Credit Education Week in Canada

I am a strong believer in education. I believe that many of our personal financial problems would be eliminated if we were educated about the impact that credit has on our lives. It is generally believed that credit is “good”, and the more credit you have, the better. Unfortunately, that’s not true. It is possible to borrow more than you can repay, and it’s excessive levels of debt that lead to the growing rates of personal bankruptcy in Canada.

That’s why I’m pleased that this is Credit Education Week in Canada. Now in it’s third year, Credit Education Week in Canada is designed to highlight consumer credit issues, and offer solutions to credit problems. Most of the events and tools are free.

The theme of this year’s Credit Education Week will be Couples and Money. Participants will learn about how couples spend and save, and learn some important techniques that will help couples with their finances, and their relationships. As a bankruptcy trustee I can tell you from first hand experience that many of the people I meet with have both money problems and marriage problems. In fact, well over a third of Canadians that declare bankruptcy are separated or divorced.

Do money problems cause marriage problems, or do relationship issues lead to money problems? The answer is both.

If you lose your job or have your income cut back, that puts you under a lot of stress, and that stress will also put a strain on your relationship. If your relationship is already suffering, you may try to repair your relationship by spending more money, and generally that only makes matters worse. I think having a week of discussions on how couples can better manage their money is a great idea.

My advice? Start with a family budget. If neither one of you has any idea what the other is spending, you can guarantee that at some point you will be disagreeing about money. Write down your expenses, and work together to agree on where to spend your money. Equally important: write down your goals, so that you can both agree on a savings plan. If you don’t have a goal for your savings plan, you won’t succeed.