Transcript Values-Based Financial Literacy

Values-Based Financial Literacy
For Graduate Students – Queen’s University
What is Financial Literacy?

Financial literacy is the ability to
make appropriate decisions in
managing one’s personal finances

It requires a set of skills and
knowledge to help make
informed financial decisions

It additionally requires an
understanding of how your
financial well-being also has an
impact on your everyday
decisions
Financial Literacy Facts

A 2011 Ipsos Reid survey
indicated that 72% of Canadians
are not confident in their money
management skills

From the same survey, 38% of
Canadians reported that they do
not put away savings on a
monthly basis

62% of Canadians agree that they
could “use help with their
financial literacy skills”,
including 73% of 18-34 year olds
Financial Responsibility & University


Graduate students have already
experienced the challenges of
managing money during their
undergraduate studies and are
often skilled at getting much out
of little
Graduate work sometimes carries
with it research expenses which
students must bear but did not
anticipate (eg language
acquisition)
The Diversity of Graduate Students

Grad students come from various backgrounds and life stages

Some graduate students have spouses and children

Others are mature students who have returned to pursue
their studies

Queen’s University has international graduate students from
all over the world

Each type of graduate student faces their own set of financial
challenges and concerns
Causes of Financial Illiteracy

Home and Family
 Many people with low financial literacy skills were not
exposed to financial tools as children
 Poverty and lack of access to info may also be major
factors
 Low financial literacy is “often intergenerational”
 Parents are also often reluctant to let their children be
financially independent

Multiple Intelligences
 People have a mix of different cognitive strengths and
challenges, it is important to know our own strengths and
when to ask for help
Other Causes of Financial Illiteracy


Learning Disabilities
 Some people have learning or cognitive limitations that
make financial literacy a particular challenge
Consumer Culture
 We are surrounded by social pressures that dictate a
culture of “buy, buy, buy”
 We are also subject to market influences that encourage
the mass availability of credit (purchasing things now and
paying later)
 Accordingly, debt piles up leading to massive financial
burdens
 Fatalism: “I’m already $40,000 in debt, why not more?”
Discussion – Budgeting

You have $100 for the month
after rent, utilities, and all
your other bills have been paid

How will you allocate the
remainder of your money?

Make a list of at least 3
expenditures

Let’s go around the room and
discuss how we categorized our
expenses
Values-Based Financial Literacy
Values-Based Financial Literacy
is a new concept that seeks to
incorporate peoples’ values,
whatever they may be, into
money-management strategies
-students at Queen’s name socioeconomic prejudice as a
significant pressure in their life
at Queen’s
Name your top 3 personal
values- eg family, accumulating
wealth, helping others…

Discussion – What influences you?

Take a moment to reflect on
your spending habits

What do you need to know
about a product before you
purchase it?

Do you consider the following?
 Is it something you need or
something you want?
 Is the price within your
budget?
 How long will it last?
Discussion – Reflection

What are your personal values?

Do your spending habits reflect
your internal values?
 Do they reflect the values of
the culture/community you
live in?

How far ahead are you thinking?
 Are you managing your
finances today in a way that
works towards minimizing
debt and financial hardships
in the future?
Financial Literacy and Happiness

Your money management skills
affect your levels of stress and
anxiety in dealing with
finances and debt
Discussion:
 How do finances and debt have
long-term implications on
happiness and relationships?

How do your spending habits
affect those around you?
Money that literally gets partied
away or goes up in smoke on
your weekly night out with friends
Don’t just throw your
money away, make the
right choices to
achieve financial
independence
Making a Budget

Look at your income/savings in
comparison to your expenses

Make a list of your necessary
monthly expenditures
 Tuition, rent, groceries,
etc.

Calculate what you have left
after those expenditures
 If you’re falling short
consistently, adjust your
flexible expenses
 Consider wants v. needs
Sample Budget – Master’s Student
Expenses
Costs
Tuition
$7,484
Books & Supplies
$2,100
Rent + Utilities + Internet
(~$750/month)
$9,000
Food
$1,800
Cell Phone (~$50/month)
$600
Entertainment (~$200/month)
$2,400
Transportation (~$80 round trip
to YYZ @Tricolour Outlet) x 6
$480
TOTAL
$23,864
Budgeting & Saving

Financial advisors recommend
splitting income/allowance
into 4 categories every month:
 Saving
 Spending
 Giving/Sharing
 Investing (tuition, etc)

