Month: November 2022

When you become a parent, not only is life forever changed but your priorities change, too. From trading in a two-seater for a kid-friendly ride to fewer fancy dinners in favour of chicken nuggets (again), you’ll find yourself doing a lot of things that put them first. And when it comes to personal finance, as parents, we don’t always make the best money decisions from inside the fog of child-rearing. 

While today’s work-life juggle can leave little room to plan for tomorrow, there are money mistakes parents make that could take a toll on finances. Here are some of the more common ones and advice on how to pivot toward greater financial stability. 

Key takeaways

Why is money management important when you’re a parent?

Being financially savvy was important even before you were a parent, but now you have kids who are watching—even if it seems like they aren’t interested in anything you say or do. If they see you valuing wants over needs by making endless purchases, selecting an expensive car that’s beyond the family budget, or avoiding a stack of unopened bills on the table, they could grow up to think this is all normal financial behaviour. Whether it’s good nutrition, good dental hygiene, or good financial habits, leading by example is how you can help create a better life for your kids. 

Point them in the right direction: If they see you getting excited about setting goals, saving money, and planning for large purchases instead of just slapping them on a credit card, then you’ll help set them up for a bright financial future (and keep your financial present in great shape, too!). 

10 common money mistakes parents make 

Hey, no one is perfect. By identifying some of your financial weak points now, you can make small adjustments that will put your family in a better financial standing. Here are 10 common money mistakes parents make and how to fix them:  

1. Not having an emergency fund

A financial buffer, a.k.a. an emergency fund, can take the stress out of unexpected life situations and help you avoid going into debt. Things happen: Raccoons get into the attic, your car needs a new transmission, or, worse—you lose your job. How much should you save? Aim for a few hundred dollars to start, then build up to about three to six months’ worth—or more if you can—of essential expenses, i.e., mortgage or rent, food, and bills. 

Putting these savings into a high-interest emergency-only account lets you automate monthly transfers and also gives you quick access to funds; avoid using long-term investment accounts that may penalize you for withdrawals. For a teachable moment, give your kids a few examples of emergencies that could come up—or let them dream up their own wild scenarios!—then let them know that you’re stashing money away for such emergencies. They’ll feel good knowing you have everything under control. 

2. Not having a financial plan 

Living paycheque to paycheque with no financial plan can easily lead to overspending and a lack of savings. As unexpected expenses come up, having a budget and an investment strategy can mean the difference between staying ahead financially and being stuck in an endless cycle of debt. 

Take the time to list the family’s income and expenses, then set short- and long-term savings goals. Opening a tax-free savings account (TFSA) is a great way to start investing—it’s easy, it’s suitable for both short-term and long-term goals, and neither your withdrawals nor your investment earnings are taxed. If making a financial plan feels outside your skill set, don’t sweat it. Speaking to a financial advisor can help you balance your priorities, set goals, prepare for retirement, and protect your wealth. Consider including your kids and older teens when you speak to an advisor so they see how straightforward talking to someone about managing money actually is.   

3. Not paying off credit card balances 

If you aren’t using credit cards to your advantage, you could easily slip into a cycle of debt. While they’re convenient for quick purchases, tracking monthly spending, and even earning points, high interest rates, which are typically between 19 and 29 per cent, mean carrying a balance gets expensive—fast. 

If you only make minimum payments on your credit card and even miss payments sometimes, this will affect your credit score. A bad credit score could affect you or even your kids down the line if you need a personal loan for an emergency or need to co-sign on your teen’s student loan. If you do currently carry a credit card balance, start by using debit or cash more often, and make it a priority to pay down the balance(s) as soon as you can. 

4. Spending more than you can afford

Whether you’re struggling to make mortgage payments but are also spending lots on an expensive hobby like scuba diving, or keeping food-delivery apps in business, your lifestyle could be unsustainable over the long run. This isn’t to say there can’t be a portion of the family budget that goes toward nice things. But by tracking your spending and identifying wants versus needs, you’ll quickly see where you need to spend and where you need to save. Include kids in conversations about a family vacation, for instance, and how you can all help save up for it. Even small habit changes, like skipping the coffee shop and pocketing the $4 frappuccino money instead, can really add up over time.  

