The Money Club for Young Adults
Financial Products
Before starting your first job you will need to open a bank account. Most people get their first credit card when they are teenagers. Cell phones are a necessary part of life. You might need a student loan to help you finance your post-secondary education. You may be thinking about buying your first car. Down the road, you will also start thinking about owning your first home.
Bank account, credit card, cell phone, student loan, car purchase, home mortgage - what do all of these have in common? They are all (or include) financial products. There are many different options for each - for example, there are at least 5 different kinds of bank accounts that range in cost from $0/month to $30/month. When they make a purchase of a financial product most people are very loyal (they stay with the same product for many years). As you get started you want to make sure that each of the financial products you own is exactly what you want - with all the features you want at the lowest cost. You will benefit from this up-front work for many years after.
Making the Purchase
Buying financial products can be approached just like buying any other product (like shoes). A little research will ensure you buy:
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the right financial product
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would you buy size 11 shoes if you have size 6 feet?
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at the best possible price
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would you pay $150 for shoes if you can find the same thing for $50 or less?
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Many people are not savvy financial shoppers so they end up paying much more for individual financial products than they have to. This means they have less money remaining for other items like savings.
Product List
We have dedicated a page to each (click on link below)
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Bank Accounts
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Checking
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Savings
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Debit Card
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Credit Cards
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key habits to build?
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Cell Phone Ownership
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buy or contract?
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Vehicle Ownership
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what is the cost?
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Savings Plans
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RESP, TFSA, RRSP
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Big Idea: Be a Savvy Shopper
Most of the education regarding financial literacy is provided by the same companies who are selling products. Many of these companies are publicly traded and they exist to deliver a profit to their shareholders. They are keenly focussed on ensuring you purchase
as many products from them as possible and the ones that make
them the most money. Do not be naive when dealing with companies who want your financial business. For each of the financial products you require ensure you find a financial institution that provides the best product for you at a fair price.
This is no different than when you go to a restaurant. Of all the items on their menu, restaurants make the most money from drinks, appetizers and desserts. Have you ever been asked these questions?
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What would you like to drink?
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Would you like an appetizer to start with?
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Do you have any room left for dessert?
By asking you these questions (to get you to buy more items) does this mean they restaurant is being unethical? No, of course not. But you do need to pay the bill when you are done and if you say yes to everything it can get very expensive. Similarly buying financial products can also get very expensive if you are not thoughtful in how you respond to the sales pitch.
