Dear Barb – Staying out of Debt

Dear Barb: I am 24 years old and a recent Athabasca University graduate. Next month, I will begin my first job since graduating. I will be making a lot of money and I don’t want to end up in debt like so many of my friends. I want to save money and buy a house. Are there any strategic tips you could suggest for managing my money and investing wisely?

Neil – Montreal

Good for you Neil! You are starting off on the right foot.

The greatest advice I ever received was to live within your means. You seem to be starting out with that intention. I have found some really good tips in the article titled “50 Great Ways to Grow Your Money” published in the summer issue of MoneySense Magazine.

The following tips are listed as the top eight:

1. Pay yourself first. Set up an automatic payroll deduction that will take either five or ten percent off of your paycheque and deposit the funds into a low cost mutual fund.

2. Contribute to your RRSP at the beginning of the year and pay your mortgage weekly or biweekly. This way you can pay off your mortgage faster.

3. Get real about your expectations for retirement. You shouldn’t feel stressed if you’re not on track to retire in your mid fifties. Be very suspicious of fast-talking brokers who promise you 20 percent annual returns.

4. Think twice before hiring someone to do a job that you can do yourself.

5. Pick a date (for example, New Year’s Day) to do a net worth statement every year. List your assets and liabilities. Then subtract your liabilities from your assets. The balance is your net worth that should increase yearly.

6. Time is money. Every dollar you invest now will double in 12 years.

7. Stand still. Never buy an investment whether it’s a house, stocks or mutual funds, if you are not prepared to hold onto it for 10 years.

8. Spend less than you make. When you get a raise at work, do not increase your spending, but instead increase your savings.

If possible, I suggest you read the entire article. The publication MoneySense Magazine may be available at your local library.

Thanks for your great question Neil.

E-mail your questions to Some submissions may be edited for length or to protect confidentiality: your real name and location will never be printed. This column is for entertainment only. The author is not a professional counsellor and this column is not intended to take the place of professional advice.