Personal finance was simpler back in the connect-the-dots world where people commonly moved from graduation or college to starting a career to marriage to home ownership to raising a family to retirement.

Save for a goal, achieve it and then move on to the next. One of the things that most differentiates young adults today from previous generations is that this linear pattern of life after graduation is breaking down. There are more choices and challenges, and that makes it tougher than ever to have your finances in order from the start of your working life.

In recognition of these changes, The Globe and Mail’s personal finance team has designed the Real Life Money Launcher. It’s an online tool designed to help twenty- and thirtysomethings plan their financial lives as they start working. Check it out here.

The Money Launcher helps users budget their monthly expenses, find room for saving and then set multiple savings and investing goals for the near to long term. Home ownership and retirement are both covered, and so are near-term goals such as building an emergency fund, weddings and travel. Real-life personal finance today means picking a few different goals and saving for them at the same time.

Emergency funds have always been a thing in personal finance, but they have never been more important than they are for the young adults of generations Y and Z, which together cover people in their late teens through thirties. Eighteen per cent of Canadian workers overall are on a temporary contract or short-term, part-time gig, but a Globe and Mail survey of young adults in 2017 found that 23.4 per cent had term or contract jobs.

An emergency fund would ideally be big enough to pay the rent and cover basic living expenses for a couple of months, though lesser amounts are still useful. Of all the savings goals in the Real Life Money Launcher, this is the most important.

Weddings and travel are savings goals that highlight the compromises young adults must make today. Aggressively saving for either could starve your house down payment fund and delay ownership for years.

Realistically speaking, saving for a condo or house down payment will crowd almost everything else out for young adults who want to buy in the near future in expensive cities such as Toronto, Vancouver and surrounding communities. Houses demand more saving discipline than they used to because prices in the residential real estate market have risen far more than incomes in recent years.

Many couples are frantic to own a house before they have children, but you can delay home ownership into your mid to late 30s without damaging your long-term financial health. A longer timeline would help you make progress on several savings goals at the same time. Planning to rent instead of buy? Just move the money that would go into saving for a home down payment into long-term investing for retirement.

The Money Launcher treats saving as parking money safely in a high interest savings account to reach goals over the next 10 years, and investing as putting money in a mix of stocks and bonds to build assets you won’t touch for at least 10 years.

Stocks offer the potential for much higher returns than savings accounts, but also the risk of big losses over periods that can last as long as five years or even longer. A simple way to pursue your investing goals as a young adult is through a robo-adviser, which builds personalized low-cost portfolios of exchange-traded funds.

More than any previous generation, today’s young adults are required to think both short- and long-term with their finances. While they juggle savings priorities such as weddings, trips and houses, they also have to think about a retirement that is increasingly unlikely to be funded by company pensions.

The percentage of workers covered by pensions has been in a long-term decline and stood at just 37.5 per cent in 2016, the most recent year for which there are data. But young adults working temporary jobs don’t have access even to the pensions that do remain. They’ll have to be disciplined retirement investors over decades.

Retirement doesn’t have to be a top priority in your 20s or early 30s, but putting at least a small amount away every month is doubly beneficial. You get into the habit of regular retirement saving, and whatever small amounts you put away will have decades to grow.

The Real Life Money Launcher acknowledges that long-term investing may not be just for retirement. Today’s young adults should plan on living 95 years or more, which means they can take time out of their working lives for sabbatical years or to upgrade their workplace credentials.

The best time to plan moves like this is when you’re starting your career. Start up the Real Life Money Launcher and consider your options.

The Globe and Mail, May 9, 2019