lot of people might get from what people are posting online, it’s understandable that so many young people feel they’re falling behind in savings and fun.”
Succumbing to this kind of pressure — oftentimes from multiple sources, including family members and socially ingrained ideas of ‘success’ — is something 34-year-old Montreal resident Jesse Kennedy said he has had to work through over the past several years.
While in his 20s, Kennedy worked various jobs in Prince Edward Island’s restaurant industry. Throughout those eight years, his paycheques and tips found their way out of his grasp almost as soon as they fell into it.
“Because it was a cash-based gig, I would walk into a clothing shop and drop 350 bucks on a couple of pairs of pants and some shirts, and wouldn’t even think twice about it,” said Kennedy. “I figured I could just make it all again the next weekend.”
However, as time went on, Kennedy realized he would need to make some serious changes if he wanted financial stability. He went back to university, worked multiple jobs at a time to pay off outstanding debts, and managed to buy a condo in Charlottetown — all while finding a way to still save and spend on fun.
“Thankfully, I was in a province that had a lower cost of living and gave me the opportunity to do all these things,” he said, “but for me, it was really a matter of realizing what was important to me in that time, managing my expectations, and making my money decisions based on that.”
Choi echoed this sentiment, stressing that the most important aspect of spending on fun is realizing what is realistic given one’s circumstances and managing one’s expectations accordingly. Spending on things like travel, entertainment and eating out is certainly possible, but exactly how much one spends on those things is almost entirely up to the individual.
“If you live in a big city, like Toronto or Vancouver, you’re going to need to put more money towards living expenses,” he said. “And if you want to buy a house earlier on, then you’re also going to need to prioritize accordingly — because the simple reality is that every time you spend on something fun, it takes away from putting it towards something you need.”
According to Choi, that means understanding that one may not be able to go on a vacation once a year like their parents did, or eat out twice a week like their wealthier friends might be able to — but that doesn’t mean the average young Canadian has to miss out entirely.
“Even if you’re only saving a small amount for the fun stuff, something like $50 a month can get you a really nice vacation after two or three years,” he added.
In fact, he emphasized the importance of attaining the kinds of experiences that are only possible while one is young — like travelling extensively without the stress of a full-time job, or going out on weekends without having to worry about child care.
“Finding ways to get the experiences you want ... is a great way to go about making sure you don’t miss out on life just for a bigger RRSP,” said Choi.
Seeking out paid positions abroad or being smart with discounts on entertainment and restaurants are two things Choi recommended. However, he added that finding a way to make one’s hobbies cheaper is probably the best way to go.
“If you like eating out, that’s great, but maybe a more budget-friendly thing for a foodie would be learning how to cook,” he said. “But of course, it always comes back to what’s most important to you and what you will and won’t cheap out on.”
This is something Kennedy has taken to heart, especially in the current early years of his finance career. While he has definitely made sure to cut down on frivolous spending and chosen hobbies that cost little, he said he has still managed to find ways to splurge on what’s important to him — including a trip to Bali, where he was able to meet his partner’s extended family.
“The trip was pretty expensive, but I wouldn’t change it, because we both had this amazing experience that we could probably only do in this time frame of our lives, and was equally affirming because it was the first time I let myself do something like that from a financial standpoint,” he said.
“So I think it really comes down to what you’re going to get from what you’re spending — tangibly, but also emotionally.”
This report by The Canadian Press was first published July 25, 2023.