#MyMoneyVision: How I manage my new financial reality
It’s been just over a year since my family and I moved to Toronto. My children, Lucas and Alessandra, have settled into their new life as though they have lived here all of their 8 and 11 years. By all accounts, everyone is happy with our decision. Leaving our island life in Trinidad behind to give my special needs son a better chance, is one that I will never regret. Nothing can prepare you for the worry, anxiety and emotional weight of diagnoses and therapies. Yet, adding a layer of financial responsibility on top of it all means that my family and I have to create a new normal in Canada. One that is a scaled down version of the life we grew accustomed to. Here, we are especially cautious with our spending while working to build our Canadian credit.
November is Financial Literacy Month, and I’m sharing my story as part of Capital One Canada and Credit Canada’s 2019 Credit Education Week, which aims to help Canadians achieve their financial goals. This year’s theme is #MyMoneyVision – a theme I relate to because envisioning and building towards a new financial reality is exactly what I had to do when we arrived in Canada. Too often we are silent about our money woes – allowing ourselves to believe that we are the only ones in our network dealing with financial difficulties. My story is proof that you are not alone. That it is possible to have it all and have to start again.
Our life back home was different. My husband, Matthew and I worked hard for the lifestyle that we created with our two children. He was a Finance Director in the oil and gas industry, while I owned a chain of women’s fashion boutiques. We lived in a sprawling 10,000 sq. foot property with five bedrooms, five baths, a pool and in the best of neighborhoods. Close to family and friends, support was abundant and all around us. Packing up my family of four and leaving everything we knew behind, meant accepting life as a tiny fish in a big pond. It meant scaling back drastically: very little vacationing, if any, one car, much smaller house, even sharing just one bathroom among the four of us!
Why such a drastic downsize? There were a number of factors, the most substantial one being our lack of Canadian credit. Did you know that nearly half of Canadians (49 per cent) do not know their credit score? This is one stat in a recent survey by Capital One Canada and Credit Canada that really surprised me. A healthy credit score is key to achieving many financial milestones in life, like owning a house or buying a car. Without credit, or a healthy credit score, we could not apply for a mortgage, which in turn meant that all payments would have to be cash. Yes, that’s right, pay for your house entirely in cash. We didn’t want to empty our savings (and liquidity) into a house when all other costs of living had just gone up, so we downsized — a lot! Once we’re more financially stable, we can upgrade. And we’re working on that. Matthew is now looking for a career in Canada after travelling for many months between Trinidad and Toronto for work, while I focus on building my entrepreneurial endeavours.
Looking at other newcomers who have taken so many steps back because they are new to Canada, at different points, makes me feel nervous, overwhelmed, and (at times) discouraged. Despite these feelings, I am confident in the skillset that my husband and I bring with us. Our plan is to be patient and strategic about positioning ourselves for a better future.
I’ve learned a lot along the way and as a result have shifted my money mindset. Here’s how I am crafting a new #MyMoneyVision:
- Prepare for the unexpected – When my son was born, we were living very comfortably and felt financially stable. We saved a fair amount of our income but also did not spare much in terms of spending quite a bit on our wants instead of just our needs. When we learned of Lucas’ diagnosis, financially we took a hit due to the medical expenses. In two years, we spent enough on therapy to put both of our children through university. A cost we did not expect or plan for. Now, we make it our responsibility as a family to say “no” to wants in exchange for saving for any unexpected expenses.
- Get honest about your wants vs. needs – In our situation, our worst-case scenario that would require a large spend is our son requiring therapy and us not being able to afford it. This scenario has become the yardstick to measure my family’s wants versus our needs. We ask ourselves, if you had to choose between our current needs and this scenario would we still consider it a need? If the answer is no, then that money should be allocated to cushioning our emergency savings. If we are in a position to spend, we cut the expense in half (even if we can afford it all). Sticking to a budget isn’t easy, and the Capital One and Credit Canada survey found that half of Canadians would feel ashamed admitting they have trouble adhering to theirs. Find your “yardstick” to measure wants versus needs. Yours will certainly be different than ours but envisioning a scenario you want to avoid might just be the motivation you need to stick to a budget once and for all.
- Build a credit history – We do not use credit scores to assess someone’s financial credibility in the Caribbean, so it has taken some adjusting to understand the process. When we just moved here, we had no credit in either of our names, so we were unable to rent a house unless a full year’s worth of rent was paid in advance. At the time, we could not get a mortgage for these same reasons. Therefore, we had to slowly build our credit. Initially, we were given a limit of $1,000 on our credit card each and over time this has increased to $3,000. We make sure to pay our balance off in a timely fashion so that we can earn ourselves a strong score and hopefully upgrade in the future. If you’ve never checked your credit score, try Capital One’s Credit Keeper which gives you free access to your score, and weekly updates.
Everyone has a money story. Capital One Canada and Credit Canada are encouraging Canadians to write their own financial success story. What is your #MyMoneyVision?
To learn more about available resources and tools to help you take control of your financial future, visit Credit Canada’s website (https://www.creditcanada.com/).