Every Parent Should Have This Money Conversation!

I was not really taught much about money and how to make money and the value of money and how you can create value to earn money. And it was something that I struggled with and had to overcome as a young adult when I was out in the real world dealing with my own money. And it goes to show how really important it is to instill those values and talk about money with your children when they're young.

What did you learn about money growing up? How were you exposed to it in school, college? This is what Sukman and I wanted to do by going on campus at a local university and just talking to people on campus, students and the like, on what their thoughts are on money and what their exposure is to it. In this video, the advisors on the Ascended Financial team are going to go over and provide their instant reactions to what these students and people talk about when it comes to money.

What does money mean to you now?

Well, back then, yeah, when I was a student, money was kind of just I used for my leisure expenses and whatnot. Not as much, obviously bills as I have now as an adult. But now to me, money is obviously equivalent to wealth. I think I value more now than I did probably when I was younger because I had more disposable income.

What's your opinion on credit cards and loans versus savings? Which one would you prefer to use?

Prefer to use savings. But I understand the strengths of what credit cards and loans can do for you. I obviously it provides some leverage in situations where you can't dip too far into the savings because otherwise your savings would be depleted or you just don't even have enough. So that's where obviously credit and loan come into place. So they both have their pros and their cons, but you gotta use it accordingly for your situation.

I thought it was interesting that he mentioned the strengths and leverage capacity of loans and credit cards, but it didn't seem like it was in a mindset of using the. That like what we would refer to or people refer to as good debt, in other words, debt that you use for like an investment purpose. It was more like, hey, if you had to repair your transmission for $4,000, you don't have the money, boy, I guess you better use that credit card. Like that was kind of the interpretation that I had. But yet he utilized the language of like strength and leverage in reference point to something like that, like a, like a life event coming up and how the credit card gives you strength and leverage. I definitely found that like it was a little like discombobulating as it went through my brain.

Yeah, good point, Richard. One of the things that resonated with me was he right away went to savings. And I think that's a pretty common kind of mindset. When people get asked a question like that, they'll go, well, ideally I'm going to save up money and then I'm going to use it when I need it. And so that struck me as pretty common that most people would go there and then, you know, after that just they would go too, well, if I need to, I'm going to use credit. So what I got from that reply from that particular person was that, you know, basically that's the normal kind of thought pattern out there.

The other thing I would mention is that it's, you know, he started off by mentioning that at the beginning or early in his. Sounding like his university days, maybe, perhaps this is a. I don't know if it's a person that works on campus or maybe someone strolling through on a nice day, perhaps an educator there, I don't know. But you know, he mentioned that it was really for leisure, so sounds like a good part of his early years. Whatever he learned previously leading up to his own university or education experience was more about spending the money and enjoying life and using it for things. So it didn't sound like there was a lot of maybe in the past or in his upbringing or what have you through his education as a youth or in the home. And for whatever reason, he didn't gravitate or take onto the idea of savings instead, hey, I've got some money now, I've got some work, it's coming in, let's go. And whatever it is, maybe it's the university experience of partying, I have no idea. But definitely like the focus was on spending the money, not on putting any aside. So I found that also to be a bit interesting.

Yeah, I can relate to this, Richard. I remember as a kid I was not really taught much about money and how to make money and the value of money and how you can create value to earn money. And it was something that I struggled with and had to overcome as a young adult when I was out in the real world dealing with my own money and goes to show how really important it is to instill those values and talk about money with your children when they're young.

But I hear sometimes parents saying things like, money should be taught in school. And I think, huh, what else do we want the school to teach our kids? Like, what are we actually teaching the kids? Do we have any Responsibility as it relates to that stuff. I don't think. I mean, it'd be great if they had some actual money courses that made sense, but I don't know if learning about money in school is the best place to learn. I think where you should learn about money is probably, probably with family. I think it's up to the parents to have good conversations with their kids about, you know, just being responsible with money and, and the power of it and all that good stuff. So I agree with you, Liz.

For me, something that came up when I was actually talking to him, what I noticed was you guys touched on this, how your relationship with money changes as you go through life. So Richard, you were kind of saying how in the beginning it's more spending it and you're using it for fun and you're not really maybe as responsible as you want to be. And then he's saying as he got older, he shifted more towards saving and paying more attention to that. So having that knowledge from the beginning, being taught to you, whether it be from a parent, a mentor, I think would be huge. Because then you have that onset to look at the long term vision and think, okay, let's think long term. Like Nelson always said, as a student, what was one of your biggest financial challenges?

She was really pretty good, my money, and frugal. So like I didn't have much challenges, probably not spending it on material things because obviously at that age you have a different mindset. You're living more probably materialistically in the moment. You're not really thinking too far long term. Although I did have long term mindset, it wasn't not like for the current things that I have now that I was able to acquire.