Review your spending habits
and create monthly
budgets/limits
 Ex: $10-15 on Coffee
 Ex: $50-75 on Restaurants
Emergency Money
Having access to ‘emergency’ money – for a last minute
trip home cause someone is sick or dying. Many kids lose
a grandparent while at school and they often have to make
an expensive trip home. Be ready for something like that,
especially if home is a long way away. Parents will usually
step up and help, but it’s a darned awkward time to ask for
money in the middle of a hospital or funeral visit!
Do you have a Will?
Although this is an uncomfortable topic
for some, students need to have a Will
prepared, even a simple, handwritten
one. Most parents don’t know anything
about the student’s finances, so a list
can be a big help for them – it should
include credit card info to cancel, debt
info and where they bank or have
investments, if any. Also, it’s a chance
to make some ‘good’ choices with
assets they do have. Handwritten is
fine, but it must be entirely in the
students own handwriting (no typing),
witnessed by 2 others, signed and
dated.
Your Money or Your life by Vicki Robin, Joe
Dominguez and Monique Tilford
Defining “Financial Integrity”
3 questions that tell us if we are in “Financial Integrity”
1) Did I receive fulfillment in proportion to life energy spent?
2) Was this in alignment with my values, goals and purpose?
3) How would this change if I didn’t have to work for a living?
Essential Financial Knowledge

If you spend more money than you
earn, you increase your level of
debt
 Borrowed money (or using
credit) is not considered to be
part of earnings

Review your expenses to see where
you can limit your spending

Ex: Look at your cell phone plan?
 Are you paying for services you
don’t use or need?
 Have you considered
downsizing?
Essential Financial Knowledge–
Compound Interest

While using credit to pay for expenses may be tempting, it
comes with the dangers of piling up compound interest fees
 Compound interest consists of interest calculated on the
initial amount owed in addition to the accumulated interest
thereafter

Example: If a $100 credit card bill accrues 10% interest every
month, then in the first month you will be charged $10
(100x0.1). With compound interest, that $10 is added to your
original debt, resulting in $110 of debt.
In the second month, you will be charged an additional 10%,
except now on $110 (110x0.10), resulting in $11 added to your
debt. Your new debt is now $121.
If that bill is unpaid12 months later, the new debt is $313.84


Compound Interest on “Extras”
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•
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There is a $300.00 difference between a high end coat and a
regular name brand department store coat.
There is a $70.00 difference between Hunter’s boats and a pair
of rubber boats from Canadian Tires.
You will pay $600.00 a year for meals if you go out 2x per
week during the school year.
You will pay $300.00 per school year if you have 1 coffee per
day x 5 days per week.
•
That’s a total of $1,270.00 per year times 4 years = $5,080.00
•
At 6% interest that would equal $1,143.00 per year in interest
times 4 years = $4,572.00 total interest paid
• The
average student debt after 4 years of
school is approximately $25,000.00
• in student loans.
• If
the student pays this debt off over a 15
year period the total amount of interest
paid on that loan would be $22,500.00.
Financial Management Tools

In order to improve financial literacy, apps, websites, and other
tools are available to better organize & track expenses

Mint.com – Mint is a free personal finance app that organizes
and categorizes your spending for you. It helps track your
expenses and budgets to show you where you can save money
 Available for download on iPhones , Androids, and most
smartphones

YNAB – “You Need a Budget” is a personal home budget
software available for free download to students
 Email [email protected] with your “Proof of
Enrolment” from SOLUS and receive the free download
license key
youtu.be/rK6WLHNYjwM
Making Values-Based Investments

Choosing to make longterm investments
represents a forwardthinking attitude
Discussion:
 Is there such a thing as an
“ethical investment”?

How can you spend and
invest your money in ways
that align with your
internal values?
Financial Resources


Ask for help, find a financial planner
You may think that because you don’t have any money, there
is no point in financial planning but this is not the case. Many
financial planners take a long-term view of bringing people to
financial success and enjoy the challenge of showing their
clients the way out. Shop around for a Certified Financial
Planner who “gets” you and your circumstances if you do not
have the skills yourself
If you have credit card debt:
www.K3CCreditCounselling.org
GetSmarterAboutMoney.ca
A website with scholarship
resources, student budget tools,
university cost calculators, etc.
CanLearn.ca
A Canadian government website
with interactive info and tools to
help you save for post-secondary
education
Resources @ Queen’s University

AMS Food Centre
 A confidential and non-judgmental food donation service
 Located in McGillivray-Brown Hall near Earl & Barrie St

Student Awards – Scholarships and Bursaries
 Many grants/awards are based on financial-need
 Apply at www.queensu.ca/studentawards

Apply to the Work-Study Program
 Queen’s offers part-time positions to students who
demonstrate financial-need
 Go to the “Financial Assistance” tab on the Student
Awards page
Financial Aid - Graduate Students

Society of Graduate and Professional Students (SGPS)
 Offers Emergency Student Aid, Dental, and International
Student Bursaries
 Apply at www.sgps.ca/services/awards.html

Queen’s University International Centre
 Find info on housing, financial aid, health insurance, etc.
 Visit www.quic.queensu.ca

Queen’s University School of Graduate Studies
 Find financial-need based awards and bursaries for grad
students
 Apply at www.queensu.ca/sgs/awards-scholarships
Questions or Comments?
Thank you for participating!
•
Special thanks to Ali Tejpar for his work in developing
this slideshow and to Betty-Ann Howard of “Making
Your Financial Dreams a Reality” her support and
sharing her knowledge.