By the MCC Financial Literacy Team
November is Financial Literacy Month in Canada and in our November 11th blog post Money Coach Melanie Buffel asked readers, clients and fellow Money Coaches to share personal stories about their financial journey. She challenged them to consider; “What’s been your biggest money lesson?” and “What have you learned about money that you wish you knew when you were younger?”
Here are some of the responses we received.
“I think the biggest lesson is that you cannot plan for everything. Life happens and you can only do your best to deal with it. But it’s also true that any planning you have done will often be to your advantage when the unexpected happens. For example, you saved for travel, so that money is available if you need an emergency roof repair.” Anthony Larsen, Money Coach
“Every payday we put aside equal amounts for Christmas gifts, property taxes, car insurance, annual activities (like hockey or skiing), vacations and any other annual expenses that are not monthly payments. By doing this we ensure that when the payment is due, we aren’t scrambling at the last minute to find the money magically. Talk about taking the worry out of money, it’s always there when it’s needed.” Leslie Gardner, Money Coach
“There are two things that have struck me since becoming a Money Coach. The first is the meaning of getting ahead in life. People often say this but I’ve always just thought of it as meaning doing better. I’ve come to understand it as literally having money to pay for the future. Rather than using this month’s money to pay for this month’s expenses, or worse for last month’s expenses, getting ahead means you are accumulating money for next month’s expenses.”
“The second thing is related to the idea of getting ahead – it’s how being prepared makes you feel. Two people can be putting $100 a month towards Christmas expenses, but one is paying off $1,200 from last Christmas and the other saving for next Christmas. On a monthly basis the result is the same, $100 is being taken out of their spending money but psychologically the person saving is going to feel so much better about it. The person saving is going to get to Christmas and be pleased to have the money ready. The person paying off last Christmas is going to get to December and think ‘Just when I finally got debt free Christmas rolls around again’ and feel miserable about it.” Christine Williston, Money Coach
“I am becoming a savings addict – I LOVE spending what I have already saved for! It feels so much better.” Wendy L., client (name changed for privacy)
“The benefit of using a money coach is the training and preparation for life’s downward turns. Our Money Coach provided us with an unbiased, supportive and educational approach to help us gain control of our finances.” Pam and James H., clients (names changed for privacy)
“Since my husband and I started working with our Money Coaches Canada On Track Money Management System, we have increased our net worth, we are in control of our spending and saving, and we are prepared for unexpected expenses. But the biggest impact it’s had, is that we now know we will be okay in retirement.” Sabine Lay, Money Coach
“I’d like to share a personal aha moment. I am on an account system that is quite similar to the one we use for our clients: Fixed Bills account, Daily Spending account, and Lump Sum savings accounts. However, I have variable income that arrives from different sources and initially gets deposited into the Fixed Bills account. Because of these fluctuations I sometimes have money left over at the end of the month, just sitting in the Fixed Bills account.”
“About two years ago I decided that any amount in the Fixed Bills account above a certain threshold is extra and to be deposited into a newly set up Extra account. Money in the Extra account is not allocated for any particular spending and so can just keep adding up. At the end of each month I shuffled any surplus from Fixed Bills to Extra, without giving too much attention to it at first.”
“Well, it turns out that since I got started I have amassed a small fortune in Extra without sacrificing any of my intended spending. I will likely be using this Extra money as a down payment for a new property that I am going to be buying in the near future.”
“Since this concept has worked so well for me I have started to introduce it to my clients and some of them are reaping the benefits as well.” Barbara Knoblach, Money Coach
“I remember feeling apprehensive leading up to our first meeting with our Money Coach. We felt as though managing our finances should be simple, but our previous attempts to make positive changes never seemed to work. By the end of the meeting we both felt confident that we would be able to achieve specific financial goals, and we were excited to begin working on them.”
“The excitement continued for a few months – we were so relieved to finally have a plan to pay that daycare bill every month. At one point, I found myself wandering alone through IKEA. It was exhilarating to realize that there wasn’t a single thing that seemed worth delaying our financial objectives. We were finally on the right track!”
“But, as with any lifestyle change, I began to question whether the budgeting and austerity were really worth it. I had spent my adult life living with debt, so working this hard to pay it off felt futile. I was sure that we would never be entirely rid of it.”
“Then our money coach sent me the magic number – the total amount that we were currently paying in interest and debt-repayment every month. Wow!! If we could eliminate our debt, we would be able to afford to make some exciting financial changes like pay off our mortgage sooner, pay for a trip before the departure, and still save some money for emergencies.”
“Now every time I find myself wanting a beautiful new pair of boots, I think about how hard we’re working to pay off our debt and the boots just aren’t worth delaying our Debt Free Date!” Alexis, client (name used with permission)