Offering helpful financial and lifestyle advice for everyday Canadians

Archive for the ‘Budgeting: 20-somethings’ Category

Three Personal Finance Tips For Soon To Be College Graduates

Scott Day of Michigan State University has 3 great finance tips for upcoming grads!

I just recently bumped into an old friend that I had not seen in a while. He has a “soon-to-be college graduate.”  We started talking about today’s tough job market, and he asked if I have any advice that I might be able to pass on in personal finances for this particular age demographic. I quickly put together a three-point elevator speech that could be explained by a concerned parent in a short period of time, and here are the highlights:

  1. Next time your soon-to-be graduate is at a book store getting a cup of coffee, meeting with a group of friends or studying, ask them to pick up a book or two on personal finances that is directed at their age. If they can buy it, great, but even if they skim through it for a half hour at a time, over time, this will get the ball rolling that will help them set themselves up or success in what might be a very stressful time in their lives. Since they are already in learning mode this would be just a little “value added” to a well-rounded college education. (more…)

5 Money Questions You Should Ask Before Tying The Knot


About to tie the knot? Mary Schwager of wrote a great piece to help give you some advice on how to manage your money.

You know this one: Struggles, arguments and disagreements about finances are among the most common reasons couples break up. If you are a saver and your love is a not-so-better half when it comes to spending money, that can be a recipe for relationship disaster.

How do you know what you’re getting into before you say “I do”? Money expert and financial adviser Margie Baldock, author of The Mother Lode Manifesto, says when it comes to your financial health, selecting the right partner is the most important decision you can make. “The wrong partner, financially speaking, can mean a life of stress, struggle and strain. It is no wonder, then, that 80 percent of divorce is believed to be based upon money disputes.”

Baldock recommends you not walk down that aisle until you’ve asked, discussed and are satisfied with how your partner answers these very important five money questions:


Budgeting Tips for Canadian Students

This article on student budgeting by Talbot Boggs was originally posted on in October, 2011. It’s October — a time of cooling temperatures, autumn-coloured leaves, and calls or letters from students at university asking for a little money to see them through the remainder of the year. A post-secondary education is a costly affair in Canada. The average four-year program at a Canadian university now costs about $60,000. Only about one in five parents with children under the age of 18 are confident they can pay off the costs to send their children to university and students themselves believe they will struggle to pay off the cost of getting a post-secondary education and expect to be in debt for years to come. The Canadian Council of Learning reports that the average debt for a university graduate had risen to $26,680 in 2009 from $24,706 in 2000 and $12,271 in 1990. Forty-five per cent of college graduates and six in 10 university graduates have taken out student loans while in school. No matter who is paying the bills, every student needs to create a budget and stick to it, says the Investor Education Fund. The obvious costs of getting an education — tuition, books and supplies — are just the tip of the iceberg. There are a whole raft of other costs that should be itemized such as residence or rent, insurance, electricity, gas, water, telephone, cable, Internet, clothing, food, transportation and personal items. Many students may think that there’s no room for any fun in a budget. But that’s not the case. They just have to budget for their entertainment and stick to it. More and more students are working during the school year to help pay the costs and should include all income in their budgets, including wages, education savings plans, scholarships, gifts, family contributions and any other sources of income such as bursaries. Each year, thousands of students turn to government loans to help them. These loans often have certain advantages over other ways to borrow, such as bank loans and credit cards. For example, students don’t have to repay the loan as long as they are in school. Most student loan programs offer a grace period of several months after post-secondary studies end before repayments begin. And students don’t pay interest on the money they borrow until after they graduate compared to a credit card which can charge interest of more than 20 per cent a year or more. It’s important for students and parents to remember that government loans are meant to lend a helping hand, not to pay the entire cost of a post-secondary education. Students and their families are still expected to contribute some money. Many students begin their working lives after school with a debt that they will have trouble paying off. The Canadian Federation of Students reports many students finish school with more than $20,000 of debt and about one in every five students who graduate with a student loan are unable to pay it back. Many students get into financial trouble using credit cards. The IEF suggests students should never use a credit card to pay big bills such as tuition or housing. The best plan is to pay cash for most things, and if you do use a credit card, pay it off at the end of each month and avoid the high interest charges. Remember that credit card companies like to sign up students because they will tend to stick with that card over time and students often will run up balances before they really understand how the card works and how much interest they will end up paying. Talbot Boggs is a Toronto-based business communications professional who has worked with national news organizations, magazines and corporations in the finance, retail, manufacturing and other industrial sectors. [end of article] blog-ad-PP