The one thing that I really wanted to speak to related to what was shared there was his take on. As you go through life, you'll start to figure out more of those pieces that you need to figure out. And some of it comes from without a doubt, just the school of hard knocks. As you live life, you get those challenges coming at you. But one of the things that I thought of as he was speaking was that the human behavior that we're all left with is not just when you're a student, it's not. It goes on for the rest of your life where, you know, the things that are luxuries, once you enjoy them, you want to keep on enjoying that. That's going to be a struggle throughout life. I still talk to people who are much more longer in life than this young person was and they're still struggling with those things. So that really was a point that I thought it was interesting. He brings that up. Yeah, you will learn. Some people learn better than others. And it really takes you back to the basic principles of how to handle money. You know, what are those things that you need to consider and start to practice that the earlier practice, the earlier you're taught. That I always go back to. I was taught to put away 10% from a young age, like when I was a little boy, and to give that, and I gave it, and I've given that all my life. So I got to learn to live on 90% of what I was taken in. And, you know, those little principles just go a long way, and the sooner you learn them, the better off you're going to be.

I think your experience adds so much value, especially to the youth of today. If they can hear your experience and the road that you walked and then be able to understand, oh, wow. If I just understood what Dan went through in life and. And I. I could see how that showed up for him, and I could make different decisions along the way relative to things like interest rate spikes and so on and so forth, it would be really beneficial. But it's interesting, I found with this gentleman is, you know, he really was recognizing, even in his own experience, because, I mean, it looks like he's, you know, certainly a young enough fella. He's. He mentioned earlier that he's got a higher disposable income now, which is common. As you get older, you get more skills, you become more valuable, you earn more money. It's very common. But it sounds to me like he recognizes how his experience and where he's set up now in life, even though maybe he wasn't prioritizing savings earlier, he's in a much better position, but he's recognizing that, you know, there's almost like a concern to some degree about the kids who are maybe attending this university. They might not have the same experience that he did because things like inflation and the pure aspect of maybe not being able to buy a home, which he's clearly sounds like he's been able to do just based on the conversation. So I think it's important to recognize we're standing on a campus, you're having this conversation, and he's recognizing the struggle of what the youth of today, at least in Canada, might be facing.

Sometimes your family can help out, but if you can kind of set the foundation now in terms of even something is thinking of retirement. Like, I don't think we think of Retirement at a young age. We're just kind of, you're living in the now, but there's going to come a time where you may live past 40, 50, and like you, you can't be every day going to work doing a 9 to 5. So it's like, I wish I knew then what I know now moment that you're going to have.

I wish I knew then what I know now. Show of hands, who here's ever had that experience before in life? Okay, so I mean, it's like one of those common adages that everyone uses, but it's also very true. I'm sure every one of us, if we would have the opportunity to go back with our current knowledge, there might be some different decisions that we made. Not to look back on anything with regret, but just recognize the strength and the impact of taking in experience, life experience, and how that shapes the future decisions that you make. You know, you have certain things happen, whether it's in your financial life, investment life, big expenses, unexpected things that come up and the way that you deal with them based on the resources you have. Those resources are savings, maybe some investments, or maybe you have the utilized debt to tackle that unfortunate or whatever experience. And the more that we are prepared for those, the better position you are for the remainder of your years, as he's even mentioning like retirement. So I just thought it's a wise statement and it's also a common feeling. As we get a little bit older, we always recognize, oh wow, geez, if only I knew this information a little bit, you know, a couple of years back, like 20, maybe 30, what an impact that would make on my life and potentially for my family and generations to come.

Did you feel at any point in.

Your university career, in your, in your collegiate career? Right.

Did you learn about finances and do you feel that they should be teaching about personal finances?

Yeah, I took like a course in financial management in terms of like business geared towards like industry, like going into the sport field, whatnot, and how to do it to start a business. I work for a company like that kind of stuff, like budget sheets, income, very basic, like accounting income and expenses, that kind of stuff.

Do you feel like they should have.

A little bit of a focus no.

Matter what field you're in, like psychology or communications or even business, that you should at least have some sort of.

Basis in personal finance in the post secondary realm? Like it's kind of tough. I think maybe it can be like an elective. I don't know if it can be like something that's like you must take this part of your career curriculum. But I think definitely like in the high school ages, like even just to get them tapped into some of the stuff that they're gonna need to know as adults, like something simple as doing taxes. Some adults as they couldn't do their basic taxes. I know now like the more things you get into, it gets more complex and like, yeah, maybe you can do yourself and it presents those challenges. But I think something like taxes, I think that's very easy. Basically here at post secondary that they do tax clinic sentence to students that.

Are coming in right to your UTM or wherever. What would your advice for them be in terms of finances and financial management if based off your experience, you give.

Them any advice, live according to your means. There comes a time when you're just going to go paycheck to paycheck. You're not lasting long run, it's going to hurt you more than it's going to actually do well for you. So definitely budget maybe 50% of your income. You can go to bills and maybe leisure and then maybe you can save like 50% then through. When you get older there's different avenues like investing and acquiring different things that can provide you wealth. But obviously if you're going paycheck to paycheck when you get past university and maybe you got to pay back your OSAP or you have other expenses, adult expenses, you're like, oh man, like I don't have any money.

