Rob Carrick is the personal finance columnist for The Globe and Mail, and has been one of Canada’s most trusted and respected financial experts for over 15 years.
Carrick’s new book, How Not To Move Back in With Your Parents, hits the shelves today. This personal finance book is aimed specifically at young adults graduating from university or college and moving into the workforce.
I had a chance to read the book earlier this month and was impressed with the straight-talk and realistic advice from Carrick on the financial challenges and opportunities facing young people today. Not only is this book a young person’s guide to financial empowerment, it’s a great read for parents as they prepare to send their kids off into the real world.
How Not To Move Back in With Your Parents: About the Book
This book is comprised of nine chapters, each taking a comprehensive look at a financial topic through the eyes of a young person as well as their parents. Each chapter also includes case study interviews with young adults as they navigate through all life’s financial milestones.
Here are the chapter summaries:
Chapter 1: Affording College or University – Unless your parents are okay with you being loaded down with student debt, they should be paying as much attention to RESPs as to TFSAs and RRSPs. If your parents can’t swing an RESP, then student loans are your back-stop. Remember, scholarships are out there. Borrow if necessary, but pay attention when payback time comes.
Chapter 2: How to Handle Debt, Both in School and Afterward – Resist getting a credit card until you’re confident you can handle it. Be honest with yourself. Build your credit rating through careful borrowing. Be sure to borrow as cheaply as possible.
Chapter 3: You and Your Bank – Take advantage of student banking packages, they often cost nothing. When you enter the workforce, look for the lowest-cost chequing account and give strong consideration to online banks no fee accounts. Pay attention to your day-to-day finances to stay in control of your spending.
Chapter 4: Saving, Budgeting and What to Do if You Have to Move Back Home – Clearing away student loan debt is the first step toward good financial health as an adult. Learn about budgeting to see how much room you have to pay off debt and save. Be aware of the boomerang effect. Economic necessity may send young people back to the family home for a while.
Chapter 5: Looking to the Future: RRSPs and TFSAs – It’s never too early to start retirement planning. Compare RRSPs and TFSAs – there’s no wrong choice, but TFSAs can make more sense for young workers with modest salaries. Get on a regular savings plan, automatic transfers work best. Finally, if your company has a pension plan, jump on it as soon as you can.
Chapter 6: Mobility: Or Cars and You – Rethink the car. The financial commitments of owning a car go far beyond the payments – and all these costs keep rising. Be a smart buyer and remember the new grad discount that many car companies offer.
Chapter 7: Buying a Home – Renting is okay if you can’t properly afford the full cost of buying and owning a home. You can pull money out of an RRSP using the Home Buyers Plan, but the TFSA gives you much more flexibility. Avoid trying for the big score in the stock market and instead use a high interest savings account to save for your down payment.
Chapter 8: Weddings and Kids – Arrange the best wedding you can afford – but avoid going into debt. Prepare for the arrival of a baby by clearing as much debt as possible. Mind the cost of daycare, it may be a part of life for many years. Remember that grandparents can contribute to an RESP account for your new baby.
Chapter 9: Insurance and Wills – Students need to have renters insurance. Always shop around for your home and car insurance. And finally, buy term life insurance when you start a family.
Final Thoughts on How Not To Move Back In With Your Parents
Rob Carrick has spent more than a decade talking to people of all ages about money. Throughout the book, he offers advice from his own pre-expert past – saying he’s learned well from his mistakes so that you don’t have to. He even admits to moving back in with his parents, briefly.
Carrick takes a realistic look at how tough it is out there for young people these days, and suggests that parents can play a role in getting their kids off to a good financial start in life. This doesn’t mean parents should be running the financial affairs of their grown-up kids, but they can fill the role of trusted counsellors who have been through similar circumstances.
How Not To Move Back In With Your Parents is a great personal finance manual for young Canadians and is a must read for both young adults and their parents.
Also, be sure to check-out Rob’s Facebook personal finance community for talk about investing, retirement, real estate, banking and other financial matters.
We’re giving away a copy of How Not To Move Back In With Your Parents to one lucky reader. Share your thoughts on whether or not parents should help out their grown-up children financially. Leave a comment below for your chance to win a free copy of this book.
We’ll announce the winner on Friday March 30th.