November is Financial Literacy Month in Canada, a national initiative led by the Financial Consumer Agency of Canada (FCAC). Each year, FCAC uses this month to highlight the importance of financial education and well-being. This year’s theme, Talk Money, encourages Canadians to have open and honest conversations about money to strengthen financial knowledge, skills, and confidence.

I asked friends what financial information they wish they had known more about. Over the next four weeks, I am going to talk about some of the topics they suggested. Today, I am going to talk about making informed financial decisions and ways to help yourself do that. 

Most of us think we are rational, logical beings. And we are. We are also guided by our emotions and thoughts that come from past experiences. These ways of making decisions are not black and white, and they shouldn’t be. They should be used together to make decisions that meet our needs and contribute to our well-being now and in the future. 

When you make a decision about money purely based on logic, you deny the things that bring you joy and feed your humanity. 

When you make a decision about money purely based on emotion, you miss out on taking into account your budget and that money is limited. 

When you make a financial decision based on both logic and emotion, you can do things that make you feel alive while also being guided by the reality of the numbers for your future self. You acknowledge that you have needs that go beyond numbers on a sheet of paper and recognize the importance of the numbers on that sheet of paper. 

I am going to make two suggestions. If all you do is one of these things this month, you would have done something amazing for yourself! GOOD JOB!

My first suggestion is to watch a video about money from an expert. 

I recently watched a webinar that made me excited about my money. It was a 60 minute webinar in which Bruce Sellery, the CEO of Credit Canada, made me feel excited about making some new goals and taking some new actions. I have been talking about what I learned in it with my friends and family. Take some time to watch this 60-minute webinar to help you think about your priorities and gain confidence talking about money. This can help you connect your emotional self and logical self. 

Moolala: How to Get a Handle on Your Money so You Can Live the Life You Want

https://www.creditcanada.com/get-a-handle-on-your-money-webinar

The thing that stayed with me the most was when he asked, “What is your money for?” When Bruce talked about the fierce mom with the son with Autism. Wow! That captured me in the moment, and I teared up too! I have been asking my friends, and we have had such cool conversations and learned more about each other. It’s been really fun. Thank you, Credit Canada, for hosting that webinar!

The second suggestion is to go through one month of your bank statements and credit card statements. This will show you where your money is going. 

When I meet with people, we talk through their monthly expenses, income, assets, and debts. Most people can estimate some of their costs pretty closely and are surprised by other costs when we add them up from their statements. 

Expenses that stay the same every month, like rent, insurance, or car payments, are easier to estimate because they stay the same and are made once or twice a month. Think about making a car payment of $400 every two weeks. It is easy to calculate two payments per month, equalling $800. 

Expenses that change (aka variable) are harder to estimate and can change depending if the cost changes, how often you purchase it, and the circumstances that month. Groceries, shopping, gas for your car, your hydro bill if not on an equal billing plan, eating out, and even minimum payments on debts, can be difficult to estimate and stay on top of. Think about buying gas for your car. The price of gas changes depending on where you buy it and, even if you buy it in the same place every time, the price changes each day. The amount you spend on gas each month also depends on how often you use your car and the distance you drive. Even weather conditions can change how efficiently your gas is used. 

Print your bank account and credit card statements. If you don’t have a printer, visit your local library; The lovely librarians can help you print them. Use differently coloured highlighters or make a tally on a sheet of paper. Add up all the categories of expenses. Some examples are groceries, rent or mortgage payments, gas, shopping, car payments, debt payments, etc. Using paper and writing it all down can help you understand where your money is going. 

• Make a list of the categories.
• Beside each category, estimate how much you think you spend on that category each month. 
• Add up the costs from your bank account and credit card statements. Write that number beside your estimate.
• Ask yourself some questions:
  • How close were the actual amounts to my estimates?
  • Did I spend less on a category than I expected? Does that feel good or bad? Would I like to change how much I spend on that? Is that realistic right now?
  • Did I spend more on a category than I expected? Does that feel good or bad? Would I like to change how much I spend on that? Is that realistic right now?
  • How do I feel about my overall spending? Does it match my priorities and what is important to me? 
  • What one thing am I going to do differently next month?

If you want to take another step forward after reviewing your statements, reach out to me, Caroline, the United Way’s Financial Literacy Program Coordinator, to talk about options to help your finances.