A few weeks ago my Money article sparked quite the response. I had some great conversations about other people’s money journeys, how they didn’t understand why money wasn’t talked about in schools and the choices they are making now to educate themselves. This is where I am at, educating myself. As I mentioned in my previous article, the way I make money has changed which means the way I deal with money also needs to have a shift.
Money is a taboo subject for most, it gets the same response as asking someone their favorite sex position, see you cringed. Most people would. I feel it’s the same response if you were to ask someone how much money they made and what they do with it? Did you feel the same reaction? Probably. No one talks openly about money. We don’t sit around a dinner table and say, I made X amount last year, invested 20%, saved 30% and the rest I spent. It simply doesn’t happen. If it does in your circle of friends, please invite me over for a dinner party.
I have always looked up to my parents. They knew the life they wanted and made it happen. I couldn’t tell you how they did it, because we never talked about money. I knew they had savings, I once saw my mom’s bank statement, (sorry mom), I knew they made investments because every so often I heard the word RRSP, but again I couldn’t say what their plan was. Whatever the money plan was, it worked. My parents retired last year in their late 50’s, because they made good choices. Some of the things they did saved money and I don’t think they even realized it at the time. Meal planning and bulk grocery shopping for example, which my mom still practices today and you know I have adopted for my life as well. Family trips every year that were not extravagant, but as a kid I wouldn’t have known the difference, they were wonderful adventures. I look up to my parents and the life they lead, the money choices they made and how as kids we had every opportunity available to us, sometimes at a sacrifice to them, but I never knew that until recently.
For part two in my money series I asked my mom if I could interview her about money…dead silence. The caveat, I would have to let her read the article first, I thought it was a fair trade.
Q: Who taught you about money?
A: No one. My parents weren’t necessarily money savvy, that wasn’t something they did, I had to teach myself.
Q: When did you decide it was important to make a money plan?
A: Well, your dad and I worked for five years before we had kids, and then I took 10 years off to raise you guys. The money we made then went towards life, and we had enough. If we ever needed more during that time your dad would go and work with Grampa on the weekend. I don’t think we made a money plan until we were both working again around 35. We were making more money and needed to make that money work for us. We started by making a monthly contribution to an RRSP.
Q: What key decisions did you make that have created a successful retirement plan?
A: It was really a threefold thing.
- We both stayed in the same job since we were 20, even though I took time off to raise kids I was able to buy back my pension when I went back to work. I have 28 years into a pension and your dad has 35.
- We made monthly contributions to our RRSP’s for many years. We were not able to max them out, but it made a difference.
- Our CPP is almost at the highest payout.
Between our pensions, RRSP’s and CPP we were able to retire easily.
I would like to say we have been retired for a year now and we are not living an extravagant life. We don’t go out for dinner all the time, maybe the occasional coffee, we go on small trips, we don’t really purchase any new clothes, it’s a simple lifestyle, but it works. (I would like to note here they are definitely not people to purchase anything they don’t need. Also she says small trips but they visited Vancouver this year and have several camping trips planned, yes a budget trip but they are still able to go on them. Also their dream was to travel across Canada when they retired, which they did last year, and that was worked into the retirement plan.) Plus there are savings you don’t even think of like dad’s coffees every day, gas for work, buying work clothes, those little things add up.
Q: Why did we never talk about money at home?
A: I don’t know. I guess for me, as a private person, we never had those conversations. We always did what we had to do to have enough money.
Q: Why did you and dad not teach us about money or saving or investing?
A: I wish we had taught you. We didn’t know what to do when we started out, we went to a firm for our taxes and investing because Grampa referred them. We didn’t know where to start. It changed at 60 when we retired because we had to make different choices and look to the future. I wish we had changed earlier because we have learned so much since moving to a new investment firm.
Q: If kids are not taught about money or it’s never discussed how do you think they can succeed?
A: I don’t know that they can. I don’t understand why this is not taught in schools. I guess they need to start by doing their own research or from a recommendation or talking to someone they know. I think kids should know the opportunities available to them.
Q: Who should be responsible for teaching our children about money? Parents or schools or should they figure it out on their own?
A: It would be great if parents could teach their children, but not everyone is good with money. Maybe it’s a combination of different avenues. I definitely think it needs to be offered in schools. With today’s technology it might be easier to start on your own, researching online or looking up your different options.
Q: If you had taught me about money what would you have wanted me to know?
A: You need to save money for a rainy day, that’s always a good idea. I guess the value of money, what it takes to live. Also how important it is to have savings. Do you want to work forever? Then you have to think about that.
Q: Do you think my life as an adult would have been different if I had a money education?
A: Probably not. (OK I am adding this in, it’s nice when your mom brags about you) You are amazing. Since the time you graduated from high school, you have always followed your own path and did what you wanted to do. You didn’t need a lot of money. You never had 10% to put away. But you also didn’t buy frivolous things, you only bought what you needed. You’ve had a few lump sums over the years and spent it doing what you wanted to do, you needed that money to live. Every person is different.
Q: What money advice do you have for everyone reading this?
A: Make smart choices.
- Our first house was really small, then we bought property and built our own house, so our mortgage was very low. We built half of the house ourselves, and slowly over time finished it.
- Stay with the same job. The majority of people change jobs or now work from home which doesn’t offer them the same pension benefits we had.
- Zero debt. We never wanted a huge debt and this was something we always knew, so if we wanted something we saved for it.
- Don’t always want the newest and most expensive. We had a few new vehicles over the years, but didn’t feel the need to upgrade every couple years. We wanted a trailer for when we retired, we didn’t purchase a brand new one, we did research to find the best brand and value for what we were looking for and it was a third of the cost.
As someone who is only starting down my money journey, I started reading the Wealth Simply Money Diaries which made me feel normal. I thought I was really bad with money but managed to work with what I had. Reading these articles I realized I was doing ok. This one by Jon Chevreau really stood out to me because as someone who will most likely never have a pension, he showed me a way to retire without one. What kind of life do you want to lead? Then that’s how much money you need to have.
I want to thank my mom for being game to talk money with me and open about their money journey. I am glad this is something we can talk about now as adults, maybe when it’s even more important. I was not asking these questions to blame my parents for not teaching me about money, I simply wanted to know why. Many other people my age were also not taught about money or how to deal with it. This was a way for me see what worked for my parents, and how the choices I make now can affect my future.
Part Three of the Money Series to follow with amazing Dad Quotes on money.