I’m addicted to finance-related blogs and websites, like Learnvest, SmartMoney and Wise Bread. Even though they are geared towards an American audience, there is always something to learn. Life hacks and money advice are always useful, right?
Especially if, like me, you don’t know that much about personal finance.
I’m sure these websites are much more popular now since the economy—or rather, the national debt and the economic downturn—is in the media spotlight. But I’m also positive that despite sometimes poor financial and economic decisions at the state or at the personal level, North Americans are more informed than Europeans when it comes to personal finance.
Unlike in France, money is not a taboo in North America.I realized that when I first started traveling with Feng.
It took me a long time to overcome my French way of dealing with personal finance, which was basically “don’t even mention it”. The problem is, when you don’t talk about money, you don’t learn any tricks. You have a checking account, pay the bills and try to save if possible, that’s all. In France, the rich stay rich and the poor remain poor. This is the way it’s always been in the old world.
On the other side, North Americans aren’t afraid to talk about money. I find the way people publicly explain how they got rich or tell the story of their bankruptcy fascinating. And rich, poor or middle-class, North Americans are first and above all consumers who take their role very seriously. They shop for big items with the same passion as they hunt for bargains, they can make or break a business and they certainly know how to complain effectively. In time of economic boom, they spend like crazy and flaunt their wealth—real or on credit. In time of crisis, they start couponing, buy deals and look for a more frugal lifestyle.
North Americans do seem to learn about money very young. I guess you have to when you start accumulating debt as soon as you graduate from high school and head to college or university. Meanwhile, most French are still in a financial limbo in their twenties: postsecondary education is usually free (unless you go to a private school) and it’s hard to get a job. Young French rely on a mix of parental help, state aid and small jobs, usually until they complete their studies and find their first real position in their field—most of my friends back home only started working around 25 years old or later, and they don’t come from rich families.
As a result, when I came to Canada at the age of 21, I had very little experience with personal finance. I had only opened my very first bank account in France a couple of years earlier—can you believe it?
I had to learn fast because I had to survive.
Within days of getting my first Canadian work permit, I opened my first bank account at CIBC (I later changed for Scotiabank—much better customer service in my opinion). I applied for a credit card to build my credit history because I was told do so. I learned to resist sale pitches and the irresistible appeal of easy credit because I didn’t want to get into debt, even though at the time I wasn’t yet grasping how lucky I was not to have student loans or other debts.
At first, I managed my finances the French way. I withdrew money when I needed to, paid the default bank fees without thinking twice, paid off my credit card every month.
Soon, I was working two jobs full time and while I wasn’t getting rich by any stretch of imagination, I no longer maxed out my checking account every month.
I started looking for a saving account. For that, I researched—gasp!—the best interest rates. Yes, me, the French socialist, was looking for a good interest rate. I had been brainwashed the North American way!
One thing led to another: the next thing you knew, I was making an appointment with an advisor to pick a banking package that was better suited to my needs (yay on saving money on banking fees!), negotiating a better credit card with perks and opening a Tax-Free Savings Account.
And little by little, I learn about personal finance.
My favourite budget trick? I got used to withdraw a fixed amount every two weeks (usually about $250-300) and I pay cash for everything: groceries, bus tickets, entertainment, and little extras such as clothing and beauty products.
I still pay bills online and I use my credit card for larger purchases (i.e. furniture, hotel, etc.) and gas, but paying cash for everything else has two advantages:
- I control how much I really spend. When you don’t carry cash and rely on Interac or credit cards, it’s easy to lose track of your daily spending, and it adds up!
- My banking fees are lower since I make fewer transactions, and I’m also unlikely to get hit with ATM fees.
How about you? How did you learn about personal finance? Any favourite money tricks?