More Money Podcast - 219 How to Tackle Debt & Better Understand Credit - Millennial Money Meetup #6 Live Recording

Episode Date: December 5, 2019

For my 6th Millennial Money Meetup that took place on Nov. 19, 2019, in Toronto, I was able to once again celebrate and promote Financial Literacy Month in Canada thanks to the help of event sponsor Capital One. For this meetup, I was joined by a panel of financial experts: money expert and financial journalist Rubina Ahmed-Haq, credit expert and author of The Credit Game Richard Moxley, and Patrick Ens, Head of Customer Acquisitions at Capital One. The theme for this event will be debt & credit, something we’ve all struggled with (or still are) and can learn more about. For full episode show notes visit https://jessicamoorhouse.com/219 Learn more about your ad choices. Visit megaphone.fm/adchoices

Hello, hello, hello, and welcome to episode 219 of the Mo Money Podcast, your bonus episode for this week. This is the live recording of Millennial Money Meetup number six that I did on November 19th, 2019 in Toronto. So it is crazy that I have done six of these things. I still remember so vividly doing my first ever meetup or first ever event back in September 2015, I believe. And I'm still working full time in digital marketing for a law firm and was doing this on the side. I worked like a crazy person looking back like, I don't know how I did that. Like that is not healthy. How much I worked. I was hustling too much. And I remember so vividly someone coming up, you know, an attendee at the event asking, oh, do you do

this full time? And I said, and I laughed. I remember like, oh my gosh, no. Like how could I ever do this full time? Like I need to pay my bills and this is something that, you know, I'm so passionate about. But I, believe me, that event, I did not make any money. And that was a little... There's a lot of things that got me thinking of, hey, maybe I should look into doing this full-time. And that was one of the moments that's so clear in my mind and I've always remembered. Someone asked me, you can't possibly be doing this just on your free time. No, I took a vacation day to host that event. And I spent all my nights and weekends leading up to that event for like a good month. I think I took to organize that event and yeah. And then, you know, a couple months later I quit my job

and here I am three years later, self-employed crazy, um, and still doing, doing these events. And it's, I, I, I love them. I absolutely love having kind of the opportunity to host these in Toronto. I would, of course, love to host them throughout the country. But let's be honest, logistically, financially, it makes more sense to do it where I live. But you never know in the future. Maybe there will be a good reason to kind of do a tour or something like that. That'd be kind of cool. But anyways, I, this was, you know, hosted, the event was hosted and recorded during Financial Literacy Month. So I definitely do this event specifically every

November to celebrate Financial Literacy Month. And I was so lucky to have Capital One as the sponsor. Without them, this event would not have been possible because if you've ever talked to me or if you've ever been involved in event planning, you know events are very expensive and that is why you need sponsors to help you put them together. So appreciate Capital One. Thank you so much for your support of financial literacy and my millennial money meetup. So for this event, the topics were debt and credit. So how to better manage your debt and what you should know about credit. And so I was so lucky to be joined by expert guests, Rubina Ahmed-Hawk, Richard Moxley, and Patrick Enns, all of whom have actually

been on this show before. So make sure to, I'm going to include the information in the show notes so you can find their original episodes. Um, so you can take a listen. I think I do further intros about them in the live interview. So, uh, I'll kind of talk more about them and then we just talk and really dive in. You're going to love, uh, everything we talked about on it. I'm going to say this and this is bold. This was hands down the best millennial money meetup I have ever put together. The panel of guest speakers was phenomenal, amazing. They're all so intelligent

and knowledgeable about the topics that we talked about. The attendees were amazing. So many inspiring people, so many people just open to coming to this event to talk about money and to learn. And just, it was honestly, I was telling my husband this after he's always involved in helping me organize these. He is the sound guy. He's always kind of in the shadows. He doesn't like to really even acknowledge that he's there. But it was just like such a beautiful, I don't know. I don't know how to express it, but basically it was the best event I've ever put together. And it really did honestly make my year. It really helped me end this year on a high note. So thank you so much for everyone who came and supported the event. I will be doing

more events in 2020, hopefully one maybe in the spring. And of course, definitely another one next November. Maybe I'll do more. I don't know. We'll have to see. But definitely I will do some more in the new year. So very exciting. Anyways, that's enough yabbering for me. Let's get to the good stuff. Let's get to that panel discussion recording from the Millennial Money Meetup number six. All right. Hello, everyone. And thank you so much for coming to the sixth Millennial Money Meetup. I am so excited to see some familiar faces and some new faces. So thank you so much for coming. So for those of you who are new to my events, I am Jessica Morehouse.

