Money on the Mind: Goal-Setting for the New Year
Or: A (Somewhat) Brief History of My Forays into the World of Personal Finance
Greetings, fellow adventurers! I hope that everyone had a wonderful holiday!
As I slowly recover from the inevitable Christmas food coma and try to piece my household back together after the holiday festivities, I cannot help but look forward to the New Year that is fast approaching, though I am not sure if anything can top the ups and downs that this past year has brought me! I finally finished my degree, got married to my wonderful husband and secured an occasional teacher position at my dream school board, to name a few highlights. I am not really one for making grand, sweeping New Year’s resolutions, but I have found myself thinking more than usual of everything that I am hoping to accomplish moving forward: paying down my student loans, taking a much needed vacation (we haven’t had our honeymoon yet!), putting some upgrades into our house… it seems no matter which way I look at it, a lot of my New Year’s “resolutions” have to do with money.
Full-disclosure, I am not a personal finance guru. In fact, I have no credible educational background in finance whatsoever (English major and elementary school teacher here) and there are some days where I just plain stink when it comes to spending, saving, investing, and everything in between. I have a toddler at home, a mortgage, and a gut-wrenching amount of student debt racked up from my two University degrees. In other words, most days I think that my relationship with and knowledge of personal finance is fairly typical to that of most Canadians.
My mother, like many baby-boomers, never received much guidance in the way of financial literacy from her own parents, who had never even had credit cards in their day. Therefore, she never felt much confidence when it came to giving her own children any financial advice (though we have always had a lot of fun shopping together!). My dad was usually more consistent when it came to doling out financial wisdom. A renowned saver, I still have fond memories of rolling change with him on rainy Sunday afternoons, getting dragged out of bed early on Saturdays to score the best deals on bottled water at Wal-Mart and being lent his copy of Rich Dad, Poor Dad to read (I never dared say that I was “bored” while at his house for the weekend again). Beyond the idea of saving money however, is where our discussions about personal finance would usually end.
Instead, I cobbled together my own financial education, which mostly included studying under the tutelage of Gail Vaz Oxlade, the Canadian finance guru, from the comfort of my couch (Til Debt Do Us Part, anyone?), briefly becoming a coupon queen and trying every Pinterest hack for saving some dough to pay for my post-secondary education. I have done some really outrageous things in the name of saving money, yet was still seeing it slip away through mundane missteps, especially through banking fees, paying too much for services I didn’t need, and being hit with high interest rates that I didn’t completely understand. However, I always say that for what I lack in finesse, I make up for in enthusiasm, and my love of being a lifelong learner has led me to greater financial confidence, with quite a few mistakes and bumps along the way.
Financial literacy has increasingly become a topic of great importance to me since becoming a teacher. I get asked all the time by curious folks “why aren’t kids learning about *this* in schools?” . *This* usually refers to real-life, practical skills that adults utilize on a day-to-day basis, yet did not learn about in school. Additionally, *this* is more often than not questions relating to financial literacy. As a peer of mine at teacher’s college pointed out:
“Students AND adults don’t even understand how their credit card interest rates work, how their lines of credit impact their credit score and what the difference is between an RRSP and TFSA. Next to budgeting and taxes, these are the most basic borrowing and saving competencies needed to be financially literate and successful.”
These are all integral skills that every adult needs to understand in order to be successful, yet there is a huge knowledge gap here. As many adults have not had proper education in the subject of personal finance, they are unable to give their children adequate information to be successful. Mainstream media sources are little better, offering a lot of scary statistics (Two in Three Adults Worldwide are Financially Illiterate!) but do little to provide reasonable advice to the general public. I think the word “reasonable” here is key, as it seems like the only financial “advice” (and I use that term very loosely here!) that gets widespread attention are either extreme or fad-like in fashion (hence the increasing popularity of reality TV shows such as Extreme Couponing, Extreme Cheapskates and any other “extreme” savings show I may be forgetting here). Thankfully, in recent years the Ministry of Education has made financial literacy a topic of priority and has striven to incorporate it more completely across the curriculum. But what does this mean? Many of the people I encountered were wondering if specific, concrete skills, such as how to build a budget, how to properly use a credit card and how to save for school were part of the curriculum, and I agree that these are incredibly important, useful skills that students will inevitably have to develop as they become adults. However, I think that the real focus needs to go a little deeper.
Because of the ubiquitous nature of how we encounter finances, I believe that the best way to prepare students for the challenges they will face is to equip them with a deep, fundamental understanding by facilitating their development of a healthy mindset towards financial literacy. Put simply, they need to not only develop the “how”, but to understand the “why”: students need to be able to understand their role in society and understand the impact of their choices, and the impact of the decisions made in the global economy, on their personal finances. This fundamental knowledge will guide students towards making sound decisions and build their confidence that they are capable of participating in the financial conversation.
This is all well and good for students of the new curriculum, but what does this mean for the over 30 million other Canadian adults long out of the elementary school system living, working, spending and saving in our country who are frustrated and fed up with their personal finances?
In my own humble way, I hope to use this space here to create a relevant and tangible conversation about personal finance, writing of topics aiming to aid all of us average adults get our personal finances on track. This could include a range of topics from the practical (how to build a better budget, beginners guide to investing), to the fun (easy and inexpensive recipes for your family, how to have a Merry Christmas without breaking the bank) and maybe even the just plain weird (I have tried every Pinterest and Youtube-worthy money saving hack so you don’t have to!). Most importantly, I am hoping to influence the way you see yourself in terms of your finances; to arm you with the knowledge and confidence to handle anything that comes your way and to kick some serious financial butt!
What are some personal finance skills you wish your parents had taught you, or that you think should be taught in school? What is one piece of advice you would give your younger self if you were talking to them now? What is the weirdest “hack” you have ever tried in the name of saving money? Comment down below!