CHOO S
PERSONAL FINANCE 101
Saving, budgeting and investing class is an eye-opener for college kids
STORIES BY CARLI WHITWELL
As students gear up for higher education, it seems the contents of their wallets are getting lower. Many students come to university and college without ever having learned how to budget and save, says McMaster University finance and business professor Sherman Cheung. “It’s a disturbing sign, he says. “The ” more you save, the better off you are. It’s a simple fact. ” But Canadians just aren’t getting it. According to a 2005 Statistics Canada survey, almost half of Canadian households spent more than their pretax income in the previous two decades. It’s one of the reasons that, in 2006, McMaster University introduced a personal finance elective course for noncommerce students. This class teach-
es students about budgeting, saving, investing, insurance and estate planning. “For people about to graduate and enter the real world, we want them to be prepared, says ” Cheung. And student evaluations show it’s a huge success. “It’s an eye-opener for a lot of them. They have never had exposure to those things, so it’s quite useful.” Why do many college students have no idea how to handle money? Certified financial planner Andy Glavac attributes this to a lack of awareness about saving money. Glavac, of Welland, says many students do not know how to look for the best deal or even pay a bill, since they’ve never had to. “People tend to blame the (kids),” he says. He believes parents and schools are responsible for teaching kids financial planning basics. He would like to see required budgeting and savings courses introduced in elementary school and expanded on in high school. Currently, the Hamilton-Wentworth District School Board and the Hamilton-Wentworth Catholic School Board have no mandatory financial planning courses. And St. Jean de Brébeuf Catholic Secondary School is the only school in the Catholic board to offer a Grade 12 elective course that teaches
students about net worth and investments, says the board’s Frank Ciancone. But, Cheung believes this personal-finance training should start at home. “It takes both sides to make it work: the school can help, but I think it’s the family, too. ” It was their parents who got brothers Robert and Matthew Weeks started in investing money in mutual funds two years ago when they were 12 and 10 years old. “(Mom) said we could make more on the money were weren’t using, says Matthew, 12, ” who is going into Grade 8 in next week. “I had never thought about that before.” He has saved $1,000 and Robert has saved about $1,700. “I’ve seen grown people mess up so bad (with money),” says the boys’ dad, Dave Weeks, who has been saving through a registered retirement savings plan and a registered education savings plan for many years. He says it’s as important for parents to teach kids about managing money as it is to talk to them about drugs and gambling. “Money is the same as any other potential threat out there.” cwhitwell@thespec.com 905-526-2452
HAMILTON SPECTATOR FILE PHOTO
Learning to save can be fun
The younger you start saving, the better, says certified financial planner Andy Glavac. The owner of Glavac Financial in Welland believes parents should teach budgeting to children as young as six. And make it fun for kids, he says. Comparison shopping is one example. Glavac suggests making a game out of finding a product for the cheapest price. When Glavac’s daughter wanted a bike, they drew a picture of it and stuck it to a glass jar where she would put her money. “She saw the money piling up, and she had incentive to fill up the jar.” Kids and teens should also be shown
how to create a simple budget. Examples can be found online at websites fpsccanada.org/public/focus_your_finances and at sfas.mcmaster.ca/budgeting/budgetbuilder.htm.
Sources: Andy Glavac, McMaster University’s Office of Student Financial Aid & Scholarships, Financial Planners Standard Council