I ran across an interesting stat from Zolo recently. It said that while 79 percent of Canadians are confident in their ability to make ends meet, 79 percent would run out of money within three months if they lost their job. There seems to be a contradiction there so I asked my guest this week for her perspective. Ramona King is an award winning personal finance writer, a real estate expert and the director of content for Zolo, the largest independent real estate marketplace in Canada. I sat down with Romana recently to talk about financial literacy and how confident Canadians really are in their money management skills.

Welcome to the Maple Money Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. Our sponsor, Wealthsimple, believes that financial independence should be available to anyone. That’s why they have no account minimums, meaning you can get started investing for as little as one dollar. Don’t delay any longer. Invest online by visiting maplemoney.com/wealthsimple today. Now let’s chat with Romana…

Tom: Hi, Romana, welcome to the Maple Money Show.

Romana: It’s great to be here.

Tom: Recently with Zolo, you wrote a summary of a survey that was taken. I found it very interesting, mainly because when I was looking at some of the stats there was about 70 to 80 percent on confidence points from the survey. But again, there were roughly 70 percent on some failings in people’s finances as well. I found that very interesting and lopsided so I just wanted to kind of delve through that. First of all, can you just explain what this report was? Why you guys did the survey and what came out of that?

Romana: We did this survey because of financial literacy—the ability to learn about money and use it effectively. It’s really important for all Canadians. I’ve been covering personal finance for almost two decades. And in the last 10 years I understand there has been a big push to really make financial literacy an important skill set to know. As a real estate marketplace, we know that a lot of people purchase a large expense—a home, based on their finances. We wanted to get an idea of how confident people feel, particularly in the year 2020, because it’s been a really unusual year. So we went out and surveyed just over 6,500 Canadians across Canada to understand how confident they felt. We also looked at, not just their confidence, but how well they managed their money based on how they answered certain questions.

Tom: You mentioned that people are getting more financial literacy in the past decade. Is that then a case of maybe knowing “a little” is kind of a dangerous thing? Because it sounds like it’s boosting their confidence yet they’re not necessarily performing with it in the end.

Romana: Yes, anecdotally, I think we can all relate to this. Just about everyone I know has either said or has had someone say to them, “Oh, I wish I bought this stock at this time when I knew they were going to be a really big company.” Even I’ve said it and I know lots of people have said it. The problem is that sort of statement almost illustrates how little we know about finances in general. We think that investing is as simple as jumping in at the bottom of a company that’s going to do really well. But there’s a lot more to investing. We think that buying a house is all about getting the best mortgage rate, but it’s actually about debt management. We think about money management as making sure we have enough to pay our discretionary expenses, our Netflix, our Spotify, et cetera, and maybe have a latte in the end. But it’s not. And quite often we think that in order to be good money managers we need to understand everything about finances. And in reality, we’re managing money every day. When I’m buying a vegetarian dish at the local supermarket, I’m managing my money. So in terms of financial literacy, it’s still considered this highfalutin thing that’s out of reach. In the last decade, there’s been a big push to help people understand that financial literacy is available to everyone. It’s accessible and really practical. So we’ve gained in confidence but that doesn’t necessarily mean the skill set is there because we don’t have a national or even a provincial financial literacy program. It’s not taught in schools. I think you can take paid courses if you’re a youngster—a young adult. I know you can take courses when you’re when you are an adult too, of course, but you have to take your own initiative and a lot of people are intimidated.

Tom: Personally, I’ve mentioned on this podcast too, I agree with the idea of financial literacy in high school or college if the student will listen to it. One thing I remember when I was in college, one of my economics teachers did the whole breakdown. If you invest in your 20s, here’s how much better you’ll be off than if you invest in your 30s. Unfortunately, I didn’t seem ready to listen to that. So I completely support financial literacy in high school and college. But somehow it needs to be made interesting enough so it gets through to people at that age. Do you have any ideas around that? Is there a way to make this happen so somebody that age is actually going to absorb and follow?

