A Money Coach in Canada

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 PhotoCredit: Joannao

It doesn’t happen often, but from time to time my clients come to me not because they spend too much, but because they absolutely can’t bear to spend a dime, and it’s driving them nuts (and likely those around them!).   This expresses itself in at least 3 different ways:

1.  Some clients find they are having to be secretive about their finances (and I mean more than the normal-kind-of-secretive) and they are starting to fatigue of the effort.  Family, friends, always these clients keep their guard up just in case people figure out they have money.

2. Another symptom clients experience is spending hours and hours researching the value of an item, and ensuring they are getting the best possible deal that can be expected.  This is not a fun experience for them, but anxiety-ridden.   And to top it all off, there is not a deep sense of satisfaction over getting the deal, but a disappointed sense in having had to spend the money at all.

3.  And then there are those we call “cheap”.  Frankly, I haven’t had a single person come to me because they thought it was a problem … but their partners have, and do!  You know the type:  Stingy on tipping.  Stingy on gift-giving.  And stingy with their partners.  Partners over time grow resentful, and feel they’re carrying the load of creating a nice life experience (dinners out, trips, a nice home).

Very often, these clients are in fact well off, or better than your average canadian bear, but this misses the point.  They are serving money as much as anyone paying crazy interest on their debt load.  Rather than life and relationships being fulsome and easy, their tension around spending spills over into tension in general.

Do you recognize yourself in this?  If so, this may be a great season for some reflection on the issue.  Here are some starter questions:

  1. What are some of the origins of this approach to your money?
  2. Can you think of recent examples of spending that caused you anxiety?  At what point did you move from simple, technical  involvement in the process of spending, into anxiety?  If you can identify the point, does that give you any clues about the underlying concerns?
  3. What would happen if you loosened your grip, just a little, on your cash, while at the same time ensuring your priorities are indeed accounted for? Is it possible that the experience may feel a bit better than you imagine?

Readers:  almost all of us experience some degree of hating to part with our money.  For me, it’s easy to spend on the little things, but dropping $2K on a piece of good furniture, for example, stresses me out (temporarily).  How ’bout you?

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Photo Credit: Michael Blanchard 

I’ve been  having a few conversations with clients/prospective clients on how to save yourself from yourself vis a vis your money. 

Here are 3 of my fave quick-and-dirty tricks:

  1. Set up a high interest savings account anywhere other than your primary bank/credit union.  Set up an automatic savings plan, even if only $10/paycheque (start small if you have to, but start!)  Do not get an atm card – repeat – do not get an atm card.  You can even go extreme – bury your online codes to make it a real hassle for yourself to withdraw the funds.  That way your true savings goals will stand a fighting change of being realized instead of subject to impulse buying.
  2. Lower your credit card limits unless you pay it off in full every month.   Most people don’t pay them off (that’s how visa/mastercard/amex make their money) and you know who you are:  Save yourself from yourself by shaving off your balance, then calling and reducing your limit.   Lather. Rinse.  Repeat.
  3. Do a quick, daily check-in with your bank accounts.  In the ideal world, we’d be so organized that we wouldn’t need this.  But who lives in the ideal world?  3 minutes to keep right up-to-date with account activity may save you a small disaster some day.

Readers:  any other crime-prevention measures you can add?

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Photo  credit: TheTruthAbout

I bet you receive irresistible visa balance transfer offers from time to time.

They go something like this:

BIG PRINT:   BALANCE TRANSFERS 2.9%

Medium Print:  for the first 6 months, then….

Fine Print:  I’ll get to that, but first,

 

These can be a good deal, but you do need to read the fine print. Be savvy.  You could stand to win, or to lose.

Watch for the following in the fine print:

  1. Balance transfer fee.  Sometimes you will pay a percentage right up front on whatever you transfer.  Factor that in – is it still a good deal?
  2.  Dramatic rate increase if you’re late on a payment.  One of my friends transferred a large balance, was a bit disorganized and missed a payment, and suddenly the low balance deal was canceled and the new rate was over 20%.
  3. Payments applied to low-interest portion first.  This is fair, but watch that it doesn’t bite you.  Here’s how it can.  Let’s say you transfer $5000 to the new card.   Then you go out for dinner/drinks and put the $100 tab on your visa.  That $100 is at the high interest rate, since it’s a new charge, and you can’t pay it off til the entire low-interest $5000 portion is paid off first. Do that a few times (go out to dinner, buy books, purchase plane tickets) and you could end up with $2 or $3K or whatever at the high interest, and again, it’s impossible to pay off until the original $5K is all paid off.

Again, transferring balances can work in your favour;  just keep your wits about you and read the fine print.

Readers:  Any fine-print that I missed?   Or any stories to share on the topic?

What to do when you get screwed, financially?  Stories I’ve heard:

One senior’s  husband secretly maxed out their joint $10K line of credit, for his own purposes, knowing full well that he did not and would not have the wherewithal to pay it back.   She was stuck with the debt,  and the lost dreams of her own.   This was years ago.   She’s paid off the debt,  but the resentment remains.

A middle aged man had worked very hard as the sole breadwinner in his marriage, only to lose the home and be driven to bankruptcy after the divorce.   Now, anytime he begins to long for romance again, he backs off because there’s no way he’s trusting another woman with his money again.

And then there was the young woman who moved across the country for a job offer, only to find herself in a crazy-making work environment, with far less earning potential than she’d been led to believe.   She eventually moved on, but figures she lost about two years of her career plus the loss of income plus the moving expenses.

And without disclosing the painful details, I’ve personally experienced what can only be described as a serious rip-off, and I bet you may have, too.

These experiences leave their scars:   Raw spots that still have the capacity to elicit expletives or angry, wet eyes.

How do we recover?

There is no “how to” or technical answer- as is  often the case, with money issues.  It’s a matter of life experience, maturity and our ability to absorb injustice without becoming a victim, or feeling diminished.

We can start by validating that indeed we suffered an injustice.  We took a hit.

We must also accept the painful truth that a lot – (!) – of injustice is perpetrated not just in tyrant-ruled countries “somewhere else” but right in our midst.

But our experience is not the end of our story, nor its defining moment.  It’s just one piece of the ups-and-downs of our financial lives.   A wide angle lens of our life, set in the context of this whole world of ours, serves us well.   We can learn to forgive, we can regain lost financial ground, and we can get on with our lives in relative ease compared to the people around the world facing systemic injustice the likes of which we’ll never face.  And besides, imho, while we may have lost some money, the perpetrators lost some of their soul.

From time to time I have clients who just.can’t.do it.   They can’t pull their head out of the sand.  Or sometimes they do, for the briefest while, and then dive right back into the comfort zone of Not Knowing.

One of my roles is to help clients reduce their anxiety about managing their money.   There are myriad ostensible reasons people prefer to avoid taking a good look at their money, but the underlying reason is usually a fear of inadequacy.

The fear could be …

  • inadequate income for their spending levels (I knew it!  I knew it! Now what??)
  • inadequate time/organizing skills to keep up with money management (I won’t be able to do it for the long haul anyway, so why bother trying now?)
  • inadequate confidence to see themselves as effective money managers (I’ve never been good with money)

Resolving these tensions takes time, and sometimes a few starts, stops and re-starts, before they fade.  In all cases, the most effective method to overcome the fears is by diving in and starting the practice of managing money.   With rare exception, clients discover that things are not as bad as they may have feared, but even more important is the sense of dignity, that’s right, dignity, of putting themselves in the driver’s seat.

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