I am a millennial money expert, financial counselor, and the founder of the Millennial Money Meetup. I hosted the first event in this series in September 2016 as a way to take the money conversation offline and to get people together to meet each other, to learn from guest experts, and basically open up the conversation so eventually no one will think the topic of money is taboo. Plus, I wanted to make financial literacy events fun because I'm sure we've all been to one or two that haven't been super fun. And since this month is financial literacy month,

I am so pleased you've decided to attend and learn more about this event's theme, which is debt and credit. Now, first, I would like to say a huge thank you to this event's sponsor, Capital One. Without them, this event would not be possible. So thank you so much for your continued support of financial literacy education and, of course, supporting the Millennial Money Meetup. Thank you. And if you didn't already know this, last week was also Credit Education Week and which Capital One is also a big sponsor of. And I had the pleasure of interviewing Jay Acharya. He is the vice president of card partnerships and customer management at Capital One on my podcast. So make sure to check that out.

I also, uh, had Richard Moxley on the show last week too. So make sure to check out both those episodes after this event. Now I am thrilled to have a stellar panel of guest experts for this event tonight. First, I would like to welcome Rubina Ahmed-Haq. She is a personal finance expert, writer, and journalist who can often be found talking money on CBC News, Global News, and AM640. Next, I would like to welcome... Sorry. Oh, yeah, you want to say something? Sorry.

Not awkward. You can do that. You can say a few words. I'm sorry. Next, I'd like to welcome Richard Moxley, who you may have heard on my podcast last week. He is a credit expert and also the author of the newly released book, The Credit Game, which you are all getting copies of

today. So welcome, Richard. And last but not least, we have Patrick Enns. He's the head of customer acquisitions at Capital One, who you may also remember from episode 175 of the Mo Money podcast, where we talked about the importance of money mindfulness during Credit Education Week last year. Welcome, Patrick. Thank you for having me. Awesome. So we will be doing this panel discussion with a Q&A to follow. So if you have any questions, awesome.

Just keep them until the end and we will make sure to get to them. So without further ado, let's jump in and talk about debt and credit. I have a list of questions I'm very excited to chat with you about. So let's start. I want to start off by talking about debt first. In a recent survey from Capital One and Credit Canada, they found that 63% of Canadians currently carry debt. That's more than half of Canadians. Why do you think this is? Is it a lack of financial literacy? Is it the promotion of debt products? Is it because having debt now kind of seems normal and everyone's just doing it? I want to start with you, Rubina. What are your thoughts? All of the above. I think that low interest rates have been the biggest driver of people just being more and more encouraged to get into debt.

When it's cheap to carry money, it's really easy at the bank when you're getting your mortgage to say the bank is offering you $400,000, but then the home you want is you need a mortgage of $500,000, and the bank's telling you, oh, you could just put, you know, you could just spend $50 extra a month, and you could get that extra $100,000, or whatever it is, the numbers. And also, if you put 20% down, you can actually get a 30-year mortgage. So it's really easy to get into more and more debt. And I also think that

the idea of savings is kind of like for our parents. It's a very quaint idea. The idea that you get money and then you squirrel a little bit away and you save it for a rainy day. I think that that sort of is considered very old fashioned. Whereas now the idea is, is that you spend money as you have it. You get the lifestyle you want now. It's more about managing your debt rather than saving for a rainy day or putting money away every time you get paid richard what do you think she took all my response did she oh i read your notes so for me i see a lot of it with fomo or fear of missing out and people of just the here and now so people want it now and if you can get it now why wait uh you go here and now. So people want it now, and if you can get it now, why wait?

You go in and now, when you go and request for a vehicle, they don't tell you how much a vehicle costs. They only tell you what the monthly payments are. Or not the monthly now, now it's weekly, right? And so that number sounds more and more attainable because they're not telling you that it's $44,000. They're telling you it's $126 every couple weeks or a month.

And that is just normal. And they're high sales and they are very aggressive on putting it in a way that makes it sound like, sure, why would I pay for it now? Why don't I just pay as I go instead of saving up? And Patrick, what do you think? Yeah, I might add one thing to that. I think there is an element of truth that this crowd has relayed before as well.

