Q and A with Kelley Keehn, personal finance educator

Kelley Keehn is on a mission to help people feel good about money. She’s a personal finance educator and the consumer advocate for the Financial Planning Standards Council. You may have read one of her books or heard her speak on various radio and television programs. NextHome spoke with her to learn more about her tips for healthy financial planning.

NextHome: There are so many financial tools out there. For those who’d like to manage their money better, where should they start?

Kelley Keehn: Great question! We have a wonderful website at the Financial Planning Standards Council (FPSC). FPSC are the folks who certify financial planners on behalf of Canadians. There are nearly 100 articles and dozens of videos on a plethora of personal finance topics. We also have a tool to find a Certified Financial Planner anywhere in Canada. The Financial Consumer Agency of Canada also has some wonderful budgeting tools and calculators. See also getsmarteraboutmoney.ca and the investor tools on the Canadian Securities Administrators’ website.

NH: On your website, you include helpful links to budgeting resources from your books. How might budgeting help someone save for a new home or pay off their mortgage faster?

KK: Budgeting is so important but it’s not actually very easy for most people. It’s like a diet – if you feel deprived, you’re unlikely to stick to it for the long term. What I find works best is what I call my 30-Day Anti-Budget. It’s simple, fun and you can involve the whole family. All you need to do is track your spending for 30 days, then figure out your largest spending categories. Are they where you thought your money was going? Would you like to continue that way? It’s not about judgment or sacrifice – it’s about choice and awareness. You can have the chocolate cake and glass of wine, just not every night.

If you multiply your 30-day spending by 12, you get an even clearer picture of where your money is going. And you might discover you could get that down payment saved sooner, contribute to your RRSP or even take a vacation if you just make some daily adjustments.

NH: Financial literacy isn’t always – or often – taught in schools. As housing costs continue to rise, what can Millennials do to educate themselves in the realm of financial literacy and personal finance?

KK: You’re right. We’re not taught and parents don’t always know how to teach their children, either. If someone was going to take up golf or start to watch hockey, it would behoove them to know that there are 18 holes in a game of golf, that a bogey is a bad thing, that there are three periods in hockey and that a hat trick is cool! The same can be said for Millennials looking to build their financial foundation – simply start with the basics. Get up five minutes earlier each day and Google basic financial concepts so you ease into your financial literacy. Consider reading the business section of a newspaper each week, subscribe to a money magazine or start a Facebook money group to talk about all things finance.

NH: Savings instruments come in so many shapes and forms (regular, TFSAs, RRSPs, GICs). Which factors should Millennials, homeowners and prospective homebuyers consider in regards to where to grow their savings?

KK: This is why it’s important to sit down with their banker or Certified Financial Planner. A TFSA might be great for one person, but maybe for an older Millennial who has a great salary, putting their money into an RRSP and using the tax refund to save for their down payment and taking a homebuyers’ plan loan from themselves later could make sense. It may seem simple, but you want to understand the long-term benefits and drawbacks of each of these options.

NH: A significant amount of banking is done online now. What are a few simple things homeowners and prospective homebuyers can do to protect themselves and improve cyber security?

KK: Make sure you have all of your devices up to date, consider getting new ones if they’re older than three years old (because patches aren’t being made as completely), never log onto financial or access personal accounts when using public Wi-Fi, check your credit report often, and put credit and debit alerts on your accounts so you know in real time if a purchase is fraudulent or not. I wrote an entire book on the subject, so if you’d like to learn more check out Protecting You and Your Money: A Guide to Avoiding Identity Theft and Fraud.

NH: There’s a lot of talk in Toronto and Vancouver about how difficult it is for today’s Millennials to afford a home, say neighbourhoods where they grew up. What advice would you give to Millennials looking to save up for a new home in their future?

KK: It’s a different world and if homeownership is super important to you, you have to be flexible and creative. It might not be possible to live in that area. Or can you get creative and buy with several friends? Some people are doing this, but you have to make sure your legal agreement is rock solid. What about income properties and garage suites, or living outside of your ideal city? Will you hate the commute in a few years, could you and your spouse save big bucks if you bought close to work and could you both ditch your cars? You really need to try on all scenarios.

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