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PUBLICATIONS
Invest
in Yourself
 
 Your Money: More choice, more to know
Quiz: What's Your Money Style?
The Real World: A reality check on some money myths
Money Smarts: Savings Basics
5 Golden Rules: For a golden future
Your Money Your Life: Your personal spending and savings
plan
Your Personal Spending Plan
Our Supporters
Your Money: More choice, more to
know
In this exciting new, independent world,
good money management - "financial literacy" - is more important for women than
ever before. Financial literacy means being able to earn
money, keep track of a bank account, use credit wisely and put cash aside for future
needs.Why
are money smarts so important?
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Self-
sufficiency |
Financial autonomy means
you can make your own decisions, be independent and be the boss of your own life - without
being told what to do or how to live by your family, a partner or anyone else. |
| Power |
The power to make your own choices, follow your own rules and create your own
opportunities (nearly one-third of all companies in Canada today are run by women). |
| Equality |
"Until they have
financial equality, women will never have social equality," says Valerie Hussey,
co-owner of the mega-successful publishing company, Kids Can Press. "It's not about
having a lot of money, it's about having your own money." |
| Choice |
To get
married or not, to travel or move across the country, to start a business or leave a job - financial independence means
more options. |
| And
what could be more important than that? |
To find out more about
your attitude towards money take the quiz What's you money style?
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The Real World:
A reality check on some money myths |
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MYTH
If I get married, I won't have to worry about money. |
 Reality Check — Only one in five families now matches
the traditional model of dad working, mom-at-home-full-time. In fact, both parents work in
80% of two-parent families in Canada, while 55% of all working women provide half or more
of the family income. Sometimes a two-income household's cash flow is reduced by choice -
for example, if the woman takes time off to have children, or one parent decides to stay
at home full or part-time. Other times, it is reduced unexpectedly through a job loss, or
divorce. Women need to be involved in family finances! |
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MYTH
There's no point in getting a university or college education - in today's tough
job market, it won't guarantee me a job, let alone a decent income.
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| Reality Check — There are no guarantees in today's
world, there's no question that the more education or training you have, the better your
chances of success. According to figures from Statistics Canada, a person with only some
high school earns an average of just $18,639 per year; one with a high school diploma
earns an average of $22,846 annually; and a person with a university degree has an average
annual income of $42,054 |
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MYTH
No matter how hard a woman works, she'll never earn as much as men do. |
| Reality
Check — It is true that, across the board, women working full-time still
earn just 70 cents for every dollar that men do. However, that's in large part because a
much larger percentage of women than men are in low-paying, low-skill jobs. In skilled
jobs requiring higher levels of education and training, women are approaching wage parity
with men. So, again, it pays to stay in school. Skill is everything! |
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MYTH
Men are better at money management and business than women are. |
| Reality Check — Even as long ago as 1984, a study at
the University of Western Ontario found that women were starting three times as many new
owner/managed businesses as men, and that these had twice the survival rate. Today, women
own and/or operate 30.3% of all firms in Canada, and these companies are creating jobs at
four times the average rate. |
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MYTH
I'm too young to worry about retirement - or saving for it - now. I have plenty of time! |
| Reality Check — Of course you're young, but putting
money away while you're young means you can save a very small amount now and see some very
big gains later. Starting now also means you'll be establishing a very good long-term
habit. Statistics show that only 25% of all women over the age of 25 have a Registered
Retirement Savings Plan, and that very few people contribute what they need for a secure
retirement. The life expectancy for women is 81 years old, and right now in Canada, 40% of
women over the age of 75 are poor. |
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MYTH
Money management is too difficult and complicated. I'll just hire someone to do it
for me. |
| Reality Check — Money management is not hard to learn.
There are plenty of very accessible resources, from books to Internet sites to courses and
seminars, that will give you financial literacy much more quickly and easily than you
imagine. No one will ever look after your money with the same kind of care or vested
interest that you will. |
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Money Smarts
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Savings Basics |
Open a savings account
But shop around first! Visit several different
banks, credit unions and/or trust companies and ask which accounts they would recommend
for you, and what options are offered with these accounts. Ask what services you would be
getting, and what the charges for these services would be. In addition to this consumer
information, look for a banker you feel comfortable with. Pay yourself first!
As soon as you get your allowance or pay
cheque, and before buying anything else, take the amount you want to save and deposit it
in your savings account. Many money management experts recommend you save 10% of your
take-home pay.
If you have a part-time or full-time
job, you are eligible to start a Registered Retirement Savings Plan.
An RRSP allows you to save on income taxes
immediately, and the interest it accumulates is tax-free. Speaking of interest, the
younger you start saving, the more money you'll eventually have. Thanks to the magic of
compound interest, compare below what happens when you contribute $1,000 a year for 10
years between the ages of 21 and 30 versus $1,000 a year for 20 years between the ages of
31 and 50.
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TAXES
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When you get a job, remember that part of your
salary will go to income taxes, Employment Insurance, and Canada Pension Plan.
