The 3 Biggest Money Problems Canadians Face (and How to Solve Them)

I got the idea to become a financial counsellor back in 2010. I was 23, had just found my first full-time job out of university, and shared a tiny three-bedroom basement suite with two other girls in Vancouver.

I was broke. I’m talking so broke that every single dollar counted. Don’t believe me? Not many people know this, but back then I used to buy milk at this family-run grocery store. If you bought a 1-litre glass bottle of milk, it would cost you $2. If you returned the bottle, you got $1 back. I made sure to clean that bottle and return it once a week for a full year because that savings was crucial to my grocery budget.

Still, even though I was the most broke I’ve ever been in my life at 23, I had two roommates who were even more broke. You’d never know it by looking at our lifestyles and spending choices, but that’s because I started reading personal finance blogs and books in my spare time, and they spent their free time… well…being typical 20-year-olds.

Sometimes I envied them. I hated having to say no to going out with friends because it wasn’t in my budget. I mean, aren’t your early 20s meant to be the time in your life to throw caution to the wind and YOLO (You Only Live Once) it up? There would be plenty of time to worry about things like debt repayment and retirement in your 30s, right?

Even though all those finance books and blogs told me I was doing it right, it still felt like I was doing it wrong. That is, until one night when my closest roommate let everything spill out. Although she was paying less rent and earned more at her job than me, she was actually living paycheque to paycheque, owed over $50,000 in student loans, and had maxed out her credit card. I could hardly believe it. Here I was envying her life, when the whole time she was envying my money management skills.

After she shared this very intimate information with me, I helped her make a debt repayment plan that enabled her to pay off her credit card. It felt amazing to show her the light at the end of the tunnel, and made me think “How cool would it be to do this for a living?”

Unfortunately, since I’d just wrapped up a Fine Arts degree and knew nothing about how the financial services industry worked, it took me another 8 years to circle back to that idea. That still didn’t stop me from starting my own personal finance blog in 2011 and podcast in 2015, but it took me a while to gain the confidence (and accreditation) to help people one-on-one.

Now that I do help people one-on-one, for some action-taking steps after this article, here are the three biggest money issues I come across with clients and how to solve them.

Problem: Delaying important financial decisions

Solution: Make building your financial confidence a priority

Drowning in debt and over-spending aren’t the biggest money issues I encounter, surprisingly enough. Instead, financial confidence is one of the biggest issues I see from clients across the board.

What is financial confidence, you ask? It just means trusting yourself to manage your money the right way. I know it sounds simple, but it’s a significant problem that plagues so many Canadians.

You see, we’re in this age of endless information. It sounds great, but really, it means an overload of facts, opinions and perspectives. What happens when you feel overwhelmed with information? You do nothing. Analysis-paralysis. Which is why so many people aren’t dealing with their debt or investing early enough, even though they know they should.

The way to solve this? Cut out the noise and believe in yourself. Being financially literate doesn’t mean you have to read every new financial article or read every book in the library. It means taking what you need then doing something with it, and trusting your gut and knowledge that you’ll make the right choice.

Problem: Not knowing where your money is going

Solution: Track your money every month

Most of the time when clients come to me, they tell me they have no idea how they got to their present financial situation. You earn money, you spend money, how can you not know what you do with it or where it goes?

That’s easy. If you don’t track it you’ll never know! Still, I get why most people don’t do it. It sounds like it will take a lot of time and effort to organize, plus ignorance is bliss. If you don’t know, you can believe your situation isn’t as bad as it really is.

But that’s no way to live. The only way to build a financial life you can be proud of is to track your money. And it doesn’t take as long as you think. Seriously. Once you have a system set up it should take you no longer than 1-2 hours per month to input your month’s spending and net worth, and compare with your budget.

Also, guess what another great benefit of tracking your money is? Financial confidence. The more you know, the more certainty you’ll feel in your financial life.

Problem: Accepting wrong or biased financial advice

Solution: Seek the right type of financial help

People often believe that most people who have financial issues don’t want to seek help, but the reality is it can be hard to find the right type of help. If you walk into a bank, credit union or investment firm, you’ll have an easy time finding someone to “help” you, but what you may not realize until later is their version of help may be to sell you products first, and give you advice second.

If you want someone to give you unbiased advice and not sell you anything outside of that advice, that’s where credentials and titles matter. You need to look for someone who has no affiliation with a financial institution and has a title like money coach, financial counsellor or fee-only financial advisor.

It can be a hard pill to swallow coughing up the cash to pay them upfront, but working with a professional who is solely focused on helping you develop a financial plan for yourself (not just selling you products or gaining commissions from managing your investment portfolio) can make a world of difference to your financial present and future.

Jessica Moorhouse, Personal Finance Expert, Speaker, Blogger & Podcast Host

JessicaMoorhouse.com / Mo’ Money Podcast