Romana: Absolutely. I think this is the problem with financial literacy in the past. We’ve often assumed that it has to be a standalone and it doesn’t. When I first started talking about personal finance and money management, I was speaking to groups of women—large and small groups. This is going back almost two decades. A lot of times when I went into the room, I would ask who (in attendance) considers themselves knowledgeable about finances and knows how to manage money? And no hands would go up. Then I would ask questions like, “Okay, who went out and bought a pair of shoes the last month? Who has bought a coffee today?” I would ask all these questions and then I would help them understand that everything they’re doing is actually money management and when they look at the end of the year to figure out how much they can spend on hairstyles, clothes for work, gifts for friends or charitable donations, that’s all money management. But it was so practical and every day to them that they didn’t consider it money management and they didn’t consider that financial education. They didn’t see it as knowing about money. They thought they had to understand what an ETF was from the inside out or understand what a deferred fee mutual fund is. They thought that was financial education and financial literacy and what I had to explain to them is that financial literacy is a big overarching concept that’s about many little things. It’s not about mastering all of them. It’s about mastering some basic fundamentals and then pursuing what you’re interested in. And like you said, I too, can relate. When I was in my 20s I had an RRSP and when I wanted money, I cashed it out. I think back now and realize I paid withholding tax and all these extra fees that I shouldn’t have. Why, because I didn’t know any better. I knew enough to listen to my father and start investing young but then I went against all the principles of investing at an early age just completely destroyed the gains on that. But I didn’t know because I didn’t have the impetus to know. It wasn’t until a little bit later when I was given a reason to actually understand about investing and making your money work for you that I really began to pay attention to it. So there are ways to do this. I have two young boys. I do not sit down and talk to them about investing and compound interest. They do not care. However, I do talk to them about saving, budgeting and understanding the importance of calculating how much you need to save in order to buy something and about delayed gratification. That’s all financial literacy and if we don’t understand that, we will never gain the education or the skill set to be financially literate.

Tom: That’s a great point about the basics, especially to get them where they’re at in their stage in life. You mentioned the high fees. I had the same problem when I first started investing. I bought a bunch of mutual funds that had high management expense ratios. I thought I was doing the right thing. I thought I was picking the good past performers and making this big portfolio that ended up overlapping in all sorts of ways that a nice, simple, index fund could have solved. But when it comes to the basics I will give myself credit for at least starting at that point. Because even in a in a high expense, at least it’s that first step of realizing, “I need to invest. I need to save. I need to not have credit card debt.” Even with I was starting out some of these basics existed. But I do give myself a hard time sometimes. When I came out of college, I had some credit card debt. Nothing massive. But I quickly realized that credit card debt is not the way to go. So, yeah, I think basics could go a long way. The 20 percent you might know could help you out with 80 percent of your finances.

Romana: Oh, 100 percent. And I think we don’t celebrate that enough. Learning how to budget. You’re a student and you have to have enough at the end of the month to have some food. That’s an integral part of it—delayed gratification. It’s an integral part of financial literacy. If you don’t have those basics and fundamentals, knowing how your mortgage rate interest is calculated is not going to help you. You need the basics first. I think that’s why our study actually illustrates something extremely important, which is that we need the confidence to go out and actually execute the skills, even if our skills are poor. Because we need the confidence to try and fail and do better the next time. I think there’s a lot of “shaming” these days. I don’t know if it’s indicative of where we’re at culturally, but there’s a lot of shaming such as, “How dare you spend that on the latte?” I don’t want to slam any one generation, but I think millennials got hit pretty hard. I’m not a millennial, but I think they got hit pretty hard with this idea of luxury spending. But really, it’s value-based spending. Maybe you value having a latte each day. It’s what you value. It’s about knowing where you want to spend to allow you to have values for the things that you want and then understand the principles behind that. Our study definitely helped us see that confidence is important. There’s lots of studies out there that to help illustrate how important confidence is. We have that confidence but now we have to back that confidence up with actual skills. We can start by doing the basics, whether it be at home or in the school or just by learning ourselves. If you’re a student, a young adult and you want to buy your own car, how much does that car cost? What would it cost if you had to finance it? And what would be the ultimate cost now that you have to pay interest on that debt? Is it worth it? It’s a depreciating asset. Do you know what that means? Look that up. All of these things help build our financial literacy.

