98 – Financial Literacy: Guide to Personal Finances

Wayne Kay 00:00
Welcome to the Debt Matters podcast, where we help Canadians find solutions to their debt with Licensed Insolvency Trustees from across Canada. 

I’m Wayne Kay, and in today’s show, we’re going to talk about financial literacy, your guide to personal finances. How do you get started if you do not have a plan? We’re going to learn about some of the resources that are available to you. We’re going to find out how you find the time to do this with all the work commitments and the family commitments you have, and what is the payoff to getting started?

To tell us all about it. We’ve got Derek Chase from Derek L Chase & Associates Licensed Insolvency Trustee serving Vancouver Island, Sunshine Coast and BC North Coast. Derek, thanks for being here.

Derek Chase 00:50
Hi, Wayne. It’s my pleasure.

Wayne Kay 00:52
Great to have you on, and I’m looking forward to learning about a guide to personal finances, financial literacy. We’ve talked about this a lot over these podcasts. Don’t you wish we learned more about this at an earlier age?

Derek Chase 01:07
Well, ideally, I think, yes. The earlier you learn, the better it gets time on your side. But unfortunately, I just think it’s just not relevant when you’re little unless there’s a concentrated effort to get the information in front of you and make you make choices surrounding it.

Wayne Kay 01:26
And also, I think it matters if it’s important to your family, because when you’re growing up, if your family is not really following this and teaching you, how do you learn about it?

Derek Chase 01:38
Yes, I think that’s ultimately the payoff for financial literacy is having generational knowledge there that’s passed down from one generation to the other. And it can do tremendous things to a family to have either good financial literacy and good personal finances versus having that piece absent from your life.

Wayne Kay 02:04
Actually, as you mentioned that I’m picturing it. I guess I never thought of it that way. If your parents are bad with money, maybe you’re going to be bad with money. Is it kind of this continuation?

Derek Chase 02:17
Absolutely. I hear that a lot. And either I wish my parents would have taught me this, or my parents had an Insolvency filing. So there is this lineage there that when I get excited is when I can see that breaking and changing, and all of a sudden people are creating a new future, not just for themselves. 

But I like to encourage, especially families, to use the whole process as a teachable moment and to really change the momentum that could extend generations if it actually took hold. That’s powerful, isn’t it? It goes beyond next week for sure.

If you start thinking about generations, it is important. It is something that you have to make a choice to make it important. And I think that’s how you really start with financial literacy, if you’re feeling uncomfortable with it or if you feel that it’s something that’s a weakness in your life. People tend to avoid dealing with weaknesses, I think. 

So to become better at having better financial literacy, better personal finances, you really just need to make that choice to say, I’m going to start to get better at this and have some determination with that. Because without that decision, you’re just going to go nowhere. It’s just going to be the same old, same old.

Wayne Kay 03:52
So step number one is making the actual decision that I want to become better at understanding finances and money.

Derek Chase 04:02
And I’m going to do something about it, I’m going to take control, I’m going to take control of this decision and I’m going to take the steps necessary to get better at it. And I think that’s pretty common strategy for getting better at anything is that you make that choice and you have that grit or perseverance to stick with it.

And then once you’ve got that in place, I think you’ll never hear a personal finance discussion without some reference to getting the numbers in front of you and getting even a grasp at some sort of monthly budget. And once you’ve got those pieces, then you can really move forward and start to add on to your knowledge on different finance, different financial aspects of your life.

Wayne Kay 04:55
And it’s never too late.

Derek Chase 04:57
No, I would say it’s never too late. It’s always something that you can start.

And I remember talking to a retired couple and we were doing some financial counseling with them and six months later they were just thrilled. They were absolutely thrilled with how much progress they’d made and they were saving a very modest amount, but they really felt that they were going in a good direction. So whether you’re just out of high school or you’re in retirement, I think it’s never a bad time to improve your financial literacy.

Wayne Kay 05:30
You know what’s amazing is a lot of people don’t talk about it. They don’t freely talk about money or where people are investing. And once you actually start asking the questions, people I find are very happy to just share maybe a bit of what they’re doing.

Derek Chase 05:50
Yes, very true. I think most people that do have especially formal training in the area are more than happy to share some things if the questions are asked. And the questions are often very easy for the person to answer.

But I do think that a very important piece to the whole plan to get better control on your personal finances or to improve your financial literacy is to find some mentor that you can ask those questions.

And not just like one or two, but be able to ask a lot of questions on a regular basis. So whether that mentor has some sort of formal training in financial matters or whether they’re just really good at it, if you can find someone that you can talk to in confidence about that, do it. Because that is probably going to be one of your best resources for moving the bar on your own financial literacy.

Wayne Kay 06:55
I mountain biked with a guy for a couple of years. We spent a lot of time driving to and from different places for mountain biking. And just recently we had this really cool discussion about retirement funds and where to be placing money.

And he showed me his whole strategy, and I learned so much, and I was like, why didn’t we have this discussion three years ago when we started biking together? But he was just like, I don’t know. This is just how I live, so I got to learn a lot. And it was a big eye opener for me. And that’s why I say, you want to talk to people, ask questions.

Now, there’s a lot of different resources out there. Where do you start when it comes to what kind of resources are available to you?

Derek Chase 07:38
I think there’s more financial literacy put in front of us than we realize. Even within the high school system, different courses have some parts of financial literacy in it. I think parents do try and convey some basics of personal finances and financial literacy, it just doesn’t seem to stick.

