Individual Finance Articles: 1) 1 In 4 Canadians Fear Income Won’t Cover Basic Needs: Salvation Army Poll 2) Bad Financial Advice Comes In Many Forms. Knowing How To Spot It Can Save You Money
1) 1 In 4 Canadians Fear Income Won’t Cover Basic Needs: Salvation Army Poll
Courtesy of Barrie360.com and Canadian PressPublished: Dec 18th, 2023
Toronto
A new survey suggests one in four Canadians are extremely concerned about having enough income to cover their basic needs, with the highest degree of hardship being felt by single parents.
The Salvation Army released the data today as part of their annual report examining Canadians’ attitudes and experiences with poverty and related socioeconomic issues.
Among single parents, closer to half are reporting extreme concern about meeting basic needs at 40 per cent, while the numbers clock in at 31 per cent for single-person households and 31 per cent for caregivers.
The research by Edelman Data and Intelligence suggests one in five Canadians are eating less so their children or other family members could eat, and one in five also skipped or reduced the size of at least one meal in the last year because they couldn’t afford groceries. Those numbers jump again to nearly half for single parents.
The research was conducted Oct. 12 to 19 among a nationally representative sample of 1,515 Canadians, but did not include those living in Yukon, Northwest Territories and Nunavut.
Lt.-Col. John Murray says the findings are troubling but accurately line up with The Salvation Army’s internal data and the need at shelters, food banks and churches in the communities they serve.
“They’re people that you and I and everyday Canadians know. I think at one point in time perhaps, people who were struggling were the people in other communities, in other parts of the country,” said Murray, technical communications secretary for The Salvation Army.
“But what we’re seeing is that this is a consistent trend from coast to coast to coast.”
Housing security continued to be of major concern for Canadians, with 1 in 10 reporting extreme concern about basic human needs like food and shelter, or being affected by an emergency or natural disaster.
Frequency of food bank usage has also increased, with 22 per cent of those who used food banks in the last year reporting going once a week or more often, up from 18 per cent in 2022. Among those who used a food bank in 2023, nearly half were first-time users.
“One of the things we discovered this year that continues to not surprise us, but I think more disturbs us as an organization, is that children make up 34 per cent of all the people that come to organizations such as The Salvation Army for assistance,” said Murray.
The report suggests the proportion of Canadians facing challenges to food and housing security, as well as health issues and managing limited resources, is not expected to improve significantly in the next six months.
And while there are high numbers of Canadians struggling, donation levels to support those in need are actually slightly decreasing by between 0.2 and 1 percentage point compared to 2022.
“It’s a reminder to Canadians, for those who do have the capability and capacity to pause, to stop and think of others, to make a donation, to invest in the lives of friends and perhaps family in the communities where they live,” said Murray.
2) Bad Financial Advice Comes In Many Forms. Knowing How To Spot It Can Save You Money
Courtesy of Barrie360.com and Canadian PressPublished: Dec 19th, 2023
By Pascale Malenfant
Whether it came from a family member, social media influencer or certified professional, if you’re a millennial or gen Z who’s been burned by bad financial advice in the past year, you can take some solace in knowing you’re not alone.
When it comes to the kind of bad advice young people seem to be particularly susceptible to, advice-only certified financial planner Jason Heath has noticed an uptick in three major areas — real estate, self-directed investing and education.
“I think a lot of young people especially take this ‘fear of missing out approach’ when it comes to their money, which might drive them to buy property they can’t afford because people tell them (the price is) always going up,” he said.
“Or, they might have tried to get into the day trading thing during the pandemic, going all-in on a few stocks instead of holding a bunch of different investments so that they weren’t overly exposed to risk.”
Nearly 70 per cent of readers recently surveyed by financial lifestyle magazine MoneySense said they’ve lost money as a result of financial advice.
However, perhaps the most relatable issue for young Canadians is impractically approaching their financial planning education in an era of high interest rates and mounting student loan debt — something Dula Deb, a fourth-year social work student at Carleton University in Ottawa, knows well.
Though Deb had always made an effort to manage her finances responsibly and ensure a relatively steady income to independently support her education, she finished high school with a limited amount of money management know-how. As such, she turned to her older sister for guidance, who had already completed her degree by the time Deb was starting at Carleton.
“She kind of advised me that, even if I had good scholarships and was working 30 hours a week, I should still take out my loans even if I didn’t need them yet, since they’d be helpful throughout (my degree) and take away the stress of being in a bad financial situation if something happened that affected (my income),” she said.
Though this may not have seemed like bad advice to many — especially given the ability to build a better credit score by taking out student debt and eventually paying it off on time — by virtue of Deb’s limited financial literacy at the time, she took out almost $6,000 in loans without the knowledge required to responsibly use them.
“I went from being a big money hoarder and feeling guilty for spending $20 on a shirt, to spending it really irresponsibly, especially when I was under a lot of emotional distress from school or other stuff.”
Heath noted that though bad financial advice can come from anyone and anywhere, financial advice given by people who don’t have the training to “meet people where they’re at” can be especially problematic — particularly when looking at advice given by family members and online resources.
“Of course, there’s the chance that someone who isn’t professionally qualified and is giving financial advice could be totally factually wrong, or with online resources like social media influencers, be trying to sell you something,” he said.
“But I think what I would caution people most about when it comes to taking advice from friends or family especially is that even if a family member’s advice is good and sound, it might be good and sound for them or for somebody else, but not for you.”
As such, Heath noted the importance of thinking through the non-professional’s perspective, given they don’t have the same training and approach a professional might have.
“I think, in my case, my sister probably assumed that I would know how to handle all of these loans, and how to think about debt,” said Deb, “and even though I know where I went wrong now, I probably needed that extra explanation back then to avoid some of the mistakes I made.”
However, Heath also acknowledged the potential for shortcomings among professionals, too, and emphasized the importance of remaining vigilant regardless of where the advice was coming from.
“I would say that one of the biggest yellow flags in spotting bad financial advice is if you don’t understand what they’re saying, even after asking for clarification,” he said.
“But beyond that, if something sounds too good to be true, it probably is, as there’s not really a lot of shortcuts to financial success — it’s normally a slow-moving process when done right.”
“This can definitely happen even with a certified financial planner,” added Heath, “so it’s always important to do your research and compare sources.”
Nevertheless, Deb’s experiences have encouraged her to seek out professional advice for the first time in her university career in order to round out her new approach to personal finance.
“This whole situation has taught me how to actually manage my money in a way that’s realistic instead of falling on the extreme end of spending or saving,” she said, “and I’m excited to see where these changes will take me.”
Patricia is the Business Mentor and owner of Grow Vantage and a Past President of the Barrie Chamber of Commerce. She applies over 30 years of business experience (from start-up to corporate) to mentor entrepreneurs. Since 2011, she has held over 6,500 coaching and training sessions in-person and online. Through Ask For Directions Training, her entrepreneurial training program (and parent company Grow Vantage), and as a business coach, she works with start-ups who are new (or who have lost traction) to design, launch and grow their businesses. Along with 20 other expert instructors she teaches strategies in marketing, sales, communications, and finance, as well as practical techniques to increase productivity, and manage their businesses. In other words, everything entrepreneurs need to learn to grow and run their businesses successfully, and avoid the costly mistakes they can't even see coming - that lead to delays in growth and getting stuck.
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