5. Having little or no retirement savings

Retirement age will come faster than you realize, along with the reality that aging comes with increased health-and-wellness needs that often cost money. If you have a full-time job now, take advantage of employer-matched contributions to company pension plans to build up a nest egg. If you don’t have access to a pension, or want to save even more for retirement, there are RRSPs. Contributions to RRSPs are deducted from your income at tax time and can reduce how much you pay in income tax. And RRSP income, such as interest and dividends, grows tax-free until it’s withdrawn.  

6. Procrastinating on opening an RESP

There’s big value in opening and contributing regularly to a Registered Education Savings Plan (RESP) for each child as early as possible. RESPs offer tax-deferred investment growth, and through the Canada Education Savings Grant (CESG), even more goes into RESP savings. The basic CESG provides 20 cents on every dollar you contribute to an RESP, up to an annual maximum of $500. So, if you put in $2,500, you’d be eligible for the full $500 in grant money available each year. 

Even if you don’t use the full grant amount each year, it can be carried forward until a child’s 17th year. And if your kid decides not to pursue post-secondary education, up to $50,000 can be transferred into a Registered Retirement Savings Plan (RRSP). However, with contribution room of only 18 per cent for every year they worked, your kid may not have enough to transfer their entire RESP. In that case, some of these funds can go into a parent or guardian’s RRSP, although the government’s contributions will be lost.  

Opening a TFSA for your child is another way to help them save for post-secondary education or even a down payment for their first home. Unlike RESPs, withdrawing from a TFSA is not taxed. 

Read more: How to pay for university or college.

7. Not having adequate insurance

Do you have a plan in the event that you can’t work because of illness or if you pass away? This can be hard for parents to think about but being covered with enough insurance means your kids will be protected—and telling them that they’re protected will give them peace of mind, too. Here’s one way to figure out how much life insurance you may need to protect your loved ones: 

(Any debt owing) + (annual income x number of years you want to provide for your family) + (mortgage owing) + (kids’ education costs) = life insurance policy amount 

Appropriate car insurance as well as home or tenant insurance are also important financial tools for protecting families in the event of an accident, fire, flood, or other unforeseen event. 

8. Not saying “no” to the kids 

As parents we want to scream “Yes!” to our kids every time they want something. But being a good role model means teaching kids they can’t have everything their hearts desire. Explaining why you can’t finance everything they want will help them identify wants versus needs, the cornerstone of financial literacy. This is how kids step into their own financial independence. The best part is, saying “no” more often reduces the strain on your wallet! 

Read more about 10 common money mistakes teens make.

9. Avoiding looking at your finances 

Sometimes when we’re stressed about money, it may seem easier to ignore unopened bills and a waning bank account. But burying your head in the proverbial sand can lead to even bigger money problems. By tracking your spending and checking up on bank accounts, credit card balances, and bills regularly, you’ll actually be more in control. Start by taking a hard look at recurring monthly charges for streaming services, gym memberships, and other subscriptions, for example, to see if they’re really necessary. Making small adjustments can add up over time and help you grow your savings. 

10. Not having a will

No one really wants to think about drawing up a will, let alone shelling out the lawyer fees to have it done. But if you pass away without a will, this can cause emotional and financial struggles for your surviving family members. In the absence of a will, the laws in your province or territory will dictate how your estate is distributed and the courts could appoint an executor (called a liquidator in Quebec). This will likely cost surviving family members time and money and add stressful decision-making to a very emotional time. Having a will means all your wishes are spelled out in a legal document so your family can concentrate on healing their grief. This will bring you peace of mind, too, knowing that your chosen caregiver will be appointed to look after your kids in a worst-case scenario.

