Save. Spend. Splurge.

What people should really learn about their money in their 20s

If you say you want to do something, you shouldn’t just be saying it. You should be trying to actually do it.

I came across this Yahoo Finance Canada article about RRSPs in your 20s, and every other paragraph, I was shaking my head at what I was reading.


…”With my modeling job, entertainment and clothing bills are stupid,” says Lori Bassarab [28-year old model who cleared her $10K debt and has $15K saved].

“Once I pay all my expenses, there’s just nothing left at the end of the year.”

Lori did some good things — paid down her $10K of student debt and has $15K saved in an RRSP, although she holds stocks in it and hasn’t bothered to check it in years.

My real issue is with Lori, this marketing manager / model / actor, is only that trying to chase a dream job that isn’t working, and thinking that expenses come before savings (namely, paying yourself).

If this modeling job is costing you more money than what you actually pull from it to be able to save, then it isn’t a job you can realistically sustain for the long-term.

It’s a hobby.

Most models who make millions of dollars like Daria Werbowy (CANADIAN!), Coco Rocha (CANADIAN!), Tyra Banks, were discovered. Sometimes discovered working in a Tim Horton’s.

They had no idea that they could model, and this discovery by a talent agent rocketed them to the top in no time.

Models who actively seek out to become models, are (unfortunately) not likely to to make any money from it. What they do have, is youth and beauty, both of which they can use to get a good job and work their way up the ladder.

Read: Do we really discriminate against unattractiveness?


Then we come to this couple that makes $110,000 a year, has 2 small kids (22 months and 2 months) and is crying a river about being “stretched to the limit”; I’ve highlighted the most distressing parts for you to read in red:

…on top of carrying $20,000 in student debt and a $45,000 mortgage on their home, the couple’s expenses just keep mounting.

They include a huge $15,000 annual daycare bill when Kimberly returns to work from maternity leave next fall, a much bigger mortgage when they buy a larger home in a couple of years, as well as the $1,000 a year that they contribute to their kids’ RESPs annually.

That leaves only about $2,400 a year for RRSPs. “Neither one of us has a company pension, and we won’t be able to contribute much more than this to our RRSPs for the foreseeable future, so we worry,” says Kimberly.

Right now, Brad has $10,000 in his RRSP while Kimberly has $17,000, mostly in bank mutual funds. “I’ve been too busy to monitor returns or look at the fees we’re paying,” says Kimberly. “It gets pushed aside because life gets in the way. But it’s on our to-do list for this year.”

I get that children are expensive, and the number thrown around is $250,000 to get them fed, clothed and taken care of until they’re ready to be shipped off to college.

I mean just look at that $15,000 daycare bill ($1250/month is no joke) for 2 kids!

HOWEVER, there ARE families who exist out there who earn less than $110,000 a year and have more than 2 kids to take care of.

Know how they do it?

They save and they don’t spend, and they ESPECIALLY don’t feel the need to “buy a larger home in a couple of years”, and go into MORE debt.

Know what else they do? They monitor their money like hawks, especially when there are fees like mutual fund fees (management expense ratios = MERs) involved.

They don’t say things like: “[Our money] kind of gets pushed aside because life gets in the way.”

Are you kidding me?

You can’t be bothered to check what you’re paying in terms of fees, that could be in the hundreds of dollars a month, which add up to thousands in a year… because “life gets in the way”?

Spending time with your kids is important, so is working, and so is enjoying your life and your money… but you should eat your financial vegetables first before you play.

And the final thing?

They shouldn’t contribute $1000 a year to their kid’s RESPs because they have other problems they should take care of first, namely their finances.

It’s great that they’re thinking (a bit) of their kids at $83.33 a month, or $41.60 per kid, per month.. but I am a firm believer that you should steady your own ship before trying to help another in trouble.

“Guess what, kids?

Mommy and Daddy were too busy trying to upgrade their lives to get a nice big home and all the trappings of wealth, without actually having any.

We prioritized everything else we spend way above savings for ourselves AND for you.”

For me, my retirement, comes first before my future kid’s education funds, but I’m also not spending money without knowing exactly where it goes.

This might sound very selfish to a lot of you out there, but I gave it some serious consideration, namely that I don’t want to leave them with a burdensome parent who will suck all the money out of their pockets for elderly care.

Read: Why I won’t be paying for my kid’s college education

If you can’t save more than $2400/year ($200/month) for your retirement and save at least $7800/year or $650 a month, when you’re pulling in at least a solid $6500 a month in income, then you flat out can’t afford the current lifestyle you are living.

Nor can you really afford to start upgrading your lifestyle by buying a BIGGER home with a BIGGER mortgage.


Don’t worry if you’re not building up a large RRSP during the early years of your career. “Saving for retirement is unlikely to be a top priority in your 20s,” says Norbert Schlenker, president of Libra Investment Management Inc. in Salt Spring Island, B.C.

