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As part of Financial Literacy Month (#FLM2017) I will be featuring interviews with fellow bloggers to get their take on the subject. Please join me in welcoming Ruth from Prudence Debtfree to the blog today.
Please tell me a little bit about yourself and your blog.
Ruth: In May of 2012, my husband and I had a wake-up call: We were in bad financial shape, and our path to financial fitness was going to paved by debt repayment. Almost 5 years later, we have paid off all consumer debt ($21,000); all business debt ($81,000); and $73,000 off our mortgage – which has gone from $155,000 to $82,0000. We’ve saved an emergency fund to see us through 3-6 months in case of job loss, and we’ve ramped up our retirement investments. We’re hoping to be completely debt-free in about two years. I chronicle our journey out of debt once per month at Prudence Debtfree.
What financial literacy education did you receive in school? If none what do you believe could be done to change or improve that today?
Ruth: I remember taking an economics class in high school, and besides presenting theories like supply and demand, our teacher had us work in groups to prepare an assignment about the stock market. We had to follow certain stocks over a period of a few weeks or so and then report on their performance. It was completely over my head, and I must have left the work to others in my group – because I sure didn’t get it. I have a vague memory of another teacher talking about living expenses and budgeting – but I don’t remember more than that.
I’m pretty sure that as a teenager, I was very resistant to lessons on financial literacy. I’m a high school teacher now, and I wish I could say I had great ideas about how to impart financial wisdom to teens. But I don’t. All I can say is that any efforts to get the message through would have to touch upon what is relevant to teens. Stocks meant nothing to my teenage brain. Part-time jobs and budgeting for clothes, food, and movies might have hit home. Navigating post-secondary education and living expenses for students might have captured my interest too.
One of the biggest blocks to my absorbing any financial literacy as a teen was the fact that my parents had no expectations of me when it came to finances, and they protected me from the consequences of my lousy money management. The more I think about it, the more I realize they spoiled me. So I think that any effective financial literacy education in schools has to involve parents
We all receive financial advice from people in our lives. What’s the most interesting or useful financial advice you’ve received?
Ruth: The most interesting financial advice I received was from Dave Ramsey; “The problem isn’t your money,” he said. “It’s the person you see in the mirror.” Getting our financial act together has had a lot more to do with a humbling recognition of our character flaws than I care to admit. This understanding has helped me to weather the long-term nature of debt-repayment, savings, and investments. Steadiness, patience, perseverance, resilience – these are the qualities that build financial health. The numbers come second.
April is Financial Literacy Month, what are you doing to help promote financial literacy?
Ruth: Financial Literacy Month where I live (in Canada) is November. Last November, I gave a presentation at a local library (inspired by you, Brian) about our journey out of debt. It was a big, nervous deal for me, but it was worth it. There were about 20 people in the room, and at the end of my talk, a woman raised her hand to say that she had never heard anything like it before – that it was exactly what she needed to hear – and she thanked me with a voice full of emotion.
Most people who present about financial matters are “experts”. I was the opposite. I was a debtor speaking to debtors – offering hope.
What financial advice would you offer to a college-bound teenager?
Ruth: I offer advice to college-bound teenagers often. I have 3 children – all of whom will be in post-secondary schools next year – and I speak with the soon-to-be graduates of my high school too. “Stay out of debt as much as you can!” I tell them. I warn them away from debt with my own story. I encourage them to apply for scholarships and bursaries. I discuss part-time job possibilities with them. I encourage frugal living – not a knee-jerk-join-the-crowd mentality of overspending at bars and restaurants. I don’t know how much they listen to me, but I try.
What resources, app, blog, tool, etc. would you recommend as a starting point for someone wanting to organize their money for the first time? Why?
Ruth: I have recommended Dave Ramsey’s The Total Money Makeover to many people over the past 5 years. It’s a great starting point. It was our starting point. People aren’t motivated to change unless they’re convinced they have a problem and they’re convinced they have the power to do something about it. The Total Money Makeover gave us clarity about our financial mess – as well as inspiration to transform it. We were psyched!
It is so important to read personal finance blogs. We are each subjected to thousands of ads per day that tell us to buy, BUY, Those ads work their power on us whether we’re aware of it or not. To balance out that influence, we have to be intentional about getting the opposite message – and reading blogs is an effective way to do that.
I advise people to find the voices that speak to them. There is such a vast array of blogs on personal finance. Just try out different sites. You’re bound to find a few that capture your interest and engage you through your long-term journey to financial health.