Written by Anastassia Pogoutse
It’s probably fair to say that most graduate students don’t think too much about managing their money. Some of us might have started saving or have had to navigate debt, but generally we’re focused on how little money we actually have. Nevertheless, according to this month’s Career Seminar Series speaker Annie Zhang, all grad students should be taking a serious look at their finances and planning for the future.
Annie Zhang is a Chartered Professional Accountant (CPA) who works in financial services. She recently founded a website called FinLitMe with the goal of improving the general public’s financial literacy. Two of her blog posts, “Millennial Paradox” and “Millennial Relevancy” have appeared on our blog. Annie’s seminar, “Financial Literacy 101”, expanded on these posts. She covered three main themes: the time value of money, budgeting, and how financial literacy is important in people’s personal and professional lives.
The seminar covered some familiar territory, such as the importance of keeping track of expenses and planning for big life events, with less familiar concepts thrown in. For example, one concept that I’ve never thought much about is the time value of money. The time value of money refers to there being a greater benefit to receiving money sooner rather than later. This is because the value of a dollar gradually decreases due to inflation, and also because receiving money later decreases the amount earned on any potential investments. This concept is particularly important for those who have most of their money in a savings account. The interest rates on savings accounts don’t keep up with inflation.
Time value of money ties into another important topic Annie addressed – investing. While buying shares on the stock market is risky and unrealistic for those with a grad student income, other investment options exist, such as fixed-income securities (a.k.a. bonds) and mutual funds. Investing proved to be a popular topic with the audience and the focus of the question period. One attendee, Caitlin, who is pursuing a PhD in Psychology, mentioned that she had enjoyed getting to “learn about investments and the risks associated with them”.
Money management may not seem like an exciting topic, but evidently can be interesting to learn about. There is a wealth of resources out there for those who want to learn more. I have included some links below, and more information can be found in Annie’s posts. Financial advisers at your bank may be able to help you get started with investing (though keep in mind that they work to benefit their employer).
Be on the lookout for the announcement for October’s Career Seminar and in the meantime, check out FinLitMe.