The loonie is tanking, full-time jobs are scarce, consumer spending has flatlined and the wage gap endures. The state of the Canadian economy is more than a little gloomy. That’s the bad news. The good news is that there are things you can do to offset these factors.
Shannon Lee Simmons—financial rock star, former FLARE 30 Under 30 recipient and founder of The New School of Finance—outlines four of the biggest challenges the economy is throwing at millennial women right now, and how to deal.
1. Temporary work is the new normal, so forget about saving for retirement (for now)
Temping used to be something recent university grads did for a few weeks or months before landing a full-time grind. No more—long-standing temporary, freelance or contract work is the new status quo. It’s called the “gig economy” and it’s messing with our ability to forge a career path and start making a livable salary. “The only plan is to plan for the unknown,” says Simmons. Step one: forget about putting money away in an RRSP. “It’s not a good idea to lock your money down [like this] because in eight months you may need that money to live.”
Instead, stash your cash in a Tax-Free Savings Account. “The TFSA is a great option where your money can be tax sheltered but you have access to it if you need it down the road,” Simmons says. Aim to put at least 10 percent of your paycheque into savings. “You will have to cut elsewhere in your budget, but it will be so worth it for the emotional chill.”
2. Full-time gigs are scarce, but once you land one you still need to negotiate a fair salary
In today’s market—in which about 13% of those aged 15 to 24 are unemployed, and another 27% are underemployed—it’s understandable to want to say yaaaassss to the first legit job offer you receive, no questions asked. But failing to negotiate a fair salary can haunt you for years to come. “You have to be a bit ballsy and stand up for yourself,” says Simmons. Enter salary negotiations with solid knowledge about what the industry standard is in your field, and insist on wage parity. “Recognize from the get-go in your career what you’re worth and charge accordingly,” she says. “Take the risk of being unemployed a little bit longer to lock down the right job that pays you well.”
3. It’s more expensive than ever to have a baby, so start planning for it
The #1 way you can financially prepare for having a kid, whether it’s in the next year or the next decade? “Try to be debt free,” says Simmons. “The less money that has to go to other places the better. Keep your fixed costs [rent, gas, utilities] low.” She also recommends doing a little advanced research and asking other women how they’re juggling work and sky-high childcare costs (the median price for infant care in Toronto is a whopping $1,736 a month!); Simmons says she’s seeing many millennial moms choosing to stay home and freelance or work part-time because it makes more economic sense.
4. The Canadian dream is still attainable… if you hustle for it and budget accordingly
Want a house, a car, a cottage, a condo? Current crappy economic conditions mean that you’re going to have to hustle significantly more to attain these goals than your parents and grandparents ever did. This is “100 percent” the way it is for millennials, says Simmons. “A lot of times you hear in the media that millennials are entitled. I don’t agree with that at all. The truth is that millennials have been handed a shit bag and we’re pissed about it,” says Simmons. That said, buck up and accept said shit bag and don’t bemoan it. Instead, trust in your power to hustle and change as needed. You can still achieve your goals; it’s just going to take patience and planning. “I’m a big fan of the 50-20-30 per cent rule,” says Simmons. “That means 50 percent of your income goes to fixed costs, 20 percent to savings (short term, debt repayment and retirement) and 30 percent to fun.”