Jessica Moorhouse is an award-winning personal finance blogger, and host of the Mo’ Money Podcast. She’s featured frequently as a finance expert in The Globe and Mail, The Huffington Post, and Lifehacker, and most recently founded the Millennial Money Meetup to help promote financial literacy among Millennials. Jessica took a moment out of her busy schedule to chat with us about Millennials and the personal finance challenges they face today. [no_toc]
Tell us a little about yourself. Why did you choose to start a personal finance blog?
At the start, it was just to document my own personal finance journey. I loved reading other personal finance blogs when I was fresh out of university, and I thought I could add my two cents if I started my own. I thought it would only last a year, but it’s been almost 5 years since I started blogging, and it has honestly changed my life. Now, instead of just sharing my personal finance journey, I’m educating people who want to learn more about their money and sharing the stories of others through my podcast.
Do you think that Millennials are less knowledgeable about money matters and personal finance than previous generations? Or has this always been the case for young adults?
If anything, I think Millennials are more knowledgeable about personal finance (or more willing to learn) than older generations.
Let’s be honest here, Millennials have had a rough start, especially compared to their parents’ generation. They graduated university during or after the recession, they’re paying higher tuition than any other generation, they’re drowning in student debt, and they’re either underpaid or underemployed. I can’t tell you how many Millennials email me after reading my blog or listening to my podcast explaining that they have to work 2-3 jobs just to keep their head above water. Because of this, they’ve had to figure out how to get out of debt, save more money, and earn more income with more urgency than say Generation X or the Baby Boomers.
What’s the biggest thing that you think Millennials tend to do RIGHT when it comes to personal finance?
Growing up, I was taught that to succeed in life, I just need to work hard. Guess what? In 2016, that’s just not enough. You not only need work hard, but you also need to excel, stand out, and go above and beyond every day.
No matter what field you work in, being a Millennial in today’s workforce is incredibly competitive. Sure, there are some Millennials out there making headlines for being “lazy,” but that’s just a flashy headline. The majority of Millennials are hustlers. They work a 9-5, freelance on the side, volunteer, raise their young family, and constantly upgrade their skills to keep up with ever-evolving technologies.
For Millennials who have amassed significant student loan debt, what advice can you provide to help them manage and pay down these loans?
The first part is always the scariest: admit that you have debt and it’s a problem. Debt is considered almost normal in our society, and Millennials especially need to understand that carrying debt is not only unhealthy, but it can also be dangerous.
Then, you should set up a payment plan and have a deadline to have it all paid off by. Without a date, you’ll never be truly motivated to take action.
Lastly, talk to others about it. You are not alone. An incredible number of Millennials are in debt, and it shouldn’t be something to be ashamed about as long as you’re doing something to fix the situation.
When putting together a budget, what area(s) do you think Millennials tend to forget about or underestimate?
Many Millennials have a tendency to not budget or save for the future. It seems so far off, and Generation Y is all about the here and now. Saving for retirement is key.
Another area is the emergency fund. You don’t need one until you really need one. That’s why it’s important to consistently put money away for life’s unexpected (and expensive) surprises.
You offer a free “Moving Out Checklist” for Millennials who are getting their first (or next) place of their own. What does this checklist contain?
I made this list when I was moving out of my parents’ place after university, and I revamped it this year. Before I moved out, I’d never had to buy housewares, and it was honestly incredibly overwhelming. So, as I made the transition from my parents’ basement to my own personal basement suite, I started writing down everything I bought. It helped me learn what I could and couldn’t live without, and helped me budget for future wish-list items.
The goal for sharing my Moving Out Checklist was to help others in need of some guidance or to help those who haven’t moved out yet start saving up for these items well in advance.
Do you have any advice for Millennials about credit card usage?
Credit cards can be your friend, but they can also be your enemy. Personally, I don’t love credit cards because I see how they can affect some people negatively. However, it’s important to learn to use them responsibly, and they do help you build up your credit so you’ll be in a good position to get a loan or mortgage in the future.
What I always suggest is to use debit cards or cash for your day-to-day purchases, then link up your credit card to your bank account for your recurring bills so you never miss a payment, or use it for bigger purchases so you can take advantage of your credit card’s rewards program. And if you really don’t trust yourself with credit cards, leave them at home! Put them someplace safe and out of reach.
Since you recently purchased a home for the first time, could you share with us the most important thing you learned about the homebuying process?
If you’re buying in a hot market like I did, make sure you know as much as you can before even looking at a place that’s up for sale. We found our current home on the first day our realtor showed us places. We ended up making an offer that day and closed in only 30 days. Luckily, we already had our mortgage approved and had done extensive research on what our closing costs would be and how the whole process would go down.
Buying a home is a huge purchase and life decision, so never go into it if you are not completely certain of how much you can afford and what will be expected of you.
Finally, do you have any suggestions on how to get Millennials to start saving money for the future?
In order to be motivated to save, you need to have a goal. I’ve always had goals, whether it be just to save up enough to have a net worth of $10,000, go on a week-long vacation in Mexico, or make a future down payment on a home. Without clear goals and actionable steps on how to achieve those goals (e.g. “Put away $300 every two weeks into my travel savings fund”), it just won’t happen.
You can even go a step further and create a dream board for your savings goals. I have a friend who does this every year for goals like increasing his income by 10% or buying a new car, and every year he achieves those goals! Why? Because when it’s up there on your wall staring at you every day, there’s a sense of realness and urgency to making those goals or dreams a reality.