Wednesday, 29 March 2017

Financial Education & Money Lessons from my Parents

Money Lessons from my Parents

I get so frustrated talking to people who don't know basic things about handling their finances. Now don't get all defensive if you feel like you are in this situation because I'm not mad at you! What I hate is that we don't give people the tools to handle money when they are young. Really, what could be more important than ensuring children and young adults know that going into debt is bad and that starting to save early is essential? Apparently learning advanced algebra and who fought who in WWII are higher priorities. 

Just last week Ontario was making headlines because they are (finally) launching a pilot project to incorporate financial education into their schools. Their hope is to create a new course that will be implemented in the Fall of 2018. Obviously, it's still a work in progress, and we don't know what the actual curriculum will be, but it's certainly a step in the right direction. Other provinces across Canada have varying levels of financial literacy components included in high school curriculums, but I don't think there are any that couldn't use some improvements. For example, Saskatchewan has no official financial literacy component included in their schools, but BC and Manitoba have both revamped their math programs to include such topics. Here in Alberta (the only province I have experience as a high school student), they currently have a mandatory 'Career and Life Management' course. I took it, and honestly, it was kind of a joke. Everyone tried to take CALM in summer school because it was an easy two weeks of fun and games, seriously. Part of this for sure is that fact that most high school kids don't worry about money the same way they will 10 years later but it doesn't help that the course itself has such a poor reputation. The one thing I actually remember was going to a car dealership to 'learn' how to buy a new car. Cringe! 

So, what can we do? 
Obviously, I believe that high school curriculums should put greater focus on financial education and provide kids with tools that will actually help them succeed in the real world, but it doesn't end there. Parents need to take some responsibility too and pick up the slack. The problem with this is that not all parents have good money skills themselves, and sometimes bad education can be worse than no education. 

I was lucky to have parents who were positive money role models and picked up a lot from them when I was growing up. Both my parents were professionals (my Dad an engineer and my Mom a physiotherapist), and we were comfortably middle class, but that didn't mean they weren't careful with their spending. Both my parents are Scottish, and I still joke that my Mom fits the bill for the stereotypical cheap Scot. 
"Have you heard the rumour that the Grand Canyon was started by a Scotsman who lost a coin in a ditch?"

My Dad was definitely the money guy in the family, in fact, I still remember him spending every Monday night sitting at the dining room table paying bills, balancing the checkbook, working out a budget, etc. Apparently, this left a lasting impression on me, and although I don't balance a checkbook (who uses cheques anymore!), I do keep a detailed account of my budget. He was old school and used the antique pen and paper method, but with all the advances in technology, it is easier than ever to keep on top of your finances. Now you can get everything done through an app on your phone; more efficient...absolutely! But you do still need to put in a bit of time/effort to keep things updated. 

Even though I was an only child, I didn't (still don't) consider myself overly spoiled. My parents taught me that I couldn't always get what I wanted and that sometimes they just couldn't afford to spend the money. Was I scarred for life about never getting that pony I always wanted? Hardly (it's still on my Christmas list, though, hi mom). Instead, I learned that I had to work to afford the things I wanted and considering how many hours you have to work to earn 'X' amount of dollars really puts purchases in perspective. My 5-cent candy buying days were sure cut down when I had to spend my own babysitting money. I also remember a very long lecture conversation before I got my first credit card about the negative impact debt could have and the importance of always paying your credit card off in full. At the time, I was an 18-year-old high school student working a part-time job and hardly in need of a credit card, but my parents also understood the value of building credit. I think that first card had a limit of $500 (maybe even $250), but it still felt like a big deal, and I never abused it. 

Where do you start? 
Maybe you are a parent and are wondering how you can instill in your kids a sound basis of financial knowledge. Now, remember, I'm no parenting expert and am only speaking from my experiences growing up, but there are some guidelines you can use to set your kids on the right track. 

1. Educate Yourself
You're not going to have much credibility with your kids if your own finances are a mess, so step one is always to get yourself in order. Your good or bad habits will rub off on your children no matter what you do, so make it a good impression. 

2. Start Early
Obviously, children have the capability to learn different skills at different ages, and you'll have to hold off on complex subjects to later days. You can, however, incorporate money matters even at a young age. Consider role playing a supermarket transaction or playing monopoly. Anytime they have to give up money for goods will get them thinking about spending. 

