My Start In Personal Finance

“My net worth is uh… well…let me think…Oh my credit score? Well I would assume it’s pretty good…”

This was the conversation that got me into the world of personal finance about a year ago.  I was just finishing up my post-secondary education with a Bachelor of Education Degree (to along with m B.A.) from the University of Manitoba and was looking for work.  I went through a stressful time of resumes and interviews (another story for another time) and ended up getting a job in a small town.  The light at the end of the tunnel was upon me.  Whoop, whoop for a year-long paycheque!

The thing about small towns in Manitoba is that your living options are often pretty limited.  I had only a couple months to figure this out and so I started hitting the local housing market right away.  The town is about 4 hours from Winnipeg so I had to do most of the legwork online and over the phone.  I concluded right away that the rental options were pretty limited, and the low supply meant they could demand whatever they wanted.

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I had not considered the option of buying.  Like most university students the thought of debt and ownership of something as big of a house scared the crap out of me.  This changed when one of the local teachers who was moving was put in contact with me.  She informed she had a nice little starter home to sell and would be delighted to sell to a young teacher.  She also began quoting me prices and even how much off of her prices she was already willing to go.  I didn’t know much about houses, but I have watched my dad negotiate on enough stuff to know how the game is played.  I knew that she should definitely not be coming off of her price this fast before I had even put in an offer or seriously considered the house.

Long story short, I knew she was eager to sell (I only had to buy a house and move my few belongings in the next two months, she had to sell her old home, buy a new one, and move her whole life) and got a pretty good deal on a starter home.  My parents were a little concerned about all the variables, but they agreed to support me…eventually…after a lot of begging.

This lead to the conversation I introduced the article with.  It took me all of about 3 minutes of talking to a mortgage expert from a major bank to realize I was definitely out of my depth.  Fortunately I had the humility to admit this much up front, and they plainly had experience in dealing with a first-time home buyer.  I had to figure out my net worth (you want to sober up quickly try figuring out what your actual net worth is as a student), what an amortization schedule was, how I was going to scrape together a down payment, how interest worked (both for the good and for the bad), and a million other little things about buying a house.

I had to learn about the 397 different kinds of taxes we have to pay on everything as homeowners, about the absolute mess of legal documentation and loopholes to jump through.  I had to learn about home insurance, how it’s calculated, who to go through (luckily I have a friend in the business, thank you residence connections) and how much per month they would take out of my account.

When you combined this experience with signing my first contract and trying to figure out what the 17 abbreviations of deductions to my paycheque all meant, I was feeling a little undereducated.

The bottom line is that I was told the same thing most university students are in high school: “Business courses are for people who aren’t going to university, you need to take something else.”  So I got little-to-no personal finance education when I was in high school and definitely none at my ivory tower of academia at the University of Manitoba.  I had a few common sense (not so common for some people) suggestions from my parents that got me through university, but I had never really stopped to think about where my money went before.  My personal finance knowledge consisted of: don’t go too much in debt, especially not in credit card debt, pay your bills on time, and try to make as much money as possible.  Not a bad start, but hardly enough to have any idea what I was talking about.

I have a semi-obsessive/compulsive personality.  So when I realized that there was a major gap in knowledge that I would need for the rest of my life there was only one thing I could do; read as many website as I could about it.  For the next few months my free time consisted of giving myself a crash course in all things personal finance.  Investing, saving, bonds, stocks, frugal living, taxes, houses, cars and a hundred other ways we receive and spend money dominated my universe.  I have since become a moderated viewer of personal finance articles, but in the process I became something of a self-appointed authority on the topic.

The tough part about learning something that can impact your life in a positive way is the inevitable realization that you could have been doing this long ago and reaping the benefits today.  If I had read a site like this at any point in university life I can only imagine how much it would have helped.  The only sad part of this for you is that you no longer have any excuses for remaining uneducated in personal finance matters!  Spend a couple hours and potentially set yourself up for life…not a bad deal.  It gets even better when you consider that there are no prerequisites or ‘student fees’ involved!

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