A Money Coach in Canada

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Hi Nancy!
I love your words of wisdom and the fact that you too have been on the “consumption train” and so I know that somehow you were able to change your thinking. I am so on that train! I sometimes wish that online banking would allow you to organize your money into “files” so that you could actually realize that once it was all allotted, there truly is only so much left for spending on non-necessities.

This is my question to you. (And I ask this question after truly trying to change my thinking… imagining piles of $$$$$$ instead of clothes, etc., and making budget after budget, but to no avail. I still find myself enroute to yet one more store in my moments of boredom.) Question: Is it ever wise to actually cut up your credit cards? Do you ever give that advice to people? I truly do feel as though my spending and justifying it is out of control…however, if I was ever invited out to 30 great parties in a row, I would have some great dresses and shoes to wear to every single one of them! But, I did not make my RRSP contribution this year, and all those dresses won’t do me any good when I am 70!)

Cathy from Ontario

Thanks for your question, Cathy-from-Ontario! It’s a good question and you’re in good company. In fact, according to a recent report by TransUnion, the average Canadian owes $25,597 in addition to their mortgage, of which $3,539 is credit card debt.

Here’s what I recommend:

1. Assume you will never win the fight against short-term satisfaction versus long-term anything . It’s well-established that we humans are hard-wired to choose the lesser-but-immediate gain (hot dress) over the greater-down-the-road gain (healthy RRSPs when you’re old or simply a healthy savings account). Don’t beat yourself up over this – I don’t beat myself up – but acknowledge it’s a component of your humanity that needs to be factored in. But it doesn’t end there…

2. You can set up the game to increase the odds that your rational side – the part of you that does want to opt out of the consumption train in favour of thoughtful budgets and your old age – has a fighting chance to win over your emotional and energizing side – the part of you that “connects” quickly to spending. Here are three ways that work for me:

a. Set up savings accounts precisely how you mentioned, ie., for specific items. Mine include “holidays,” “dog emergencies,” “slush fund”. Each of these have a gut-level attraction to me, so I have an emotional commitment to them. Find the items that resonate for you — a gift for your child? a great outfit for an upcoming event? Then set up saving accounts AND set up regular contributions (even $25/paycheque) into them. (By the way, I use ING – super fun for multiple savings accounts – and if you sign up with them, quote my “orange key” as 14641937S1 and we’ll each get $25 or something like that.) Will this create your retirement plan? No, but it will easily and quickly shift your self-perception into being a Saver and trust me, that will start to play out for you over time. Plus, you’ll have money ready for stuff you value.

b. Give yourself full permission to shop when you are bored With This Caveat: you can only buy the item(s) you find the next day. If you still really want it the next day, go for it. Truly. This little trick is the.single.most.effective habit that turned me around. I can honestly say I basically never impulse buy any more!

c. Create a new pathway. Right now, it sounds like you are in a rut: I’m bored -> I shop -> I buy. Think this through right now: next time you are a little bit bored, what is an alternative action you could take? It’s important to identify just one action. Then, try it out. Next time you are a little bit bored take that action and see how it works. It will take a bit of “muscle” to develop the new pathway, so it’s important to start with the little bit bored times. With repeated practice, a new pathway will be created.

3. And the credit cards? Don’t cut them up. But do lower their limit. I have a $1000 limit on mine. A low limit helps us think of them in a healthy perspective – there when we need them, but not for all our wants and dreams.

Hope that helps Cathy!

And, of course, check out my $25 online program which will help on exactly these sorts of issues!

READERS: If you have a question about your finance (not investment or tax stuff, but day-to-day issues) by all means e-mail me: moneycoachcanada at gmail d0t com.

Photo Credit: consumerist

About the Author

Imagine if Canadians were known for being all over their money. Engaged. Proactive. Getting out of debt. Savvy. Saving. Generous. Nancy wants to help. Nancy started her own journey with money over 15 years ago, and formed her company “Your Money by Design” in 2004 to help others along the same path. It’s not the usual financial advising/investment stuff. It’s about taking control of day-to-day finances –managing monthly cashflow effectively, spending appropriately, getting out of debt, saving. If you're ready to take control over your finances, pop by her business site, YourMoneybyDesign.com


  1. et

    I keep thing on my to buy list even longer – months sometimes. I can look at the list and imagine the item w/o buying it and still feel like it’s mine. Browsing doesn’t have to lead to a purchase.


    Nancy (aka Moneycoach) Reply:

    I’m impressed et! Were you always content that way, or was it an acquired skill?


    Jun 27, 2011

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