From financial literacy to planning for retirement, CPA/GCA Jeff O’Rourke shares a few tips on how young people can better financially prepare for the future.
According to O’Rourke, the biggest tip he has for young people is to learn more about how to budget and to stop living in the now.
“Budget is the big key,” he explained. “Know how much you make so that you can how much you can spend. When you’re young, you may still be living at home and maybe you want to move out, but you have this credit card debt racked up.
“Then you want to get a car, so you go get a car loan, but you find that your credit card racked up too high and you don’t qualify for that loan. It’s very difficult to pay down that debt, so it does make sense to live within your means, think about the future, and ask: How does what I do today affect tomorrow, next week, next year, or even 10 years from now?”
He adds that building the habit of learning to save from an early age is an invaluable skill for the future.
“The habits that young people develop with money when they’re young, I promise you they’ll carry on into the future,” he said.
O’Rourke believes that everything from learning how to save, making money a little less accessible, and even developing good spending skills will all pay off long term. In terms of financial literacy, O’Rourke says that the internet is a great tool when it comes to learning more on the topic, and suggests to learn more through Canadian content.
In the realm of taxes, O Rourke outlines that taxes should be a priority for anyone entering the workforce at any level. Although the level of experience with taxes from person-to-person, he said that everyone should get into the habit of doing their taxes every year.
“Different accountants will have different opinions, but for me if someone has a T4 and an RSP slip, they’re young, and they want to try it for themselves, go for it,” he said. “There’s enough information out there that you should be able to file it, and if there’s any trouble we can certainly help.”
From reducing penalties to receiving benefits that people are entitled to, O’Rourke said it is important to make sure your taxes are filed on time.
“If you’re going for any sort of mortgage, banks are going to want to see your notices of assessment and you got to have your taxes filed for that,” he said.
O’Rourke said he is a big advocate for helping young people acquire the tools to help develop good money management skills. He adds that parents are more than welcome to put their children in contact with him to learn more about making informed decisions about money.
“Young people can run into trouble with debt very quickly, and when it comes down to the habits that you develop with money when your young can turn into really bad habits when you’re older,” he said. “Unfortunately, money is a very evil thing, so if we can get our thought pattern to think about money as a tool to accomplish our goals, maybe that would help it not be such a devil.”
