Over the last decade or so there have been large public and political movements to get greater representation of women in executive roles. There has also been a wide acceptance of gays and lesbians into our communities. People continue to stand up for equal rights in the Black Lives Matter movement. And we also see continued public awareness for mental health issues. But why, oh why, do we not see any public movement or political awareness to teach people personal finance? When will topics of personal finance ever come out of the closet?
I still hear comments where sharing your salary with anyone is “bad taste”. In fact, some workplaces will even fire you if you share your salary with other colleagues. So why is freedom of financial information so wrong? What makes financial matters so secretive that people end up suffering dire consequences from sharing information?
It’s been proven that lack of communication over financial matters is hard on relationships between families and couples. Not surprisingly, a 2015 poll showed that 68% of marriages end due to financial reasons. These numbers probably haven’t changed much over the last few years since Canadians have continued to rack up more and more debt to finance their way of life.
Often times people jump into relationships or marriages for money. Or so they thought. The reality of it all is that many people are living a lie, to themselves and to others. A recent survey by Manualife exposed that 1 in 5 married couples don’t even know how much debt the other half has accrued. How astonishing is that? To think that the boyfriend or girlfriend you married driving a fancy BMW and dressing in the latest designer clothes was living on borrowed money?! The contempt!
One of the main reasons why Canadians have racked up so much debt over the last decade was just how cheap and easy it was to get credit. Banks were more than willing to help fund lifestyles with cheap loans having low interest rates. Canadians took advantage of low interest rates to buy new homes, new cars and new electronic gadgets. Our appetite for debt was ferocious.
Add the fact that mortgages were considered “good debt” and HELOCs were handed out by banks like candy on Halloween and you can see why individuals are swimming in mountains of debt.
So why has all of this been kept secret? Because we are embarrassed and we’re envious. We don’t want to portray ourselves as “poor”. Not when all our friends on social media are living the glamorous lifestyle. We all want it too. It takes money to keep up with the Joneses.
Do You Even Know?
The worse part of personal finance is that everyone likes to make assumptions. “He has a high paying job, he must be rich!” “He’s driving a Ferrari, he must be rich!” “She made so much money on stocks, she must be rich!” All of these observations are skin deep and at a superficial level. But do you really understand the person’s financial well being? Have you ever seen her monthly budget?
These are things that aren’t openly shared. The fact that society keeps these things a secret is why each generation after the next fail over and over again with their personal financial management. We never learn from mistakes. We continue to repeat the same mistakes as our predecessors.
Sadly, it doesn’t look like it’s going to change. Financial matters remain the biggest taboo topic at the dinner table. Emotions always run high when matters of finance get brought up as a topic rather than taking a logical approach.
It seems people prefer to remain ignorant when it comes to personal finance. We would rather lay blame to others, like the government, than to look in the mirror to understand why we’ve made financial mistakes.
Maybe one of these days we’ll finally be able to openly share our financial stories, but until then expect the masses to continue to live their lives in financial secrecy. Who knows, maybe the guy living next door with the Porsche really is broke ¯\_(ツ)_/¯