Skip to main content

There's a time management solution to Gen Y's anxiety about home ownership, careers and retirement.

Time is the one asset that young adults have in abundance. If they use it well, they can build a career, buy a house, raise kids and retire comfortably. These milestones may happen later in life than they did for previous generations, but they will happen.

In building our new Gen Y Money web page, we asked twenty- and thirtysomethings to tell us their biggest financial fears. They answered by saying they're most afraid of not being able to afford a house and retirement and build a career. The solution is a new financial timetable for life that addresses Gen Y financial challenges by taking advantage of increasingly long lifespans. If you live longer, you can take more time to get where you're going.

Story continues below advertisement

This is no slacker's manifesto. It's a practical response to the frustrations many young adults feel as they try to meet expectations that they will, in quick succession, graduate into a good job, save a house down payment, have kids, move to a bigger house and so on. With some compromises, all of this is achievable with the new financial timetable for life.

We'll start with postsecondary education. The standard timetable works something along the lines of graduating from high school at 18, taking four years to get an undergrad degree and then maybe another two years for a masters degree. By your mid to later 20s, you're done.

Let's advance that by a few years and say you're still on track if you complete your education by as late as age 30. This allows for taking time off to work, earn money for tuition costs and learn more about yourself so you make sound career choices. There's room in this schedule for going to college to upgrade credentials earned through a university BA program, and for a victory lap in high school if it helps kids improve their marks and focus.

There's room for postsecondary education to take longer in the new financial timetable, and for people to take more time to get a career in gear. Today's grads should expect 40-plus years in the work force, with the first five or so quite possibly spent in an establishing phase that includes part-time and temporary jobs and maybe even additional education. If you haven't found career-building work by your early 30s, you still have time.

A longer path toward career-building employment will push buying a house further into the future, but that's workable. At age 38, you could buy a house and have the mortgage paid off in roughly 22 years simply by making payments every two weeks instead of monthly. You're mortgage-free by 60 and have five to 10 years to top off your retirement savings.

We can extend many of life's milestones, but biology limits your ability to put off having children. The result is that kids may come ahead of home ownership for some millennials. Here we come to one of those compromises mentioned earlier. You may have a couple of years of raising kids in a condo or apartment before moving into the house. It's not ideal, but it's doable.

Another compromise associated with the new financial timetable concerns the idea of buying a starter home and then moving up to something larger.

Story continues below advertisement

People think rising house prices grease the way for this kind of move, but they ignore how expensive it is to sell one house, buy another and cover moving and closing costs. The later you buy a house in life, the more it makes sense to stay there indefinitely. Plan to renovate if you outgrow a home, not move.

Later retirement is the last milestone in the new financial timetable.

Here's the upside for millennials. Many of them will work for long periods in temporary or contract jobs, which is a major disadvantage in one sense because there are usually no benefits or pensions available.

The upside of working in the so-called gig economy is that you're developing contacts and skills that will help you keep working past 65. You won't have to rely on your full-time job remaining available to you.

Think about working to the age of 70 or thereabouts if you're just getting into the work force today. Five extra years near the peak of your lifetime earning power can offset a lot of the negatives of a later start on life's financial journey.

Ask Rob Carrick your money questions in an "Ask Me Anything" Q&A on Reddit on Monday from noon to 1 p.m. (ET). Follow the conversation on twitter with the hashtag #genYmoney

Story continues below advertisement

Report an error Editorial code of conduct
Comments

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • All comments will be reviewed by one or more moderators before being posted to the site. This should only take a few moments.
  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed. Commenters who repeatedly violate community guidelines may be suspended, causing them to temporarily lose their ability to engage with comments.

Read our community guidelines here

Discussion loading ...

Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.
Cannabis pro newsletter