“If I can’t afford to buy it twice, then I can’t afford it,” is the money philosophy I now live by. However, this wisdom only came to me at the cost of years of mounting debt, a weak credit score and a cycle of poor financial choices made throughout my teens and early twenties.
For years, I refused to face the truth about the dark cloud my negative credit history was casting over my life. The realities of this mindset caught up to me when years later my life made a pivot I had not planned for.
Like many others starting post-secondary school, seeing thousands of dollars in my bank account was shocking. The money was a loan to pay for my education, but this did not stop me from treating myself to new clothes and dinners out. That summer, I had to work two jobs to make up for my spending so that I could pay back my tuition. I realized then that even the smallest purchases have consequences. Yet still with that lesson under my belt, I continued to take a passive approach to my finances. Stuck in this vicious cycle, my credit score dropped significantly. I racked up $4,000 in credit card debt plus thousands in student loans.
Genuinely, I believed that I had time to turn it all around. That the negative hits to my credit score I got from not paying bills on time would eventually be forgiven in a few years and the thousands in debt I accumulated over time would be simple to pay back once I increased my income. Now the years have rushed by and I am still working to reverse my previous mistakes. This year, I am thirty-years-old, newly divorced and a mother to my 5-year-old daughter, Alina. I no longer have anyone to depend on but myself. It is now up to me to figure out our future – purchasing a house, saving enough for emergencies and funding my daughter’s education when she gets older.
Despite being on this journey as a family of two now, I do not feel alone. Stepping into a place of transparency about my financial story and getting involved with this month’s Credit Education Week makes me feel empowered and connected. November is financial literacy month. As part of this Capital One Canada and Credit Canada partner to bring Credit Education Week to life across the country. The goal of this week is to address financial stigmas, highlight the importance of talking about finances, and to help Canadians everywhere become equipped with the tools and knowledge to plan for a healthy financial future. This year’s theme, #MyMoneyVision encourages us to envision the ‘what’s possible?’ within ourselves and in our finances from a place of knowledge and empowerment. It’s important, more than ever, for all of us to share learnings and talk about the mistakes we have made in the past, especially given the survey conducted by Credit Canada and Capital One – while 60 per cent of Canadians are earning the same or less than last year, nearly half (48 per cent) are spending more. This obviously is taking a toll on our finances and well-being.
Have you ever noticed that you are able to approach a situation with more confidence when you are well informed?
Here are a few things I am doing to make a difference in my family’s financial life:
I always have my own financial back – It was risky for me to assume that I would always have someone to rely on through the lows and highs of my finances, yet this is a common attitude. This is my first time being completely independent – no parents to fall back on for support or a husband to lean on. It’s just me and I’m learning how to manage my finances and meet the goals I have set for myself. I am doing things differently now and at the core of it all is my determination to take full responsibility for my financial future.
Save more than I spend – As an entrepreneur, I have multiple streams of income which is helpful for pooling resources but also means money comes to me in ebbs and flows.
To ensure my daughter’s future and my future are secure, I have to save. Period. Turning my finances around meant starting with a no-excuse plan that includes saving 20% of my income and at least 10% toward paying off my debt. The credit card debt that I accumulated during school, I negotiated it down to $4,000 and then saved up enough to pay it completely off. Next, I use the debt snowball method to pay off the accounts starting with the lowest balances first and try to knock those out. My largest debt is currently my student loans which I am working on reducing. When that is over, I will be debt-free.
I assembled my money team – To start building my financial plan, I actively sought the guidance of those who could help me change my money habits. First, I started to track how my credit score was progressing. Through the advice of a financial advisor, I made sure to check both my TransUnion and Equifax scores to ensure I had the best view of my overall credit health. You can also use Capital One’s Credit Keeper tool to access your credit score for free, and receive weekly updates. I hired an accountant who understood the unique needs of my industry as a social media influencer and who could help me navigate my taxes each year. As you assemble your money team, consider turning to Credit Canada Debt Solutions to get started. You might benefit from free tools like their monthly expense tracker, or from meeting with one of their Certified Credit Counsellors.
It’s a great feeling to now be in control of my finances and to no longer be intimidated by it. I try my best to learn all that I can so that I will always be financially independent. Armed with knowledge and determination, I am proud to be creating a better future for Alina and myself.
What’s your #MyMoneyVision?
This blog post was made in Partnership with Capital One. All thoughts and opinions are my own.