3. Allowances
There's no better way to learn about your priorities in regards to money than to have to spend money you actually earned. This is where an allowance would come in. Younger kids don't have any way to make money (except maybe through Birthday or Christmas gifts), so an allowance can give them that access. I also like the idea of taking them to the bank to set up a bank account. There's no minimum age to set-up a bank account in Canada, and the requirements will depend on your bank, but most of the big banks offer accounts for kids. This way they will have a place to deposit money and watch their savings grow, you can even get them online access to help learn the ins and outs of the banking system. 

4. Encourage Working
Nobody likes laziness, so build up a good work ethic in your kids by encouraging them to take on a part-time job. I worked at my Mom's physio clinic from the time I was 14 all the way up until University. Working taught me to be more responsible, how to deal with a variety of people, and gave me an income that let me be more independent. 

How did you learn about money? Was it through school or from your parents? And, what the best money tip you ever learned? 

Money Lessons from my Parents

Tuesday, 21 March 2017

So, you Got a Tax Refund...

What to do with your Tax Refund

We're right in the swing of tax season, and I'm sure many of you who are expecting a hefty refund have already submitted your taxes there's likely a bunch of us there who owe money and are holding off to the last possible second. If you are still holding out, you still have a bit of time. The deadline for Canadians to have their personal taxes filed is April 30th.  I know when I was still a student and had all those education credits in my pocket I was getting things sent in as soon as my T4 arrived in my mailbox. Those were the days! 

Or were they...

Getting a big refund might feel like the best thing ever, but it's really not. What it actually means is that you have provided the government with an interest-free loan for the past year, and are just now getting your hard earned dollars back. On the other hand, if you actually owe money it means that interest-free loan came your way and the government was lending you money. I know it can be a tough pill to swallow to owe a chunk at tax time, but it helps a little to think of it this way. The best thing you can do is attempt to level out your taxes, so you come out neutral every year...easier said than done though. 

If you are in a position where you are getting a refund, then consider what to do with that money. Because it can often feel like found money, you might be tempted to splurge on something you couldn't normally afford or take a hot vacation to escape the endless winter. However, your tax refund isn't actually the windfall you might think, it's actually money you should have received over the past 12 months as earned income. Say you're getting $900 back from the government, that's not life-changing money, but it sure could go a long way in refreshing your wardrobe. What that actually means, though, is that your income should have been $75 higher each month. Doesn't sound like such a big deal anymore right? 

How would you have allotted that money into your monthly budget? That really depends on what your primary objectives are, but here are a few suggestions that might not be the most fun but would make the most financial sense. 

Pay Down Debt
This is always the top priority for when you have excess cash available. High-interest debt (like credit cards) are a killer when it comes to your finances, and you always want to get rid of them as soon as you can. Putting a lump sum on your most expensive debt will decrease the amount of interest you spend over time and free up additional money in your budget down the road. Eliminating those high-interest debts first is your best bet, but you're all caught up on that front you can also use your refund to make a lump sum deposit against your mortgage. 

Top-Up your Emergency Fund
Next, on the list would be ensuring you don't go back into debt when the unexpected happens, and the best way to do that is to have a fully funded emergency fund. You want this to be readily available so keep it out of the market and just in a high-interest savings account. An emergency fund will keep you on track if you get in a car accident (those deductibles though!), your furnace breaks down, or your dog needs surgery. 

Save for Retirement
There's never a bad time to increase your savings rate so why not add your tax refund to your RRSP. This has the added benefit of putting you in a better position when you retire but will also help you get another tax return next year. We all know that the earlier you start saving for retirement, the better off you'll be because of the wonder that is compounding interest, so take advantage of time and put that money to work. Instead of an RRSP, you can also invest in your TFSA, if you're unsure of which option would be best for you right now then check out this post on that very subject. 

Invest in Yourself
One thing that people don't always think of is spending money on something to improve yourself. And no...I don't mean go and get yourself some plastic surgery! Depending on what your career path is, getting more education is often a sure way to getting a raise. Is there a course you need to take or a conference you could attend to get you to the next level in your job? Increasing your income is one of the biggest factors when it comes to your finances, so having to outlay money at the start is can quickly pay itself off and then some. Pro tip, make sure your boss thinks your plan is as brilliant as you do. The last thing you want is to spend all the money and not get the raise! 

