It’s crazy to think that I went through twenty years of education, and I didn’t learn a single thing about how to manage my money. Maybe it was my fault since I didn’t choose to take any courses related to personal finance, but there weren’t exactly many choices. I did take an introduction to business class, and even that course had no mention of taxes or money management.

Once I landed my first full-time job, I made more money than I had ever seen in my life, so I did what most people do, I spent it all. It was great. I was eating out all the time, I planned vacations, and I purchased the newest gadgets. Fortunately, I didn’t go into debt for these purchases, but I also wasn’t saving. It took some time to figure things out, but here are 5 money lessons I’ve learned over the last 5 years.

Updating your budget should be done at least once a year

Once I created a budget, it kept all my spending in check, but it took a little time to get right. First, I had to track all my spending for 3 months. Once I knew where all my money was going, I was able to create an accurate budget. Although things changed over time (everyone forgets to budget for presents), I made adjustments until everything felt natural.

While having a budget is great, it’s essential to look at it every year. Over the last few years, I was fortunate to get a few raises. I would immediately update my budget and put more money towards savings. I would also take the time to correct any other expenses to see if my budget was still accurate.

What I noticed is that my expenses started to slowly creep up every year. I’m talking about my auto insurance, cell phone bill, fitness memberships, and streaming services. While I could afford these additional costs, I also didn’t need them all. I decided to reduce and cut some of these expenses, which put more money in my pocket.

Eliminating fees will save you big

money plant

As soon as I graduated from college, my bank immediately told me that I no longer qualified for the no-fee student banking plans. They asked me to come into the branch so I could switch to a regular account. The lowest monthly fee was $15, and it had a limited number of transactions. I would also have to pay fees for e-transfers and using ATMs not belonging to their network. I didn’t think much of it, but after a few years, I realized that I was paying a lot of fees.

My bank did offer no fee solutions, but I didn’t like how I had to keep a minimum balance, so I looked for an alternative solution. I quickly realized a digital bank such as EQ Bank was exactly what I needed. They had no monthly fees, no minimum balance requirement, and no fees for e-transfers. Best of all, they paid me a decent interest rate. In one month with a digital bank, I paid fewer fees and earned more interest than I did with my old bank in 30 years.

Having an emergency fund is a must

One of the most fundamental concepts of personal finance is to have an emergency fund. Yet, many people don’t have one set up. The idea is simple. Set aside 3-6 months’ worth of expenses that you can easily access. If an emergency comes up, such as unplanned repairs, health issues, a job loss, etc., you’ll be able to dip into your funds until you get back on your feet.

There have been a few times over the years where I’m glad I had my emergency fund. There was that time where my income dropped 75% for 5 months. I also won’t forget that time where I scraped my car’s side, and it cost me $1,500 to repair.

Putting aside 6 months’ worth of expenses can be difficult for many people, so try to start with $50 or $100 a month. Over time, you’ll build up your savings.

Loyalty programs are worth joining 


It seems like every retailer has a loyalty program these days. It makes sense; you sign up, earn points or dollars, and then you can use them later for discounts. There’s really no reason you shouldn’t sign up, but it pays off when you understand how to maximize your points. For example, I signed up for PC Insiders, which allows me to earn additional points with PC Optimum. Since PC Optimum is the loyalty program at Loblaws owned grocery stores, Shoppers Drug Mart, and Esso/Mobil, it doesn’t take me long to rack up those points.

Also, by using my American Express Platinum Card, I earn American Express Membership Rewards points. Over the years, I’ve been able to use those points to redeem free flights to the Dominican Republic, New York, and Los Angeles. I even had a 4-night stay in Boston for free since I was able to use my points.

It’s not the small expenses that add up, it’s the big ones

Personal finance author, David Bach came up with the term “The Latte Factor” and it was quickly adopted by people around the world. It’s a simple idea that if you were to buy a latte every day when at work, it would add up to a massive amount of money over the year. Bach believed that if you could eliminate small daily purchases, you could save a lot of money over time.

While I don’t disagree with this concept, I don’t think it’s the small purchases that matter; it’s the big ones. When I was shopping for a new car, the dealership was able to show me how I could afford a luxury car due to the low monthly payments. He failed to point out that I would be paying much more than the sticker price due to the financing costs. I did the smart thing and chose a car that was $25,000 less than what the car dealer was trying to push on me. 

I ran into a similar situation when purchasing a home. The bank approved me for a mortgage of $750,000, but I decided to set my limit at $600,000. By not spending an extra $150,000 on housing, I can enjoy a latte whenever I want guilt-free.

Final thoughts

Money lessons aren’t always immediately clear and sometimes you need to learn by making mistakes. However, once you start to get a feel for things, managing your money becomes second nature.


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