Money Saving Tips for 20-Something Canadians

Here’s another great article for our 20-something viewers. This one, written by Shelley White was originally posted May 22, 2012 on

Living frugally in your 20s: Five tips
By now we’ve all heard that being a twentysomething today is no financial picnic. Higher tuition costs (and higher debt loads), higher housing prices, and poorer job prospects – as Rob Carrick wrote recently, young people really do have it harder than he did.

But lately I’ve been wondering if these difficult financial times might create some sort of “new frugality” movement within the younger generations. Instead of heading into their 30s saddled with debt, throwing everything on credit and taking out mortgages on houses they can’t afford, perhaps people in their 20s will rebel by embracing previously uncool concepts like budgeting, penny-pinching and saving for a rainy day.

Meet Jaime Woo, the 29-year-old co-founder of Gamercamp, a videogame conference in Toronto that is entering its fourth year. He’s fulfilling his dream of owning his own business – and he hasn’t gone into the hole to do so.

Mr. Woo self-funded his business, due in large part to the financial literacy and discipline he’s been exercising since he was a teenager. Mr. Woo got his first credit card at 14 and his first part-time job at 15. His mother and aunt worked for banks and taught him about money very young.

After graduating from university (his parents paid his tuition and he lived at home during that time), Mr. Woo spent three years working as a molecular biologist. But instead of spending his new-found money on a car or other luxuries he’d been craving, Mr. Woo decided to continue living with his parents in Markham. For three years, he saved almost every penny of the money he made. And he kept his entertainment budget low, doing things like renting movies.

“I didn’t understand going out in the evenings and spending $60 or $70 dollars a night on drinks the way some of my friends were. I didn’t feel like that was a good use for what money could do for me.”

Mr. Woo’s careful saving allowed him to start his business with a friend, while still leaving him enough of a nest-egg to live on while he builds it. He puts everything on his credit card “for the points” and to keep track of his spending, but never fails to pay all of it off each month. He’s got his own apartment now, but says he is still “very, very meticulous” about his spending.

Surrounding himself with a group of fellow entrepreneurs who are also committed to their fledgling businesses has also helped, says Mr. Woo.

“I’ve learned that our spending is so based on our social circle,” he says. “If your friends are always going to Marben and Canoe and that’s what’s expected, of course you’re going to have this drain on your expenses, but my friends are happy to play a board game and have a bottle of wine at someone’s house because we all know we need to put our money into our businesses.”

What stands out about Mr. Woo is that he remains undaunted about spending a good deal of his 20s in tough economic times. “You have to make the best of what you’ve got, there’s no point in feeling hard done by because I think that feeds more into the idea of entitlement by Generation Y.”

Penny-pinching might not seem like a very sexy way to spend your 20s, but it’s a heck of a lot sexier than getting snowed under by debt.

If you’re a twentysomething looking to reach your financial goals, here are some tips from Melissa Jarman, director of student banking at RBC:

1. Know what’s coming in and what’s going out. “You always want to have that view, whether you do it quarterly or even once a year, this is how much I’m making this month, this is how much is going out. And where is my wiggle room there?” says Ms. Jarman. Whether you’re doing it manually or using software or an online budgeting tool, this will give you a realistic snapshot of your financial situation.

