Canadian Money Forum banner

1 - 12 of 12 Posts

·
Banned
Joined
·
6 Posts
Discussion Starter #1 (Edited)
Hi my name is Sponge and I am financially illiterate.

I am 28 years old and I have have never givin my finances a second thought beyond putting my paycheque in the bank and saving a little. I am by no means a big spender (thank the lord) but I have NO idea about this whole money game.

I honestly do not really have a clue as to how personal finance works or even really how the whole money system works. I pay my taxes because I have to, if I get some back at the end of the year great, if I pay...that sucks, but the bottom line is I have no idea why I get any $$ back or why I have to pay? I just accept it that sometimes I do and sometimes I dont.

Regardless of how I have spent my money or treated my personal finance in the past, the main thing is that time of being financially irresponable is OVER! I have begun a great crusade to arm myself with the knowledge and skills that will help me to gain control over my personal finances. But I need LOTS of help.

I am feeling VERY overwhelmed by my lack of knowledge and the amount of info that I need to learn in order to master my finances. Having bought the Personal Finances for Dummies (for Canadians) I find myself even more overwhelmed, since the book only ended up showing me just how little I understand about the whole monetary system.

What I would like is for those of you who like to help others in need, to treat me as you would a young adolescent ( I basically still am, just with more hair on my face! ) just starting to learn about money and saving and investing. Thats how little i get it!

What is my first step? Are there any sites you could recommend? Any good books that will help s-p-e-l-l it out for me? I am very confused and I am tired of feeling stupid when I am faced with any kind of situation that requires making a financial decision.

Just in case you are wondering this is a serious thread. I am not dumb, in fact when I have made something an interest to myself, I can really dive into it and absorbe the information, I just sometimes need a hand getting pointed in the right direction. When left to my own devices I tend to look down every road I can think of...........then I get stuck cause I see too many roads.

This will be a hard climb up a steep mountain for me, I thank you for your time and help.
 

·
Banned
Joined
·
6 Posts
Discussion Starter #3
So you are 28 and don't spend much and have hair on your face?

You need to add a little more info.
LOL fair enough, I guess I was a little vague. Well one area of concern for me has been that I have a nice little amount saved up, but it is just sitting in a savings account. Now some of that money I would like to keep as my cushion, I read that you should have a good 6 months worth of living expenses saved up. Once I have decided on that, where do I put it? Leave it in the savings account or go for something else?

After that I will still have a good chunk of coin left and I would like to move it to somewhere that it will actually see some sort of growth. I dont know if I should invest it, and if I do where??

I have been contributing to an rrsp since I was 18 but I have no idea really what kind it is, or really what it does?? (see this is what I am talking about) I basically heard it was a good idea and so I opened one up and forgot about it pretty much. So I would like to maybe see what my options are there too?

Also I am thinking of buying a new car in the fall of '10 (well actually a quality used car) so I would like to draft myself up a savings plan, so I can afford a decent downpayment, also it would help me to see what my actual price range is?

My ultimate goal would be to move back out west, and buy a house out there.

There is so much more, and I hate that feeling of not knowing how to make it happen. Or that overwhelming feeling I get whenever I start to think about my finances, I just feel so small and lost? BUT that is why I am here, to arm myself with knowedge through asking questions.
 

·
Registered
Joined
·
1,516 Posts
The very first steps for financial planing are not that complicated. Start with avoiding and/or paying off any consumer debt and spending less than you earn. Taking these steps alone will put you well ahead of the majority of North Americans.

After you have aquired a bit of a nest egg, can start looking into various investment products. I would suggest for now, to start reading one financial book per month (works out to a few pages per day). Take them out from the library. After about a year you should have a fairly good handle on what type of investment path you would like to take. Although I don't agree 100% with the philosophy (perhaps 90%), the "Wealthy Barber" is the standard beginners manual.
 

·
Registered
Joined
·
2,892 Posts
use the search feature to find some of the threads on recommended reading.

read as much as you can, about everything financial.

that will help you with your base knowledge first.
 

