- “Pay yourself first.” That is, save when you can. Start early to benefit from compound interest. Make saving a “habit.”
- Live within your means and plan ahead. The future will be the present some day. Plan for all phases of your life. Be prepared for the unexpected expenses. Manage your money to be able to sleep well.
- Pause and think – even for a minute – before making a significant purchase. Do you need it? Why are you buying it? What are the trade-offs – today and in the future? Have you taken time to compare options?
- Ask questions until you are comfortable when making a financial decision. Information is key to making good decisions. Learn enough to know the kinds of questions you should ask – and then ask them.
- Know your own debt/credit limit. And live within it. Work out how much debt you can afford. If you get to your limit, shut down any further borrowing. Set your own limits. Don’t have others set them for you.
- Resist temptation. There are so many efforts to make you “buy this,” and “buy that.” Buy what you need and want – not what others want you to buy. Make sure you, and not others, keep control of your money.
- The potential “rate of return” from an investment will equal the “level of risk.” The more you hope to gain, the more you risk losing. Find a balance that is right for you. And remember, if something sounds too good to be true, it probably is
- Read the fine print. The things people want you to see will usually be big, bold, and obvious. It’s the things they might not want you to see that will be in the “fine print.”
- Avoid fees and penalties. Pay bills, taxes, etc. on time. Late charges can really add up – and late payments affect your credit rating – and can affect the rate of interest you pay. Make sure you have bank accounts, credit cards, cell phone plans, etc. that are right for you.
- Seek advice when needed. If you are uncomfortable or unsure with financial decisions, consider getting some advice. You may find you need to pay a fee for some advice – but it could be worth it. Make sure the person you work with is trained and registered to provide the services you need. Ask about fees.
- Know where your money is going. Is it going where you want it to go? Are you saving enough? Are you spending too much in some areas? Do you want to help others? Track your spending. A budget can help you get control of your money – and keep control. Keep good records, as well as receipts, warranties, etc.
- Money can’t buy happiness! But it can help – and a lack of it can cause unhappiness and stress. Try to keep control of your money and your financial life situation. Keep in mind that many of the things in life that matter most have little to do with money – family, friends, relationships, experiences, adventures, and so on. Don’t let money problems get in the way of your happiness.
- Know how to use an ATM properly. Make sure you protect your identify and are not vulnerable to others taking advantage of you or accessing private information.
- Know how and when to use a credit card effectively. There are pros and cons to using credit cards. Take advantage of the “pros” and avoid the “cons.”
- Know how to shop online. Learn how to avoid online shopping mistakes, fraud, and other problems so that you do not make any purchasing decisions that cause you financial difficulty or loss.
- Know how advertisers try and influence your buying decisions. Stay in control of how you use your money and the financial decisions you make. Don’t let others influence your decisions so that you do not make those that are best for you.
- Distinguish your needs from your wants. We all have to take care of what we need – but we can think about and try to make sound decisions in terms of what we want. Needs and wants also differ from person to person. Make sure you know what your needs are versus your wants.
By Gary Rabbior
Canadian Foundation for Economic Education (CFEE)