PERSONAL FINANCE
If your relationship with money feels COMPLICATED,
please read on By TESS VAN STRAATEN
When I was 5, I begged my mom to let me open my first bank account. I didn’t save much, but I proudly marched into the bank and poured my piggy bank on the counter. Over the years, I diligently saved birthday money, babysitting income and eventually the earnings from my first part-time job. By age 16, I’d saved enough to buy my first car. It was a huge accomplishment and an important lesson in money management. I didn’t realize it then, but I’m a saver by nature. My natural instinct is to sock money away for a rainy day, a big purchase, or my favourite indulgence, travel. A small budget early on taught me that it’s not how much you make, it’s how much you spend that counts. Over the years, I’ve tried to make every penny count, harnessing the power of money to achieve my financial goals. For the past 15 years, as a journalist writing about personal finance, business and consumer issues, I’ve interviewed many industry experts. In several cases, I’ve heeded their advice, from taking advantage of a down property market to finding opportunity in crisis. I’ve also learned that our relationship with money is complicated. There’s no one-size-fits-all solution. The number of personal finance issues and investment options is overwhelming. And there’s a lot of fear. FEAR COMES FROM MANY PLACES “That fear can come from many things;
a bad experience, a lack of understanding, not knowing what questions to ask or just being overwhelmed by all the information that’s out there,” explains Matthew Rainsberry, an investment counsellor with BMO Harris Investment Management here. The problem is so widespread, a BMO survey on personal finances recently found that half of the people surveyed would rather visit the dentist than talk to a financial planner. It also found we spend far more time on short-term goals like planning for holidays than planning for big issues like retirement and money management. “If you’re not doing it, you’re not planning ahead, you’re not building your success and you’re not building your future,” Rainsberry cautions. Sybil Verch, a portfolio manager and vice-president with Raymond James, estimates that about 80 per cent of people coming to see her for the first time don’t have a financial plan, which is considered the first and most important step in good money management. A FINANCIAL CHECK-UP SOUNDS PAINFUL Perhaps most surprisingly, Verch says even her high net worth clients, those with $1-million or more in investable assets, don’t always have a plan and often don’t spend enough time looking at their finances. “People procrastinate because the idea of a financial check-up sounds like a root canal,” she says. “But it’s really about identifying your goals and dreams, knowing where you are and finding out what you need to do to fill that gap.” Once you have a plan, experts recommend yearly check-ups to track progress and make adjustments. Whether you have a lot to invest or a little, experts agree this is the best way to take charge of your finances. If you have a lot
of debt, a formal financial plan becomes even more important. “People often fear that they have too much debt. They’re worried a planner will think they have poor financial management skills. We’re not here to judge; we’re here to help you manage that debt and build wealth,” says Rainsberry. In many ways, money is one of the last taboos. People don’t want to talk about how much they have or how much they owe. But not talking about it can do a lot more damage in the long run. FEAR AND GREED COST MONEY “I’m a big believer that only two things will cause people to lose money and that is fear and greed,” Verch says. “If it sounds too good to be true it probably is.” We often forget good money management is an essential life skill. If you didn’t learn it early, as I did, it’s not too late. In the coming months, this column will look at breaking down the money taboo and talking about issues that may affect you. And it’s not just about retirement planning; real estate investing, debt management and more will be covered. Whether you’re a novice investor or the savviest of savers, Boulevard’s new personal finance column will help you harness the power of money. VB
Tess van Straaten is an awardwinning journalist and TV news anchor with CHEK News who has been writing about personal finance, business and consumer issues for more than 15 years. Reach her at tvtess@hotmail.com. 95