Perhaps Canada is just backwards, but I don’t think so. MoneySense asked some of the northern country’s top personal finance experts for their top money tips, and they gave some surprising answers.
Do you think it’s all emergency funds and the “power of compound interest?” If so, you’re wrong. Here is what they had to offer.
Money is a tool, not a solution. Do you accumulate money just for the sake of doing so? Do you save what you earn so that your net worth climbs higher. Are you aching for the positive comments you’ll receive when you post your net worth online? Money’s function is to acquire things. More specifically, money is a tool to acquire “goods and services you find useful.” What good is $50,000 if it never gets used?
How you spend it is more important than how you invest it. “The only way — we repeat, the only way — to amass money is to live on less than you generate.” That’s sensible; live below your means, spend less than you earn. Either axiom is a popluar mantra whether you’re reading The Motley Fool or talking to a financial advisor. Consistently spending more than you have is a voyage to disaster.
Love your job — or leave it. This is interesting. If you look around personal finance blogs, you’ll find people analyzing the latest salary report from CNN or another source. Which college degrees are the hottest? What professions are earning the most money after graduation? If you love what you do rather than choose your profession according to what makes the most money, you’ll work at it harder and consequently earn more money doing so. While you’re enjoying your job so much, you may just forget to retire, having no desire to stop “working.”
Put first things first. I’m not a big Suze Orman fan, but even I agree with her bite-sized nugget of wisdom: “People first, then money, then things.” Spend as much time taking care of your health as you do taking care of your finances. For every hour you spend in front of Quicken trying to make sense of your mess, spend an hour jogging or playing tennis.
Know your spouse. By this, the authors mean understand how your spouse approaches finances. “Schedule a time at least once a month to sit down and discuss money matters with your spouse before minor irritations turn into a major crisis. Better yet, if you’re not already married, take money attitudes into account when choosing your partner.”
These five tips present a good start to the top 25 money tips of all time (as determined by some Canadians). There will be more to follow.
Updated June 17, 2014 and originally published July 7, 2006.