Treat Yourself
I'm all about balance, so if you have yourself all set up in each of the above categories, then I don't see anything wrong with spoiling yourself. There's no fun in always saving your money for a rainy day, but you do need to make sure that you've already got an umbrella stored away ;) Let's make a deal though and not blow your entire refund on something silly, how about half? Doing something smart with a portion of that money will make you feel better about spending the balance on something more entertaining. Maybe you already have a big purchase that you are saving for (new car, kitchen renovation?), this money could get you closer to that goal.

So tell me, have you done your taxes already this year or are you still procrastinating like me? And if you got a refund, what are you going to spend it on? 

What to do with your Tax Refund

Wednesday, 15 March 2017

7 Steps to a Better Resume

Resume Tips

If you are currently on the job hunt in Alberta, you are likely VERY aware that the job market is really tight and there is a lot of competition for jobs. Recent reports have our unemployment rate hovering around 8.3%. This is down slightly compared to late 2016 when it peaked (hopefully!) around 9% but still very high when compared to two years ago when it sat at 4.6%.
I've been lucky to have had stable employment since I graduated University almost a decade (yikes!) ago. I'm only on my second job in that time period, and the one move I made came out of connection in my industry. I know networking isn't everyone's favourite thing (personally, I hate it), but having an in can be the exact thing you need to set yourself ahead of the crowd. 

While you're working on meeting the right person, you will also want to make sure you're resume is looking good and is actually going to get you and interview. I've had to look in my share of resumes and let me tell you, resume writing is not a skill everyone has! Particular things drive me nuts when I'm browsing through a stack of resumes and other things that will get you moved to the keep pile almost instantly, and the most frustrating thing is that it is SO easy to avoid simple mistakes. Let's talk about that, what can you do to improve your resume and what do you need to make sure you avoid at all costs. 

1. No Pictures
Nothing catches me off guard more than someone who includes a head-shot on their resume. I realize that in some places this is the norm, but here in Canada it most certainly is not. The only reason it might not be a hard pass is if you're applying for a modeling position, but if that's not the case then just don't do it...ever. 

2. Spelling and Grammar
You would be shocked how many resumes that I have read that have spelling or grammatical errors in them. Come on people! This is the easiest of easy fixes. Use the built in spell check on your computer and take advantage of free grammar programs to catch the most obvious errors (I like Grammarly). Then get someone to proofread your resume to make sure there is nothing you've missed or maybe a more efficient way to say something. Not taking simple steps like this makes you look lazy and nobody will want to hire you. It might sound harsh, but if I'm going to through a bunch of resumes, any with spelling or grammar errors will instantly be put in the 'no' pile. #sorrynotsorry

3. Short and Sweet
Keep things concise, so the person looking at your resume actually takes the time to read through it. I highly recommend keeping it all on one page if possible. You don't necessarily have to put every single position you've held on your resume. If there are jobs that don't apply to the job you're applying to then feel free to leave it off. It's more important that you show your potential employer that you have the skills they are looking for. Basically, if you are applying for a job as an architect, you don't need to include your job history as a line cook. I'm also not a fan of the 'Objective' section that is included in most resume templates. It just feels so fake and unnecessary. 

4. Reliable References
You can hold off and not put your references directly on your resume, but I don't think it's a bad idea to include them. The chances of a potential employer contacting them before you go in for an interview is slim (checking up on references sucks). Keep the number of references limited to 2-3 and make sure they are good ones. The last thing you want is to have a successful interview and then have one of your references not give you a glowing review. This is why you always, always need to check with people before you list them. If you are having trouble coming up with references, then think outside the box. It doesn't always have to be an old boss, you can use a co-worker or a family friend that can speak to your personal attributes. A good reference from a not so great source is still better than a bad reference from a more credible source. 

