Mistakes in our youth are normal and forgivable, but financial ones can be nasty to fix.

Young consumers are still missing the basics, experts say. Budgeting, saving, planning for emergencies, using credit cards correctly 鈥� advisers are seeing young clients who struggle to grasp the fundamental principles.

It seems Canadians in general aren鈥檛 in touch with this reality. A recent RBC poll found 75 per cent of respondents said they have good financial habits, and 62 per cent even rated themselves 鈥渁bove average鈥� compared with friends and family. But when asked about those actual habits, more than a third admitted they did not monitor expenses or set financial goals.

Barbara Knoblach sees the results of ignoring expenses and not having goals.

The financial planner with Money Coaches Canada had one client in their mid-20s who seemingly had his life on track 鈥� finished school, well-paying job, relatively new car, living on his own. But his finances were a mess. His credit card was nearly maxed out at $20,000 and he struggled to make rent.

Then, a disaster: he was at-fault in a collision, totalled his vehicle, but needed a car for his job. His family bailed him out because he had no savings and no credit left.

鈥淭he experience was a wake-up call that he needed to change his financial behaviour,鈥� Knoblach said.

This client鈥檚 credit card statement was 鈥渞outinely spanning several pages鈥� with many small purchases, mostly for food, she said. He had no idea how much it added up every month.

Knoblach corrected his course: watching expenses, taking cooking classes, making his own meals, paying down his credit card balance, starting to save.

But his case epitomized the top three mistakes she sees with young consumers 鈥� ignoring their spending, especially with smaller, frequent purchases; accumulating debt; and forgetting to save, which means a financial setback can be crippling.

鈥淣ot keeping track of finances can be likened to driving in winter with an iced-over windshield 鈥� you don鈥檛 know where you鈥檙e headed,鈥� Knoblach said.

鈥淪tarting to save early has numerous benefits, the most important being the ability to consistently live below one鈥檚 means.鈥�

Kate Childerhose sees similar situations as a financial adviser with Edward Jones. She remembers one piece of advice she took from her entrepreneurial father: 鈥淣o one is ever going to take care of you like you.鈥�

Young people aren鈥檛 saving, she said, they鈥檙e forgetting to put money aside for themselves.

Her retiring clients are now facing the consequences from choices in their youth in their twilight years, Childerhose said 鈥� after putting all their money into a house and not saving for retirement, they鈥檙e actually going to lose the house. These clients don鈥檛 even have enough cash to carry basic costs such as property taxes and utilities.

鈥淵ou need to prioritize your debt, but you also need to take a little bit of that money every month and start some savings for yourself,鈥� Childerhose said. 鈥淵ou need to do both.鈥�

Even with massive student loans from advanced degrees and doctorates, young people still need to pay themselves. Relying on credit cards to fill gaps means they鈥檙e dealing with crushing interest.

鈥淲hen they take all their available cash and pay the debt off, that鈥檚 when the credit card accidents happen, because we don鈥檛 have a plan B, we have nothing to fall back on,鈥� Childerhose said.

Young consumers should not carry credit card balances from month to month, she said 鈥� they should make purchases within their budget and pay it off promptly.

鈥淚鈥檝e sat down with young couples and I started asking questions about debt, and they鈥檝e got three or four credit cards, and they鈥檙e carrying balances on all of them,鈥� she added. 鈥淎nd the (interest) rate, I鈥檝e seen anywhere from 15 to 30 per cent, depending on the card. Like, that鈥檚 never going to get paid off, right?鈥�

An unsecured line of credit would be a better option than a credit card for emergencies when you don鈥檛 have enough savings built up because the interest rates are lower, Childerhose said.

As for solutions, there are free or affordable resources everywhere, Knoblach said, including books, library courses, non-profit credit counselling services and budgeting workshops. Financial planners and coaches can provide tailored advice.

Young consumers are in a growth phase, she pointed out, which can be costly. And peer pressure to maintain a lifestyle may encourage poor financial habits.

鈥淵oung people tend to work in entry-level positions with limited discretionary income, yet they may take on substantial debt, such as student loans or car loans, to build their lives,鈥� Knoblach said.

鈥淪urrounding yourself with individuals who manage their money wisely can help improve your own financial habits over time. As the saying goes, 鈥楤irds of a feather flock together.鈥欌��