For some, family budgets are tight, and financial planning isn’t everyone’s favourite activity. But by being aware of these top parenting money mistakes and taking small steps toward correcting them, you’re more likely to set the entire family up for a better financial future. Sure, things will come up, but fixing small money mistakes today means the entire family should be better equipped to avoid big financial problems tomorrow. And by taking control, you’re also teaching your kids financial literacy. For even more help, there’s the Mydoh app, which gives your tweens and teens the experience of making their own money and helps teach them how to spend and save it wisely, laying the groundwork for their own healthy financial future.

Download Mydoh and help build the foundation of financial literacy for your kids and teenagers.

You know how an annual trip to the doctor helps you keep track of your health? And how regularly talking about your feelings with friends and family can be good for your mental health? Well, it may surprise you to learn that financial health is considered just as important. That’s because it impacts other parts of your life in pretty profound and unexpected ways.

In this article, we’ll cover what financial health means, why it’s a big deal and what you can do now, and in the future, to make yours stronger.

Key takeaways 

• The overall condition of your finances is referred to as your financial health.
• Healthy finances include a reliable income, expenses that don’t vary much, and savings that grow.
• Your financial health is measured by your net worth, debt, earnings, and spending habits.
• To boost financial health, create a financial plan, make a budget, manage your debt, have an emergency fund, and save for your future.

What is financial health? 

Financial health is a term used to describe the state and steadiness of your finances to handle surprises (not the good kind, unfortunately). Setbacks can be anything from a pay cut at work to an increase in university tuition or a roommate suddenly moving out, leaving you to cover their part of the rent. 

Just like a physical exam at the doctor’s office checks various vital signs such as body temperature, blood pressure, and heart rate, a financial health evaluation looks at major money-related markers. Examples include what you own, what you owe, and how steady your income is. 

Why is good financial health important?

Financial health—for better or worse—can greatly impact your life. Research shows money problems are the top source of stress for Canadians due to rising living costs and high levels of debt. Finances can be even more worrying than concerns about personal health, work, and relationships.

Now, there’s nothing wrong with a little stress. In small amounts, stress can help motivate you to do important things like study for an exam or look for a job. But stress related to money problems can become chronic and, in the long term, can have unfortunate knock-on effects on your physical and mental health, too. 

Financial stress can affect you whether you’re young or old, rich or poor. It could hurt work and school performance, and personal relationships. And it could lead to serious health issues such as heart disease, high blood pressure, depression, and anxiety. Doesn’t sound good, right?

Why should you learn about financial health? 

Just like good oral hygiene habits start by learning to brush your teeth as a toddler, good financial health should also start as early as possible. And for the parents reading this, just like it’s important to show kids how to brush and floss every day, you should try to model healthy financial habits: paying bills on time, not relying on credit cards, and saving toward short- and long-term goals.

How do you measure your financial health?

The concept of financial health may still seem vague, but luckily there are specific ways to measure it. Typical signs of strong financial health include a regular flow of income, expenses that don’t yo-yo all over the place, and savings that can help you build wealth over time. 

Here’s a more detailed look at the factors that affect financial health. Understanding them can help you set financial goals and track your progress toward each one.

What you have: Net worth 

If you were to sell everything you own to pay off what you owe, you would be left with your net worth. In finance speak, the word “net” means minus debt. To calculate net worth, you’d add up all your savings, investments and assets (such as a house, a car, or stocks) and then subtract any debt (such as a car loan, student loan, or credit card debt.) Is that number positive or negative? If the sum is positive and growing, it’s a sign of good financial health. If it’s negative and decreasing, it’s definitely an indicator of concern.

What you owe: Debt 

Let’s take a closer look at what you owe. How much of your debt (things like credit cards and loans) are considered good debt versus bad debt? 

Good debts, such as taking out a mortgage, are manageable to pay off, plus they’re more likely to earn money for you in the long run while increasing your net worth. A loan to pay for university or college is usually also considered good debt because it could increase your earning potential down the road. 

Bad debts, such as a high-interest credit card you signed up for to buy more clothes, can be more difficult to pay off, don’t provide a return on investment, and decrease your net worth. 

