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Millennials are often debt-shamed about buying fancy coffee, but chances are that they are too time poor or don’t have the resources to think Starbucks is a way to treat themselves.John Lehmann/The Globe and Mail

Frances Woolley is a professor of economics at Carleton University. Follow her on twitter @franceswoolley

November is financial literacy month. Canadians are being advised: Start with a budget. It is about as effective as declaring National Fat Shaming month, and advising Canadians: Start with a diet. Saving money, like losing weight, requires fundamental lifestyle changes. But it is hard for anyone to change the way that they live.

Take, for example, one of the standard pieces of financial advice: Give up that morning latte, and other frivolous habits, and soon you'll have saved enough for a down payment on a new home. As someone who works at a university, I have some sympathy for those who rail against millennials with their lattes. Here am I, bringing my coffee from home in a Thermos, and I see students who are less affluent than me sipping fancy drinks from Starbucks. What would it take for them to do what I do?

To begin with, it would take time: an extra 10 or 15 minutes in the morning. Second, it would take capital: a kitchen with a coffee machine and space to store stuff. Third, it would take know-how: coffee brewing skills. Finally, it would take self-discipline: to go to bed early, and get up in time to make coffee at home.

Financial literacy education tries to remove that last obstacle, self-discipline, by lecturing people about the virtues of managing money and debt wisely. But, for the most part, it does not work. As Carleton University economist Saul Schwartz, puts it: "Financial education might have some positive effects on financial outcomes, but they are modest at best." People are simply not very good at exercising self-restraint. When consumers have tap-enabled credit cards that make purchases painless, it is hard to resist the temptation to spend.

Governments, working together with business, could do things to help people be strong. For example, studies have found that people spend more when they have access to credit cards, because no one likes parting with her hard-earned cash. Anything that makes it even fractionally more unpleasant to pay by credit card would, therefore, be expected to help people save. One example would be requiring people to actively "opt in" to tap payment on their credit cards, instead of automatically enabling tap payment on all new cards.

Another would be to follow Australia's model, and allow businesses to pass credit card processing charges on to their consumers, charging a surcharge on those who pay by credit card. I would also like to see credit card issuers make it easier for people to sign up for automatic payment of their credit card balances, instead of the default being missed payments and mounting debt.

Changing the rules governing credit cards would help people control their spending without having to exercise quite so much willpower. But it would also cut into credit card firms' revenues, and so is unlikely to happen.

Yet if pushing people to spend less is politically impossible, perhaps we can address some of the other obstacles to making fiscally responsible choices, like lack of know-how.

At one time, schools put more emphasis on do-it-yourself know-how, with mandatory shop or home economics classes. If everyone who graduated from high school knew how to make lentil soup, or other low-cost, nutritious, easy-to-prepare meals, they would have an alternative to eating out, and the power to make different choices. Unfortunately, equipping schools with kitchens is expensive. So students learn budgeting instead.

Financial know-how, like being able to read a bank statement, or knowing what registered retirement savings plans (RRSPs) and tax-free savings accounts (TFSAs) are, does have value. Much financial management is nothing more than basic arithmetic, like adding up expenses. A recent U.S. study found that increasing high school mathematics requirements improved graduates' financial outcomes – while mandatory personal finance courses were completely ineffective. Again what matters is people's capabilities; what they can do and achieve.

At the same time, it is worth asking: is it possible to make people's financial lives simpler, so that people don't need so much know-how to get things right? For example, for years the federal government has been trying to give away Canada Learning Bonds to low-income children. But because program is so complicated – it is delivered via registered education savings plans (RESPs) – the majority of eligible families miss out on it. The problem here is not a lack of financial literacy, but bad program design – and the solution is to find a better way of delivering funds to low-income children.

Yet even with better nudges, better know-how and better financial products, people will still buy lattes. Some are just too "time poor" to make coffee or breakfast at home in the morning. Some do not have a nice kitchen – and figure that, since it will be decades before they can afford to get into the housing market, they might as well enjoy life in the meantime. Some simply choose to spend their money this way. And they may be making a smart choice. Saving to buy a home might have been the best financial strategy in the 1990s, but that does not mean it is the best financial strategy now.

It's time to stop "debt-shaming" those who, faced with inadequate incomes and rising costs, are not able to stick to a budget.

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