Houses, retirement, weddings, travel: How will young adults afford it?

Introducing the Real Life Money Launcher, the latest in a series of Globe and Mail calculators designed to help people achieve their financial goals.

The Real Life Money Launcher is for young adults – call them millennials, members of generations Y and Z or just twenty- and thirty-somethings. This is a demographic that must save harder than any previous generation, while also facing more choices about what to do in life.

For example, houses are steeply expensive compared to incomes and retirement saving is more imperative than ever because of the lack of jobs for young that include pensions. Meanwhile, some young adults today take a different view on balancing life and work. They may take time out of the workforce for extended travel or to improve their education or training.

The Real Life Money Launcher is designed to help people save and invest for multiple goals at the same time. Figure out how much you can afford to save and what you want to save or invest for. The launcher then helps you divide your savings so you make progress on multiple fronts.

For more real life help with your finances, check out the Real Life Ratio calculator. It’s for home buyers who want a tough assessment of how affordable a house or condo is. There’s much more to it than just paying the mortgage, property taxes and utilities.

Rob Carrick's

Real Life Money Launcher

How to set up your savings after you start working

Down payment or dream trip? What about retirement? If you’re entering the workforce and struggling to decide how you’ll meet competing financial goals, this calculator is here to help. Simply plug in your income and monthly living costs, and the Real Life Money Launcher will help you map out how much of each paycheque should be going into short-term goals like weddings, medium-term goals like home ownership and long-term objectives like retirement.

Step 1. Start with your income

Tell us your next biweekly pay after tax and deductions…

…and we'll tell you your monthly net pay

Step 2. Plug in your monthly expenses

Student debt payment (add any other debts as well)

Rent and utilities (include cellphone, internet)

Groceries, drugstore items

Car payments, car sharing, public transit

Gas, insurance and other car costs

Entertainment (bars, restaurants, concerts, etc.)

Fitness and activities

Subscriptions

Clothes

Miscellaneous (daycare, pet costs, etc.)

Savings and investments

10% of your monthly takehome pay is a good target, but you decide your own amount. This is what we'll use to calculate your results.

Your total monthly spending + saving:

If you have your saving and investing locked in as a regular expense, it's OK to spend your whole takehome pay.

Step 3. Define your savings goals to see your results

Saving goals for the near or medium term (1-10 years)

You tell us the % of your total savings for each goal:

We tell you how much to save per month:

Emergency Fund

Travel

Wedding

Down payment or home reno

Other

Where your near or medium term money should go:

Money needed in the next few years should be kept safe and not invested in the stock market. Learn more about zero risk high interest savings accounts.

Investing for the long term (10+ years)

Building assets for various uses, including retirement

0 of 100% allocated

Where your long term money should go:

Pick your risk profile to see your results. Risk is defined here as exposure to the stock market. Stocks can be expected to deliver higher returns than bonds over the long term, but they can fall hard in the short term. Bonds help limit the pain when stocks fall. Learn more about investment risk profiles and check out Volume One and Volume Two of our millennial investing guide.

• High risk
• Med. risk
• Low risk

Not worried about stock market risk

90% stocks, 10% bonds

Reign in the risk a bit

75% stocks, 25% bonds

Nervous investor

60% stocks, 40% bonds

More from Gen Y Money

A ‘how do I compare’ guide for millennials on savings, debt and home ownership

With so much disruption, it’s difficult to know what a normal debt load, a normal mortgage balance and a normal amount of savings is if you’re a young adult

Subscribe to Carrick on Money

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Rob’s personal finance reading list…

She got into trouble by being too frugal

A blogger reports how her single-minded emphasis on a saving and frugality was temporarily derailed by a big splurge. She has some good ideas on how to sustainably live a frugal lifestyle.

Location, location, location

What makes for a good location in a house? Increasingly, it’s nearness to transit. Better transit links support property values.

How to protect yourself against cybercrime? Think like a criminal

That’s the advice from a technology expert on how to protect yourself having your personal data stolen.

Are crypto-currencies a bubble?

Yes, says the influential economist Nouriel Roubini, an expert on bubbles. “The more I thought about it, the more I started to realize that they had the features of a typical asset bubble.”

Today’s financial tool

An outfit that helps airline passengers get compensation for disrupted flights has published a list of the best airlines and airports for on-time performance, service quality and other factors.

Video/Podcast

How Canada’s stock markets are regulated to ensure fair trading of stocks. A short video from the Investment Industry Regulatory Organization of Canada.

Ask Rob

Q: I am investing for the first time and am finding low risk ethical investing difficult to understand. I am reluctant to invest in companies that are not actively combatting global warming, low wages, arms, exploitation. I am also opposed to a high risk investments like individual stocks of my choosing. I like the idea of the restful sleep a market-linked GIC would offer. Am I stuck in a savings account forever?

A: First, let’s dispense with market-linked GICs. They’re a junk investment sold to people who believe the myth that you can get stock market-like returns without stock market risk. You won’t lose money in a market-linked GIC, but your returns will almost certainly fall short of the stock markets and, in fact, could be worse than regular GICs. Also, market-linked GICs are unlikely to have exposure the socially responsible stocks you’re interested in. So how about a compromise? Put most of your money in GICs from alternative banks or credit unions with top rates, and a little in a socially responsible mutual fund or exchange-traded fund?

Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.

What I’ve been writing about

• A new tool for helping young adults find their financial footing
• A lot of Canadians seem to have stopped investing to pay down their debts
• How much should conservative, balanced and aggressive investors expect to make annually? (for Globe Unlimited subscribers)

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