What you make: Ability to earn 

Whether you have one regular job or earn money from different sources, aiming for a steady flow of income and tracking how much you make every month can help you improve your financial health. You can also use those numbers to calculate your debt-to-income ratio, which compares how much you make with what you owe. Anything under 36 per cent is considered a reasonable amount of debt, while anything over 50 per cent is not so great news. 

What you spend: Your spending habits

How much of your budget goes towards overall expenses, such as rent, food, and bills? Are you spending more money than you’re making? What percentage of your spending do you have control over (shopping for shoes), versus can’t do anything about (paying your student loan)? Tracking your spending habits like this, and being able to differentiate a want from a need, can also help get your financial health in better shape. We go into more detail on this below.

How can you improve your financial health?

Here are five habits to help improve your financial health and keep your financial goals on track:

1. Have a financial plan (set short- and long-term goals) 

As with any goal in life, it helps to have a plan. Since everyone’s financial situation is different, experts advise creating an individualized financial plan that includes both short- and long-term goals and the steps you need to take to get there. You can build your own financial plan by using a spreadsheet or tool like the one on the Government of Canada’s website, or by hiring a certified financial planner. 

2. Make a budget 

To create a budget, you can start by listing all your income sources and how much money you bring in each month. Then list everything you spend money on and the amount of each item. Remember that income and expenses may change month to month, so creating monthly budgets for the year may be helpful. (Luckily, there are super handy budget apps and calculators for this.) 

The difference between the money you make and what you spend is called your “net savings.” Want to know what a healthy budget looks like, and how much of your budgets should go toward needs versus wants? A good rule of thumb is the 50/30/20 principle: 50 per cent for needs, 30 per cent for wants, and 20 per cent for savings. (Hopefully, those savings will go toward the strategies mentioned below.) Another way to budget is create a zero-based budget, where you allocate every dollar of your income to expenses, savings, and debt.

3. Manage your debt

Once your budget is in place, you can focus on how to get out of debt. While no one likes being in debt, managing debt responsibly will go a long way toward improving your financial health. The “debt avalanche” and “debt snowball” methods are two of the most popular ways of paying debt down fast. The former pays down high-interest debts first and the latter targets the smallest debts first. There are pros and cons of each (which you can read about here), so think about which one best suits you.

4. Have an emergency fund

Building an emergency fund (a.k.a. rainy-day savings) can significantly improve your financial health. The fund acts like a safety net so you don’t have to withdraw money from your savings, or (worse) go into credit card debt to handle an emergency like losing a job, repairing a cracked windshield, or replacing a stolen bike. Experts often advise that people should try to set aside three to six months’ worth of living expenses for this purpose. If that seems like an overwhelming amount, start small and keep building on it.

5. Save for your future 

Healthy savings and, perhaps in the future, investments that are making you money are another crucial way to boost financial health. While you may feel this is far off, remember: the earlier you start saving, the better. Savings goals are one of the best ways to hold yourself accountable. When you’re simply putting money into the bank and withdrawing it whenever you want, it can be too easy to overspend without thinking.

Read more: A guide to tax-free savings accounts (TFSAs)

Getting your financial act together isn’t always easy, but starting to pay attention is the most important step. You’ll see that being in control of your financial health, and giving it as much attention as other wellness habits like exercising regularly and building a meditation practice, can be life-changing in the best possible ways. 

Download Mydoh and help build the foundation of financial literacy for your kids and teenagers.

Learning how to manage your money often starts with simple trial and error. This is probably how you learned the lesson that it’s a whole lot easier to spend money than it is to save money (unless you’re one of the lucky ones who are natural savers). 

But relying solely on trial and error to learn money smarts can be costly—literally. So, why not learn how to avoid making mistakes in the first place? Unfortunately, there’s one small problem. The subject of finance can be pretty dry, especially when taught by your monotone accounting teacher or “helpful” parental advice during dinner conversation.

Thankfully, you can turn to social media for lessons in finance that won’t put you to sleep (we promise). In fact, today’s influencers have made financial literacy entertaining—and completely applicable to your interests, aspirations, and, yes, even worries. They can help teach you how to set a budget, land a job, save for big purchases, and even start investing. In fact, it may not be long before you’re the one providing financial expertise to your parents!

