Money Month: Young people need a better education on personal finance.

Did you know that money is often cited as one of the leading causes of stress?


Where does our relationship with money begin? And, how do we develop how we think about money?

I’ll tell you this: I have a bone to pick with the Canadian education system, because I don’t think they prepare young people with enough knowledge about basic financial information before they graduate high school.

There, I said it. It’s off my chest.

I know that how we are brought up has a huge influence on how we come to know what money means, but that should never be the only way to learn. Most of our parents’ generation have massive debt. This is not a great example!

I remember my dad teaching me about money through regular heart-to-heart chats. He liked to tell me that saving money was important, and that if you want something big, you’ve got to work hard to earn it. Pretty basic stuff, but it’s stuck with me.

I also remember my grandparents dealing only in cash. Yep, no credit cards to be seen, and before there were debit cards, it was literally just cash. They made going to the bank part of the daily routine, which is something I can’t imagine doing today. How we bank and what we do with money has drastically altered over time.

Case in point, just watching and learning doesn’t always benefit you. I didn’t know much about credit until I was racking up my student loans and had my first credit card as a student. I still don’t know much about how I should be investing for my future, and folks, I have a Bachelor of Commerce! 

Getting back to the root cause and how to solve it, I have a short list of topics that I think the education system should be teaching kids about all through elementary and high school. They’ve cut so many programs over the years, that I have no idea where this would fit, but the national household debt level (among other information) tells me that a basic finance education is an absolute necessity.

1. Credit is not “free” money. Most people learn this through trial and error. Why not explain the types of credit and what they can do for you, instead of letting kids end up with credit cards and student loans without understanding what happens when it’s time to pay them off? Interest rates and payoff plans matter.

2. Saving for your future. Pensions have seen their day, and I doubt that many gen-y employees will stick at any one place to actually reap any benefits if they do exist. However, RRSPs and RRSP matching are easy to understand and should be capitalized upon. In fact, if young people started a fund earlier (say at the age of 16 when they get their first job), they’ll build habits that stick, and be able to make a massive jump ahead in their savings.

3. Budgeting and forecasting. Seriously. This is so simple, but so overlooked. I like budgets because I like numbers and that’s me, but not everyone learns this skill before it’s necessary and needed to get back on track from overspending.

4. Investing can be more than GICs and Mutual Funds. This is more about understanding your personal risk profile, but if you don’t take basic high school economics or learn this from a family member who is very adept and interested in the stock market, you might have to learn this one on your own.

5. Build a relationship with your banker. I think the first meeting I had with a bank was about my student credit, and my dad had kindly set everything up so all I had to do was sign the paperwork. Thinking back, I wish I had been taught to form a relationship with a financial professional earlier so that I could talk about my entire financial profile at once, and start building a relationship with a financial professional I could trust. It’s kind of like going to the doctor – you don’t always want to go, but you should go because you know it’ll be good for you. And banks are getting better at customer service, so it’s not so scary after all.

What finance lessons do you think should be taught to young people and the next generation? 

Five things for the week of March 26.

Here’s what’s on my radar this week.

1. [service] LugLess. I read about this cool new business over at Cup of Jo this week, and I couldn’t get over how cool a service this is. Basically, for a fee you can ship your luggage direct from home to destination and not even worry about the whole checking baggage process at the airport. Genius!

2. [music] Walk Off The Earth. These guys are becoming a YouTube favourite of mine. They are based out of Ontario, and have done some really cool covers/videos. I loved this song as the original theme of Weeds, and I really love their version. It’s a pretty rad video, too.

3. [movies] Netlflix. This is a one web product that I absolutely love. I kind of had a movie marathon weekend, and watched St. Elmo’s Fire (a little Rob Lowe 80’s awesomeness), The Business of Being Born (a fascinating documentary on midwifery), and a new favourite, Love & Savagery, which stars a Canadian favourite of mine, Allan Hawco. If you’re wondering how I found that last gem, it’s because of the power of Netflix suggestions. I love seeing what “taste profiles” they create based on what I’ve previously watched. The titles of the categories are hilarious, too. For example, “Romantic Dramas Featuring a Strong Female Lead“, and “Emotional Movies based on a book.” Oh Netflix, you know me too well!

