Our overspending problem explained: We don’t say ‘I can’t afford it’ any more


If you’re feeling anxiety about your personal finances, Kelley Keehn feels your pain. Ms. Keehn, an Edmonton native, has spent the past 15 years writing and talking about money. She has a positive, practical style that builds confidence, not feelings of inadequacy. Ms. Keehn’s current position is personal finance educator and consumer advocate for FP Canada, an organization that sets standards for the certified financial planner (CFP) designation, and she just published her ninth book, Talk Money To Me. Here’s an edited transcript of a conversation we had this week:

How do you assess the financial health of Canadians right now?

Poor. In FP Canada’s surveys, money stress is cited as the No. 1 source of stress over health, relationships and work.

I see financial stress mentioned a lot these days, and affordability was a big theme in the recent federal election campaign. And yet, people keep spending. What’s going on?

We don’t say ‘I can’t afford it’ any more. I’m in Calgary all the time, the economy’s horrible there and the restaurants are packed, and not inexpensive restaurants. Places with $20 cocktails. We find ways to make spending happen and we use debt to do it.

How big a problem is social media in encouraging overspending?

It’s probably one of the biggest factors. We have something in our brains, something called mirror neurons. Researchers found that when someone scores a goal in hockey or a basket in basketball, part of our brain lights up as if it happened to us. Your mirror neurons light up when you see your friends with a new car, new clothes. You can’t help but want that. Now, magnify that effect by one million per cent with social media. You’re seeing all your friends, all the time, and they’re only showing their best stuff.

If you could get people to engage with one single improvement or change in their finances, what would it be?

We’re all busy – I get it. So set reminders in your Outlook calendar. Sit down, figure out all the [financial] things you need to do and put them in your calendar.

The first time I interviewed you was back in 2007, when you had a new book out called The Woman’s Guide to Money. Is it true that women have a different view of money and, if so, what’s the biggest difference?

We negotiate less, we generally feel less confident about our money. I can send you a study showing a high percentage of millennial woman high-income earners deferring to their spouses. I was shocked and disappointed that even in this day and age, younger women are saying that money management is a man’s thing.

What’s your view on home ownership?

I don’t think there’s enough conversation about the stigma of being a renter, and about doing a fair analysis of whether home ownership is right for you.

You’re in front of a class of Grade 12 students – what’s the most important piece of advice you’d pass on to them?

Be responsible with your credit. You will be a pariah in today’s society if you don’t have stellar credit. A lot of employers check it, landlords – [and] some provinces may check it for your auto insurance. In your twenties or thirties, this is going to cost or save you a lot of money.

How old should young people be when they get their first credit card?

I think they should start by going to the Bank of Mom and Dad when they’re 16 to do a mock credit card. Their parents should grant them credit and explain the parameters of paying money back. That way, when you get a real card you have a visceral understanding of what happens if you don’t pay off your credit card in full.

How well-prepared is the broad population for retirement?

I don’t think Canadians know if they’re ready to retire. They haven’t looked at the numbers, they haven’t engaged even with a simple online calculator, let alone a financial planner.

What’s your biggest frustration in terms of the personal finance habits of Canadians?

One is people not paying attention to their finances. Also, not reaching out for help.

What’s the weirdest question anyone has ever asked you about money?

The weirdest was how to hide purchases from their spouse.

By: Rob Carrick
Personal Finance Columnist
The Globe and Mail, November 15, 2019

(Note: Kelley Keehn is a member of CFEE’s Board of Directors.)

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