#3 — Rob Carrick: How Personal Finance in Canada Has Changed Over the Last Three Decades
Oct 22, 2024
auto_awesome
In this discussion, Rob Carrick, a renowned personal finance expert from The Globe and Mail, shares insights from over three decades of experience. He highlights the growing financial support from parents to adult children and the impact of social media on spending habits. The conversation touches on the challenges of rising costs for families and seniors, the need for mindful retirement planning, and the benefits of First Home Savings Accounts. Carrick's perspective adds depth to the evolving landscape of Canadian personal finance.
The rising costs associated with raising children today compel parents to reevaluate their financial strategies and support systems.
Social media and marketing pressures contribute significantly to societal spending habits, complicating traditional advice about living within one's means.
Single individuals face heightened financial challenges due to soaring housing costs, often struggling without the support systems that couples might have.
Deep dives
The Evolving Landscape of Personal Finance
The podcast emphasizes the increasing complexity of personal finance, particularly in the context of raising children today. Costs associated with extracurricular activities, like sports and summer camps, have escalated significantly, creating financial strain for many families. The discussion highlights how parents are now expected to invest heavily in their children's experiences, with expenses that were once manageable now becoming overwhelming. This shift in societal expectations regarding child-rearing has made it imperative for parents to adapt their financial strategies to ensure they can meet these demands.
Navigating Modern Spending Pressures
There is a growing concern about the societal pressure to spend, driven by factors such as social media and marketing. The discussion points out how the urge to spend is not solely a personal choice, but rather influenced by external forces like government agendas and retail pressures. As families try to navigate their finances in this environment, many find themselves struggling with debt and the challenge of saving effectively. This pressure complicates the long-standing advice of living within one’s means, creating a dilemma for many individuals and families.
The Impact of Lifestyle Inflation
The podcast delves into lifestyle inflation, particularly regarding the expenses associated with vehicle ownership. Attendees share their confusion over the rise in expenses related to cars, especially among younger populations who are also contending with high housing costs. Many young people prioritize owning expensive vehicles, potentially jeopardizing their ability to save for vital long-term goals such as homeownership. This trend reflects a broader issue where individuals prioritize immediate gratification over financial responsibility, leading to unsustainable spending habits.
The Challenges of Homeownership for Singles
The discussion highlights the financial challenges faced by single individuals navigating the high cost of renting or buying homes. As housing costs soar, single earners, especially those wanting to live independently, struggle to manage the financial burden that used to be shared with a partner. This has led to a significant increase in stress among single adults, as they often lack the safety nets available to couples. Furthermore, there is an ongoing conversation regarding the lack of supportive policies for single homeowners and renters that might alleviate some of these pressures.
Exploring Financial Planning Trends
The podcast explores the evolving landscape of financial planning and the increasing desire for unbiased, fee-for-service advisors. Individuals are increasingly seeking professionals who can provide comprehensive financial strategies without a sales agenda, often feeling overwhelmed by the complexities of investment products. However, there is also a growing trend among younger generations who are constantly seeking the next big investment and may be lured into risky markets. This signals a shift in how financial literacy is approached and the need for more robust education around prudent investment practices.
Debunking Myths about RRSPs
A significant portion of the conversation is dedicated to the misconceptions surrounding Registered Retirement Savings Plans (RRSPs) and how they are often viewed negatively by retirees. Many individuals express regret for their RRSP contributions, failing to recognize the long-term benefits and tax deferment aspects of these accounts. The hosts emphasize the importance of understanding the math behind RRSPs, including how they can provide tax advantages during retirement. This discussion underscores the need for better education to help clarify the advantages of RRSPs and how they should be viewed as a vital component of a strong financial strategy.
Our guest this episode is Rob Carrick—one of the most well-known personal-finance experts in the country through his 30+ years as a financial writer and columnist for The Globe and Mail.
In this episode Dave and Rob discuss how personal finance in Canada has changed over the last 35 years including how more parents are helping their adult-age children financially, how social media is increasing the pressure to spend, why FHSAs are the ultimate no-brainer and much, much more.
You'll enjoy this discussion with Rob Carrick.
-------
The Wealthy Barber Podcast is Canada’s go-to source for approachable, entertaining, and free financial education. Hosted by none other than David Chilton—former Dragon on CBC’s ”Dragons’ Den” and the best-selling author of ”The Wealthy Barber” and ”The Wealthy Barber Returns”—this podcast is here to help Canadians manage their money better. Much better.
Find all episodes and more Canadian personal finance content at https://thewealthybarber.com.
-------
Show Notes:
(00:00:00) – Introduction
(00:03:30) – It's More Expensive to Have Kids Today
(00:06:01) – Pressure to Spend
(00:07:24) – Crazy What People Spend on Cars
(00:09:24) – Spending & Lines of Credit
(00:12:27) – What Dave is Seeing From People's Spending Summaries
(00:13:47) – It’s Financially Difficult to be Single
(00:15:12) – Costs Are Rising for Seniors
(00:19:06) – More Parents Are Helping Their Kids Financially
(00:22:09) – People Need Help with Retirement Planning
(00:27:05) – Fee-Only Financial Planning
(00:31:19) – Divorce Rates Going Down
(00:32:18) – People Are Having Fewer Kids
(00:33:13) – Boomers Had It Easier
(00:36:18) – Pensions Are Making a Comeback
(00:38:18) – Counting on Inheritances
(00:39:05) – Some Young People Are Giving Up
(00:40:16) – Anyone Can Manage Their Money Well
(00:41:24) – Is Personal Finance Harder Today?
(00:42:17) – Pets Are More Expensive Than You Expect
(00:44:30) – You Have to Make Spending Tradeoffs
(00:46:16) – You Feel Better When You’re On Top of Your Finances
(00:48:44) – Debit vs. Credit Cards
(00:50:54) – Should Couples Manage Their Money Together?
(00:54:01) – FHSAs
(00:55:08) – TFSAs
(00:58:11) – The Problem with the Bank-Branch System in Canada
(01:00:23) – FHSAs Are a No-Brainer
(01:03:39) – Why Hasn’t Canada Embraced Passive Investing Like the US?
(01:05:38) – The Wrong Way to Use ETFs
(01:08:26) – Men vs. Women Investing
(01:12:19) – Why Don’t Canadians Use Mortgage Brokers?
(01:14:08) – RRSPs are Still Great
(01:16:48) – Conclusion
Remember Everything You Learn from Podcasts
Save insights instantly, chat with episodes, and build lasting knowledge - all powered by AI.