5. Qualifications are there for a Reason
It might seem like a good idea to apply for ALL the jobs, but it really isn't. There is nothing more frustrating than reading a resume and wondering why the heck someone applied to the job. On just about every job posting you look at there will be a list of qualifications or required skills, make sure you fit the bill. If not, sorry, but keep on searching. If you are dead set on getting a particular type of job that you consistently don't have the qualifications for then it might be worth your while to work on that. Maybe there's a course you can take or some other job you can get to build your experience. It might not be ideal, but it's better than doing nothing. Sometimes you have to spend a bit of money to better your education because getting your dream job. 

6. Employment Gaps
There's not much that scares away a hiring manager more than an unexplained hole in your work history. If you have lots of short term jobs and gaps between them all, it makes it look like you aren't able to hold down a job and that no one else wants to hire you. Be aware of this and try to cover yourself. Obviously lying on your resume is not the way to go, but leaving out a few details can help you get your foot in the door. Instead of putting down exact employment dates maybe just organize it by year, so it doesn't look like you've been off work for as long. Details like this are always easier to explain in a person so make sure your resume highlights only the positive. 

7. The Dreaded Cover Letter
I hate cover letters, I hate writing them, and I hate reading....but, you know what? Write one anyways! This goes back to the laziness factor. Taking the time to introduce yourself through your cover letter makes it look like you are more serious about getting the job. It might not even get a second glance from a prospective employer, but it's not going to hurt your chances. You'll want to follow many of the same tips we've talked about for your cover letter; proofread, keep it concise and highlight your qualifications. Make sure you personalize at least a portion of it to the company you are applying to so it doesn't look like you just have a generic letter for everyone. 

Hopefully, these resume tips will help you on the job hunt, and if you've got other tips, please feel free to post them in the comments. 

Resume Tips

Wednesday, 8 March 2017

Healthy Amount of Stress

Is there such a thing as a healthy amount of stress?

I was recently listening to the audiobook version of '#Girlboss' (worst title ever) by Sophie Amoruso, and there was a section in the book that talked about stress that stuck with me. The rest of the book was just ok. I liked Sophie's no-nonsense attitude, but listened to it as an audiobook and found the narrator to be a bit annoying. It was also the very first audiobook I've every listened to (I talk about that here), so maybe my lack experience was a factor. Is that a your audiobook listening skills improve with practice? The quote that got me thinking was actually from a section written by Leandra Medine (an author and fashion blogger over at Man Repeller):
"I also think you age a lot quicker if you can't keep yourself busy and under the right, healthy dose of stress. Too much of anything obviously isn't a good, but as my dad always said: Overwhelmingly busy is a much better state to be in than overwhelmingly bored."
I could not agree more with this statement. People always complain about how much stress they are under and while too much stress is definitely a thing, the right amount keeps you motivated and efficient. Have you ever had a job where there's just not much going on, and you find yourself browsing the internet to keep yourself entertained? I sure have! And I find when that happens, even the smallest of tasks feels like such a drag, and I end up pushing off everything just to do one more (four more) stupid Buzzfeed quizzes. On the other hand, when I have a job where I am consistently busy and have a (not too huge) pile of files on my desk to get through, I work harder, better and faster (your welcome for getting that Daft Punk song stuck in your head). It's way too easy to fall into a non-productive rut when you don't have a bit of stress nipping at your heels. 

Different people have varying levels of tolerance to stress; a level that might result in peak performance for one person could cause another to buckle under the pressure. You just need to figure out how much stuff you can take on to keep yourself in that target zone, without overloading yourself. How exactly are you supposed to find that sweet spot, though? Well, trial and error I guess. Think back to times where you felt like you were thriving under pressure and then compare them to times where you were under too much stress and just wanted to cry. What was the difference? It also depends on what area of your life you are dealing with, let's talk about that a bit more. 

Money Stress
Since this is a blog about finance, we're going to start there. If you are feeling overwhelmed by your finances, then there are a few things you can do to get things in order and running more smoothly. Debt tends to be the biggest money stressor but even living with high levels of debt can be bearable if you have a solid plan to pay it off. 
  • Budget, budget, budget!: The number one thing you can do to feel in control of your finances is to create a monthly budget for yourself. This does not need to be complicated (money in, money out) but knowing where your money is going and how much you can spend on what is essential. 
  • Emergency fund: An unexpected expense can often throw a financial plan off track, so it is critical to have an emergency fund to cover your butt. I like to have about 3 months of expenses saved in my emergency fund but if job security is something you are concerned about it may make sense to bump that up. I wouldn't go overboard, though. An emergency fund needs to be readily available and should not be invested, and you don't want to have too much of your assets sitting on the sidelines.
If you're living the good, no money stress life then it might be time to up the ante. As we discussed above, stress can be a motivating factor and might be the push you need to better your financial position. I don't recommend going on a spree, so you have debt to pay off but maybe set yourself a goal to save a percentage of your income.