2. Start saving. To grow your savings, Ms. Jarman suggests saving between three and 10 per cent of what you earn. To help make that happen, have that money come right out of your bank account as soon as you get paid. “Whether you have it go into high-interest savings, whether it’s for your retirement or paying down debt, have those things happen when the money comes in your account, and then you don’t notice it.”

3. Have an emergency fund. “A lot of us are buy first, save later,” says Ms. Jarman. “We have a recommendation that says [you should save]three months expenses if you’re single, six months if you have a family, but any amount to cover an emergency is a good amount to have.”

4. Tackle your debt. Put together a debt repayment strategy. Organize your debt in order of interest rates and pay off the debt with the highest interest rate first. Or consider consolidating your debts into one payment. “With consolidating, there’s an opportunity to get a lower interest rate, and you’re down to one payment and for some people that makes things easier,” she says.

5. Rethink your spending. Ms. Jarman advocates making a list of your expenses, from the necessities (like phone, transit, etc.) to the luxuries (like coffee, lunches out, entertainment, etc). Then figure out where you can trim. “You can look and say this is a priority for me, I like to have that coffee in the morning, that’s the one thing I live for, but maybe I’m going to bring my lunch a few days a week.”

Is this young business owner part of a new frugality movement? Is this something you think is happening now in Canada? Tell us what you think in the comment section below.

[end of article]


Financial Tips for Young Canadians

Arti Patel of the Huffington Post Canada writes an insightful article for young Canadians on financial literacy. Originally posted on

Financial Advice For Young Adults: Tips For 20-Somethings

When most people think of 20-somethings and disposable income, they picture a group of young adults disbursing money frivolously and leaving their futures behind. But in reality, most youth want to have a grip on their finances and start saving as soon as they can.

Financial priorities for Canadians between the ages of 18 to 34 don’t seem to look all that different from those older than them: 49 per cent want to own a home, 48 per cent want to reduce or eliminate debt through regular payments and 39 per cent of youth want to start an emergency savings fund, according to a recent RBC poll.

“People aspire to own a home and this is a time when people want to,” says Melissa Jarman, director of student banking at RBC.

Jarman says to start saving money, people need to start figuring out where they’re spending it. “People need to rethink their spending, regardless of age. When you think of somewhere that your money is going to, like buying lunch everyday, a lot of people spend a lot,” she says. To break it down in simple math, $10 a day on lunch is $50 a week and $2,600 a year, she notes.

But this doesn’t mean you can’t have any fun. If going on a vacation once a year or blowing a few bills on alcohol-filled nights is your idea of fun, budgeting and saving for the things you want to do won’t hurt your bank account.

Keep Some Wiggle Room

The key, Jarman says, is to live on less than you earn. Keep some wiggle room for youself so you don’t spend close to or above your limit. When you get your next paycheque, try to save more — at least three to ten per cent — and spend less.

Get Used To Saving

Save, even if it’s just a few dollars at a time. As you start your career, paying down student debt and planning major purchases like a car or first home can make it difficult to save. The trick is to incorporate savings into your budget before you get accustomed to spending it every month, Jarman says.

Emergency Funds Are For Emergencies

“As a general rule of thumb, an emergency fund should be about three times your monthly expenses if you are single, and six times your monthly expenses if you are married or have children,” Jarman says. Opening a high-interest savings account will help you earn money through interest.

“D” Is For Discipline — Not Debt

Organize your debt in order of interest rates and pay off the debt with the highest interest rates first. You may also want to consider consolidating all of your loans under one umbrella, with a lower interest rate if you can, Jarman says. Make your payments on time and, when you can, pay more than the minimum payment. Missing payments can hurt your credit score and should be avoided at all costs.

Rethink Spending

Let’s say that, on average, you spend $10 a day on lunch. That’s $50 a week and $2,600 a year. If you earn $30,000 a year, for example, you would save up to nine per cent of your salary by preparing lunch at home, Jarman says. Saving on these simple costs leaves you more money to save with a RRSP (Registered Retirement Savings Plan) or TFSA (Tax-Free Savings Account).

[end of article]


Tag Cloud