I thought it was interesting you mentioned like, yeah, you should, you know, only have 50% going towards things like your leisure and your, your expenses and try to save 50% which I thought was, hey, I mean, yeah, if anyone can do that, that's incredible. I think that's a really lofty goal. We all need big goals in life, but I think, you know, so if that's the kind of advice he would give to youth today. You know, there's, there's something called the fire movement which is, you know, about people like really focusing on, on getting their expenses super, super low and really putting away a huge amount of their extra income. So it sounds like that's almost to a degree what he's talking about there. And if someone can actually do that and do that at a young age, that could create a huge amount of volume, velocity of capital accumulation which then sets them up for opportunities in a really effective way. So probably pretty difficult for a lot of people to do, especially coming out of university. Maybe if you're saddled with a whole bunch of student debt etc. I mean, in Canada, student debt here is still a problem. It's nothing like it is really south of the border in the United States. I think that's actually good advice. Whether someone would actually heed that advice or recognize it. Sometimes you hear something, it's like, oh, my God, like, that's just so crazy. Like, how would I even do that? That it maybe, you know, I think a lot of people would almost set that aside. But if you actually took that to heart and try to really focus on figuring out how you would go about accomplishing that, you know, it could really set you up. You know, a few years of that could really set up the stage for all the future years of your life in a really powerful way, especially if you could save that capital in a really efficient machine that allows you lifelong usage. Great way to do that is to go to watchibc.com of course you can learn all about it. But, yeah, I thought that was interesting.

I heard him say the word mindset. And to your point, this has nothing to do really with money. I think everything begins with the way that you think. And I think this is why it's really important. You know, they talk about setting goals and stuff like that. Like, you should have some sort of an intention. Like, if you're clear about what it is that you're trying to achieve, it's going to be a lot easier for you to be clear about what actions it is that you need to take to produce that outcome. Like, for me, if you want to save 50% of your income, that means your mind's going to go about finding ways. Well, it looks like I got to get a roommate. Looks like I got to move back home with my parents. Looks like I got to get whatever right.

Like, you're.

I'm going to get rid of the car payment. Like, you're going to find a way. If that's really what it is that you want to do, you'll at least get a hell of a lot closer to achieving it.

This gentleman, he's referencing a bit of a mindset and behavior on things that, hey, this is my advice to the youth today. If I could go back in time, I would try to do something like this effectively. And it really comes down to mindset. It's how are you? How do you think? And then how do you prioritize things? And if you could really get that clear and set up, set that foundation of what it is you're looking for, your actions will stem from there. So, but it. But if the Mindset in place first. You'll never achieve that where it's kind of like a rudderless ship just drifting out at sea without any direction or a way to control where it's trying to get to. And it knows, it wants to go get to the other side to where land is, but it doesn't really have any idea how it's going to get there. And that's how a lot of people run through their financial life because they're not getting appropriate education. Early on, he mentioned, you know, hey, I don't think this should be like a prerequisite course, you know, maybe an elective, but maybe they should learn some stuff in high school. The basics. The basics being, how do you file your taxes? What are taxes? What are the taxes you need to pay? Why do you need to file it? How could you get penalized? Like, those would be important things for people to understand. Even those basic fundamentals would allow them to start asking questions. My experience of kids is they like to ask a ton of questions, and if we give them information, understand how they might be, let's say, penalized in some way or stuff that would negatively impact them, like money being sucked out of your bank account once a year or every paycheck, if you really understood what those components were, you could start asking questions about it and then be, oh, well, maybe I want to be a contractor, Maybe I want to be incorporated and control my taxes, et cetera. Like, you would start asking a different basket of questions that might take you down a different financial path if you understood some of those basic fundamentals.

You think about life and, you know, it's so. Well, when he spoke about being intentional, a lot of people go study history. A lot of people come out of any university or a college, and they're at a really good place in their life, and they figure, okay, my whole life's ahead of me. I'm going to set this world on fire. But when you follow it through, how many people actually achieve what they would call success? Well, that number is extremely low. So why is that? And it's about intentions. You want to be intentional and set the right actions to get there. You'll get there. But if you go through life just going along and, you know, letting life happen, and, you know, okay, and you're not paying attention to certain things, whether it's financial or other things, those will get away from you. And pretty soon, you know, you just realize, okay, life's going by and it's going by quickly, and you lose some of that excitement. Some of that drive that you had, because you get caught up in life, and life has a way of really taking you off track. So I like that when Vern started talking about being intentional and then taking the right action so that, you know, you don't end up in that place where you're just, you know, going with the flow, and, yeah, this happened. So you're always reacting instead of being proactive. And I think there's a lot to that. And as you know, if there's one thing I would share with students as they're coming out of school, they're all in a good place then. But it's going to take work, and it's going to take that mindset and that commitment to the actions that you want to do, you want to take to really make that difference for you in the long run.