Just the cost of living has gone up a lot. So even if some people are old-fashioned and attempting to squirrel some money away, it can be hard. It can just be literally hard, right? Everything from paying for school, it's gotten more expensive, to paying for rent,

paying for your first home, to paying for your first car. All those things have just gotten more and more expensive over time. Yeah. It's tough for us. It's tough for us out here, right? It's tough for us.

It's tough for those youngins. Yeah. Okay, here's something, a term that I feel like I see over and over again, which is good debt versus bad debt. These terms have been floating around for years. Is there such a thing as good debt and bad debt? What are your thoughts? Let's start with Patrick, actually.

I would love to. I think that's an awesome question. I would encourage this group and anyone to think about good debt and bad debt is in the eye of the beholder. Really, it's up to you to decide what's good and bad. And don't let someone else tell you that, you know, because this is a mortgage, it's all good debt. Or because this is a car loan, it's all good debt. Kind of my definition for good debt versus bad debt, I have debt that I intended to have and a plan for paying down, and I call that good debt. And then I have everything else. And

to me, that's bad debt. But I think everyone could come up with their own kind of decisions or parameters around that. I don't like anything coming out of my bank account. So it's all bad. It's all bad. Makes sense that you're the credit expert that you think that, but okay. Rubina? I think the reality is that most of us have to get a mortgage or get a car loan. We don't have that kind of money just readily available. So that's often referred to as good debt. But sometimes we can get a little bit sucked into, oh, well, I'm buying a home that's 50% more than what I first budgeted, but it's all good debt.

Or I'm getting a really high education, but I don't really know what I'm going to be doing with my career. It's all good debt. It's for my education. So it's really about learning that I'm borrowing this money, but what's my return on this investment?

If I'm borrowing $50,000 so that I can go and get my MBA, what kind of job do I expect to have at the end? What's my plan to pay it off? So some debt is all bad. I mean, consumer debt is bad. If you're going out for dinner constantly and not paying your credit card off, that's all bad debt because you've consumed it, it's done, and it's still hanging around in your credit card. But good debt can also sometimes become bad debt if you are irresponsible with it and you're not really planning on what you want to do with that

money down the road. You're just sort of, you've got it in your mind, oh, it's all good debt. I'll just borrow more for my mortgage. But can you really afford to make those mortgage payments, et cetera? And for me, I don't like that. I think we are kind of all on the page. We don't, you know, good debt, bad debt. It can be kind of a slippery slope when we think about it in those terms. For me, I usually think of like, is this necessary or is this unnecessary? Because everyone ever has been like mortgage, it's good debt. I'm like, you're still or is this unnecessary? Because everyone ever has been like mortgage, it's good debt. I'm like, you're still in debt though. And so that's why people kind of get a little crazy, borrow more than maybe they should. And now they're in a situation that

they didn't perceive themselves. So I think it's really comes down to, it sounds like mindset, maybe creating some rules for yourself. So you're kind of more accountable. What are some mistakes you've heard or seen people often make when it comes to borrowing or handling their debt? I know it's a big question. So whoever liked to start, go ahead. Richard, maybe? I feel like you talked to a lot of people about debt. Can you give the question again? Yes, sir. What are some mistakes you've heard or seen people often make when it comes to borrowing or handling their debt? I think most of it is awareness. People will borrow debt or get into debt.

And like Rubina had said, they don't have a game plan in place for taking care of that. It's I got the thing or the doodad and now it's, okay, now how am I going to take care of that? And then it just keeps on piling on because that thing becomes irrelevant real quick, as you guys know. The newer thing comes out that you want to replace it with

and it just keeps on going. And if you don't ever look at your bank statements, the first thing I do with my clients when it comes to budgeting or debt, it always starts with, what have you been doing with your money in the last few months? Let's actually look at your bank statements. And that's pretty scary for a lot of people just because they don't want to know. And then the other tip that is also really enlightening for most of my clients is when we group all of those together and put it into a category. Because when you're spending six, seven bucks here or there, you might not feel that pain. But when you group it together and realize that you're spending $1,200 on fast food

or coffee or whatever that category is, then it's painful. And we need more pain in our life to realize that maybe we should be doing something a little different or at least be aware that it's happening and where all our money is going, which is a question that I think everyone in this room or watching has asked at least once in their life. Where does it all go? Mine's kids, but everything else, yeah. How many do you have again? Five.

Yeah, so that makes sense. It is all their fault. I was going to add a couple from the consumer lending space, the world that I'm in. There's two painful mistakes that I've observed. One is from customers who will make minimum payments and think that as long as they do that, they'll avoid interest. I think a lot of us know that that's not true. Hopefully everyone here knows that's not true.

