Today I’m excited to share a guest post from a fellow money coach. Entrepreneurship is not easy, and I hope that you can find inspiration in the vulnerability of this post
In an effort to build a community of curiosity, empowerment and growth around personal finances, I’ve written this blog entry to share my money mistakes and lessons so that you know you’re not alone. We are all working on something, we’ve all made mistakes, and it is out of our mistakes that the most beautiful lessons and growth always come. I want to preface this all by saying, I am a Canadian CPA, a former CFO and accountant who has supported many corporations and not-for-profits in the last couple decades at managing their financial systems and results, and now I help people do this. But first, I made a lot of mistakes.
My high rolling 20s
Back in 1998, I landed my first job in downtown Toronto at a big 5 accounting firm making a whopping $32k per year. I refused to live with my parents in the suburbs for a year to save money and rent. The thought of taking a commuter train for two hours a day, and having to go home every day at 25 years old to my parents’ house, was a non-starter. I moved with a college friend to one of the trendiest neighbourhoods in the city. I could barely afford the rent. My take home was about $2k per month. I was saving nothing, and my rent was $600 plus utilities! I still had to get to work. Eat. Buy business clothes so I can appear professional, and try to find some joy.
I also had a car which I really didn’t need – as I lived right by a subway station. I also had a $100/month gym membership by my office. I got a cell phone because they were a new necessity. And I was tempted daily by the underground mall under my office where I could find expensive treasures targeting all of the six-figure making bankers, on a daily basis! I was out drinking and eating at bars two to three times a week.
I was trying to live life as a high roller on less than $70 a day! So this is where I befriended Visa and MasterCard, until my paycheque caught up with my “high rolling” lifestyle.
Getting my money sh*% together
Fast forward to being 32 years old. Everyone around me was buying condos and houses in the booming Toronto real estate market. With this mounting pressure, and starting to make a better salary, I did start to get conscious of getting my (money) sh*% together. I had $10,000 of lifestyle debt and I needed to GROW UP! I figured the easiest way to get into the real estate market at the time was to purchase a pre-construction condo without a down payment.
I had managed to convince a bank to give me a line of credit at a lower interest rate (sorry Visa!) and I proceeded to pay off my credit card completely with the line of credit. This seemed like a small interest savings win!
At the time, I was dating a very sensible accountant who had his (money) sh*% together, and he agreed to lend me (or allow me access to his secured line of credit rates) roughly $60,000! I took the golden opportunity to clean myself up, pay down my $10,000 of lifestyle debt and have the $50,000 required down payment for my first piece of real estate. I fondly refer to this as the “reverse down payment”. I borrowed to make a down payment on a condo!
Eventually, the sensible accountant and I amicably split. My parents bailed me out and lent me the remaining balance so that I could pay my ex and split cleanly. Within 2 years, I had just shy of 25% for a down payment and no credit card debt for the first time in at least 7 years! This was a turning point in my money story. I vowed I would never carry a balance on a credit card again. Not even for one month. And I haven’t! Now, that doesn’t mean I haven’t had months where I’ve spent beyond my limits. I do it with awareness and utilize the access to cheaper credit that is secured against my house for the overages, and more importantly, they do not become systemic balances. I adjust my spending in coming months to get back into the black!
Real life confession at 40+ years old
You ready for this? I didn’t have an emergency fund until the summer of 2020! It took a pandemic, global border closures, no flights, nowhere to go, no eating out, and no commuting, for me to save three months of salary in an account for an emergency. Finally. Now I can practice what I preach. Now, while I didn’t have an emergency fund, but I have been saving consistently in my RRSP for at least 15 years. So I had savings, just not accessible savings for an emergency. I knew full well, that I should have one, there just never seemed to be a time that I could commit to making that sacrifice. I justified it to myself that it was fine because I had cheap secured credit from my house. This is definitely an approach, but I do not recommend that you try this one at home!
We have all made mistakes. At the end of the day, none of us were taught in school how to adult and manage finances! So do not worry if you’ve made mistakes and you’re not feeling overly confident about your current financial house. The important part is that you move forward and make changes, and know that there is a whole community of people here to support you, and who are living or have lived your experience. I hope that by sharing my story, as someone that now supports people to build good financial systems that it will inspire you to take a step.
Much love, gratitude and money.
About Michelle
Michelle is as a Mindful Money Coach. She created Ms. Money and Math as she was craving something more connected and mindful in this phase of her career. Ms Money and Math‘s mission is to support and connect with individuals and entrepreneurs on their growth, specifically in the areas of financial acumen and literacy, with the end goal being financial freedom!
Ms. Money and Math just launched 10 Weeks to Financial Fierceness, a program that empowers individuals to build a sustainable money system, giving them bad ass money habits, an investment strategy that they can trust, and the confidence they have a solid plan toward retirement.
Website: www.msmoneyandmath.com
IG: @ms.moneyandmath
Follow me at @savemycents on Instagram and @savemycentsfb on Facebook for other great money coaching tips and stories.