Tom: Yes, I think anyone looking at something like a car, especially if it was a new car, looking at the depreciation while their interest is adding up the other direction might make them look at it a little differently.

Romana: Oh, don’t talk to me about all that… That’s where my value is. I will not buy a new car. I know lots of people that do but I just—that’s just not where my value is.

Tom: I have a list of some of the stats here. There are just two I wanted to call out together. Seventy nine percent report that they are good at making ends meet. But on the opposite end of that, I see 78 percent said they’d run out of money in 90 days if they lost their job. That seems like a complete contradiction. Again, is it just because they have this confidence but haven’t fully realized what’s needed? Maybe a bigger emergency fund or something like that?

Romana: You hit the nail on the head. I think making ends meet is entirely different than strategically planning, financially. When we plan financially, it means that we are not hit with a sudden loss or expense we can’t cover. Making ends meet means that I pay my bills on time but I’m not planning for the future. I’m not doing anything to make sure that I get ahead with either a financial goal or something else that needs to be met. And that’s the problem with making ends meet, it’s hand-to-mouth all the time. And it’s why we have people say, “I would run out of money in thirty30 days,” or, “I’d run out of money in 90 days.” And yet we all know the importance. Eighty-eight percent of people surveyed said, “Yes, I know how important it is to have an emergency fund. And I also know that it’s supposed to be about six months of my expenses.” And yet, 70 odd percent of people said they would run out of money within 90 days. So within three months they’d be “cash poor.” So, yeah, there is a bit of a disconnect. And part of the problem is that we are a very immediate gratification culture. We don’t really want to think about the future. We don’t really want to think about retirement. That’s decades away. But the thing is, you do get to retirement and you will need funds and you don’t want to be scrambling at age 50 to try and make up that loss.

Tom: One thing I was just thinking was the way you explained making ends meet. When people say that, it sounds like a positive. They think they’ve got it together because they can make ends meet. But a more negative way to say the exact same thing might be living paycheck-to-paycheck. Going back to mindset, it’s kind of saying the same thing but one sounds a lot worse than the other.

Romana: I would absolutely agree. I think it is living paycheck-to-paycheck. And a lot of people have are okay with that, partly because we’re in a culture where there are Black Friday sales, Boxing Day sales, retail sales—the newest and latest… It’s hard to say no to these, myself included. It’s hard to say no to the next gadget or thing that you really want. But then you need to look at how that impacts me in the long run if I have nothing left over now? I think we’re also in a sort of culture that deprives ourselves. It’s either all or nothing. Either we pay off all our debt and then we can spend, or we pay off none of our debt and just spend now. At some point we need to balance out a little bit and understand that depriving yourself is just as bad as spending so much that we don’t think about the future. There was actually a financial planner in Ontario that pointed that out to me. I did this big piece on debt management and how to pay off your debts and what’s the best way to do it if you really feel overwhelmed by it. There are all these strategies like Snowball—all these things you can do. And he actually gave me a point that I thought was so profound. He explained to me, “The best thing you can do is build in those rewards for yourself because paying off a $500,000 mortgage seems almost insurmountable.” When am I ever going to get that done? “Gradually, over time you will. But if you save and save and save, rent out every single room in your house in order to get extra money and don’t really live for today, then you’ll feel like you are depriving yourself. There are people that live fine with that, but most of us wouldn’t be so you need to build in those strategies of rewarding yourself for taking responsible steps.” So, it means saying, “I’m going to pay off $5,000 of debt this year. And as a reward, I’m going to take $500 and buy myself whatever I want.” That’s a perfectly acceptable solution. It allows you to feel like you’re gaining for all your hard work, but it also allows you to achieve those really monumental and important financial goals that allow us to live now and in the future.

Tom: Yeah, that’s a great point about now and in the future. One of the stats I found interesting related to that says 77 percent are willing to neglect saving for retirement in order to buy a home sooner. This is one I was a little tough on. Maybe it’s a personal opinion on where the real estate markets lay. Where do you like personally on whether people should be paying the house down or investing? Or is the answer a little bit of both?