…As for the DeLenardos, they’re ahead of the game and shouldn’t worry too much about saving for retirement yet.

“You can always catch up later,” says Schlenker. “And given the small size of the existing RRSPs, high fees shouldn’t be a big concern now.”


They’re AHEAD OF THE GAME by basically wasting their amazing $110,000 income because they’re not watching their budget and their expenses?

I’d suggest that they get a second opinion, or at the very least, listen to their gut.

The DeLenardos are right to worry, because they already have no idea how to build good saving habits, so if they get a raise or a tax refund, they’re going to spend it on increasing their lifestyle and their consumption instead of saving it.

They’re not going to stick it into a bank account!

Are you kidding me? They’re going to want to go on vacation.

On top of that, let’s just not bother to tell them to take advantage of compounding interest over time to save us money in the long run.

Look, I agree with clearing your debt (consumer and student) being a top priority, but right after that, it should be retirement savings.

If you can’t save anything before you turn 50, you need to make more money and/or make some drastic cuts in your lifestyle.


Think you have it bad now in your 20s?

It only gets worse as you get older.

Wait until your 50s when you’ve realized just how much money you’ve wasted and have not saved to be able to retire.

Know what people in their 50s who haven’t saved wished they had done?

  1. Saved money instead of spending it
  2. Started saving and watching their money sooner

You have time on your side now, but you won’t when you’re nearing retirement.


Look, my main point about ragging on these people is that there will ALWAYS be something cooler and better to do with your time than to sit down and dig through your mess of financial statements to figure out your money.

Going shopping is more fun than that.

Playing with your kids is more fun than that.

Watching TV and all of your favourite shows is more fun than that.

The problem is that time that is spent, is lost, so once you let these things pile up and turn into a tangled, twisted mess that is unrecognizable when you turn 50, you will wish you had spent that hour (OR LESS) each week figuring out your money.

What does it take for you to care about your OWN life and your OWN money?

Someone else to come in and tell you what to do?

Are you an adult or are you a child who needs someone to tell you what to do with your own money?

If you say you’re going to do something and you WANT to do something, you better put your time and your money (literally) where you mouth is, and DO IT.


All you need to know is how to add, subtract, multiply and divide.

  1. Come up with a preliminary budget for each month (Read: An ideal household budget and How to create a budget)
  2. Track your expenses against this budget (and then freak out at how much you’re really spending)
  3. Adjust your budget accordingly to be more realistic
  4. Trim the fat and start saving money
  5. Rejoice in your debt repayment and/or growing savings which makes up your wonderful net worth

That’s. It.

That is really. It.


  • jim

    Hello from across the pond. You’re damn right that taking care of everyone but ourselves is epidemic in America. And I am damn sick and tired of it. (Can we get rid of obama yet?) Dare I say I sense other Americans are starting to wake up and feel the same way? I think they may be. That’ll make for an interesting turn of events in history.

  • Anne @ Unique Gifter

    I feel you missed the point of the Advisor’s advice. She specifically followed what you quoted with the line, “”Instead, do what you can to increase your income, cut your expenses, and start cutting your debt.” Yes, the article closes with “don’t worry” but the bulk of the advisors’ comments make perfect sense and are rational.
    Paying down debt and creating savings are important, the vehicle is less so. On 110K, they ought to be able to discharge the mortgage fairly soon, with some budget tweaking and a prioritization of savings.

    • saverspender @ save. spend. splurge.

      True. I think how they decide to tackle their money situation would differ from person to person. I am more of someone who perhaps prioritizes getting rid of loans at higher interest rates than focusing on savings. I just feel like I am losing so much money each time it goes to interest. Must be a throwback from my student debt days.

  • Tammy R

    Well done, Mochimac, as always. You fire me up, and I could not agree more with your assessment of that couple. $110,000 not enough. Give me a break. We are making less than we used to, saving more than we used to, paying down debt, AND having fun. Does it look like fancy cars and purses? Hell no. It looks like walking and talking and laughing.

    So many people I know have not started to address money issues. I do know one thing: I won’t be eating Meow Mix when I’m 65.

    • saverspender @ save. spend. splurge.

      It’s all a change in perspective, I think. If you can’t see the forest for the trees when it comes to your money, and accept that your life is perfect the way it is, then it’ll never be perfect. Things will always suck.

      Being here in Europe, I am ever more grateful for living in Canada. I’ll post about this more in detail but it breaks my heart seeing how people struggle here now.

  • snarkfinance

    It all has to do with the “Jones’s” and they are totally setting a bad example. Worse roll model than shaved head-era Britney Spears.

  • cj

    Mochimac!!! You don’t sound selfish at all. I agree, you must take care of yourself first out of consideration for others. That is not hard to understand – at all.

    Also, because we took care of our finances, our lives became more, and not less, fun because we are not secretly shitting our pants about our financial future. We can relax, take our time, and make good decisions.

    Living beyond one’s means deserves this type of post, so thanks for firing it up over here.

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