Work Stress
This can be a tough one and more of a challenge to solve. Unless you're the boss, you don't always have control over what tasks are assigned to you and how fast they need to be completed. There are some things you can do to make sure you are working efficiently and hopefully lower your stress level. 
  • Prioritize: When I get overwhelmed at work I find that it helps to take a second, stop whatever it is you are doing and make a priority list. It might feel like everything has to be done right this second, but I promise you, it doesn't. Once you figure out an order to do things you will be able to focus on checking things off your list instead of freaking out over everything at once. 
  • Plan ahead: Most jobs have busy times and slow times, so take advantage of breaks to get a step up on the busy season. Keeping your stress level at that healthy amount consistently by staying productive even during slow periods will mean fewer freak outs when things get crazy. 
  • Ask for help: Maybe your boss doesn't think you're doing the job of two people, but if you are always feeling stressed out and overworked then it might be time to discuss this. You might just be so good at hiding your stress that no one has any idea you are suffering. It might not even be a matter of hiring a new staff member, but just re-assigning some tasks internally. 
If it's boredom you are dealing with at work, then there are also things you can do to boost your motivation. Perhaps there's a project that no one wants to do, but that would make things run more smoothly. It's never a bad idea to take on extra work, you can use it to your advantage when performance review time comes around. If there's nothing available, then consider doing something that might not be directly work related but will improve your skillset. There might be an online course you can complete or a book you can read that will make you a more productive employee.

Home Stress
I'm no expert on relationships or parenting (no kids here), but I do have a few tactics for dealing with stress when life gets in the way. 
  • Just say no!: I think everyone is guilty of agreeing to do something they don't really want to do, so stop doing that. You are allowed to say no! Taking on too much is going to result in you doing things poorly, and nobody wants that, so don't feel bad for passing on an event or refusing to take on another task. 
  • Me time: Schedule time to 'treat yo self'! And if you've never watched Parks & Recreation then you should start there, such a good show. There's plenty of ways to be kind to yourself that don't even involve spending money. Take a nice hot bath with lots of bubbles and a good book, go for a long walk with your dog or do a little at-home yoga. 

I always seem to have a hard time finding middle ground at home, I always either have way too much on the go or nothing at all. Not ideal! I'm also not the best at getting myself motivated to do things. One of my New Year's Resolutions was to build up a bit of an archive of blog posts so that I never have to scramble. Let's just say that is still a work in progress...I've been better about sticking to a schedule but am still writing most of my posts the same week they go up. I need to figure out some way of rewarding myself, that seems to work for getting me to the gym! I always see that quote that talks about not rewarding yourself with food because you're not a dog...but hey, if it works ;) 

How do you guys keep yourselves motivated during slow periods and from losing your minds when you get stressed out? 

Is there such a thing as a healthy amount of stress?

Wednesday, 1 March 2017

The Fear of Missing Out

Are you suffering from #FOMO?

Have you ever felt pressured into spending money just because you didn't want to miss out on an experience? I'm going to guess that almost everyone answered with a resounding yes and I am right there with you. Here's an example... Garth Brooks did a nine concert stand here in Edmonton and it was all everyone could talk about for awhile. Am I a Garth Brooks fan, nope? Did I almost convince myself I should buy tickets to the show just because EVERYONE else was going? Absolutely! But I was talked off the Ticketmaster ledge by my more rational minded (aka. more country music hating) friend. Did everyone currently raving about how incredibly awesome every single show was and post endless shots to social media...heck yes. Am I sad I didn't get to experience it? Not so much. I find that more often than not, you aren't really that disappointed when you don't get suckered into missing out on something you didn't have much desire to do anyways. If you desperately want something, then yes, do everything you can to make it happen but if you're feeling indifferent to something that's a sure sign it doesn't deserve your hard-earned dollars. 

