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Through the Illuminate x RBC: Everyday Banking work-integrated learning experience, I developed my skills as a leader in the community. Additionally, I was able to expand upon my knowledge about banking, taxes, credit, and the financial system as a whole. This opportunity allowed me to simultaneously learn and teach at the same time.
Bank Accounts:
The work-integrated learning experience informed me about bank account types and their various uses, as well as how money should be allocated and used. The main takeaways from this topic were the difference between checking and savings accounts. Chequing accounts typically have a higher inflow and outflow of money. This type of account is meant to be used for everyday expenses such as purchases in-store, online, or via an ATM, and things like receiving payroll. While a savings account does not as often have money withdrawn but rather money deposited. This money earns interest and allows one to save for large or important purchases.
The Importance of Credit - Key Takeaways:
In addition to bank accounts, I learned about credit. A major takeaway I got from this work-integrated learning experience was the importance of credit in nearly every aspect of financial life. Credit is essentially money that can be accessed and used like a loan when needed. Credit is built by owing money and paying it off on time, and how reliable and likely someone is to get a loan and the terms of their loan are calculated by a score that factors these aspects. I learned that everything from getting a car to drive somewhere, a place to rent, to even sometimes a job can rely on your credit score. A key takeaway I got from this is just how much your lifestyle can be impacted by credit. As the ability to have a car, or a nicer one, to even a place to live is dependent on this. This aspect of the learning and leadership experience really stuck with me and will be something I am going to be really mindful of due to its importance when taking out credit in the future.
Investing and Taxes:
One key message of the Everyday Banking work-integrated learning experience was taxes. The work-integrated learning experience discusses investing and various investing accounts. Common types of investing accounts include TFSA, RRSP, and RESP. Additionally, I also learned the importance of filing taxes regardless of income, the taxation system, and how to file taxes. A key learning point that particularly young adults should pay attention to is how investment accounts such as TFSA and RRSP work in-relation to taxes. Investing particularly young is really important and one of the best ways to set up one’s financial future. A TFSA is an account where every year, starting from 18 contribution rooms, is provided to deposit and invest funds. These funds grow tax-free and can be sold without having to pay any taxes. In comparison, an RRSP is an account where every deposit made reduces the amount of tax someone owes; however, this tax is deferred and paid upon withdrawal. Making deposits into this account when in a higher tax bracket and withdrawing during retirement when earning a lower income is a large benefit of this type of account. How much room one has to contribute is determined by their income as reported when filing taxes.
Besides RRSP room, another key-takeaway regarding the importance of filing taxes is the fact that it provides the opportunity (if eligible) to earn tax credits. Tax credits reduce the amount of tax someone owes. They include things such as the GST/HST tax credit, tuition tax credit, and the Canadian Child Benefit. The GST/HST and tuition tax credit in particular are relevant to students. Those with an income below $30,000 and over the age of 19 are eligible for the GST/HST tax credit, and part-time and full-time students are eligible for the tuition tax credit. The GST/HST tax credit is paid four times per year by the government. While the tuition tax credit provides part time students with a $120/month credit and full-time students with a $400/month credit. Something really important to note is that only ordinary and deemed residents are eligible for these credits, and deemed residents are only eligible for the GST/HST credit. An ordinary resident is someone with residential ties in Canada that lives there for 183 days of the year, while a deemed resident is someone from a country without a tax treaty to Canada but is a resident for 183 days out of the year.
Key Takeaway - The Ease of Doing Taxes:
A key takeaway I got from the work-integrated learning experience was just how easy filing taxes can be. Filing taxes is possible via the internet, phone, and mail. I learned that so long as you have the documents relevant to yourself and a SIN number, you can create a CRA account and file your taxes through there. I always thought the process of filing taxes was complicated and difficult, and required hiring an accountant. However, after this learning journey and doing some of my own research, I learned that, particularly for students or people whose only source of income is from a regular job, filing taxes is very simple and something that can be done yourself. All that is needed for someone to file taxes assuming their only source of income is from a salaried or hourly job is a T4 slip from their employer, which can then be provided online to the CRA.
Fraud:
My learning journey also included understanding various forms of fraud and how to protect oneself from them. A key takeaway I got is how most fraud actually involves oneself in the process. Previously, the first thing that popped into my head when I thought of fraud was ATM skimmers and other forms of fraud that involve hackers. In these types of fraud, the victim plays no active role in the fraud. However, I gathered that a far more common form of fraud, which has many different methods, are various phishing scams. It is often the victim who provides sensitive information whether this be explicitly and willingly to the fraudster or in more deceitful ways such as fake links.
Be Careful What You Share and With Who:
A large portion of my findings when researching examples of fraud pertained to fraud that is phishing and largely involves elements of social engineering on the victim's part. For every instance or site I saw that talked about fraud where the victim does not play a part in giving sensitive information, I saw at least twice as much fraud involving the victim giving information. In particular, when researching different types of fraud, what I gathered was particularly fake email or text message links impersonating a company, and asking people to login or provide sensitive details via fake links, which seems to be one of the most common and emerging forms of fraud today. What I’ve gathered from this is that one of the best protections from fraud not only involves security measures such as using complex passwords, etc., but also includes being highly cautious about how and who you share your information with.
Tips for Advancing Financial Literacy and Beginning a Career in Banking or Finance:
Advancing your day-to-day financial literacy is important for everyone, especially those interested in developing and becoming leaders in the banking and finance industry. This learning and leadership journey has taught me about how important it is for the public to be educated about finance and, as a leader, how I should continue my efforts to educate my peers and the community around them regarding everyday finance.
Here are some tips:
Firstly, you should ensure any debts are paid on time and managed. This is particularly important for those seeking to develop a career in the financial industry, as many financially sensitive jobs, particularly higher up, deny employment for those with poor credit and financial history.
Secondly, you should learn and update yourself constantly about all tax credits available and the requirements for their eligibility. Finance is an ever-changing industry, and nearly everyone can benefit from learning what benefits they are eligible for, and those, particularly accountants, need to know this information to perform their duties.
You should regularly research new forms of fraud coming out. Fraud is ever-changing and adapting, and new methods appear constantly. It is important as a consumer to protect your finances. Additionally, for those interested in a career in finance, it is important as a consumer to protect your finances. Learning about fraud is essential to ensuring any personal or sensitive information you handle is safe. If you are following the law, falling victim to a fraud, especially in relation to work in a finance career, can be potentially career-ending or have severe consequences.
Final Thoughts:
Overall, this work-integrated learning experience was a really great experience to connect with others and expand on my leadership skills. By learning and teaching new information, I had to digest information in a new way and use skills I hadn’t before to teach others. Having to consider others in the process of learning is something really important. Nearly any job or future career requires you to collaborate and oftentimes take the lead; this includes considering others and teaching others in a way that they understand. Throughout this learning and leadership experience, I had the opportunity to utilize my leadership skills, analytical and research skills, and communication skills, which allowed me to develop and improve my ability as a community leader.
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