Pat Foran

Indigo Non-Fiction Blog (INFB): I had to start with a controversial question. Is finance-education like sex-education – we just don’t want to talk about it?

Pat Foran (PF): It’s true some families would rather talk about sex education than financial issues. Of course, parents should be talking about financial matters with their children. Some may feel embarrassed about their own situation but that doesn’t mean they should shy away from financial topics. Children should have an idea how much the mortgage payment is, how much the hydro bill is, and how much it costs to have a cell phone every month. They should know about interest on credit card debt and how much it costs to own and operate a car. Parents are not doing their children any favours if they don’t talk to their kids about money matters.

INFB: Ever since finishing the book, I keep noticing shows and articles about financial literacy. How can governments, schools, and consumer groups help out young Canadians in this regard?

PF: I was a member of the federal government's task force on financial literacy, which is part of the reason I decided to write this book. There is a real need for more financial literacy in our school system and, in fact, I believe there should be a mandatory financial literacy course in high school. Young people need to know the basics when it comes to money management. Good debt and bad debt. How interest is calculated. What an RRSP and TFSA is. How to avoid the rent trap, how to invest for their future, how to negotiate the best deal they can on products and services. The more people can learn about money management the better off and less stressed they will be. It’s great that financial literacy is now an important topic that people are paying attention to.

INFB: I admit to being exactly the demographic that you’re writing for, so I recognize many of the issues in the book – some I’ve successfully dealt with, some I’m avoiding. Is finance-avoidance a big problem in Canada and how do we deal with it?

PF: It’s not so much avoidance as it is about developing good saving and spending habits early. The sooner young people watch their spending, pay themselves first, open a Tax Free Savings Account and make saving a routine part of their lives – the better off they will be. They should start by deducting $50 off their pay cheque and having it automatically go into a bank account, mutual fund, RRSP or TFSA. Over time they will want to increase the amount to $100, then $200 or even $300. Once you put the money away you will get used to not having it and if you don’t have it – you won’t spend it. I speak quite a bit about the Tax Free Savings Account which is a great way to pay yourself first, and take advantage of dollar cost averaging and the magic of compound interest.

INFB: You suggest a big problem isn’t poor saving, it’s poor spending. What’s the best way for young Canadians to build good spending habits? (without cutting back on books!)

PF: Everyone wants to have fun in life and there is nothing wrong with spending money on ourselves. Some people may want to have a new car, an annual vacation down south, or they may like to dine out every week. The problem is when you want to do everything – all the time! If you are someone who dines out often, drives an expensive car, and takes a lot of vacations it will be very difficult to get ahead. After all, $100 a week spent dining out is over $5,000 a year! By having money deducted from your paycheque at the source it will help you save automatically because if the money is not in your account you won’t spend it. Also you will want to monitor your spending carefully. A problem for many young people is “Keeping up with the Joneses” meaning wanting to have the same clothing, electronics, luxuries, and other things our big spending neighbours have. Of course the “Joneses” may have these things by racking up consumer debt which is something you don’t want to do.

INFB: There seems to be one topic missing from the book considering the 14-34 year-olds you’re writing for – kids! What advice do you have for young parents trying to budget for a larger household.

PF: It’s true I don’t address having children, which is something many young people may want to do in their twenties and thirties (however many people are waiting longer). As long as someone is spending and saving wisely and they meet a partner who is also on the same page as they are, then everything should work out just fine. Of course, there are financial struggles unique to having children but they are worth it. Once children come along though, your spending will have to be under control to pay for all the added expenses that come with parenthood. I recently saw a young mother with a $350 designer diaper bag – was that really necessary? I don’t think so.

INFB: Many young Canadians are dealing with several of the topics in your book: paying off student debt, saving for a mortgage, and worrying about their lack of RRSP contributions. Should people focus on one issue or slice the paycheque several times to address all of them?

PF: It’s hard to say because everyone’s situation is different. You should always pay down high interest debt first. So if you had a credit card with an interest rate of 19%, you should really clear that up before trying to save for a mortgage. I always say as long as you are saving you are on the right track. So if someone did want to put $50 into an RRSP, $50 into an account to save for a down payment on a house, money on their student loan, etc., they are doing the right thing. The most important issue is making sure you don’t run up credit card debt and other forms of debt while you are saving. It makes no sense to pay off $200 on your credit card if you are going to rack up another $250 that month on the same card – doing this will ensure you never get ahead.

INFB: Should parents give The Smart, Savvy, Young Consumer to their adult children for Christmas (and for the January bills)?

PF: It would be self serving to tell people do to this – but I can say the young people who have read my book tell me they did get a lot of good information from it. I wrote the book with the hope that young people will benefit from the information in it and get them to think about their spending, investing, about getting a better deal, about trying not to keep up with other big spenders and how to live within their means. I know many parents and grandparents are purchasing the book so I think it may end up in a lot of young people’s stockings over the holidays.



Pat Foran sits down with Investor Education Fund to chat about how your small expenses can add up. A few smarter money choices can trim your spending without causing too much financial pain.

