During these times of financial uncertainty, it can be difficult for millennials – people currently aged between 18 and 35 – to see a bright future for their bank balance. As house prices continue to rise in New Zealand and seem increasingly unattainable, especially in Auckland, financial independence may seem an impossible dream for many young Kiwis.

With 'Generation Rent' growing in number by the day, it can be a hard ask to think about securing their financial future, but for the determined, it's not as improbable as it might seem. Let's take a look at a few ways millennials can start laying the foundations for a better financial future.  

Become a frugal bugle

It might seem a simple solution, but that doesn't mean that it's any less effective. The better that you can control your spending, the quicker that your bank balance will rise. This doesn't mean that you have to become a miser as soon as you start earning, but it will pay for you to keep track of what you're spending each month.

If you're living paycheck to paycheck without much note of where your money is actually going, you'll likely be amazed when you sit down and figure it all out. All you have to do is set up a spreadsheet that will track your outgoings and income, and cut back on non-essentials.

Cutting back on non-essentials can really build your bank balance.Cutting back on non-essentials can really build your bank balance.

For example, do you really need to eat out so often? According to a MasterCard survey, 71 per cent of Kiwis dine out twice a month, spending an average of $54 dollars each time. Additionally, the report states that younger people can spend up to $126 per visit – that's a lot of money for a bowl of pasta and glass of red wine that you could prepare at home!

If your salary rises, it can be tempting to let your luxury expenses increase also. However, that's the wrong way to think about it – by keeping things strict, you'll be giving yourself an even bigger financial cushion. It might be tough at first, but stick with it and you won't be disappointed.

Keep up with KiwiSaver

There are few simpler, more accessible saving schemes out there than KiwiSaver. As of June 2016, there were more than 1.3 million registered members – a nod to its popularity – and with both the government and your employer making contributions (as well as yourself) you have a recipe that's ripe for making big savings.

Again, it can be really tempting to opt for the default 3 per cent of your salary to go into your KiwiSaver – after all, you'll be giving yourself more cash for the here and now, rather than preserving it for use in years ahead – but if you can, choose to make maximum contributions.

With both the government and your employer making contributions to KiwiSaver, you have a recipe that's ripe for making big savings

This is a whopping 8 per cent of your yearly salary, meaning that your KiwiSaver balance will soon start to mount – and leave you with plenty of cash in the years to come.

Invest in investment properties

Of course, investment property is something of a speciality for us here at Goodlife. When you choose to build an investment property portfolio, you're steadily creating a source of income that could feasibly last you well past your retirement years.

You don't have to own an entire empire of properties across New Zealand – though the more you own, the better, admittedly – just a small student house on the fringes of town will see you reap dividends in the long run. It can seem a little daunting to get started on such an investment, and that's where the expert team at Goodlife Financial Advice come in. We're here to help you negotiate every nook and cranny that comes in this sector, so be sure to get in touch with us to find out what we can do for you.

Here's to your financial independence!

Daniel Carney
Authorised Financial Adviser / Investment Property Expert

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