·
Registered
Joined
·
2,054 Posts
First of all congrats!!! You have overcome one of the major hurdles to financial illiteracy which is believing you have knowledge. :p

A good start would be to start contributing to your TFSA (for money you may need later) and saving in your RRSP for your retirement.

An RRSP and TFSA is a container for other investments. Once you have them started you can decide what investments you will put in them. You can buy something very safe or mutual funds or ETF's or stocks.

If you want to practice trading stocks you can go to www.wallstreetsurvivor.com and open a virtual money portfolio.
 

·
Registered
Joined
·
28 Posts
While you are 'reading up' I would suggest you set aside a certain amount each payday for savings (even if you just plunk it into a high-interest savings account for now) so that when you know where you want to put it you will have saved a nice little sum. Also, never ever carry a balance on your credit card! And if you have any debt that is not a mortgage, work hard to pay it off.
 

·
Registered
Joined
·
3,197 Posts
Start with a couple of basic references such as:

Personal Finance for Canadians for Dummies, 4th ed. (2006) Eric Tyson & Tony Martin

Money Management for Canadians All-in-One Desk Reference for Dummies, 2nd Ed. Andrew Bell, Andrew Dagys & Paul Mladjenovic; Tony Inannou w. Heather Ball; Margaret Kerr & JoAnn Kurtz; John Lawrence Reynolds; Kathleen Sindell.

We can't give you a complete introductory course in a format like this forum. But start reading one or both of those references, and come back with specific questions.
 

·
Registered
Joined
·
305 Posts
The forum leaders, being the modest people that they are, won't say it so I will:

Head over to canadiancapitalist.com and milliondollarjourney.com and read through the archives. There's a ton of great stuff there.
 

·
Registered
Joined
·
68 Posts
Congratulations!! It's never too late to learn about personal finance (unless your 40+)- you're making a great decision being 28 (a lot of my friends don't know much about personal finance and I'm in my mid-late twenties too).

I would start off by reading some books- one of the books that I really liked (timeless classic-though TFSA's need to be factored in) was:

The Wealthy Barber by David Chilton

and another one that's really good is: The Automatic Millionaire by David Bach

That's great that you have been contributing to RRSP's. I wonder if you have been checking to see how they have performed over time? (You should be able to get an online log-in easily to check).

Secondly, the easiest thing I would recommend is to automatically siphon some money away from your chequing account to savings (aim for 10% of your pre-tax income if possible-- at least) and then you'll have some money to play with.

Think about setting an investing account up (I recommend Questrade because they're cheap and the Questrader WEB platform is pretty great) and thinking about Exchange Traded Funds to start off.

Or you could set up a TD e-series account and buy some of their e-funds there as well.

I would max out on the TFSA and RRSP contribution room before getting anything non-registered, if you can.

Hope that helps! Welcome to the fascinating and fun world of personal finance!
 

·
Banned
Joined
·
6 Posts
Discussion Starter #12
First of all THANK YOU for your replies everyone, seriously it is very much appreciated!

We can't give you a complete introductory course in a format like this forum. But start reading one or both of those references, and come back with specific questions.
That is a good call. I do actually have both of those books, I just bought them a little while ago. It was reading the personal finance one that really got me, overwhelmed. I guess what I was really looking for was a list of the fundemental knowedge that I could keep as a referance.

However this
Head over to canadiancapitalist.com and milliondollarjourney.com
was a GREAT idea. WOW I just took a small look at them and they look full of good info. Thank you for those sites!

Hope that helps! Welcome to the fascinating and fun world of personal finance!
Yes it did help. I have taken some notes of some questions that I will follow up on.

I apologize if yesterdays thread seemed a little "vague" but I wrote it while I was having a brainlock episode. You know where something just seems so big it looks almost impossible to climb? Well after calming down a bit and reading these replies I know that it will take a lot of time to really get comfortable with all this, but as long as I keep learning and asking questions I should get there.

Thank you all so much for your time and understanding, it really helped out alot! You all ROCK!
 
1 - 12 of 12 Posts
Top