Welcome to our Gen Y money blog, where a recent grad chronicles her real-life journey to becoming a financially independent adult.
Let's be honest. The majority of my previous New Year's resolutions haven't exactly stuck beyond the first few days of January. But a recent career change has left me feeling good about staying committed to my goals for 2015 – at least the financial ones.
My bank account was stretched thin for most of 2014, as the aftermath of an unpaid internship and funding of a lengthy work commute proved to be major leaks in an already-shallow income tank.
Although the thought of re-entering the job hunting arena made my palms clammy, I knew that it was the best option for fulfilling my top three career objectives: continuing to develop my skills, earning a higher salary and achieving a good work-life balance (which, in my case, meant shaving off as much commuting time as possible). So I suppressed my job-hunting PTSD and started looking for opportunities.
The hunt was far less stressful this time around. Although I still faced plenty of rejections, the entire process was made easier by the fact that I was already earning a steady income and actually had some skills to display on my resume. I no longer had to rely on the hope that the company was specifically hiring for fit, or that my interviewer and I could skip the hard-hitting questions and bond over our mutual interest in Sheryl Sandberg's Lean In.
Eventually, I was offered a position at a startup in downtown Toronto. Not only was the commute ideal – less than 30 minutes by public transit – but there would also be a salary increase and the opportunity to take a huge step forward in my career. I accepted.
In the excitement and anticipation of this career change, I've decided to set some big financial goals for the coming year. I've targeted 2015 as the year in which I'll pay down close to half of my student loan and start to seriously educate myself on how to set up my financial future.
With my salary increase and the amount I expect to save on transportation, my income should be almost 25 per cent higher than last year. Through the financial ups and downs of 2013 and 2014, I was able to repay 22 per cent of my student debt. It will take some serious budgeting and dedication to cough-up the remaining 48 per cent that I've set as this year's goal, but I'm up to the challenge. It will mean that in total, a year from now my student debt will be 70 per cent eliminated.
Outside of student debt, 2014 forced me to live a paycheque-to-paycheque lifestyle that prevented me from accumulating savings and discouraged me from thinking ahead to building a successful financial future. If I could barely afford to live outside of the budget I followed as a student, how was I supposed to think about saving to buy a home, investing in the stock market or stashing away money for retirement?
There are other things I feel like I should know. Do I need an emergency fund and if so, how much? What is a TFSA? What kind of bank account should I have?
Though my primary focus in 2015 will be hacking away at my student debt, it's about time I start lining up a financial strategy beyond the confines of Debtlandia. Besides, the thought that I'll soon be debt-free and can start saving to actually do things with my money, like travel or eventually have enough of a down payment for a house, is definitely motivating.
They say money doesn't buy happiness, but as I look ahead to next year I feel a lot more cheerful about my financial future. As for my non-financial resolutions, well let's see how long I can cut carbs or go to the gym.