Money is such a taboo subject in North America. I realized quickly that I am very comfortable talking about money with my close friends and family and I think everyone should too. I’m still very new to money and finances and how to manage finances. I live with my parents and I’m blessed enough to enjoy many things they have chosen to provide me with which means a lot of the things that normal university students have to deal with like rent and bills do not cross my path. This left me in the dark and since I’m graduating in a year or so, I figured I would look into how these things work so that later I would at least have an idea of what to expect. Here are some tips that I have that might be of use to you too, no matter if you are living independently or completely reliant on your parents.
As a science student, research is the backbone of my degree. Knowing how to do high-quality good research is something I’m trained on so establishing a solid base of knowledge and information about finances is the first thing anyone should do. This means that checking your sources, asking the right questions and having a breakdown of the different topics and ideas you have in mind is essential. For example, if you want to learn about finances you need to start by understanding taxes. Taxes are such a huge part of people’s lives in North America and although you might think you’re making X amount of money from your job, taxes can very quickly slash that for you and leave you with less which can be shocking for some people, especially those who don’t plan for taxes, spend all their money then end up being in trouble with the IRS because they never set an amount of money for their taxes. Big mistake. I personally still don’t understand taxes but the point is to start learning. So I would advise you to do the same. You can also focus on investing! I plan on making investing a very very big part of my life and I’m trying to learn about it as much as possible so that later I can start on the right foot when I start making a stable income. So do your research!
Get a job and learn to have control
In my article, I talk about how important it is to have a job and how much it taught me about money and the value of a dollar. I think getting a job is very important. I believe that once you start to make and spend money, you start to have control over that money. In that sense, you get a little bit of autonomy and you learn just a tiny bit of what having control over money feels like. When you work so hard at a restaurant for an hour just to end up with $14 you start to value that $14 that you got through sweat and tears. You understand how precious it is so you don’t waste it as hastily which probably makes you want to start saving your money or just spend your money more wisely. Also, generally speaking, first jobs don’t pay much so you won’t have a lot of money to spend in the first place and will have to learn to control your impulses. I think that is a skill that needs to be developed and practiced over time and the best time to do that is when you’re living with your parents. When you live at home, most of your bills are paid for so you sort of ‘play’ life on ‘easy’ mode to ease you into things.
Don’t just save, make more money
Everywhere on youtube I always see people talking about how frugally they’re being and how great living frugally is. There is even an entire movement about retiring early by living frugally (FIRE). Although that is all good and well, I think making more money is even more effective. Now, I understand that many people struggle to get jobs in the first place let alone ask for a raise or get another job or an extra job, but I think that if you set a goal and establish a game plan it could be done. You could go back to school and get a certificate or learn a trade or even change careers. The point is to think about how you can make more money. The secret to getting rich isn’t not spending money, it’s having multiple sources of income. I recommend an incredible book called “Rich dad, poor dad” (I listen to it on YouTube) that breaks down what the rich person’s mentality is like and what a poor person’s mentality is like. Having multiple streams of income is important not just for building wealth but also for keeping you safe. Many people, in light of the global pandemic that has taken the world by storm (WHO), lost their jobs. Their only source of income disappeared literally within hours or days. These kinds of things happen out of nowhere and although we don’t hope that they happen to us personally, we must always prepare for the worst. So, having an extra source of income can at least keep you afloat in a worst-case scenario which is happening as I’m writing this.
Invest and think of the long run
I think investing is such an incredible concept. Your money works for you. That’s how it should be, in my opinion. I watch many YouTube videos revolving around investing and dealing with finances and building wealth (I recommend Graham Stephan and The Dave Ramsey Show). Compound interest is such a fascinating subject to me and I don’t think enough people are thinking about it. Investing is all about looking at the long term. People in this generation are so used to instant gratification and that includes me too. I get frustrated when a page takes a minute too long to load or when there is no overnight shipping on an item I want. It’s normal, this is our reality. That doesn’t mean that it is wise to stay with this mentality. I still struggle with investing and the idea of not being able to reap my reward so quickly, but it’s still something that I force myself to do and hopefully, you will too.
The greatest investment is your education
Speaking about the investment, the greatest investment is the one you put towards yourself. For just $500 you can get a certification, a license or a book to get you started on making good money. Education is the single thing that no one can ever take away from you. The money will come and go, beauty, fame, likability, etc. all those things are finite and will eventually come to an end. Your education, on the other hand, is the single most precious and valuable thing that you can hold dearest and nearest to yourself. Even if your knowledge is ‘old’ you can still use that knowledge to keep yourself updated on new technology, ideas, theories and push yourself to learn.
Managing money is something that I have not mastered and don’t think I will master any time soon, but hopefully, these few steps will at least guide me to have a positive attitude towards money instead of fearing the reality that I will eventually have to pay my bills or look at my bank account balance.