4. [music] Shadow Days. So John Mayer has a new single out, but I don’t know if I quite love it yet. Anyone heard it yet? I love his old stuff, I loved the Trio stuff, and I have grown to love the last album Heartbreak Warefare, but I’m just not jiving with this one yet… Thoughts?

5. [happening] Dreamr & my $125 for Casino Nova Scotia. Last night, a new social organization named Dreamr hosted a Mad Men Premiere party at Casino NS, and it was a great time. Everyone took the theme seriously, and if you looked around the room, you could have thought it was the 60’s. Check out the website, as the organizer is hoping to gather more people together for social things like skydiving and paintball! Additionally, I won $75 cash and $50 for food at the Casino on a promo scratch ticket, so I guess I’ll be heading back in soon! Any suggestions on how to spend (gamble?) my $75 dollars? I’m soooo not a Casino regular…

Money Month: What’s your money secret?

Last week I told you my main money secret: I’ve automated my finances so I don’t have to think about deadlines, due dates, and budgeting. Doing this makes my life easier, and I can better monitor spending and saving to meet my personal financial targets.

There are lots of ways that money affects the choices we make, the things we buy and the way we live. And now that you know my biggest money secret, I’m curious to know what your money secrets are!

But first, here are some a few more self-imposed money rules I have.

1. Aim for 2 or 3 no-spend days per week.  I track what I spend on a daily basis, because the odd lunch out at work or spur of the moment cup of joe really add up. These small purchases are what end up busting my monthly budget. So, days where I don’t spend any money are big wins, and I try to have three to four “no spend” days a week. Yep, that’s difficult, and it means I have to choose what I do (or not do) wisely.

2. Use a re-loadable Starbucks card. This technique helps me make no-spend days more effective. It’s really just “allocation”, but using a re-loadable Starbucks card helps me control the amount I spend over a regular period of time (usually every two weeks). I load my card via my online account, and monitor how many trips I make over each period so that I can’t reload until it’s payday again. No $, no Starbucks.

3. Use gift cards as cash. I like receiving gift cards in lieu of other gifts because I can apply them to things that I’m already going to purchase (groceries, toiletries), versus buying new things. I hate getting a gift card for some store that I don’t often visit, because I normally end up spending more than what’s on the card to buy an item I would use, which means I get something new (yay!) but I’ve gone and spent money that I otherwise wouldn’t have spent (boo!). I like to subtly remind loved ones (read: email my relatives directly) of the places that I shop regularly, so when my birthday rolls around I get things I’ll use, letting me saving my money for other things. Right now, Costco, Superstore (Loblaws), LUSH and Chapters are the ones I like to receive. (Psst, mom: feel free to throw in Banana Republic, too).

4. Buy pantry and staple items on sale. Listen, I don’t really know if this saves me lots of money over the longterm, but this is a habit I’ve refined over time, as I’ve learned when to recognize a good deal. I buy pantry essentials (e.g., olive oil, peanut butter) or staples (e.g., toilet paper) only when they are on sale. You get to know what types of sales to expect on certain items, and when they are on discount I stock up.

So, what are your money secrets? 

Five things for the week of March 19.

Here’s what’s up for this week.

1. [activity] Running Room. So, I’ve said for years that I will run 5km before the year is over. I’ve probably said that every spring, for five years running (ha), and I’m finally actioning that goal by enrolling in a 5km running clinic with the Running Room. Friends have sung their praises many times to me, so they’ve convinced me to commit. I’m only one week in, but so far it’s much more fun than I expected, and I’m looking forward to seeing progress and improvement!


 Baked Oatmeal. I love oatcakes and oatmeal, and now I’ve found the perfect combination of the two. What I like about this recipe is that it’s very filling as a breakfast serving, it doesn’t need flour, and it’s healthy! I’ve mixed it up by trading the cinnamon/nuts with cocoa powder/peanut butter, and applesauce for 1/2 a banana, mashed. I’m sure there are many other combinations that would be delicious, too!

3. [article] Is Facebook modifying behaviour? Wow, my jaw really dropped when I read this. Youth’s on spring break are actually being more reserved due to the fact that anything can appear on Facebook with the snap of a camera phone, and no one wants to get caught with their pants down, so to speak. Folks interviewed mentioned career implications as well as family and friends they are connected to as reason to avoid a bad photo op.

