General

Money is important in all aspects of your life. Soon you will be responsible for managing your own money and finances. Earning, saving, budgeting, paying bills, credit; there is a lot to learn about. It is important to educate yourself and make informed choices to become “money savvy.” 

Opening a Bank Account 

You will need someplace safe to keep your money! It is important to open a bank account while you are in government care. You could even start saving a little bit of money now in your account! You will usually need two pieces of ID to open an account. Many employers will require a bank account in order to direct deposit your pay cheques. Keep in mind that there are lots of different banking options and types of accounts out there. If you are comfortable, do a little research on what the bank has to offer you, or set up a meeting at the bank to discuss the different options that are available to you. If you already have a bank account, make sure you know what your bank fees are and if you are getting the most out of your account.

Sources of Income 

Make a list of all your sources of income, such as a job, social assistance, Section 56, disability, or student loans. List the contact information for all of these places and how long you will be receiving that income. It is a good idea to have a rough estimate of how much money you will be bringing in on a month to month basis. 

Budgeting 

Will you have enough money coming in to pay all of your monthly expenses? Put together a monthly budget in order to know and plan where you will need to spend your money in a month. Ask an adult ally to help you estimate the cost of living on your own in order to create your first budget. Budgeting is a lifelong skill; for most people it takes practice and repetition. Start early to take advantage of learning how to manage your money. 

Savings 

Can you start saving money now? Do you have a part-time job? Can you set away part of your allowance in savings? Set a goal of how much you would like to save before you exit the system. Financial planners say it is good to have six months of rent saved up, as one way to set a goal. 

Credit Check 

Do you know what a credit score is? Do you know what your credit history looks like? Have you had your credit checked? It is important to talk with an adult ally about credit history and how it can effect your finances. You may not have a credit history yet, if you have never had any bills to pay or borrowed money from a bank. Remember, NEVER let anyone EVER useyour personal credit for ANYTHING — NEVER EVER! While not very common, some people have been a victim of what is called “identity theft” (someone else using your name and credit information). This can harm your credit and be a very difficult situation to go through. Yet, it is important to check as it is possible to have had friends, family, or strangers use your name to get credit without your knowledge. 

Credit reporting companies in Canada keep track of your payment history, how much you owe, types of accounts you owe on and so on. Your credit score is assigned by these companies and is largely based on whether you pay your bills in full and on time. Say you want to take out a loan for a car or eventually apply for a mortgage to buy your own house. Banks or lenders can then access your credit score to decide if you qualify for a loan or to determine what type of interest rate they will give you. 

Cell phone bills and credit cards are two major areas where youth can quickly damage their credit rating. It is important to pay your bills on time and in full. If you absolutely cannot pay, call the company to make arrangements. It is better than not paying at all. If you leave an unpaid balance with a company, don’t think it just vanishes; that will go onto your credit history and affect your score. Also, NEVER put anyone else on your cell phone contract, you could become responsible for paying that bill even if you didn’t incur those charges. We all make financial mistakes, especially when we don’t understand how the system works. Pay attention to these areas when planning for your financial future!