‘There’s a silent personal finance crisis,’ author says
Money concerns major source of stress, especially for younger people facing steep housing costs
Endless stress and sleepless nights have one cause for many people: Money.
That persistent worry about personal finance stems from the lack of education on this basic but vital topic — a major oversight that retired teacher Fred Masters has been working to change for decades.
“The reality is, people have learned nothing about this in school,” said Masters, an author and presenter on money management.
Not only does this lack of financial literacy affect a person’s bottom line, but it also has a big impact on their overall well-being.
“Money is the Number 1 source of stress,” Masters said. “This is a wellness issue.”
His book “Lessons on Mastering Money: The Personal Finance Guide for Canadians in their 20s and 30s” launched in November. It was recently named a global finalist in the best book category for the international Money Awareness and Inclusion Awards.
“There’s an insatiable appetite,” he said. “People want to learn more in this area but they’re not sure who to turn to.”
Masters saw that firsthand during nearly 30 years of teaching in the Waterloo Catholic District School Board, mostly at Resurrection Catholic Secondary School. Students were working long hours in an anxious effort to make money.
As head of business at the Kitchener high school, he started a weekly, lunchtime personal finance club for students. “They came, and then staff started coming.”
He offered information to help people in the club learn to thrive financially, filling in for the lack of formal education on the subject.
Masters would like to see mandatory personal finance courses in all grades and right into university and college. For those already out in the work world, he believes corporate Canada should step in to offer ongoing personal finance training.
“People can’t just pick it up on their own,” Masters said.
Younger Canadians in particular struggle, which is why they’re the focus of Masters’ book.
Millennials often have an intense fear of missing out and can get into financial straits while trying to keep up with the extravagant social media posts of peers. Unfortunately, Masters said they’re also caught up in tough housing and stock markets — leaving them in desperate need for help to get their financial affairs in order.
Housing affordability is a hot topic, as the average detached home now sells for well over $1 million in this region.
Masters would advise young adults to take a stepwise approach to home ownership, starting with an apartment-style condo, then moving up to a semi-detached home until finally reaching their “forever” home.
Masters shared more tips from his book, including his key piece of advice: forget about getting rich quick.
“The much better approach is get rich slow,” Masters said. “Take advantage of time.”
When it comes to investing, the fast approach is risky. Saving consistently for decades is the most dependable way to reach goals.
Figure out the cost for retirement, post-secondary education for children and housing, then begin putting away money in an RRSP, RESP and savings account.
Embrace the habit of saving over a lifetime. “Don’t wait. Start now,” Masters said. “Don’t let that slide.”
He worries that rising costs for everyday items will spur people to stop saving. Automated saving is the best way to go, because the money is set aside without effort or the saver even noticing it’s not there to spend.
Masters encourages minimalism and focusing on experiences rather than accumulating things. “Mindful spending” avoids racking up huge debt to buy unnecessary stuff.
“There is no such thing as retail therapy. It doesn’t work,” Masters said.
A little-known factor that can raise a red flag for lenders is how much money is charged onto a credit card or taken from a line of credit. People should use no more than 30 per cent of the available limit; if more credit is needed, then ask for the limit to be increased.
Without knowledge about personal finance, significant and longterm damage can quickly be done to a credit score. Yet many are embarrassed and don’t ask for help from a professional or even discuss their predicament with family or friends.
“I think there’s a silent personal finance crisis,” Masters said. “It’s silent because we don’t talk about money.”