“Blah blah bond yield, blah blah interest rates, yada portfolio…What do you mean you don’t have a tax-free savings account?” your friend says judgingly.
Finance can be really dry and boring. I know, I’ve been there, but understanding personal finance is empowering. Jocko Willink, former U.S. Navy Seal, coined the phrase discipline equals freedom. Instead of ignoring it, hoping it’ll one day get better, taking even a little bit of time can put you on the right track to financial freedom.
The truth is some people love to learn and read about all things finance. They can’t get enough of mortgage rules, securities (whatever those are), dividends, tax deductions, et cetera ad nauseam.
And then there’s you. You may be reading this because you’ve made a new year’s resolution to get on top of your finances once and for all. Maybe your debt has gotten out of hand and you’re finally ready to make a change. And maybe you’re in charge of your own money for the first time and don’t know where to start.
Actionable rules to start improving your personal finance
- Pay off debts first (debt snowball vs. debt avalanche)
- Pay yourself first (automatically take 10% of your paycheque, put it in a savings account).
- Improve your credit score (Read:How to fix a bad credit score
- Create a plan to manage your bills
- Get a better chequing and savings account
- Find a credit card that suits your needs
- Decide on a budget that works for you (detailed or rough, so long as you know where you spend)
- Invest the rest
But fear not! Because I am here to point you in the right direction and make this as easy and painless as possible. Sometimes the only way out is through, so let’s go find some interesting sources of personal finance information.
Dig in to some personal finance blogs
If you ever want to feel bad about yourself learn what some people are doing to master their finance, there are some terrific personal finance bloggers who ignore the technical jargon and just share their story of how they started out on the same journey as you.
Check out the blog 'Money After Graduation', in which Bridget Casey and others share stories like “ 4 Things To Consider When Saving For Your First Tattoo,” that set things like mutual funds aside and discuss real-world finance issues. (They also have posted 30 articles about mutual funds in case you find yourself suddenly interested).
To find your favourite flavour of personal finance blog, this list is a good place to start.
Read a dang book once in a while
Sometimes it doesn’t hurt to do what our parents used to when they wanted to learn something: hop in the car, go to the library, sign up for a card because you never go to the library, and take out a book on the topic. You can also use Overdrive to download and borrow free ebooks or audiobooks from your local library. (Or save the hassle and order one from your existing Amazon account).
Sometimes it can be hard to find Canadian content in a sea of American gobbledygook (if you’re ever reading something that starts talking about a 401(k) you know you’re in trouble), but there are some fantastic home-grown writers who have published entertaining books in recent years. A good starting place may include one of these:
- “Stop Over-Thinking Your Money!” by the brilliant and entertaining Preet Bannerjee outlines five simple rules for thinking about money that filter out the nonsense and won’t give you a headache.
- In "Wealthing Like Rabbits," Robert R. Brown discusses sex, zombies, Star Trek, and introduces the world of personal finance.
- Ratehub.ca alumnus Cait Flanders shares how her personal challenge to quit shopping for a year turned into a new lifestyle in her book “The Year of Less.”
- And you can never go wrong by picking up a copy of the David Chilton classic, “The Wealthy Barber”.
Make someone else do it for you
Typically attributed to William Bernbach, the quote “never do anything yourself that you can hire someone else to do” applies to personal finance. And yes, you can pay someone to do it for you.
The old-fashioned way is with a financial planner. The trick here is that anyone can call themselves a “financial planner” and oftentimes they are just salespeople whose job it is to push you into investments that pay them hefty commissions. Look for an adviser with a certified financial planner (CFP) designation who charges a fee for their work and will make a commitment to do what’s in your best interest, and nobody else’s.
If you’re not willing to go old-school, you can try an online service like the New School of Finance that lets you book an online session with a financial planner for a not-small fee (sessions start at $275). They also offer online courses with seriously relatable titles like “Budget With Your Boo” and “Can You Afford to Buy a Home” that will each take roughly 90 minutes of your time and 97 of your dollars.
And if you’re really serious, you can even go back to university.
The Bottom Line
The key to happy personal finance is to embrace it, and make your money work the way you want it to. If you’re excited by boring analyses of low-cost exchange traded funds, that’s fine. But if you would rather remain casual about your finances, that’s ok too. Search out personal finance advice that’s reasonable, relatable, and acknowledges that you’re not a robot, but a human being who needs a cup of coffee every once in a while.