Romana: Oh, I love this question. I love it when people ask me this question. The answer is, it’s not that simple. And I’m very clear about this. I get this question every single time something economically happens to the market. Every single time there’s an issue with interest rates. Every single time my friend wants to buy, sell, or whatever. The answer is never the same for every single person. You have all these general rules. I remember being on a panel with a variety of really important financial people in Toronto, Canada who were all saying you shouldn’t buy housing. It’s a terrible time to buy housing. The housing market has escalated beyond belief. It’s overpriced, unaffordable. Don’t buy now. This was four or five years ago. Anyone who did buy then will tell you that they’ve done very well in the last four or five years and that it was a perfect time to buy. My answer was entirely different. My answer was, “Let’s look at your personal financial goals. Let’s look at what you want to achieve financially and decide what works best for you,” because the answer to that question has nothing to do with the market and everything to do with your personal financial plan. My response would be you can’t answer that question until you’ve understood your goals and have actually put on paper your personal financial plan. Once you’ve done that, then you can take strategic action to achieve those goals because financial decisions are not made based on money. They’re made based on goals. I cannot get my husband to spend less on his outdoor survival gear—and he spends a lot on our survival gear. I can’t get him to spend less on that. But what I can get him to do is understand if he spends on that, we have to give something up as a family or him personally, in order to meet our goals. And when he looks at everything he says, “You know what? I don’t need to buy lunch. I don’t need those coffees. They’re not that important to me.” And without badgering or belittling him—without doing anything, he just makes that decision and takes responsible action. And that’s how we meet our financial goals. The same applies to whether you should pay down your mortgage or invest. It depends on your risk tolerance and your financial goals. I personally have a higher risk tolerance than even my husband. I’m perfectly comfortable with taking out debt (keeping a mortgage) in order to invest right now. Why? Because my mortgage rate is really, really low. Based on my calculations and research, I think I can get a better rate of return if I invest. So that’s what we do. We don’t do all of it. We pay a little bit more on our mortgage and make a little bit of investment. It’s about my husband, my sense of risk and tolerance and our future goals. And no one person is going to have the same strategies. You have to work together as a team if you’re in a partnership—in a family. But it really does depend on what you believe. I think people that are just socking away and making sure their mortgage is paid off within five years is excellent. Do it. That’s awesome. But it’s not going to work for everyone.

Tom: I love that answer because I wasn’t so sure if this was a negative or not on this one point of the survey. It does depend on the person. And when you mentioned the goals, personally, I like owning a house. I don’t want to be a renter. I know that’s a tricky subject with some people and depends on where you live in Canada. I couldn’t imagine buying a house in Toronto or Vancouver. I’m in Alberta, so it’s a little different. Maybe my mindset would be quite different if I lived somewhere where it was going to cost me a million dollars for a house.

Romana: Well, I do live in a very expensive city—North Vancouver. I have lived and still own property in a very expensive city too, Toronto. When people ask me about these really expensive cities where it’s still just astronomical and ridiculous to buy in, my answer is, “Not if the math doesn’t make sense.” Sometimes we need to look at just the math. And sometimes we need to understand that the desire to own a home is more than math. I think, in part, we did this survey to understand that. Here’s the pandemic where the global economy is suffering, people are losing their jobs and suddenly they’re out in droves, buying houses, spiking the housing price market. Why? We wanted to understand that. We might intuitively understand but we still wanted some data to help support our assertions. My assertion was (and always has been) that buying a home isn’t purely a mathematical or financial decision. If it were, no one would own a home in Toronto or Vancouver. It would be ridiculous. But it’s not. It’s not purely mathematical. It’s very psychological. And for the same reason you probably bought your home, I bought my home. I bought my home for more money than I think it is worth but I bought it for psychological reasons and I paid a premium. I bid against four other bidders on a home that I wouldn’t even look twice at 6 years ago. But I did that because I wanted to be in a certain neighborhood, in a certain school zone. I wanted to be able to walk my sons to school. I wanted certain amenities close to me because that was important to me, psychologically. So I was willing to pay what I would consider premium. I could have gotten a similar stock in a similar location in another part of the greater Vancouver area, but I didn’t want that house because of what was around me. And that’s a psychological decision. It’s not a poor financial decision as long as the math makes sense. So, when my husband and I sat down and did the math, we knew we weren’t going to flip the home. We weren’t going to sell at a loss. We were never going to be pushed into a financial decision that would make it unfathomable where we wouldn’t be able to pay the mortgage so it made sense for us to be able to buy this home and pay down the mortgage.