But insofar as you're providing advice to people, your friends, your clients, keep that in mind. Not everyone knows that. And we work really hard to make sure that people know that, yet we still run into these situations. And another one is the pay occasionally strategy. I don't know if people have seen this, but people kind of lump all their bills together over the course of a few months and then make big payments all at once. And they think they're getting to the same outcome of making those payments, but I'm sure you've seen this, Richard. That's a very damaging thing to your credit profile and credit score, and people don't really know that that's going to be an outcome attached to that. This is going to sound a bit finger-wagging,

but I think one of the biggest mistakes people make is not realizing how powerful it is to save money in your 20s. So if you make investments in your 20s, even if you make bad investments in your 20s, you are more likely, whether it's in the stock market, whether it's in real estate, whatever you invest in, you're more likely to, in the end, see a big return on investment because you'll be able to ride those highs and lows. And so a lot of people wake up at the age of 40, 45 and say, oh, I got to start saving for retirement or I got to start putting some money together for a down payment on a house. In your 20s, even though it seems so expensive and even though life seems like, you know, every cent is being, you know, is being accounted for, you have more disposable income in your 20s often than you do in the 30s and 40s are your crunch years. It's when you get your mortgage. It's when you have your kids. It's when you might be even financially taking care of your parents. It's a lot more difficult to try to set up a

sort of a financial future for yourself. But if you do that in your 20s, you've kind of sort of, you're sort of two steps ahead of everybody else. And you can sort of rely on that. So even if you can't save so much in your 30s because you've got other things going on, those investments you made in your 20s are still paying off for you. Yeah, absolutely. What is one crucial step that you think people should take to start their debt-free journey? So lots of people here may be dealing with some debt. A question I often get is, I don't even know where to start. I'm so overwhelmed.

What do you think they should start doing? No one wants an answer. Okay, I can do that. So you guys all know Dave Ramsey, right? And so he made famous this snowball method or avalanche method. So I think these are two really smart ways to start dealing with your debt.

So it's about recognizing your personality. If you have the kind of personality where you make a list to do things and you really feel satisfied crossing those things off your list, then the snowball method might be for you. kind of personality where you make a list of to-do things and you really feel satisfied crossing those things off your list, then the snowball method might be for you. So you like that you've paid off that credit card for $150. You paid back your friend that you owed them $200. And you're just crossing stuff off and you keep motivated to pay that money off. It might not be the cheapest

way to pay debt down, but it keeps you motivated and you continue on that journey. The avalanche method is by listing your debts from most expensive to least expensive and servicing the most expensive first. Once that's done, using those payments, still making minimum payments on the rest, but then that sort of like an avalanche sort of gets your debt going,

wipes your debt out very quickly. So recognize your personality. Like I'm a very to-do list kind of person. So sometimes, you know sometimes just getting things done, even if they're little bit things, make me feel very motivated and keep going. So I think those two ways are good ways to start trying to live a debt-free life.

Those are like tried and true. Absolutely, yeah. So many people have found success with those, so those are great places to start. Richard, what do you think? So one of the things that I've noticed a lot is that people will pay off their credit cards and then they'll get right back into it.

So my history is eight years as a mortgage broker and you could see people come in and they'd be like, oh, I'm going to put all my credit card debt, all my high interest debt, and get it into my mortgage. And then they'd be back five years later, three years later and be like, so can I do that again? And so one of the things that I

am a big proponent of is yes, pay down debt. It's the highest interest and it's a guaranteed rate of return, which no other investment can really say that. And it's a good rate of return to pay it down. But also remember that you need to build good habits. And so if you can automate your investments like you do your debt, you will be much richer in the end. Because I think a lot of times when we see the high debt, it's painful

and we want to service that and get rid of it, which is a great plan. But once it gets down low, you're like, yeah, that's not so bad, I'll get a new car. Or, yeah, not so bad, I'm going to do something else and rack it back up. And so one of the things is also just if you can balance the investments as well

and then automate it, because you will most likely not miss that money. You'll figure out how to survive without it. And then you'll look in your TFSA or whatever investment that you're doing and realize that you got $5,000 stocked away, and you're, oh, that's great. Yeah, no, I think that's really smart, actually, because we always talk about automating savings. We should also be thinking of automating our debt.

