Rising Young Entrepreneurs Hub

Rising Young Entrepreneurs Hub

9.3 – Finances 101: Your Relationship with Money

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It might seem obvious to say, but it’s really important to educate yourself about your finances, especially as future entrepreneurs.

Our feelings about money today almost always can be traced back to an incident from our past, our first experience or message about money.”
– Suze Orman

What is your relationship with money?

What we think and feel about money can affect how we earn, spend, and save it. It’s important, therefore, to look at the attitudes and behaviours we hold towards money.

Take some time to fill in the My Thoughts on Money worksheet below. Don’t overthink it; just write down what immediately comes to mind for you.

Most of us learn about money from friends and family, and that means we may have absorbed certain messages about money that impact our beliefs, and also our good or bad habits around money. Do you notice any patterns in your answers in the activity above? Anything you think you need to change in order to move forward in your trek?

Just imagine…

Let’s try another little exercise around our thoughts on money.

Did you find your plans or goals change with each different amount? You might have noticed this pattern:

$10 million = focused on big dreams
$25,000 = focused on things you want
$1,000 = focused on things you need

Did you also feel different as the amount got less? A lot of people say they feel annoyed or frustrated when they do this exercise, and it’s interesting how even when you’re running through an imaginary scenario, you can actually feel a sense of loss as the amount drops down. That’s how powerful money is in our minds. Even when it’s imaginary, you can feel a real sense of loss!

What is financial literacy?

Financial literacy is about understanding how money works and how it can work for you. It means having the knowledge, skills, and confidence to make responsible financial decisions and manage your money better.

There are many benefits to being financially literate, and there are definite costs to not paying attention to your money, especially when it comes to running your own business. We’ll work through different financial concepts to help improve your financial literacy, but first, it’s important to understand your current financial knowledge.

Your Starting Point: Rate Your Financial Knowledge

Based on the questions below, rate yourself from 1–10 on your current financial knowledge, where 1= Very Low and 10 = Very High.

Don’t worry about what your score means; it’s more important just to get a sense of your starting point and where you might need help or where you need to pay extra attention, when it comes to understanding finances.

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When you look at the questions and your score:

  • Do you see any areas for improvement or gaps in your knowledge?
  • Are there any specific money topics you want to know more about?
  • Does it reveal any beliefs about money or behaviours with money you want to change, especially when you go back to your My Thoughts on Money answers?

Setting SMART Goals

We’ve discussed goal setting before in Lesson 6: Building Your Vision, so this will be familiar to you, but let’s go a little deeper. When it comes to finances, it’s very important that you set yourself SMART goals.

What are SMART goals?

Goal-setting Steps

Step 1

Define your SMART goal. Be as specific as you can. Include any costs associated with achieving that goal. Try to summarize your goal in one sentence: for instance, “I will make a list of all my spending categories,” or “I’ll save for a flight to visit my family in Saskatoon for a week.”

Step 2

Outline the steps towards your financial goal. Write down all the steps you’ll need to take, whether big or small. This will give you a clear path toward your goal.

Step 3

Look at the challenges and think of strategies for dealing with them. There are often roadblocks on the path to achieving our goals. Think about what some of these might be. What resources and knowledge do you have to overcome them?

Step 4

Set deadlines. Having a deadline for your goal is a great way to keep you on track. You may want to set deadlines for each step as well. Achieving each step will keep you motivated to the finish!

It’s important to remember these SMART goal-setting strategies when it comes to things like budgeting and saving, which we’ll look at more closely in the next topic.