Childhood experiences can have a direct impact on your money mentality, but for many Canadians, personal finance wasn’t a hot topic at the dinner table. On this episode of Ratehub’s Real Money Talk Podcast, however, we provide you with a different perspective – from someone that did have conversations about money (a lot) growing up.
Tyler is joined with guest host, Aashti Vijh, Ratehub’s Senior Marketing and Communications Specialist, to discuss money lessons from first-generation Canadians with Liz Enriquez. As the founder of Ambitious Adulting, Liz shares how growing up in an immigrant household changed her perspective on money.
The effect of immigration on money-management habits
It’s no surprise that the way you’re raised can influence how you value money. Liz shares that her identity and relationship with money was greatly shaped by her upbringing, with her family immigrating to Canada when she was 5 years old.
She feels lucky her parents set a good foundation of money management habits: only spend what you have, work very hard, and never rely on others financially.
“I don’t think a lot of my peers who weren't immigrants had that mentality. A lot of people had safety nets – we didn’t have that.”
Financial lessons from first-generation parents
In some cultures, parents can be more strict with their kids, especially when it comes to money. Growing up, Liz says there was no room for complaining, and she couldn’t ask for things just because she wanted them.
“They were very clear that if you want something you have to get it yourself – don’t expect anything from anyone else.”
As a result, her parent’s money mindset became her own personal finance approach. Liz learned early on that an enjoyable life isn’t defined by spending.
In fact, her happiest childhood memory comes from visiting the park with her brother. Going to the library for free became her ideal entertainment. She now integrates the same philosophy into her personal finance coaching (and now parenting on Ambitious Parenting).
“I kind of encourage that with my clients. Yes, you might think that this gives you joy, but if you’re struggling with a budget, the reality is that you always either have to find ways to decrease your expenses or ways to increase your income. That's the only way you can get ahead.”
So if you aren’t ready to increase your income, you should search for joy in aspects of life that don’t come with a cost. Instead of depriving yourself to get ahead financially, change your mindset.
Relearning how to strategize debt
Despite learning great lessons from your parents, there are oftentimes a few things that you should unlearn. In Liz’s case, it was her relationship with debt. Because of the way she was raised, Liz had assumed all debt was bad and aimed to pay off her mortgage as soon as possible.
“I had to relearn and reframe how I thought about debt and how to use debt strategically and leverage it.”
Consumer debt is different – it mathematically doesn’t make sense to be paying added interest if you can avoid it. However, Liz believes you don’t need to be afraid of taking on other types of debt (such as real estate) if you know how to use it strategically.
One of Liz’s top money lessons that she shares with her clients is to invest early. You don’t need to be an expert to start as she started in her teen years without knowing exactly what she was doing.
“Just starting is huge because it got me into the habit of saving every month and investing every month.”
The longer your money sits in a savings account and out of the stock market, the more you’re missing out on potential earnings.
However, you still need to ask yourself a few questions before throwing all your earnings into the stock market. It’s important to proceed with caution and make sure you’re in the right position to invest. Liz shares a few prerequisites to investing, including actually making some income, setting up an emergency fund, and clearing out any high-interest debt.
To hear the entire conversation with Tyler, Aashti, and Liz on money lessons from first-generation Canadians, tune in to your favourite Canadian personal finance podcast, Real Money Talk. And don’t forget to visit Liz’s website, Ambitious Adulting, for more resources on smart money management.