Fireside Chat Series – Personal Financial Literacy

What is Personal Financial Literacy and why is it so important? The earlier you learn the basics of money the more confident you’ll be managing your finances later on. Money coming in and out, making decisions about major purchases, fees, bills, debt, due dates, financial planning for the future. It can all be very overwhelming. Let’s start one step at a time. We invited Pamela George, CEO of Sand Dollar Financial Literacy Counselling, author of Three Little Piggy Banks and Financial Counsellor, to speak to us about the basics of personal finances.

What is the biggest issue people have in understanding their own money?
Pamela told us that “they just don’t want to address the issue, they think money is something that will just fall into place, there’s not a habit of taking care of your money.” Money should be discussed at a young age. She explains that just as we get regular haircuts and dentist appointments, our parents should teach us about money as well. There should be an understanding and appreciation of what money is and how it works.

What is the first thing we should do to start learning about our money?
The first step is recognizing  that there is a problem – if you can do that, you’re halfway there. The second step is to face your money head on. Start by opening your credit card statements, and looking at your chequing account. You need to be aware.

What are some practical tips for money management?
The first tip that Pamela recommends is to have a money date, which should be set in your calendar twice a month. You need to be consistent. It’s important to prioritize your money dates and not skip them. Pamela suggests starting at 10 minutes and building your way up to 30. Start small and each time you sit down do a little bit more.

Open your mail and check your statements, you never know what kind of things you’re paying for until you check. Pamela gives us an example where 1,800 dollars was being paid in subscriptions, all because a statement was being ignored. There are lots of free services you can get online, and there’s always a catch. After the first 30 days, you start getting charged, whether it’s a membership or subscription fee.

Pamela has been in the business for many years, helping women deal with their financial traumas and become financially empowered. One of the participants wanted to know Pamela’s fee structure.
Pamela has her signature system called seven pillars of money management which lasts 6 months. The price for this one on one is 600 dollars a month. Pamela also has a group program called the prosperity circle, it also lasts 6 months with 12 meetings and the price is 300 dollars a month. There is also an option for those who cannot afford 300 a month to spread the payment out to 150 dollars a month over the course of a year.

Does Pamela have any financial tips for couples?
“If you’re married or common law, you don’t have to have a joint bank account where all the money goes into one pot. My love and money don’t mix.”  Pamela tells us that a great tip is to each have your own bank accounts and then to have a joint bank account for household expenses. “It’s important, have your own money.” There are many reasons why she suggests this, from gift giving being more difficult to having to untangle finances during a split, having your own money makes it easier.

What makes money so different between men and women?
Pamela says that the way women were brought up is different compared to men.. She says it plain and simple “we are different.”. Pamela also explains that we live in a society where women are constantly being told, from a young age, that they are not good enough, “it’s ingrained into our heads.” Some girls grow up to be young adults who do not feel good enough and can spend too much money on things like makeup and clothing to make up for feeling that way. Lastly, Pamela mentions domestic violence which mostly affects women.

With Valentine’s Day coming up, does Pamela have any good tips for couples? 
Starting February 1st, Pamela will have a social media blitz, where she will list 14 questions to ask your beloved. These are things you need to talk about! Questions such as: Do you have a pension? Are you paying child support? Do you want kids? These questions might not be a first date topic but are surely something you should ask before getting serious with someone. Pamela believes that going to see a financial counsellor prior to getting married is something we should all think about doing.

Should financial literacy be taught at school?
“If you want to teach financial literacy at school, start with budgeting,” Pamela says. A budget is not just numbers and an excel sheet, budgets need to align with your values and goals. Pamela explains that if one of your values is altruism then you should have a section in your budget for charitable giving.

Pamela highlighted the importance of having different accounts, not just using chequing. In her book, Three Little Piggy Banks, Pamela talks about having a saving, chequing and sharing account. This is something which will follow us into adulthood as well.

If you’re breaking even at the end of the month but not putting money away for your savings, you do not have a balanced budget. If your debt repayment is just the minimum, that is not a balanced budget. Pamela says that anybody can have a budget but it’s a balanced budget that we are looking for.

What is a good cash reserve to have?
Pamela says that 6 months income is a good emergency fund to have. It is something you should work towards building up. She also recommends having a couple hundred dollars in cash on hand. You never know when you’ll need it!

When we asked Pamela about credit scores, she said the first thing we should all do is pay our bills on time. Always. Paying your bills late just three times can really drop your score. That’s the key thing you can do if you would like to rebuild your credit score.

Is there a recommended split when it comes to budgeting?
Housing should be 35% of your income, transportation about 15%, debt repayment 15%, lifestyle should be 25% and savings 10%. These breakdowns are all guidelines.

Pamela ended the Fireside Chat by telling us, “if you’re struggling with your money, cut yourself some slack.” She reminds us not to blame ourselves and to let it go. Once you start having the money dates and you face your problems head on, you’re well on your way to financial fluency.

Choose your path to financial empowerment, book a free consultation with Pamela George. If you’re ready to take your accounting to the next level, book a free call with one of Zenbook’s Accounting and Tax experts today!

Want To learn More?
If you liked this Fireside Chat Webinar Series, we recommend you check out our upcoming events to learn more about important topics for small business owners.

Zenbooks has been Canada’s go-to cloud accounting firm since 2015. The Fireside Chat Webinar series discusses useful insights for small business owners and explores small business issues. Zenbooks combines modern cloud technology with our in-house expert analysis to provide you with the online accounting service and guidance that best suits your business needs. From tax planning to payroll and monthly accounting services. They’re your finance team! (follow our blog here.)

Additionally, if you missed a Fireside Chat Webinar Topic, check out our YouTube Channel for some of our prior recordings.

Eric Saumure, CPA, CA, Principal

Eric Saumure, CPA, CA, Principal

Eric is a recognized Chartered Accountant (CA) and Chartered Professional Accountant (CPA) in the province of Ontario. Eric Saumure studied Accounting and Business at University of Ottawa, and obtained his CPA, CA designation during his time at KPMG LLP. Eric has 11 years of experience and actively works with over 300 clients. Eric Saumure is a Quickbooks Online ProAdvisor and a Xero Certified Partner.

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