Tom: With this real estate versus investing question, we don’t have a crystal ball so you can’t answer other than to look backwards (when it comes to the numbers side) because you don’t know where real estate’s going to go. You don’t know where investments are going to go. When I bought my first place, I was a little concerned that the market in Alberta, midway through the oil boom, it was already up 30 percent. And I was thinking, “Gee, I wish I had bought sooner. If I buy it now, I’m at the peak?” And I was not at the peak. It could be the same with these more expensive cities where it’s a million dollars now but you can’t tell it’s not going to be one and a half million dollars in the future where that may outpace your investments. I like that you just have to make a decision based on values and goals because the real mathematical answer can only come from looking backwards.

Romana: That’s an excellent point. Part of financial literacy is to really understand that we are making a lot of our decisions based on history. History repeats, but not in the exact same way. And they also had these black swan events like a pandemic that throws everything up. When we make these decisions based on historical information, we also need to understand if you’re stretching yourself. Whether it be your investments, a house purchase—whatever purchase you’re making, are you stretching yourself? Are you going to be forced into making a decision in the future that would put you in a bad predicament? So my big takeaway for anyone that asks my advice when it comes to the housing market right now is, don’t market time. That’s speculation. That’s not investment. If I’m going to try and time the market, whether it be investments like a stock or an ETF or a house, I’m doing speculation unless you have educational accreditation like you do, Tom. I don’t have that so I don’t want to speculate. I want to make smart strategic decisions by looking at the market, making value-based decisions and doing the math for myself. And when I do that, quite often I’ll make better decisions. So if I buy a house and it doesn’t appreciate… And this actually happened to us. We bought at the absolute peak when we came to North Vancouver—the absolute peak. And then two years later our house value went down on paper and everyone was asking me, “Are you freaking out?” And I said, “No, why? Why would I freak out?” My house may be worthless now on paper but I’m not moving. I’m not selling. I haven’t lost anything. I’m still in the same house and I’m still going to be in the same house five years from now. And historically, we know real estate always goes up. It’s when you’re caught in a bad situation where you have to make a decision on a debt that you become someone who loses money on real estate. It’s really about making decisions where you have wiggle room to make smart decisions, strategic decisions. Decisions where you’re not forced into a corner. That’s what you want in any given situation, whether it be investments, buying a home or an investment property.

Tom: I like the idea of strategic decisions. Using a house as an example, you don’t know if it’s going to go up or down. But one thing you do know is if you are able to afford that mortgage payment. That’s something where you don’t want to put yourself in a position where you can’t afford it because then that’s when you end up saying a few years down the road, “Oh, no. Now I have to sell on a dip because I just can’t keep making these payments.”

Romana: When you think about all the individual the families that buy—and this happens a lot in Vancouver which is why you hear these stories. They buy based on a two-income household. Both individuals are making a really good sum and then someone loses their job and they can’t find employment for their skill set for 6 to 9 months. That 6 to 9 months is supposed to be your emergency fund. What if you don’t have an emergency fund because you bought this large house? You needed furniture to go along with it—whatever the case may be. This is where we get the snowball effect of not having the foresight to be able to say, “I need to make some more strategic decisions financially. I need to take my financial literacy and apply that knowledge and use it for smart skills so I can make sure I can live today and plan for tomorrow.” This is what we need to do. I did not buy my dream home. I can guarantee you that. My husband is building a lovely portion of it so that it’s going to be a nice home but it’s not our dream home. It’s on a busy street. And a lot of people ask me, “You’re in real estate. Why would you do that?” At the time, we were confident with all the information we had, that interest rates weren’t going to go up. And I just wasn’t willing to take on a huge debt in a very expensive market just because it was a smart thing to do because real estate always goes up. I really wanted the wiggle-room that if we lost a job or had a financial setback, we would be able to cover the mortgage costs and whatever happened with one income and be fine about being able to pay off that debt in time based on our plan. So we bought a smaller house that wasn’t as expensive. And I don’t regret the decision at all because when the pandemic hit, we were not scared. We were okay. We had that financial wiggle-room. We had an emergency fund and had made decisions that allowed us to weather a storm. I know not everyone is in that situation. But it doesn’t matter what snack-bracket you’re in. You can always make decisions or plan so that you can give yourself wiggle-room. It’s about understanding that you need some delayed gratification for all the things that you want and also reward yourself for some of the things you want now.

