January 16, 2020 | By: Sandra Sherk

Money Advice You Wish You Had Taken

Money Management

Many people have regrets over money advice they didn’t take—the stock they didn’t buy, the account they didn’t open, or the RRSP program they didn't sign up for. So since we’re at the start of a brand new decade, we're giving you the best money advice that some of us, just a bit older than you, might have wished we had taken a lot sooner, in the hopes that you can improve your own financial well-being as we move forward into 2020.

Why don't we take 'good' financial advice?

When you're young, you think you know everything, so you don’t always listen to the advice given by your parents, grandparents, and teachers. What do they know about your life anyway? However, at one point in their own lives (long, long ago) they felt the same way you do, but they learned the hard way about how important it is to pay attention to others—especially those who might know a thing or two more than you, and not necessarily because they're smarter than you. But just for the simple fact that they've been around a lot longer than you, and they've seen first-hand how one seemingly small decision can yield big, big rewards down the road. 

Money lessons everyone should take up in 2020

As credit counsellors, we've seen and heard it all. I can't tell you how many times I've heard clients say, "I wish I had done this sooner," referring to our Debt Consolidation Program, or even just coming in for a free counselling session to learn about their different options to solve whatever money problem they were facing. (Did I mention we offer free, unbiased, non-judgmental money advice?) We all know the saying: Hindsight is twenty, twenty. And it's true! It's funny how the right money advice can seem so clearly right years later, but in the moment, didn't seem all that important. So here are the top money tips that many of us—including some of our very own clients—wish we taken years ago.  

Save for a rainy day

I am sure we ALL heard this growing up.  A friend’s daughter recently told me that she found out that rainy days do happen. She was working and getting regular paycheques every two weeks, so she wasn’t overly concerned about putting money away into savings. She would put some into savings, but something would come along— like a “good sale on a new outfit”—and she would take the money from her savings. Then she was advised to get snow tires because of all the travelling she was doing for work—a thousand dollars! Where would she get that money? Her credit card didn’t have that high of a limit and she wasn’t going to go to a payday loan company (thankfully, that advice she DID listen to). She finally caved and asked her parents for a loan. They did loan her the money, but not before they stressed the importance of being prepared for the unexpected. 

Think before using your credit card

You get your first credit card and your parents’ advice is to remember it isn’t your money. It's the bank’s money and you have to pay to use it. Years ago, an acquaintance would talk about the travel she did and she usually went away once or twice a year. I often wondered how she could afford to do this. I remember telling her that my vacations were spent at my parents’ cottage, as I couldn’t afford to go elsewhere. She said she used her credit cards for the trips, so then I replied that I wasn’t going to pay for vacations months and years after taking them. Fast-forward a few months later, and that same acquaintance tells me she wasn’t going away this year. Turns out my comment about not paying for months and years after the fact got her to look at her own credit card statements. And after doing some math, she realized she was still paying for the trip she took over two years ago – and she had taken another two since that trip! She said her parents had given her this same advice in the past, but it took hearing it from someone her own age to listen to it.

Is it a need or a want?

You probably also heard this when you were growing up. But when you started working you might have also thought that it was your money, so you'll spend it however you please. But if we focus too much on satisfying our wants, one day we won't be able to satisfy a need. 

When we're young, many of us like coordinating our outfits, having nice shoes, getting the latest purses and of course topping it all off with some nice jewelry (real, not costume). And maybe even going on an all-inclusive vacation every other year. Our parents might have questioned our extravagant purchases, but then we just told them it wasn’t their concern. Besides, everything is paid for and it's not like we had a large credit card balance. But then this goes on for a few years until one day we decide we would like to buy a home. So we ask our parents to lend us the money for a down payment... and they laugh at us. Instead they decide they are going to use their savings to travel and renovate their house. 

Pay more than the minimum payment on your credit cards 

This is great advice that many people don’t listen to. After all, the bank only requires that small, minimum payment every month to keep them happy. But that strategy will bite you in the you-know-what in the long-run.

Another friend’s son fell into the habit of only making the minimum monthly payments on his credit card. He did this for a number of years until he happened to see the spot on his credit card statement where it showed him how long it would take to pay off the balance if he continued to just pay the minimum monthly payment. He was astonished to discover it would take almost 18 years to clear his $1900 balance! He couldn’t believe how bad of a financial decision it was to just pay the minimum monthly payment on his credit card for years. Right then and there he decided to stop using his credit card and paid more than the minimum each month until the balance was finally cleared. 

Start early putting money into your RRSP and TFSA

I recently asked my son what was his biggest financial regret. He said he wished he had kept money in his RRSP and TFSA (tax-free savings account) that he had set up on my advice. My son, like so many young people, doesn’t look too far into the future. But the sooner you start saving, the more money you will have thanks to compounding interest. It's so important to start early to invest, and there are benefits to investing that go beyond the funds themselves. For example, you can use funds from your RRSP as a down payment on your home when you are young, and then benefit from the funds when you retire. 

Get free money advice at Credit Canada

It is never too late to start learning from the advice of others. At Credit Canada, we have great tools, like our brand new Budget Planner + Expense Tracker and our Debt Calculator which can tell you how long it will take you to be debt-free (and how much money you can save) using different payment strategies. If you want to pay off your debt and save money but don’t know how to get started, we also offer free one-on-one advice. All you have to do is give us a call at 1.800.267.2272 to book a free, confidential appointment with a certified Credit Counsellor. And we will never say, "I told you so." 

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