Heading off to University is both an exciting and daunting time. Freedom and choice await, along with opportunities and new experiences. But how do we ensure our teenagers are ready for this whole new world? We have packed up the trunk, taught them how to cook pasta, and shown them how to turn on the washing machine. However, has anyone demonstrated to them how to manage their money on their own?
– Andrew McCartney, Managing Director for RBC Dominion Securities in the Caribbean
At all ages we are made aware of healthy eating and become familiar with nutritional terminology. But how is financial jargon any different to words like keto, BMI or organic? “Like health and wellness, general financial literacy plays an enormous role in ensuring long term success. Investing in financial literacy is the best investment you can make, to help you make key financial decisions which will have a positive impact on your life”, says Isabelle Bajeux, Dean and Professor of Finance of McGill University, Montreal.
RBC Dominion Securities Global Limited in Camana Bay, has been actively trying to increase financial literacy education in the community, by providing a bi weekly class for the Grade 10 students at Cayman International School. “This programme provides a formalised advisor-led learning platform and effectively focuses on the multitude of benefits that an earlier introduction to financial literacy can offer younger generations,” Managing Director, Andrew McCartney said. “We’re helping to ensure they have the resources and tools needed to be confident as they gain financial independence. “The modules are based on a similar set of classes that were launched in Canada by RBC. “Even in Canada, it’s not until students get to university — if at all — that there’s any financial literacy training available to them,” McCartney stated. “The purpose of the programme is to fill the gap that currently exists
in ‘when and how’ younger individuals are exposed to and educated about financial topics.”
The feedback from the students was very positive with one topic in particular really capturing their interest; budgeting. “The management of money skills are very useful for these next years when we become independent, go to college, or get a house/car.”
“This course really opened my mind to see what
we are going to be facing financially in the future
(expectations vs reality).”
Depending on your stage of life and your lifestyle, there may be a wide range of items or services that contribute to your overall expenses. Some may be smaller, day-to-day expenses, such as groceries, mobile devices and entertainment, while others involve much larger costs, such as a home or car, postsecondary schooling or raising children. When you consider all of these types of expenses, it’s no wonder that setting money aside and saving for the future may often seem difficult.
When it comes to budgeting, this is the formula that’s most commonly used:
It’s also important to keep in mind that the savings piece doesn’t have to be difficult. For example, one of the simplest methods is setting up an automatic savings plan from your bank account. By automatically putting aside small amounts regularly, the money is out of sight and out of mind—and it can grow quickly.
One simple change to the above budget formula can make quite a difference, and this is where it becomes important to focus on “paying yourself first.”
Budgeting is an essential part of University life – whether for books, entertainment, takeaways or road trips. This is only one of the topics covered in the programme, which hopes to enable students graduating from school to be comfortable with the financial terminology that lies ahead of them. “I would recommend taking this course because it prepares you for the future (like college or when one becomes financially independent for the most part) and also because it is very informative especially for people with little prior knowledge.” When it comes to financial education, it’s never too late or too early to start. Whether it’s understanding the basics of earnings, budgeting or credit; tax considerations when leveraging registered and non-registered accounts; the benefits of wealth planning; or the ins and outs of transferring wealth, all members of your family will benefit from building sound financial management skills. As well as learning how to cook pasta!