What was the largest money lesson you learned growing up?
The biggest money lesson I learned as an adult was at Borrowell and thru our members. From interviewing a few of them, I learned that many individuals who struggle with money are literally excellent at managing money, but do not have enough income.
I probably was once prejudiced and think that folks who struggle with money just don’t manage their money well. But I’ve found that whenever you’re living on a really small margin, you really must be excellent along with your money. If you are like me and earn a salary that covers my expenses, I do not have to administer my grocery bill well or worry about my automotive breaking down because I do know I manage to pay for to pay for it. I do not have to be so good with my money because I actually have an income that’s higher than my expenses.
But many individuals who live paycheck to paycheck are excellent at managing their money because they must. It was good for me to learn this because it is easy to say someone has a spending problem, but many individuals even have an income problem, and that doesn’t suggest they don’t seem to be diligent about managing their money. This is why it is vital to have good credit so that folks have access to money in an emergency, as they often lack savings to fall back on.
What’s one of the best money advice you’ve got ever received?
Make it a habit to save lots of at the very least 10% of the cash you earn from a young age.
What’s the worst money advice you’ve got ever received?
There’s no point in having an emergency fund if you may have outstanding debts and access to a line of credit. So the worst money advice is to place a major amount of cash into an emergency fund that is just sitting there.
If you may have a line of credit you can fall back on in an emergency, I’d use that [emergency fund] Money to repay debts. When you may have debt, it is a guaranteed interest cost, as opposed to simply paying interest whenever you use your line of credit. Later, once you’ve got paid off your debts, you may arrange an emergency fund or invest your money. But repay your debts first.
Would you reasonably receive a big amount of cash abruptly or a smaller amount recurrently throughout your life?
I would like to receive a lump sum abruptly. It gives you more flexibility to do something impactful and meaningful with it. I feel like consuming a smaller amount every week or every month is more of a security net and more of a secure solution.
What do you’re thinking that is probably the most underrated financial tip?
Paying off debt, especially those with high rates of interest like bank card debt, is underestimated. Many people think they should contribute to an RRSP, save, or need an emergency fund, but when you may have a balance on a bank card and are paying 20% interest, I imagine the higher financial decision is to repay debt.