Here we explain what a financial influencer is and list 10 top financial influencers who are worth checking out for their entertaining, anything-but-boring, info-packed posts on personal finance. 

What is a financial influencer?

An influencer is someone with a large social media following who uses the platform to influence the buying habits of their followers through tactics (like sponsored posts) that often earns the influencer income. A financial influencer, or “finfluencer,” creates content specifically to help people manage their money and build wealth.

Finfluencers discuss a wide range of topics including personal savings, the stock market, student loans, credit cards, spending habits, and even the best handbags to buy as an investment (for real).   

Some of them shamelessly share their past financial mistakes along with the lessons they’ve learned and the expertise they’ve developed in a way that’s authentic and often humorous in bite-sized videos on TikTok, YouTube, and more. 

What to look for in a financial influencer

Not every financial influencer is worth following. Some provide inaccurate or just plain bad financial advice. Some promote multi-level marketing (MLMs) or “pump and dump” schemes. It’s also important to note that many finfluencers are not licensed financial advisors and therefore, they should clearly state that their aim is to educate, not advise, their followers. 

Personal finance influencer red flags

• Give financial advice without transparency on how they may financially benefit
• Pressure followers to sign up for costly courses that they’ve created
• Encourage high risk investments such as crypto and meme stocks
• Create content that focuses on how to get rich quick rather than educating about personal finance.

10 top financial influencers for teens

These popular financial influencers cover a variety of topics on financial literacy. Their videos are relatable, informative, fun, and could even empower you to take control of your finances:

1. Tori Dunlap, @herfirst100K

TikTok followers: 2.4 million

A self-proclaimed financial feminist, Tori Dunlap is one of the most well-known financial influencers in North America and author of Financial Feminist. She offers quick lessons geared toward young women on how to manage, earn, and save money by “giving you the money talk I wish they taught in school.”

Why you should follow @herfirst100k

She’s a likable financial expert offering no-nonsense talk about money smarts covering relevant topics such as negotiating salary, investing, and mindful spending with a mission to financially empower women.

2. Nicole Victoria, @nobudgetbabe

TikTok followers: 1.9 million

Nicole Victoria is a Toronto-based real estate broker who has made it her mission to help teach other women how to take control of their finances, just as she learned to do in her 20s. She shares her past struggles with money and clear details on how she overcame them (and how anyone else could, too.) 

Why you should follow @nobudgetbabe

Nicole’s videos on financial literacy are personable and often based on her own experience of overcoming debt and building wealth through smart money management and the right mindset. A hard worker (she graduated with a BComm in just two years vs. four), she’s smart and passionate about helping others adopt solid financial practices in their lives.

3. Vivian Tu, @yourrichbff

TikTok followers: 2.5 million

Vivian Tu is a former Wall Street trader who noticed a lack of personal finance know-how among her own “finance-educated” colleagues and, so, made it her mission to provide bite-size financial literacy to empower people to make smart decisions about their finances. 

Why you should follow @yourrichbff

Vivian is a smart young woman who is serious about delivering money sense lessons. You should find her videos relatable and practical on topics ranging from how to limit online shopping to getting job referrals

4. Steve Chen, @calltoleap

TikTok followers: 1.1 million

Steve Chen is a former public school teacher who quit his day job at age 33 to live off his investments. He now shares his investment knowledge through videos that are especially geared toward Gen Z and millennials.

Why you should follow @calltoleap

Steve Chen offers advice on more than just investing; he also shares practical guidance on how to live frugally (in one video he explains why he shops at Goodwill). Even though he’s a former teacher, he’s good at delivering easy to understand content.  

5. Michaela Allocca, @breakyourbudget

TikTok followers: 830,600

Michela Allocca is a finance professional whose goal is to make personal finance simple and easy to implement by following the basics, consistently. 

Why you should follow @breakyourbudget

Michela’s videos are clear, practical, and smart without the antics that sometimes characterize other FinTok accounts. If you’re looking for an influencer who clearly focuses on sound money management with guidance on how to go about it, then this might be it. 

