FirstOntario‘s Dave Schurman joined us this morning to answer questions submitted from students in grade 10 business studies at Glendale Secondary School in Hamilton.
Radha asks, “What should you consider before purchasing a house and how will our generation even be able to afford a house at this rate?”
Schurman says he truly believes that people will be able to afford a house, even in the future.
“I know housing prices go up, but so does salary,” said Schurman. “Take it one step at a time.”
He recommends focusing on graduating high school first, then getting a post-secondary education, starting your career and then saving for a down payment.
Schurman says there are also government programs available to help first-time home buyers.
Jelena asks, “When I get married and have children, when is the best time to start saving for them and what is a good amount to save every year?”
Schurman says the amount is not that important when starting off, but the important thing is to save. He recommends opening a registered education savings plan for your children as soon as they are born.
“You’ll watch the magic of compound interest,” said Schurman. “You’ll see that savings grow…again, don’t worry about the amount, just set it up and they will come.”
Hina asks, “Since there are accounts like the tax free savings account, why do people still have accounts that require them to pay?”
Schurman says there are reasons that people don’t take advantage of the tax free programs. One is that tax free savings accounts have maximum manual limits.
“Your pay goes into a savings, or checking account so you can pay monthly bills, so [a tax free savings account] is probably not the best place for that money,” said Schurman.
He says everyone should still take as much advantage of tax free savings accounts as possible.
Anmol asks, “Setting up a budget is one thing, but how do you stay on track like resisting unnecessary purchases? How do you balance your spending mistakes?”
Schurman says budgeting is the key to personal finance. He says the most important thing is to actually create a budget and then follow it.
“Make sure you have that self discipline to only spend what you’re budgeting to spend on,” said Schurman. “However, things do happen and that’s where people get off track.”
His solution to things like a car breaking down, or emergency home repairs is to have an emergency savings account so that you are not affecting your budget.
He says if you find yourself impulse buying, the best solution is to cut back spending for a bit until you are back on track.
