Financial Planning For Young People

Financial planning aims to use money more effectively and more efficiently

Effective is about doing right things and efficient is about doing things right. Always start with effective. If you have poorly formed ideas about what you are doing, no amount of efficient will make it work out.

It’s Simple.

Don’t be dumb. Don’t do dumb things. Choose your actions to support your strategic purpose. It is mostly about focus and discipline.


Strategic – relating to the identification of long-term or overall aims and interests and the means of achieving them. {Google}

Effective is about your strategy.

Think about why you want money at all.

You need money to live. To eat, to have shelter, transportation, and recreation. Probably you will need a phone and a computer and maybe a TV. You should have the ability to get medical care if you need it. You need money to support physical fitness and fulfill your interests. Hobbies for example.

Explore the price of those things. Once you have a sense of what you need to live you can estimate what you must trade to get it

Notice that beyond a certain point, money has no meaning. How much differently do people live with $100 million as opposed to those with $50 million. Understanding how you want to live is really important because it will define how and how much you must earn.


Price – the amount of money that must be traded to acquire a product or service.

It will be surprising.

Where does the money you earn go?

You tend not to be able to spend everything you earn.

Money you earn goes down several possible paths.

Before you get it, the government takes money for income taxes, employment insurance, and Canada Pension. The employer may take deductions for union dues, uniforms, savings plans or group insurance. The more you make the more these deductions become an issue.

Take home pay can go towards living, paying off loans, saving for the future and for insurance.

What’s left is for consumption or cost of living.

It is a strategic mistake to spend first and save what’s left. That never works because money is dynamic in time. Some of what you earn today, you will need to spend on living costs some other day. More later.

Think about money in time.

Everything you earn, you earn in the present. You cannot earn something new yesterday and you cannot earn before the future comes. Thinking about money in time helps you understand planning.

You earn in the now and you consume in the now. Both for the benefit of you. Think what happens in the now.

There is also the supporting of others involved. You pay taxes union dues and maybe some other deductions. Think about them.

Think about then. Money you earn today but pay for things that will happen in the future or have already happened with borrowed money. Call that then.

You should understand your money in four silos.

  1. Now. Things I consume in the present
  2. Them. Money I send to others for some nebulous benefit not carefully attached to my strategic vision.
  3. Then the future. The money I send to the future by saving and the money I spend now to insure the future works out under some adverse conditions.
  4. Then the past. The money I send to pay for spending I made before I had the money. Paying for the past is a serious impediment to now and the future. Debt management is a key variable.

Shortcut thought NTT Now-them-then.

The key to financial planning is noticing they invented time so everything didn’t have to happen at once. To be successful, people need priorities and a sense of how things play out over time.

I help people understand and manage risk and other financial issues. To help them achieve and exceed their goals, I use tax efficiencies and design advantages. The result: more security, more efficient income, larger and more liquid estates.

Please be in touch if I can help you. 705-927-4770

One Comment on “Financial Planning For Young People

  1. Well said and fundamental to financial literacy not only for young people but all of us. Thank you

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