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It’s 2018 which means it’s time to set some goals! Whether you are looking to pay off that school loan or open your own business, getting your finances in order is a pivotal part of your success in the new year. That’s why YWiB Toronto has teamed up with Darlene Patgunarajah to talk about the importance of financial literacy and the misconceptions young people have about their finances.
How and why did you get involved in financial literacy?
Education has always been a common thread throughout my career. In healthcare, teaching is an important part of the health professional’s relationship with their patients. As a financial advisor, education is also a significant part of the client-advisor relationship. Without knowledge and some basic literacy - whether in relation to your health or your finances - you can’t make informed and educated decisions about either.
Do you think most young people today have a grasp on their finances?
My short answer is “No”, but it depends on the person. With young people there are a lot of misconceptions around finances tied in with the need for immediate gratification. People are looking for a quick buck, and not at the long-term planning it usually takes. We were never taught about finances at any point during our school years, so there is very poor financial literacy going into adulthood. People are learning through observing what their friends and family are doing, or hearing through media the hottest stock picks while at the same time becoming disillusioned by insane house prices. Learning it as you face the realities of being an adult isn’t the best way to go about it.
What do you think is the biggest misconception young people have when it comes to finances?
There’s this consumer mentality that everyone needs to have the latest tech, trendiest clothes or most epic experience. With the blow up of social media it takes “keeping up with the Joneses’” to a whole new level. It screws up their perception of reality and they’re not being smart about their choices and priorities. They’re afraid to say no to the bachelorette party in Miami and there’s a pressure there. It’s that whole YOLO or FOMO culture. That, combined with money having been so cheap to borrow, snowballs into a huge problem with debt and financial stability.
Why do you think financial literacy is particularly important for women?
Women are now equal in terms of their economic power. We (women) are making the money and the decisions around it. There is no longer a dependency on a partner for our financial stability. Combined with the fact that women are also becoming more entrepreneurial, its even more important now that we have a solid understanding of how money works.
What is a personal lesson you learned about financials, saving or investing that you want to pass to our audience?
The biggest detractor to success in financial health is mindset. As children we’ve internalized the relationship our parents had with money, their beliefs and values, which then informs our own relationship with money. In many cases, our handling of money is a reflection of our own self-worth and beliefs about ourselves. Unless part of your financial coaching or planning addresses the emotions around money, you won’t have the discipline or the emotional capacity to follow it. It’s not just about getting a plan in place or saving money, its about figuring out what are your deep-down money scripts and dialogues are making conscious efforts to reprogram it.
Darlene's professional experience is rooted in healthcare and teaching - which has given her a unique perspective and passionate approach to financial health and financial literacy. She believes that at the heart of the financial advising profession is education, collaboration, and relationship building. She is enthusiastic about integrating technology not only into her practice for efficient administration but also for enabling better client engagement. She serves clients all over the GTA, developing a niche in the small business owner community. She lives with her husband and her two young and very energetic sons in Vaughan.
Written by: Ashleigh H.