Money Myths – Part 1

Money Myths: Part 1

Every day there seems to be new advice popping up on how to manage your finances. From credit score education to consumer proposals, there is a lot of information available online. This is the first part of a five-part series on Money Myths – common misconceptions Canadians have about money

Money Myth 1:

Only those strapped for cash or uneducated are the only ones that have trouble with debt. Those that earn more money don’t experience debt.

Truth: Debt can happen to anyone 

Debt doesn’t discriminate. From the lawyer with an unaffordable mortgage to the minimum-wage worker just trying to pay rent, poor financial management can affect anyone.

According to Stats Canada, the average Canadian household owes more than $1.50 for every dollar of disposable income.[1] In other words, debt is a far more common problem than most people realize. It can happen to any age group, any family type, in any province.

In truth, the debt ratio for those making over $100,000 is actually higher than those making less than $50,000.[2] Canadian debt is a very real problem for many Canadians. Just because someone earns over $100,000 doesn’t mean that they are great at managing their finances.

Think about all of the cases of celebrities with debt issues. Jack Johnson, a hockey player for the Columbus Blue Jackets, signed a $30.5 million dollar contract only to file for bankruptcy months later. Nicholas Cage was able to blow tens of millions of dollars despite constantly being in some good (and not-so-good) films. Almost every year you can count on hearing the story of a music artist or athlete wasting the fortunes they have collected. The only difference is the size of the items purchased, but poor money management skills remain constant.

That’s great, but why are you telling me this?

Building a brighter financial future isn’t as simple as making more money, it’s about sound financial management skills. Budgeting, living within your means, and planning for your goals in the future go a long way in helping you get to where you want to be. From that dream vacation to your future home, strong credit combined with smart financial planning can help you get there.

Canadians from all walks of life come to Refresh Financial to build credit, savings and create a brighter financial future for themselves. Regardless of if you are going through bankruptcy, consumer proposal, or make a six-figure salary, Refresh can help.

In our next blog we will explore the concept of ‘Cash is King’ and whether or not you should purchase everything with cash.

[1] http://www.statcan.gc.ca/pub/75-001-x/2012002/article/11636-eng.htm#a3

[2] http://www.statcan.gc.ca/pub/75-001-x/2012002/tables-tableaux/11636/tbl01-eng.htm