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Indigo Non-Fiction Blog (INFB): I had to start with a controversial question. Is finance-education like sex-education – we just don’t want to talk about it?

Pat Foran (PF): It’s true some families would rather talk about sex education than financial issues. Of course, parents should be talking about financial matters with their children. Some may feel embarrassed about their own situation but that doesn’t mean they should shy away from financial topics. Children should have an idea how much the mortgage payment is, how much the hydro bill is, and how much it costs to have a cell phone every month. They should know about interest on credit card debt and how much it costs to own and operate a car. Parents are not doing their children any favours if they don’t talk to their kids about money matters.

INFB: Ever since finishing the book, I keep noticing shows and articles about financial literacy. How can governments, schools, and consumer groups help out young Canadians in this regard?

PF: I was a member of the federal government's task force on financial literacy, which is part of the reason I decided to write this book. There is a real need for more financial literacy in our school system and, in fact, I believe there should be a mandatory financial literacy course in high school. Young people need to know the basics when it comes to money management. Good debt and bad debt. How interest is calculated. What an RRSP and TFSA is. How to avoid the rent trap, how to invest for their future, how to negotiate the best deal they can on products and services. The more people can learn about money management the better off and less stressed they will be. It’s great that financial literacy is now an important topic that people are paying attention to.

INFB: I admit to being exactly the demographic that you’re writing for, so I recognize many of the issues in the book – some I’ve successfully dealt with, some I’m avoiding. Is finance-avoidance a big problem in Canada and how do we deal with it?

PF: It’s not so much avoidance as it is about developing good saving and spending habits early. The sooner young people watch their spending, pay themselves first, open a Tax Free Savings Account and make saving a routine part of their lives – the better off they will be. They should start by deducting $50 off their pay cheque and having it automatically go into a bank account, mutual fund, RRSP or TFSA. Over time they will want to increase the amount to $100, then $200 or even $300. Once you put the money away you will get used to not having it and if you don’t have it – you won’t spend it. I speak quite a bit about the Tax Free Savings Account which is a great way to pay yourself first, and take advantage of dollar cost averaging and the magic of compound interest.

INFB: You suggest a big problem isn’t poor saving, it’s poor spending. What’s the best way for young Canadians to build good spending habits? (without cutting back on books!)

PF: Everyone wants to have fun in life and there is nothing wrong with spending money on ourselves. Some people may want to have a new car, an annual vacation down south, or they may like to dine out every week. The problem is when you want to do everything – all the time! If you are someone who dines out often, drives an expensive car, and takes a lot of vacations it will be very difficult to get ahead. After all, $100 a week spent dining out is over $5,000 a year! By having money deducted from your paycheque at the source it will help you save automatically because if the money is not in your account you won’t spend it. Also you will want to monitor your spending carefully. A problem for many young people is “Keeping up with the Joneses” meaning wanting to have the same clothing, electronics, luxuries, and other things our big spending neighbours have. Of course the “Joneses” may have these things by racking up consumer debt which is something you don’t want to do.

INFB: There seems to be one topic missing from the book considering the 14-34 year-olds you’re writing for – kids! What advice do you have for young parents trying to budget for a larger household.

PF: It’s true I don’t address having children, which is something many young people may want to do in their twenties and thirties (however many people are waiting longer). As long as someone is spending and saving wisely and they meet a partner who is also on the same page as they are, then everything should work out just fine. Of course, there are financial struggles unique to having children but they are worth it. Once children come along though, your spending will have to be under control to pay for all the added expenses that come with parenthood. I recently saw a young mother with a $350 designer diaper bag – was that really necessary? I don’t think so.

INFB: Many young Canadians are dealing with several of the topics in your book: paying off student debt, saving for a mortgage, and worrying about their lack of RRSP contributions. Should people focus on one issue or slice the paycheque several times to address all of them?

PF: It’s hard to say because everyone’s situation is different. You should always pay down high interest debt first. So if you had a credit card with an interest rate of 19%, you should really clear that up before trying to save for a mortgage. I always say as long as you are saving you are on the right track. So if someone did want to put $50 into an RRSP, $50 into an account to save for a down payment on a house, money on their student loan, etc., they are doing the right thing. The most important issue is making sure you don’t run up credit card debt and other forms of debt while you are saving. It makes no sense to pay off $200 on your credit card if you are going to rack up another $250 that month on the same card – doing this will ensure you never get ahead.

INFB: Should parents give The Smart, Savvy, Young Consumer to their adult children for Christmas (and for the January bills)?

PF: It would be self serving to tell people do to this – but I can say the young people who have read my book tell me they did get a lot of good information from it. I wrote the book with the hope that young people will benefit from the information in it and get them to think about their spending, investing, about getting a better deal, about trying not to keep up with other big spenders and how to live within their means. I know many parents and grandparents are purchasing the book so I think it may end up in a lot of young people’s stockings over the holidays.



Pat Foran sits down with Investor Education Fund to chat about how your small expenses can add up. A few smarter money choices can trim your spending without causing too much financial pain.

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