And because it’s more kind of a patchwork quilt sort of thing, we just sort of waffle along. But if you want to take that next step that I’ve been talking about and really take ownership of this area in your life. There’s no shortage of resources. There’s all kinds of financial books available. You could probably find them at the public library, so you don’t have to pay for them. 

We like to encourage people to have a look at The Wealthy Barber, which is a long standing Canadian book. It gives you some good information about all sorts of different topics. But in addition to that, you’ve got the Internet, you’ve got YouTube, lots of good information on there. 

But you do have to watch that you’re not looking at American information. Sometimes that can be a bit confusing, as opposed to the Canadian content and Canadian rules and different products. Certainly what we’re doing right now.

I mean, how easy is it? To go on that bike ride and be listening to a podcast about some sort of financial topic or just your regular sort of what used to be newspapers, but you could still access the Financial Post or the Globe and Mail type thing. You just have to start consuming the different financial literacy articles and it’ll come along quicker than you think. And once you get over the fear – I don’t think anyone ever wants to feel dumb, right? You never want to feel embarrassed. And so if this isn’t your thing, to step over that threshold and just try and start learning, I think is important.

I can equate that to people saying, well, I’m not very good at the computer, but once you get in there and start mucking around, you can eventually find a solution or get better at it. So it’s just a matter of doing it and starting to put the effort in to consume this information, and then that is going to start coming out in your life and hopefully like, we touched on your family and your future family. 

But to your point, Wayne, time is of the essence. Whether it’s three years that you could have been employing some of these new learned strategies or 23 years, you need to get it going.

Wayne Kay 10:43
Yes. So some people may be saying, well, I’ve got all this work commitment. I’ve got family commitments. How am I going to ever find the time? You must have a strategy for that.

Derek Chase 10:58
Well, there’s more time in the day than you realize, I think. And I can totally relate to having to work long hours, and you got to a young family maybe, and then you got to go help with hockey or whatever your other commitments are, and it can be a pull on your time. 

But I think this aspect of whether you’ve got a YouTube thing on or a podcast on or you really don’t need a ton of time to make this a reality in your life, so long as you just keep doing it a little bit. And then maybe all of a sudden you get quite interested in a particular author or podcaster and you’ve got it on in the car while you’re commuting. Or you can fit it into a little bits and pieces here and there and it takes hold.

Wayne Kay 12:00
Well, and as you said, The Wealthy Barber. I think there’s The Wealthy Barber Revisited. I think that’s the latest edition. Very good information that gives you a great basis of understanding. And he does it in a very simple way. But I almost feel like because he’s Canadian and you can even send an email to him through the website, and a lot of them will answer their different forums, and they have all kinds of information there.

There’s another one, another Canadian book that I read that I thought was amazing was The Millionaire Teacher. And I bring those ones up because I’m not able to understand the financials of how everything works. But these guys broke it down to make it easy for me to understand.

Derek Chase 12:46
Yes. And I think that’s just a matter of continuing to look around and have a listen to or to read different authors or different sources –  ones that really resonate with you, and then you’d be able to take in more of what they’re saying.

So it’s just a matter of trying it and don’t give up, because if you tried and you got confused from one source of information and you just gave up, then that’s not good. So try somewhere else, and you will find someone that is relatable to you. And then from there, it’s just the sky’s the limit. You’re on your way.

Wayne Kay 13:31
And what does that look like? We’re talking about the payoff. Let’s dream. You’ve seen this with some of your clients that you even mentioned one already, saying that they just started saving a little bit of money and they felt like the Rockefellers. They felt awesome.

Derek Chase 13:46
Yes, the payoff is huge. It literally can change your life. Because you could go from being depressed, being in debt, things the world’s terrible, to all of a sudden you’ve got some hope, you’ve got some momentum, you’ve got something to work towards. 

And the payoff can be huge for you individually, for your current life, your current finances, your retirement finances, and it can be huge for your family. So the payoff is big. And, yes, it really gets me excited when I see people change that whole dynamic within their house and all of a sudden they’re all pulling on the rope in the same direction and things are going in that positive momentum is building for finances.

Wayne Kay 14:36
How important is it to do this as a couple?

Derek Chase 14:41
I think it is very important. I think if only one person is on this journey, then there can be frustrations there, especially if the other person is making some spending decisions that are working against these sorts of choices. 

So it is important for there to be buy-in for a couple and even for the whole family. If there’s not, you can still make that decision to be better individually and to still walk the walk individually. But I think the best case scenario is for the whole household to do it.

Wayne Kay 15:21
I really like the way you said that pulling on the rope in the same direction. That’s just a great way of actually thinking about it, right?

Derek Chase 15:31
As opposed to pulling apart or pulling in opposite directions. You don’t need that.

Wayne Kay 15:37
Yes. All right. Final words of advice from you regarding the financial understanding of your personal finances.

Derek Chase 15:46
Yes, I think make the decision, make the choice to go for it and then start researching the different resources that you have available and start consuming them little bit by little bit, and you’re going to build that momentum in a good way.

Wayne Kay 16:01
Terrific. Derek, always a pleasure. Thanks very much for being on the show.

Derek Chase 16:06
My pleasure, Wayne. You have a great day.

Wayne Kay 16:08
Well, my guest today, Derek Chase. You can learn more or schedule a free consultation with Derek L Chase & Associates Licensed Insolvency Trustee through the website bankruptcytrusteebc.ca. 

And that’s it for today’s Debt Matters podcast. Make sure you subscribe wherever you get your favorite podcast from. And of course, for more information, you can always check out debtmatters.ca. Thanks very much for listening.