Monday, March 5, 2018
7 Things I Have Learned in the Past Year
Since joining the financial industry, I have met many different people and taken a glimpse into their personal lives. In the past year since launching my website, I have had many people open up to me about their greatest financial fears. It has truly been an eye-opening experience and indeed very humbling. Learning about the concerns and triumphs of others grounds you. It makes you see how different we are and yet how alike we all are as well. Through my first-hand experience in helping client’s, I get to see what average people are dealing with when it comes to their finances. Many are fearful, while others are optimistic. Some are engaged while others are withdrawn. The truth is, what I do is all about people. Our habits and our lifestyles dictate if we will succeed with money. In today’s post, I will go over 7 things I have learned about people’s financial situations in the past year. This will give us all a chance to see if how others are feeling about their money, applies to us as well.
1) People are scared about the future
While we all do a great job with masking our feelings, many of us are scared about the future. There is a common theme with the people I speak with every day that the future is very uncertain. This has changed over time with people of previous generations. A sense of optimism exists with the older generations. I find that younger people are more pessimistic about their situations. What I am seeing is that many people are unsure of how to battle the problems they are facing. There are no answers out there for them, and the ones they are being given are not in their best interest. The level of confusion is at an all-time high and it is hurting people mentally along with their bottom lines.
2) Debt is an issue, a big issue
I write a lot about the student loan trap that currently exists. Young people are starting their lives with a huge burden on their shoulders. As a young person with 20-50 thousand dollars in debt before the age of 25, it is easy to be overwhelmed. What is more troubling is the amount of consumer debt that is being accumulated by younger people. Having credit card debt is normal and seen as not a big deal. That is until you actually have a conversation with that person and they tell you how it worries them. The same is true with older people who carry debt into their later years. A large number of middle-aged people have sizable debts that weigh down their monthly cash flow. It is very stressful for them to operate from that place.
Get out of the Debt Cycle – The Balance
3) People are spending way too much
I think there is a disturbing trend going on in our society and I see it every day. The companies we work for have conditioned us to think that we are getting paid a reasonable wage when we do not. What this has caused us to do is spend as if we are not poor, or close to poor, when in fact we are on the edge of poverty. I have noticed far too often that people who make salaries of 30-50K a year spend as if they make salaries of 100K plus. In my mind, making 50K a year is not enough to dine out once a week, unless you are a single person. In my mind, those who make less than 35K should dine out almost never. The same goes for expensive outings like the movies or sports. We are definitely not acting our wage and it is very disturbing.
I’m Not Cheap……I’m Frugal!!! – Budget Boss
4) We are saving far too little
Let’s go back to our friends making 50K a year or less. While I understand life is very expensive, it also doesn’t mean you shouldn’t be saving. A golden rule of saving is that you should be putting away a least 10% of your income into savings. So, our friends making 50K a year, you need to put away at least 5 of it every year. That equals $192 per paycheque. Are you doing that? Are our friends who make 100K a year putting away $400 every paycheque? It is rare for me to find savings levels that high. We can blame the cost of living all we want, but it doesn’t change the fact that as a whole we are not saving enough. The solution is quite simple: If you do not have enough money every month to be saving at least some of it, you either spend too much or do not make enough money. Chances are it is both and it is a trend that has to stop.
5) Wages are an issue
The recent turmoil over the minimum wage increase makes me want to puke. It is as if poor workers are Oliver Twist asking for more gruel. As mentioned, people have been conditioned to think that they make a decent wage when in fact they are living near poverty levels. This might not seem like a popular thing to say, but if you make 40K a year or less you are pretty much poor. To me, 40K a year is the base level of existence for a single person. For this amount, you can have a decent place to live, decent food, an okay car, and not have to wear used clothing. This amount doesn’t allow you to save much money or progress in life beyond where you are. As a society, we need to become more cognizant of the amount of money we make. Do not be okay with being paid less than you are worth. Do not be okay with just having a job. Remember, people died in factories and mines 80 years ago and if we continue down this trend we might not be far from it coming back.
15 signs you’re underpaid – Business Insider
6) People are dangerously uninsured
While the cost of living has risen to scary levels and wages have dropped, people have left themselves exposed to catastrophe. We all recognize that it is hard to just get by, yet we do nothing about the fact that we might not always be bringing in a paycheque. The amount of people I meet that have no emergency savings, no health or disability insurance and even no life insurance is startling. Most households require 2 incomes to just keep the lights on. If one were to disappear it would signal financial disaster. The same is true for people who get hurt or injured. I don’t talk about this because it is fun, or because I am trying to sell something. I genuinely worry about what would happen should I not be able to work. We all should fear that prospect enough to prompt us to action. The main reason people don’t retire comfortably is that injury or illness has disrupted their lives during their working years. It honestly scares the crap out of me, and it should do that to you as well.
7) Despite the doom and gloom, there is hope
A lot of people are fearful, and a lot of people are scared, but many are also hopeful. I find many people who carry on with an optimism that they are taking the right steps to secure their futures. I have clients that are putting away their first savings ever. I applaud them for their $50 a month contribution. I have other clients who have bought life insurance for the first time and now sleep better at night knowing their loved ones are secure. I have helped others get rid of costly debt and now they have extra money each month to do what they wish. We are the smartest, most technologically savvy, most ambitious generation there has ever been. All we need to do is get back to the basics and everything will be fine. Many have come to me wishing to do that and I applaud them.
This first part of my journey as an advisor has definitely been an interesting one. I have grown a sixth sense to the financial problems of others. I notice more intently when a loved one is lost or a new addition to the family arrives. I have been let into the lives of people I hardly know and that is a great responsibility indeed. I have learned more about myself than I ever thought I would have. My industry is all about people and I have met all kinds during my first few years on the job. I know the learning will continue and I am excited about the future.
Thank you for tuning in as we begin Anniversary Week here at Budget Boss. Don’t forget to tune in tomorrow as I discuss my focus as an Advisor. If you have any questions regarding your financial situation, please do not hesitate to contact me at joe@budgetboss.ca. Have a great week Bosses!
“Real knowledge is to know the extent of one’s ignorance.” – Confucius
Email – joe@budgetboss.ca
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