One of the issues we in the personal finance business have to face up to is that telling people what to do with their money isn’t enough. As important as the message is the way it’s framed and explained. Can you do it in a way that gets people to act, rather than just nod or click to the next story online?
Vanessa Bowen has some thoughts on this. As a chartered professional accountant and money coach for women, she works with clients to change the way they relate to money. Here’s an edited version of an exchange we had by e-mail, including her own discovery that making more money doesn’t solve your money problems:
Q: Vanessa, can you tell us a bit about your background and how you came to be a money coach specializing in helping women get control of their finances?
A: Like most people, money wasn’t the topic of discussion around our dinner table. So, when I started my CPA career and began making money, overspending and racking up debt became my new norm. Luckily, I had a mentor who sat me down and taught me how to better manage my finances. As I was climbing out of debt and changing my own money habits, I began sharing my journey with other women, and I realized that we all held the same insecurities, beliefs and relationship patterns with money. I decided to focus on helping women with their finances because I’ve lived their journey and I understand that financial independence can change a woman’s life.
Q: Let’s say you’re sizing up a new client - what are the top two or three pieces of information you use to form an impression of someone as a money manager?
A: I want to know their money story – their financial struggles, mistakes they have made and continue to make and their thoughts and feelings about money. I also want to know why they are coming to me for coaching, and why now. The answers to these questions provide a good indication of whether the person is truly ready for financial change. While some people think they are, I’ve found many aren’t actually ready to shift their habits and do what is necessary to create their own financial freedom.
Q: You talk on your website about thinking in your younger years that making more money would solve your financial problems. I feel like a lot of young adults today have the same idea in talking about side hustles and high-risk investing. What’s your advice to those who think all will be well if they have more money?
A: If you can’t manage a little, you won’t be able to manage a lot. Making more money while having the same bad money habits is only going to get you into a bigger financial mess, faster. I think people often use this as an excuse to continue avoiding their finances – I know I did. I tell my clients all the time, it’s not about how much you make, it’s about what you do with what you make. Create the proper money habits before you make the money and you’ll be more likely to keep that money instead of wasting it away.
Q: What are the common themes among your clients who in the past tried and failed to get their finances under control?
A: Lack of financial education and accountability — even with the best intentions people still end up having their money in the wrong accounts or throw it away on bank fees. I think there’s a bit of a pendulum when it comes to fees and people sometimes swing towards the fee side without noticing — I had a client who was paying $75 a month in bank fees! But there’s another side that rewards you for banking. We switched her over to a no-fee PC Money Account so she could put that $75 towards her debts instead. Now she’s also earning points on all her purchases which frees up even more cash for debt payments.
Q: Let’s flip the previous question around - what are some signs of being in control of your money and on the path to financial independence?
A: Having a budget, spending smart and building your own financial security. Budgeting may seem like a chore, but people who are in control of their money take the time to do it - a half hour a week to take stock of your finances can be all that’s required. People who spend smart are always looking for ways to earn a return on their money. With interest rates at all-time lows, many are turning to bank accounts that reward them for spending. When it comes to financial security, people in control of their finances also have an emergency fund. If the last year has taught us anything, we never know what life may bring.
Subscribe to Carrick on Money
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.
Calling all parents
Are you paying thousands for daycare? Are exorbitant childcare costs preventing you from paying down debt, investing, saving for retirement? To share your personal story on our Globe Stress Test podcast, please email personal finance editor Roma Luciw at rluciw@globeandmail.com
Rob’s personal finance reading list
About those unconditional offers for houses
In a hot housing market, buyers are often told that not including any conditions makes an offer more likely to be accepted. A mortgage broker argues here that you should always make an offer conditional upon financing, and he includes a real-life anecdote that will get your attention.
Too good/bad to be true
Prepare for your trust level for online reviews to take a beating. CBC reports on the business of providing fake positive reviews for providers of goods and services, and a racket involving fake negative reviews.
The problem with billionaires
A New York Times columnist marvels at how people are obsessed with billionaires like Jeff Bezos, Elon Musk and Bill and Melinda Gates. He thinks the pandemic not only made billionaires richer – it has also left them “unleashed and untouchable.”
Pandemic puppies can be a handful
I have heard reports of soaring costs for puppies because of pandemic-driven demand -- $3,000 and more. Before you take the plunge, give this story about dog behavioural problems a read.
Do you have a question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.
Today’s financial tool
Vehicle shopping? Compare the fuel economy of the models you’re looking at using the 2021 fuel consumption guide published by Natural Resources Canada.
The money-free zone
In honour of Bob Dylan’s 80th birthday, here are a pair of lists of the 80 best covers of his songs. One list is from Rolling Stone, the other from a website called Inside Hook. Both give the Number One spot to Jimmy Hendrix’s version of All Along the Watchtower, which is hard to argue with.
In case you missed these Globe and Mail personal finance-related stories
- The five deadly sins investors should avoid
- Renters under pressure in Canada’s active home resale market as owners look to cash in
- Forget the bank of mom and dad — some young people have had to support their parents in the pandemic
More Rob Carrick and money coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.
Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Are your parents giving you money? • Why it’s time to stop shaming the renting lifestyle • Is now the right time to buy a house? • Why are young Canadians leaving the cities they love? • Eating in: How COVID has shifted our food spending • Crisis-proof your finances? • Can you afford to live downtown? • The cost of kids
- ✔️ The housing file: The housing boom is ripping apart the financial fabric of Canada • Shut out: A well-qualified millennial home seeker throws up his hands after losing multiple bidding wars • Big city housing affordability is over – now what? • She sold her Toronto house to retire somewhere cheaper, but it didn’t work • How young adults and the whole country win with a tougher mortgage stress test for home buyers • Can’t afford your house? It’s likely not your fault
- 📈 Investing: Robo-advisers have grown out of the novelty stage. Here’s help in finding one right for you • The 2021 ETF Buyer’s Guide: Best Canadian equity funds • The 2021 Globe and Mail online brokerage ranking: Who’s best for investing ... and answering the phone • Are these the stock market returns of a lifetime? • On the cusp of retirement and wondering about an ETF that pushes the limits on aggressiveness
- 💰 Your money: The five most important numbers for checking the health of your personal finances • Today’s freakishly low mortgage rates can’t last. What will pandemic home buyers do when they rise? • There’s a cost in money, isolation and family stress when seniors choose to remain in their own private homes • Taking CPP early can cost you $100,000 and limit your long term options • Fleeing the city for the suburbs? Watch out for higher property taxes, more cars and other costs
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.
Rob Carrick