Yeah, I just wanted to advocate for one more thing while we're here. And part of the reason why I come here, because I think this is awesome that there's a community of people here to help each other out. The vast majority of people we talk to tell us that they're doing this alone

and it's complicated. And when you're sick, you go to a doctor, right? So how can you help people? How can we push people to reach out, ask for help, go visit a financial coach or someone like that to help establish the plan and figure out, should you use the steel ball method or the avalanche method or

whatever it is that's going to work best for you? Because money can be a scary concept and it actually scares me a little bit that so many people are walking around thinking, I have to solve this solely on my own and nobody here can help me with this. It's just not true. I'm kind of building upon that.

That's another question I get. Who do I find? Because there's so many people with different titles and designations. And also people are like, I don't have any money. That's the problem. So how am I supposed to hire somebody? Any suggestions, anyone? I think there's a lot of Facebook forums

that are private. So no one else can see it except for when you're in the group. So you can build a community online. It's always nice if they're in person and they're friends of yours. That way you can actually go in and meet up once in a while have someone, it's always nice if they're in person and they're friends of you, yours, that way you can actually go in and, you know, meet up once in a while or go and have a coffee, I guess,

or whatever you're going to do to remind yourself and have that support system. Because I think it's really important that being alone and trying to overcome something where you've, that's obviously your lifestyle has got you to where you're at. How do you get out of it? Well, generally sharing and connecting with others is the best way to improve that mindset. Were you going to share something? Were you? Were you?

I've actually forgotten the question. That means it was a great question. There's something wrong here? Just if someone is seeking for help and I think that, where can they look? What do you think? So there's financial planners, there's financial counselors, there's financial advisors. They all have different roles. They all do different things. So I'm not a big fan of walking into a bank and just asking someone to give me financial advice, because they don't have a personal connection to you. They are most likely pushing a product. And you may not understand it, because they're really there just to say, this is, you know, this is what your personality is, this is how your investments, this is where you should put

your investments. Not that there's anything wrong with that, but you should know what you're signing up for before you walk into the bank. So if you're going into a bank to speak with a financial advisor, you should have already done your research. This is the kind of investor that I am. These are the kind of investments I want. This is based on my age, where I should be. And then they use them as a sounding board rather than as the person that mentors you for your investments. I'm a big fan of financial planners where you go in and they give you, they kind of look at all your debt and they look at your financial goals and they look at your salary and everything else that you have in your money life. And they say, okay, this is what you should be doing.

Like moving the pieces around saying, you know, if you were to work a couple extra hours a week and put that money away, then you may be able to save towards that goal of paying that debt down or save towards that goal of getting some money in the bank for that down payment. So it's not, a lot of people will say, well, how do I save for retirement? It's really, it's a very individual, it's very intimate too. It's a very personal question. So someone really being able to look, it's like a personal trainer. Like if someone wants to lose 10 pounds, you go to someone and they say, okay, what are you eating? When are you working out? They kind of give you very tailored advice for your lifestyle. Like the mom of three kids and, you know, the single girl at 21 has two different time, you know, she's got, they've got different struggles in their life.

So you're able to give them advice that's tailored to them so that they can get to the goals that they want physically. And in this case, your money goals. Switching gears a bit, let's talk about credit now I don't know why but maybe it's because I've had you on the podcast I've had you on the podcast last year I talked to Jay from Capital One this year we're all alumni Rubina's been on the show too of course I've been doing a lot of research

and reading and obviously I read Richard's book I've been thinking a lot about credit and I find it actually so fascinating which is bizarre I never thought it was lot about credit, and I find it actually so fascinating, which is bizarre. I never thought it was this interesting. Credit is cool. Right? Credit is kind of cool.

So I want to start off with what are some of the most common myths about credit you've heard before that we can now debunk here at this event? Richard, do you want to start us off? Because I'm sure you've heard everything ever. Yeah, I hear a lot. I guess one of the most popular, and I'm glad there's a lot of talk about it, is the credit score itself. The book and the new message out there is a lot to do with the credit scores that you have access to as a consumer are extremely misleading. So you as the consumer will never have access to the credit scores that the banks and lenders are actually using to approve you.