4. [game] This one is for the designer and artists. This neat online game tests your ability to match colours on a colour wheel, and gets more difficult as you progress. I scored a 7.8 on my first try; not bad, eh!

5. Official spoiler etiquette. Don’t you just hate when someone tells you what happened on TV last night when you were waiting to watch it on DVR later on? CollegeHumor agrees, and gathered some celebs to teach everyone the etiquette of spoiler alerts.

Follow me on twitter: @kmosher

Got something interesting to share? Leave a comment below! 

Money Month: Automating your finances

Everyone has their own method to manage their money – some ways are complex and elaborate and others, like dealing only with cash, keep things really simple. No matter the method, it takes some serious trial and error to figure out what works for you, and I’ve struggled for many years to figure out what works well for me.

The learning curve

My first job at age 16 was at the local DQ

In high school, I had no idea what “budgeting” meant, and so I just spent whatever I earned, without saving much at all.

That was a major #fail.

I swung to the other end of the spectrum in university, and I created an excel spreadsheet with which I logged every single purchase receipt. Sadly, all that data tracking just became overwhelming, and it didn’t really help me change my habits, just recognize where money was being spent. And, it was incredibly tedious. I’ve done away with the spreadsheets since came along, which is a huge help. I love data, so now it’s more interesting to monitor my finances as I can track trends and changes interactively.

So the good news is that I have been conscious of needing to manage my money for many years, but the bad news is that, for a long time, I just didn’t know how to do it in a way that would help me reach any sort of goal. Getting to the point where I can set and accomplish a financial goal has been a long time coming. I’ve always felt like I’ve been behind financially, and for the type-A personality in me, that’s never a good feeling.

Coming full circle and taking action

You should read this.

A few years ago I read Ramit Sethi‘s book, I Will Teach You To Be Rich, and although I immediately thought the content was really great, I didn’t actually do anything with it for a long, long time. I’ve since told tons of people to read the book, too, but I wasn’t even practicing what I was preaching! I think the book is a really great read, especially for the fresh out of college set, or better yet, those that haven’t yet got to college. I wish I had known then what I know now…

In the last 8 to 10 months I’ve finally acted on the suggestions of Ramit by automating my finances. What’s the benefit? Well, now I don’t have to worry about bills being paid on time, ensuring that the right money is in the right account when my rent cheque is due or consciously trying to shave off a few extra dollars for my savings account. All of that happens automatically and I don’t even have to think about it. What I actively monitor day-to-day are three spending categories that I have immediate control over, once the rest of my money is allocated: groceries, gas, and entertainment.

Since so many bills of mine are a known amount – my phone, rent, internet, student debt, line of credit and utilities – and are moved out of my checking account right after pay day. Then when a bill is due, the payment moves automatically to the right place – be it a credit card, or a direct billing account with a provider (e.g., cell phone). I try to overpay where possible, so right now I’m starting to build a bit of a debit in my power and phone bills. Debt (student loan and credit) payments are pre-set amounts, and I don’t even have to think about making the deadline – it happens without me realizing it’s happening. And with my new automation plan, I’m slowly putting a tiny amount into a savings account, something that’s been a huge personal challenge my whole life.

I bank online with ING Direct, but I would guess that many online banking sites will allow the setting up of recurring payments. I like ING because their customer service is great, and they don’t charge me any monthly fees. (Fees suck.)

Managing the beast

Oh, and what about all those other categories of spending, like clothing or make up or yoga classes? That money is part of the automation, too. I’ve figured out (with all that data I mentioned earlier) what I spend over time on these things, and I take a lump sum out of my pay to cover those items as they come up, which isn’t every month. I still have to monitor how much I spend on clothing (it’s a tight budget!), but at least I know the money is there when I want something vs. using a credit card and paying it off later, with money that I haven’t yet earned. Yeah, that sounds simple, but trust me, it can be (and was) a large learning curve.

I haven’t figured out how to get rich quick yet, but now that I’ve got automation down and I’m starting to feel much more financially secure. More likely than a massive money-making scheme is setting goals like starting an RRSP fund, a Tax-Free Savings account and setting some personal goals like a travel fund. All things that I’ve previously admitted to being ignorant of.

So – how do YOU manage your money? Any tips you’d want to share? I’d love to hear ‘em.