I’m delighted to say that David Chilton will be joining Credit Education Week Canada (CEWC) this year as the event’s keynote speaker. As a presenter and as a writer, the celebrated Canadian author of The Wealthy Barber (and more recently, The Wealthy Barber Returns) has a funny, marvelous way with words about personal wealth management, and about life in general. I encourage everyone to come and hear what he has to say at CEWC’s Gala Dinner at The Royal York Hotel in downtown Toronto on the evening of November 15. Tickets are $155 per person, and the money goes toward a very worthy cause; namely, not-for-profit programs supporting financial literacy throughout Ontario and across Canada.
What a treasure Canada has in David. Author, publisher, speaker, humorist – and now a star on the hit CBC TV series Dragons’ Den - he is probably our country’s most noted figure in matters of personal money management. His originally self-published book, The Wealthy Barber, sold more than two million copies in Canada and almost another million in the U.S. As a bestseller, The Wealthy Barber has only been outdone in our publishing history by J. K. Rowling’s Harry Potter book series and The Bible. Now bookshelves everywhere are stocked with David’s latest work, The Wealthy Barber Returns. And that’s cause for celebration, too, for David is doing much to inform a public in dire need of financial literacy, as alarming statistics concerning personal debt levels in Canada amply show.
David has a way of making humdrum matters of finance interesting and fun to explore. During his keynote speech at the CEWC gala, he’ll likely touch on points that serve as the focus of The Wealthy Barber Returns, which shines light on methods that help families and individuals balance the way they spend and save money.
He spoke about The Wealthy Barber Returns during a recent interview appearing in Fifty-Five Plus Magazine.
“I have tried to come at the saving-spending challenge from 10 to 15 different angles in The Wealthy Barber Returns,” David says. “One of the big pushes I have in the book is instead of dwelling on how bad we are as savers, it might be more productive to think of how fantastic we are as spenders. Then I start breaking it down to see why we are so good. Why do we want to spend so much? I look at it from every angle - our DNA, our prehistoric roots, the psychological and philosophical aspects, even from the angle of how our brains light up when we spend certain amounts of money. And I always try to wrap it in humour and short stories. I think that’s why the book is going over well.”
David goes on to say that the good news for personal money management is, “you don’t have to change your spending habits by very much to increase your savings rate dramatically. Cutting back your spending by five, six, or seven per cent can raise your savings rate by 100 or 200 per cent.”
Tracking spending for a couple of months can make a big difference, he points out.
“All the research shows that when people monitor their spending, even without making an effort to adjust, they actually spend less money. Just the act of keeping track creates awareness and changes behaviour. They save more efficiently and spend more effectively. When spending, they tend to migrate to the areas that give them true joy and spend less money on things that didn’t really give them any bang for their buck.”
David doesn’t mince words about credit and debt, either.
“It is a myth that people who pay off their credit cards each month are not adversely affected by them. All the studies show that when you use a credit card, you are much more likely to spend excessively than when you pay cash. Credit cards anesthetize the pain of parting with the money. A lot of people do pay off their credit cards each month, but they use them so much more to spend that they pinch their savings and don’t save at the appropriate level. It’s similar with debit cards,” he explains.
“Another of the myths is that debit cards are better than credit cards. They are insofar as you are spending your own money and not building up a big balance at a high interest rate, but the downside is that the debit card makes it easier to spend in an easy-spend environment, where everyone is marketing at us all the time and there are ATM machines everywhere. Everything is just a mindless swipe away. I use cash more than anyone I know because it acts as a system of checks and balances. You know what you are spending as you spend it. It stops money slipping through the cracks,” he adds.
Sage words of advice from one of Canada’s most financially literate souls.