Fear of missing out is a thing, it has its own acronym (FOMO) and search #FOMO anywhere on social media, and you'll get inundated with results. RateHub actually completed a study just last year and discovered some pretty staggering results: 
  • 26% of Canadians have experienced FOMO (and that jumps to 48% when you focus just on millennials)
  • 70% of Canadians believe 25% of their debt is because of FOMO
  • 50% of millennials feel FOMO when on social media
But Why?
Humans are competitive, that shouldn't come as a surprise to anyone given our mild obsession with handing out awards (I'm watching the Oscars as I write this...go La La Land!) and playing (or watching) professional sports. Being the best used to be a matter of life or death (way, way back when) but those survival instincts have stuck with us even though the stakes aren't so high. Now it's almost the opposite...we push ourselves so hard to live up to the ideals set forth by people we might not even know that it affects us emotionally, physically and financially. 

The stat from the above survey results that really stands out to me is that 70% of Canadians can attribute 25% of their debt to FOMO! Going into debt just to keep up with your friends, neighbours, internet acquaintances, whoever, is not ok. Let's all make a deal right now that we're not going to do that anymore ok? Spending money that you should be saving is one thing, but charging a FOMO experience to your credit card is bad news. Not only will it cost you the upfront charge but factor in the 18%+ interest rate you pay and what you're paying is going to increase each month you can't catch up. It's not worth it, and I can promise that you're going to regret it in the long run. 

It's not just about money either, people (myself included) are hooked on social media and being up to date on all the latest news. FOMO can lead to unrealistic expectations of what your life should be. Everyone knows that no one's life is as perfect or exciting as it seems to be on Instagram and yet we still compare ourselves to all those edited posts of other people's daily lives. Just take a gander at your own posts, is it an authentic portrayal of how you live or what you do? Or is it more likely a recap of the highlights with none of the lows? I have no problem with people posting those pictures, but I just have to remind myself that everyone is in the same boat and only let you see what they want you to stop comparing! 

How to overcome FOMO
Turning off your fear of missing out and keeping your focus inwards is no easy task, but there are a few things you can do to keep yourself on track. 

Set Goals
Specific savings goals are a saviour for me when it comes to sticking to a plan. I need something to look forward to and something to put my money towards otherwise I end up spending it on random things or experiences I don't even really want (Garth Brooks tickets). If I can say to myself, no Sarah, if you spend your money on this stupid thing you won't be able to do this super awesome thing in the future, I'm way more likely to stay strong. 

Having a stable budget can also help dissuade you from spontaneous spending. If you know you have a set amount of money to spend on entertainment, clothing, food, etc. then you'll know when you can and can't afford to splurge a little. 

Take a Social Media Vacation
Being flooded with people talking about an upcoming concert or wearing an article of clothing you just HAVE to have is not going to help you convince yourself to go without. Give yourself a break and do something to distract yourself (that doesn't involve spending money). Take your dog for a walk, have a nice long bath, or read a book, binge watch a new TV show...distracting yourself is key. And turn off your phone, even if it's just for a few hours. Not seeing the notifications going off will make it easier to stay checked out. 

Read for Inspiration
Have you ever read a book on personal finance and been suddenly inspired to cut your spending and start saving for retirement? My hands up! This happens to me all the time and not even just for personal finance. I've read 'Born to Run' by Christopher McDougall and had dreams of becoming a marathon runner (ok, not entirely, but I did run way more than my norm) and 'The Life-Changing Art of Tidying Up' by Marie Kondo had me cleaning out my closet before I finished the first chapter. Sometimes a little push from a good book is all you need to change your mindset. 

Like-Minded Friends
The biggest influence on your spending habits is often your friends, and this is particularly the case for millennials. Frugal friends will almost always mean you spend less. Now I'm not suggesting you banish all your friends and attempt to make new, less spendy ones, but maybe try and come up with different things you can do together that cost less. Instead of always going out for dinner, how about hosting a girls night in? 

Do you guys find that the fear of missing out impacts what you do? Or have you figured out ways to cope with it?

Are you suffering from #FOMO?