Finance is a broad term for matters about the study, management, and allocation of capital and other financial resources. In the financial context, fund refers to the following questions: where and how an individual, business, or government obtain the money required to run the enterprise and the way they use or spend that money (capital in the business context). Learn more at https://personaltradelines.com.
I’ve always been a bit of a nerd when it comes to money and numbers and math. I was the kid with the lemonade stand who was like, ˜Lets scale this bitch!’ Shannon yells emphatically. I stare at her slack jawed from behind my cup of overpriced coffee.
Let me rewind a bit. A few weeks ago I emailed Shannon Lee Simmons, Certified Financial Planner, winner of the 2014 Notable Award for Best In Finance, and founder of the New School of Finance, and basically asked her if she could help me be less of a poor person when I graduate from University in 6 months” because I, like most 22 year olds, am completely incapable of ˜adulting’.
When I arrived at the New School of Finance to meet with my newly enlisted financial planner, I was pretty certain of three things: 1) That she would immediately call me out on my four-dollar latte 2) Insist I cut my twice weekly grain bowl at Kupfert and Kim and 3) Shock me into becoming a socially isolated but slightly-less-poor hermit. But within the first few minutes of meeting Shannon, (somewhere between when I first sat down and when she referred to having retirement savings as the ultimate ˜squad goals’) I realized I had been very very wrong. To put this in Mean Girls terms, Shannon Lee Simmons isn’t just a regular financial planner, she’s a cool financial planner, which means that yes, happy hour is still from 4-6. When I ask Shannon to spell out her budget philosophy she makes it plainly clear that she’s ON MY LEVEL.
A lot of people ask me what to cut out of their budgets. she says, I don’t think there is a magical thing that you can cut out. Here’s why” what’s important to you and your life is different from my life, so I could set you up for failure if I tell you to cut your lunches and stop getting coffee. And then if you fail you feel like shit!
She insists there is more balance to budgeting than simply ruling out Starbucks and green juice. It’s all about how much money you can spend all things included. Regardless if it’s for shoes of coffee or clothes or whatever¦ YOU get to decide how you make cuts within that, not me, and I think that’s a really revolutionary way of looking at budgeting because most of the time people sit up on their soap box and they preach ˜cut your lunches, cut your coffee!’ No. You decide what you cut because I’m not going to put my value system on you, I don’t know how you live your life.
She shakes her head, and gestures towards the aforementioned four-dollar latte I have been nursing throughout our meeting, as if it bonds the two of us together. Some people say, ˜Oh, you spend four dollars a day on coffee?’ And I’m like ˜Hell yes I do!’ I cut in other places because that coffee is important to me and its part of my routine. I start to get the impression that Shannon Lee Simmons is going to be my financial spirit animal.
We finally get around to talking about preparing me for life in the real world, and she spells things pretty plainly. It might not be all rainbows and shopping sprees at Aritzia, but with some careful budgeting, saving, and living in my parent’s basement for a little longer than I’m comfortable with (which for the record is 0 days), I should be able to keep the coffee and maybe throw in a few weekend trips.
Step 1: Pay off your debt
The first thing to do is to take a total tally of your student debt and then to prioritize this in order of importance. So if you have credit card debt, which a lot of students graduate with, this is obviously the first thing we want to isolate. This is our first goal! Prioritize paying off your debt and always put your money towards the areas that charge interest first.
Step 2: Keep fixed costs low
If you have the privilege of living at home, do it! Taking one year after school and living at home can be a big game changer because you can just bare-bones-minimum for your living expenses and then throw your earnings towards your student debt. If that’s not an option for you, (which it isn’t for a lot of people) I would say to make sure that you keep your fixed costs really low and live within your means. Get a roommate and rent a house so maybe you don’t have to start adulating so soon, try and keep transit costs low so that those bills that you can’t get out of stay low every month, and really stick to a budget.
Step 3: Budget
Look at what is coming in after tax, so if you make 3,000 dollars a month after tax you don’t want any more than 50 percent going towards bills and groceries and transportation. You want to try and save 10 percent towards debt repayment, long-term goals, or whatever that nest egg looks like. Put aside another 10% for emergencies, trips, and short term spending” the other 30 percent is your variable spending money.
Make sure that you separate your bills from your spending money! A lot of times what happens is if we have just like one big ass chequing account, where everything is coming in and going out at the same time, its hard to know what you can and can’t spend so you end up overspending. I’d say even to make two chequing accounts, one chequing account for all of your bills and stuff that you can’t spend, and one chequing account for all the money you can spend, so there is a hard line in the middle that says ˜this is money I can blow to zero and not feel guilty about it’
Step 4: Start saving
You want to start saving. If you’re young you don’t need ALL THE THINGS right away. For young people who are newly graduated and aren’t exactly sure what their long term goals are, the Tax Free Savings Account (TFSA) is a great place to start saving. RRSPs are great too but when you put money in an RRSP it can only be withdrawn tax free for retirement, a first time home buyers plan, or if you’re going back to school.
But if you do just one think: Make a plan!
Book a new grad session with us! I know that’s really self promoting but this is specifically what we do. A lot of parents are actually gifting sessions to their kids as a graduation gift like, ˜Hey happy graduation, go get your shit together!’
Sometimes people come to us and they don’t have a job so we can reverse engineer it and be like- well how much do you need to make in terms of living expenditures and paying off debt? That kind of information is super important, and it is empowering” especially for females who tend to be not as assertive in asking for what they need in salary negotiations. When a third party” The New School” is advising them, they don’t need to feel guilty or greedy for being like, ˜No, your number isn’t going to work for me I’m going to need this¦’ It’s really empowering to know how to negotiate and also to know what that number is.
If you now find yourself wanting Shannon Lee Simmons as your spirit guide, and asking life altering questions such as “When can I move out? What can I afford to pay in rent? When will I be done paying student debt back? Can I buy this Aritzia dress and still eat next week?” The New School provides one on one New Grad session where they make these questions seem a whole lot less scary. Think of it as investing in the moment Future You gets to look back on life from the balcony of your penthouse apartment and say, “Damn girl, you did good, you did real good.”