Tom: I like the wiggle-room idea. When I went for my first mortgage on my first house, the amount of house they told me I could get, I did not feel comfortable with. I looked at what the mortgage payment would have been (for that amount) and it was almost half of my pay so I wasn’t comfortable with that at all.

Romana: A lot of times lenders will give you up to that amount because they bank on the fact that you will not buy high quality food. You will not go out—you won’t do anything. You will do whatever it takes to pay that mortgage. They say, “We don’t mind. We’re going to make money off you anyway.” But the big thing is, that’s their budget. You have to look at your budget. What can you afford? And quite often that’s very different. My colleague Alison and I actually talk a lot about what house can you afford? What’s a realistic budget? What do you really pay as a homeowner? Because it’s a lot more than you anticipate. And when you look at that from a purely mathematical or financial perspective, it’s all about investments and returns. Owning a home isn’t the best strategy, but it is a smart strategy if it’s part of your psychological need or your overall financial plan, if you can actually use it as part of a tool kit, as part of your overall financial plan. But if it’s purely mathematics, if you look at the returns on housing versus the returns on investment—investments always win out, historically. You have to look at all these things, the wiggle-room, historical factors, your personal psychological factor. A lot of times you want to boil the, “Rent versus own,” or, “Pay down your mortgage versus invest.” These are really simple questions with really simple answers. I’m constantly saying they’re not that simple but they’re not complex either. It just requires a little bit more thought where you may have to slow down the conversation, slow down the thought process and understand what your actual goal is and how you can get there. What are the multiple ways to get there? And what’s the way that works best for you and your family?

Tom: The final thing I wanted to cover that I purposely left to the end because it’s an “end of life” thing is, when you’re planning for the future two of the steps I found concerning is one in five don’t have life insurance, and a little over half of Canadians have a written will. Basically, nearly half do not have a written will and the majority do not have life insurance. I know we could certainly say not everybody needs life insurance depending on their situation. But in general, it’s a little concerning that people aren’t preparing for the final stage of life.

Romana: If there is one thing I could say to people if they were going to take anything away is please, please… Rather than look at whether or not you should be investing in TELUS stock, oil stock or whatever—go and get a written will. You can go online and get fairly cheap, fill-in-the-blank things. Or you can go to a lawyer for $150 to $500. And buy life insurance. The reason I say that is, I personally, anecdotally, have had in the last two months, two individuals come in their early 40s and tell me they have stage two or stage four cancer. These are young individuals with families. You’re really opening yourself up to a tremendous loss, both emotionally and financially when you don’t actually take care of these estate planning requirements. Getting a will—it’s not fun to talk about but a lot of cultures shy away from the idea of talking about death and what to do. But we have to get over that. It’s not something that we should shy away from. If you love someone, you should be able to talk to them about what you want for them—what is best for them. I know I love my family. What’s best for them is for them to not have to grieve and scramble to pay the bills. So I make sure that if I were to pass on or be put in a situations where I can’t earn a living any longer, they’re going to be taken care of. It’s the same thing with life insurance. And we’ve heard this before. My husband and I have had friends sitting on our dining room table telling us how so-and-so died and it had to go through probate. The next thing you know, they only had half of the estate left because the taxman took the other half because that’s the tax owed on an estate when you don’t have a will. And that’s not probate fees. That’s just tax owed on life because they didn’t do any estate planning. And so I do struggle with that. I think it is sad and dangerous because you really are not preparing your loved ones to be able to deal with the emotional consequence of you passing if you don’t actually take these steps. The nice thing is, is that life insurance is really easy. Even if you get enough to cover your funeral expenses and the first 6 months of expenses, it still gives your family wiggle-room to be able to do something and figure this stuff out.