If you get a pay cheque of $800 every
two weeks, these are the deductions that would be made:
| Canada Pension Plan |
$21.29 |
| Employment Insurance |
$21.60 |
| Income tax |
$122.20 |
| Take-home pay |
$634.91 |
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BORROWING |
Unless you get an interest-free loan from
your mom and/or dad, borrowing costs money.
You'll have to pay back not just the money you
borrowed, but interest - and the longer you take to pay it back, the higher the amount of
interest you'll pay. That's why you should shop carefully for your loan, and understand
exactly what you're getting - the interest rate, how it is calculated, repayment
expectations, and so on.
If you do borrow money, make sure you
have a repayment plan, in writing, that includes the interest rate, plus how much you'll pay back and
when.
All loans have to be re-paid, including
student loans.
If you default, it will appear on your credit
history for a long time. |
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CREDIT CARDS
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Credit cards can help to establish a credit history for you,
which will be helpful if you need to borrow
money from a financial institution at some point in your life. But a credit card needs to
be in your name to be a credit reference for you.
Not all credit cards are created equal.
Interest rates and terms vary widely, and you
will also need to consider annual fees and benefits offered. It pays to shop for a card
before you shop with a card!
Be careful not to make a policy of using a
credit card whenever you want something you can't afford -
Credit cards can be useful for making purchases
over the phone. They can come in handy in an emergency. And yes, sometimes the sale of a
lifetime happens when you just don't have enough cash in hand. If you do use your card in
cases like this, think carefully about how you're going to pay off the amount when it
comes due.
Pay your credit card balance every month -
Paying just the minimum means you'll also
be paying a lot of interest. For example, if you owe $500 on a credit card with a 12%
interest rate, and make just the minimum payment, it will take you five years to pay it
off, and your final cost will be $657.49. (This assumes you've made no other purchases
during that time period!) |
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RECORD-KEEPING AND
CHEQUE-WRITING
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Keeping track of your income and "outgo" is
the first step,
and one of the most critical, in getting
control of your money - in making sure that you're using your hard-earned cash for what
you really want, both in the short and long terms. If you have a savings account, it's important to keep a careful record of all
deposits, withdrawals, debit payments, bill payments, cheques written and other
transactions because if you become overdrawn (you've taken out more money than you put
in), it will cost you money. You could be embarrassed when your debit card is refused at a
store, or when a cheque you've written is returned (this will cost you money, as well).
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5 Golden Rules |
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The only one responsible for your future is you.
Learn from generations who have gone before
you: all women must prepare themselves to take charge of every aspect of their lives. No
one will do it for you. |
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Improve your education.
"Education is the single most important
variable for achieving financial equality," says Jerry White, in Your Family's Money.
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Start saving now.
The younger you are when you start, the more
money you'll have eventually. Put another way, the sooner you start, the sooner you'll
have whatever you want! |
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Become financially literate.
Many people think money management is a lot
harder than it really is. There are dozens of great books, software packages, courses and
other information resources that can manage yours wisely. |
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Dream, and dream BIG.
Planning, saving and investing might not be all
it takes to make you an opera diva or a successful executive. But they can give you the
cash you need to finance your interests - from going to the movies to traveling around the
world. And ultimately, they'll allow you to live the life you want to live. |
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Your Money Your Life:
Your personal spending and
savings plan |
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If you had a
fairy godmother or a genie in a bottle, what would you wish for right now, today? What
would you like two years from now? Five years? A budget - a spending and savings plan -
can be your genie in a bottle. As your money 'servant,' it will give you control over your
finances, plus the cash you need to make your dreams come true.
The major elements to include in your spending plan are:
| 1. Your financial
goals - both short and long-term |
| 2. All sources of
income |
| 3. All expenses
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| You may use our chart or create your own |
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SOME TIPS FOR USING THIS PLAN
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Take time identifying your savings
goals - whether these are for a
trip, a car or a computer; or going to college or university. Then determine how much, per
month, you will need to save to meet these goals within a given time frame. |
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Think
about your monthly expenses, it's obvious that if you live on your own you will have very different, and more
expenses than if you still live with your parents. But whatever your circumstances, write
them all down. |
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How
do your total expenses and savings goals compare to your total income? If
they're less, great! If they're more, you'll need to revise some items, which means
looking for ways to trim expenses. |
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Keep
track of all the money you spend for at least one month. Do you
really spend the amounts you estimated in your budget? Recording expenses will allow you
to revise your budget, give you a clear snapshot of where your money goes, let you know of
any budget categories you've overlooked, and tell you where you can cut costs. |
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Go to your bank, credit union or trust company - or visit
their Web sites - for further information. Ask what kinds of accounts
you should have, how the institution can help you meet your goals, and how you can manage
your debts and make the most of your savings. |
Click here for to fill out Your Personal Spending Plan
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Our Supporters |
Invest in Yourself
has been produced by the
Manitoba Women's Directorate
with thanks to the
Federal/Provincial Ministers
responsible for the
Status of Women, especially:
The Ontario Women's Directorate who developed
Your Money, Your Life, Your Way!
The British Columbia Ministry of Women's Equality that
produced an earlier version Just in Case You Don't Win the Lottery on which
this publication is based, and
With support from Manitoba Education and Training and
Youth
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