We’re more than halfway through January, and that means many New Year’s Resolutions have fallen by the wayside. But a few impulse purchases are no reason to forget about your goals. In fact, they should be even more reason to get up and get back on track.
Aly Hirji is a Toronto educator who focuses on Financial Literacy and Digital Technologies. Hirji is a proactive and motivated collaborator, teacher, and mentor who has implemented numerous initiatives to foster students’ academic success. He is actively involved in financial literacy workshops, career counselling, guidance on post-secondary pathways for youth and their parents, and much more. He kindly took the time to share his knowledge and advice for readers looking for ways to get serious about saving, set financial goals, and effectively manage their money.
A lot of financial advice is geared towards serious investors or families. Rarely do you see helpful articles about students and money that go beyond “buy your textbooks used”. It appears as though there isn’t a lot students can do to get serious about saving and investing aside from spending wisely. Do you think this is an accurate assessment?
I can pretty much agree that many articles – and much exposure and attention – are focused on youth, young professionals, and adults (middle age and elderly). Post-secondary students tend to be overlooked due to many factors from not fully partaking in the work force to not being a target market for financial institutions and certain products and services.
What are the biggest financial mistakes you’ve noticed that students make?
Many students do not take advantage of various funding mechanisms such as scholarships, bursaries, and grants that are easily accessible to fund post-secondary education. There is also the mismanagement of OSAP monies that students have access to after paying their tuition and fees, and feeling as if they’ve received a small lottery to enjoy and spend. I can speak from experience. I needed to ask my parents for assistance after my first few years of university. I learned that I needed to manage my money effectively and ensure that it would last for the school year. Any monies that I didn’t have to manage my loans, fees, costs of food, transportation, and clothing, came from taking on a part-time job and taking on a lighter course load of four instead of five credits per semester. This allowed me to balance my grades and effectively manage my money and that in turn enabled me to save some for the following year for any future increases in the cost of tuition, transportation, food, and school-related expenditures.
For many students or new graduates with loans – OSAP or otherwise – saving is something they believe they can only start doing after they’ve paid off their loans completely. On the other hand, tackling such a large amount of debt can leave one feeling overwhelmed or simply passive about actively paying off their balance. Do you think it is smarter to work on multiple financial goals concurrently when you are young and if so, how does one go about achieving this?
It is always good for students to manage multiple financial goals concurrently along with their other expenditures while in school. To start, a student should adjust their lifestyle and their budgeting. Start by looking at how you spend your cash and income for the month. Record all of your expenditures such as coffees, drinks, eating out, apps for your phone, etc. Then begin to determine which of these are your Needs and which are your Wants. You’ll quickly notice that many of those Wants (such as coffees, eating out) can be removed from your life. These habits will become a part of a student’s lifestyle and allow them to make more informed decisions when they make other important financial decisions regarding mortgages, car payments, managing credit card debt, and more.
Students need to understand that making good financial choices along with being disciplined about their expenditures is not only a short-term goal, but a long-term goal as well and one with impactful consequences. It’s very common for many young professionals (after undergrad and post-grad) to complain about making rent or saving for a home or car, while making poor everyday financial choices that add up.
There’s this perception that financial responsibility comes at the expense of an enjoyable life. What are some concrete strategies students and young adults can employ to strike a healthy balance between planning for the future and living in the moment?
Financial responsibility comes with making good choices and decisions. Buying a brand new car, without knowing that it will depreciate after it’s driven off the lot to purchasing a new cell phone plan with a new phone without understanding that the plan and cost of the phone is built into the cellphone plan. The same goes for doing research and shopping around for furniture or a rental unit to live in. Look at all the details and be knowledgeable through research. Access the various group benefits you have as a student through associations, parent alumni groups, and work-connected group discounts. You can enjoy life in many ways by going for walks, taking the local transit, partaking in programs offered by various community groups, and networking with alumni and various industry associations. Reading books, participating in art clubs and groups, as well as giving back to the community by volunteering are also good options. Many of these activities are free or have minimal to no costs. Start by seeing what truly makes you happy internally, and what gives you a sense of peace and balance.
I’ve come across a lot of writers online who are critical of the lack of compulsory financial education in schools. A few times a year you see posts on Facebook like, “I can tell you that the mitochondria is the powerhouse of the cell, but no one ever taught me how to do taxes”. Do you believe it is necessary to incorporate lessons about budgeting and accounting into the elementary or secondary school curriculum, and what are a couple simple concepts people out of school can google or read about to start their own financial education?
Yes, it is very necessary for Financial Literacy to be mandatory in curriculum. Financial Literacy is already in Ontario Curriculum through the Ministry of Education’s Scope and Sequence that has been added to Secondary School Curriculum, but it’s all based on the educator’s comfort level, understanding, and competence to deliver the material to their classes. There are resources available through the Canadian Bankers Association’s Your Money program, The City by the FCAC (Financial Consumer Agency of Canada), Junior Achievement’s Dollars with Sense program, Investor’s Education resources, and much more. There are plenty of resources to access to complement and help deliver Financial Literacy across curriculum. In addition, reading articles by Ellen Roseman and books like The Wealthy Barber and The Intelligent Investor can help start the dialogue between teachers and their students.
In one or two sentences each what quick advice would you give to:
A student in their last year of high school living at home with a part-time job and planning to attend a post secondary institution the following year.
I would research and apply to as many External Scholarships (prior to acceptance) and Internal Scholarships (after acceptance) to help offset the cost of post-secondary education. Your part-time job may count against your OSAP eligibility so be aware of that. Also, in regards to working a part time job, you may want to take a lighter course load or do night school so that you can better manage the part-time job and the course load and have a smoother transition.
Someone in their second year of university, living in residence, who is on OSAP and working part-time.
Consider Internal and External scholarships to offset the costs of residence and tuition. Since you’re on campus, look for work-study and part-time work on campus to help lessen the travel time between school and work. Any extra monies from the part-time job would be good to use for savings for a rainy day in the future such as paying a good chunk of OSAP upon graduation. Build your experiences related and unrelated to your field so that you can network, develop more skills, and connect with people for future jobs and advancement. Networking is very important at this stage. Also, look into post-graduate studies, but do look at the career and industry trends in the job market.
A new grad working an entry level job.
Network after work through alumni and industry events, build your group of mentors and manage your income so that you’re paying off your high interest debt first and low interest debt last. Also, any extra income from overtime, part-time jobs and so forth should be put towards any debt so that you can be debt free quickly and can save for your future and long term goals. When it comes to your mentors, job shadow, ask for advice, guidance, and any wisdom to help in your journey of life.
What resources or websites would you recommend to our readers who are eager to learn more about handling their money?
Some helpful resources are:
Thank you for your time!