Tom: Yes, life insurance is similar to my advice with emergency funds. More is better but having something is better than nothing as well. I’ve found with life insurance too, just talking to some people, obviously, with things like preexisting conditions and everything, getting it when you’re younger is helpful because then you can lock that in before you hit your 40s and all sorts of health problems start popping up. You’ll pay less overall. The other thing on the “will” side is, wills don’t have to be complicated. I think a lot of people look at them thinking, “This item has to go to this person. And this is going to mean the most to this person…” but our will is very simple. If I were to die, it goes to my wife. If we were both to die, it goes to the kids. It’s split evenly between the kids. That’s basically all it says. It doesn’t get into detail giving this item to this person and that item to that person. It’s as simple as can be, but it’s in place.

Romana: Just get a piece of paper and sign it. It’s not the best thing but something is better than nothing. I absolutely agree with you, it doesn’t have to be complicated. We overcomplicate these things. We overcomplicate finance. We think that we have to know how to invest well and make astronomical returns to be smart at it. No. Just learn how to budget, delay your gratification, figure out a few financial goals, and allocate the money. That’s financial literacy right there. When it comes to wills, the same thing… I think the hardest task we have is trying to understand if we both pass, who takes care of our children? That was the hardest part. Everything else was easy, 50-50 all the way down the line. We did have to make an amendment because apparently both my husband and I, prior to understanding what this meant, thought that a year on life support was sufficient. And we’ve now since amended that because, unfortunately, we’ve gone through that with a family member. But these are the things you need to discuss. My big takeaway on anything to do with finances is, it’s a lot like a relationship. If you can’t talk about the intimate stuff, you shouldn’t be sharing it. It’s finances. If you can’t talk about money with your spouse, what to do with it, how to deal with it when you’re alive and when you’re dead, you shouldn’t be combining those finances. You really need to understand what you want and what’s best for the people you love.

Tom: So to wrap up, what do you think the next steps are? Whether it’s an individual person or us as a country, what can we do to switch these numbers around a little bit so that the results start matching the expectations?

Romana: Well, the first thing I would say is do more of the same. In the last 10 years, the proliferation of financial bloggers, financial journalists, media covering personal finance has exploded. And I love it. I love the idea that everyone is interested and it’s accessible. And it’s not about educated people having this information and we have to go to them. It’s about everyone getting access to this information and being able to use and apply it for themselves. I love that. So, I’d like to see more of that. The other thing I think we need to understand is that it doesn’t have to be complicated. Start with the basics. If you can master the basics, you can do anything else you want. Do the basics across the board with life insurance, estate planning, saving, spending, investing. Once you’ve done the basics then you can start to elevate or increase your knowledge, your skills and your confidence in each individual area as you see fit or as your interest provides. All of these are personal responsibility things. The other thing I would really love to see is a national financial literacy program start in elementary school. We talk a lot about how our teenagers need to understand how to do this, how young adults and adults need to do that… There have been plenty of studies and plenty of evidence that shows the younger you start, the better. If we can get these fundamentals, these basics, into kids as young as two or three or four years old, we’re actually setting them up to be better, more responsible consumers. That will help alleviate a lot in the future when it comes to credit card debt or anything else like that.

Tom: This has been great. Thanks for running through all the surveys. Can you let people know where they can find you online?

Romana: Yes, you can go to zolo.ca. You can find a whole manner of things on everything to do with personal finance and real estate. I can be found @rkhomeowner either on Twitter or Facebook. And I also love hearing from people that have questions or problems they cannot solve. I actually do a lot of that on the side. I just talk to people that have problems and try to help solve them.

Tom: Great. Thanks for being on the show.

Romana: Thanks, Tom.

Thank you, Romana, for showing us that anyone can learn the basics of money management and improve their finances. It doesn’t take an expert. You can find the show notes for this episode at maplemoney.com/127. Did you know you can watch videos from our past episodes on YouTube channel? If you’re interested, you can check them out on maplemoney.com/youtube. Make sure you hit the subscribe button while you’re there. I’m looking forward to having you back here next week when Diania Merriam is on the show to discuss flexibility in her path to financial independence. See you then.