6. Nick Meyer, @nicktalksmoney

TikTok followers: 1.1 million 

Nick Meyer is a certified financial planner with a mission to increase financial literacy rates by making finance fun (really!). His goofy videos on TikTok feature tips such as how to save on purchases, what career to choose, and investment strategies. 

Why you should follow @nicktalksmoney

His videos are upbeat and easy to understand. He regularly offers tips related to parents (so they can learn a thing or two as well!). The lessons are often US-focused so may not always be applicable to Canadians.

7. Ellyce Fulmore, @queerd.co

TikTok followers: 535,000

Ellyce Fulmore is a self-taught financial feminist educator from Calgary who shares basic lessons on financial literacy, as well as discusses money challenges for those with ADHD. Her mission is to help you gain power and build wealth. 

Why you should follow @queerd.co

If you feel like you’re struggling to fit in, Ellyce can be a welcome voice as she addresses how privilege, race, gender, sexuality, mental health, and disability can affect one’s ability to build wealth. She’s not only approachable, but her content is Canadian-focused. She recently released a book, Keeping Finance Personal.

8. Nathan Kennedy, @newmoneynate

TikTok followers: 876,700

Nathan Kennedy is based out of Toronto and his TikTok videos cover basic financial topics that relate to teens and young professionals, delivered in a light and humorous tone. 

Why you should follow @newmoneynate

Nate keeps the messages pretty general and light, but makes good financial sense. From cutting out frivolous purchases to budgeting for the school year, you could learn financial lessons that apply to your life.   

9. Brandon Beavis, Brandon Beavis Investing

YouTube followers: 187,000

Canadian influencer Brandon Beavis teaches investment basics with friendly, easy-to-understand YouTube videos geared toward young people. His most popular video of all? A lesson explaining TFSAs. 

Why you should follow Brandon Beavis Investing

Even if your teen has no plans to invest anytime soon, Brandon’s videos can help clarify why investing is essential to grow wealth and how to do it smartly. He has taken the Canadian Securities Course (CSC) which adds professional cred to his teachings. 

10. Cassandra, @moneywithcass

TikTok followers: 141,400

Cassandra is a nurse living in Toronto who shares her passion for personal finance through practical yet entertaining lessons on balancing money, work, and life.

Why you should follow @moneywithcass

As a young person living in Toronto, Cassandra’s life experience may be relatable to many teens. Her down to earth personality and content offers useful and practical guidance on topics such as TFSAs, real estate, and tackling university debt.

Read more about famous teen influencers.

How does someone become a financial influencer? 

Once you start following financial influencers, you’ll soon notice they share one important trait—a passion for personal finance. Followers appreciate the excitement, creativity, and personal spin that influencers put into every video. And, although it may look like all fun and no work, creating content on a regular basis (often daily) requires a tremendous amount of personal dedication and time. To become a financial influencer, you must be willing and able to post quality content consistently to build a loyal following.

Read more: How to become an influencer as a teen.

Certainly, and perhaps most important of all, a financial influencer should be knowledgeable about finance through personal or professional experience. Many influencers are popular because they lead by example—they may have experienced financial challenges like massive debt and learned how to successfully build wealth on their own. To become a finfluencer, you should have your own finance story that’s worth sharing. At the same time it’s important to clarify what you don’t know and that your goal is to explore financial education, not provide financial advice (unless you’re actually qualified to do that). 

Lastly, safety should always be a priority for anyone striving to become an influencer. Keep your personal information private and don’t click on links by people you don’t know or whose identity you can’t verify. 

Read more about how to make money on TikTok as a teenager.

Financial influencers make personal finance fun

It’s never too early to build your financial literacy, and an influencer can help spark your interest. As you start earning your own income through part-time work, following financial influencers can help you develop healthy spending habits, learn how to invest, and encourage you to save money for your aspirations, whether it’s post-secondary education, owning a car, or booking a trip across the globe.  

Download the Mydoh app to help build your confidence in money management and become financially independent.