Thanks to student debt and a post-recession job market, most millennials know the importance of being money smart.
However, knowing something and doing something are two completely different things. From figuring out what kind of investments to make, to creating a monthly budget, personal finance can be a little confusing, to say the least.
Fortunately, we had the chance to connect with financial expert Ahmad Dajani, VP, Retail Deposits and Investments at Scotiabank and asked him a few questions about how young professionals can get their finances in check.
Here’s what he had to say:
1. What is your definition of financial literacy?
Financial literacy is having the knowledge, skills, and confidence to make responsible financial decisions.
People take many different paths to becoming financially literate. Some use a trusted family member or friend who is an expert in the field to start the conversation. Some are avid readers of the news and, of course, many turn to information available online. Money talk shouldn’t be intimidating. Beginning the conversation with friends or family is a good place to start, but meeting with a financial expert is especially helpful to deepen your knowledge and build strategies to help you become better off.
2. What underrated piece of financial advice do you wish more people would follow?
One piece of advice that is easy to put into place is to ‘Pay Yourself First’ by setting up pre-authorized contributions (PAC) with your pay cycle. Scotiabank recently conducted a poll that showed millennial Canadians (31%) are less likely than their older counterparts to have a PAC. PACs can make saving a habit, and it’s amazing how quickly we stop missing the money when we pay ourselves first, and how quickly our savings add up.
3. How can young professionals be smarter with their money?
Taking the time to understand your unique financial situation and identifying strategies to meet your goals are foundational to becoming financially better off. Start by sitting down with a financial expert. Our advisors can work with you to develop a financial plan and savings strategies that suit your unique circumstances. I think it’s also important to be smart with the little things. A few of my go-to routines include:
– Live within a budget – it may sound simple, but spend less than you earn. Using a budget and understanding where your money is going, will empower you to make financial decisions to help you achieve your goals
– Create good financial habits – Pay yourself first by setting up automatic contributions that coincide with your regular pay cheque. It’s an easy way to ensure savings grow over time! The sooner you start the better because in many cases you’ll never be able to make up for lost time.
– Digital Diligence – I use my mobile banking apps, and services such as Scotiabank’s Info Alerts to monitor my spending
4. If you could remove any financial misconception from the minds of our readers, what would it be?
I want Canadians to know that financial planning and advice is available to everyone. At Scotiabank, you can meet with an advisor at no cost and no minimum portfolio is needed to create a financial plan. They can help you create strategies that fit your unique needs and help you balance today’s priorities with tomorrow’s goals.
5. Do you feel like people tend to be overconfident when it comes to managing their money?
I think it’s sometimes the opposite. A lot of people are intimidated by ‘money talk’ and therefore don’t seek out the right professional help to educate them until later in life. At Scotiabank, we encourage all our customers to meet with our advisors as early as possible and as often as they need.