And so not that there's something wrong or bad with tracking or paying attention to your credit. I think that's great. But this obsession of the credit score really needs to be curved and stopped. The conversation needs to be, what do I need to do to always get approved for best rates and best terms, never be embarrassed or restricted because of my credit? Once you know that,

you don't have to worry about your score. I could care less what my score is. I don't know what my score is. I check it once in a while, but I'm more concerned about what's on my report. I know how the game is played, and that's my passion. That's the conversation that I'd rather have than, how do you jump the credit score? Just so everyone hears that, when you check your credit score it doesn't really that particular number it's not going to be what the banks look at it means so they've it's confusing a little bit

i won't get into it you're gonna get me yeah it's probably in the book actually it's in the book so essentially they call it an educational score, but it has no relevance whatsoever. So it's not what people, lenders are seeing. It's great to compete with others. You could compare to others, but as far as that, that score is irrelevant. So it is good to have a good credit score, but that score that you're seeing is not what the banks and lenders are using. So it's more important to know what it takes to get approved for best rates and best terms to have good credit. Ruby, do you want to share anything? So two things. I recently bought a house and my credit score plummeted. So I checked it recently. And so again, to your point, because all of a sudden I've got more mortgage that I'm paying. And so if I was to go and try to get another loan, they would see that low credit score really reflects the fact, lower credit score reflects the fact that I don't have a lot of extra money now to buy a car or get a credit card.

So the bank would say, you know, if you were to pay all your mortgage payments and service all your other debts, how would you service this debt if you happen to run it up? So that's one thing, to your point. And the other thing is that the credit report is deeply flawed. So even personally, I know friends who have had to carry affidavits that say that I am not this person, I am the other person, not the person with the bad credit, I'm the person with the good credit, so that they can get their mortgage approved because there's someone with the same name

who's got terrible credit, who's been doing bad things with their money. On my own credit report, there was a student loan that I had paid off back in 2003, 2004, and it was still hanging around. According to RBC, I still hadn't paid it, so I had to spend a week running around to RBC

getting all the right paperwork. So the credit report is deeply flawed, and make sure that you check it, and that you make sure that the information reflects you. And also they don't have all the information on my credit report. I'm like, you're missing a ton of information, a good information that would probably up my credit score a little bit if you knew, if you knew that. Patrick, anything to add? Yeah. Well, I got more questions from my fellow panelists, but things that I think are worth noting. I mean, as much as I agree with Richard that kind of credit scores are overblown,

there is some merit to maintaining a credit score above some certain level, but I think getting overly scientific about, like, is this score 750 or 800? You've probably gone too far. Where I think there's a lot of value is actually looking at the trade line data that's on your credit file to make sure that it is in fact

yours. One, to correct errors. Two, to be on the forefront of whether or not you might have been impacted by identity fraud, which happens a lot unfortunately in Canada. So I would strongly encourage people to do that. And there's a whole variety of free options out there, including Capital One,

but also many other free options as well. The painful myths that we've heard from our customers sometimes revolve around, if I need to carry a certain balance for this card to contribute positively to my credit score, I think that's both objectively not true and would be an awfully expensive way to pay

for a better credit score. So things like that, we'd love to find ways just to debunk that. Didn't Capital One start that myth, though? Just kidding. Whoa. I'm totally joking.

The good news is I don't think so but I haven't been there forever so who knows just kidding but you can also other ways you can increase your credit score

you don't have to have a credit card even by paying your rent on time by paying your utility bills on time by paying your cable bill does anybody even have cable anymore

but even if you have those kind of things all help your credit score because it shows that you're responsible that any debts debts that you owe, you pay on time. And so if if you have a landlord that you've been paying rent to, you can ask them to contact TransUnion or Equifax and say, could you you know, I don't know. I don't know exactly how it works, but they can put a note in to say that you've been paying your rent for X amount of years on time. You've never been late. That's going to help your credit score too.

So yeah, Richard, you want to talk a little bit more about that? Because I know one of the things, yeah, yeah. So that's actually a myth. It's American. So the renting myth is American. We're pushing that for you. Yeah. So that's one of the things where, as Canadians, it's amazing to be from Canada.

It really sucks to get a bunch of American information that doesn't apply. But if you don't pay your rent, it does affect your credit score. It actually doesn't unless the landlord reports as a collection. So yes, the bigger landlords will have collection companies. And if you don't pay any of your bills like utilities, stuff like that, then yes, it will negatively influence that because they'll put a collection on there, which is a whole other conversation. But it's a public record, and it will severely lower your score. that actually show up and jump the credit score here in Canada are your credit cards, your loans, lines of credit, mortgages now show up and affect your credit score,

which is a change that's happened in the last few years, which is surprising to most people because they always thought it was the most important. And cell phone accounts are the other ones that, the main ones that show up on the credit report now. But as Rubina was mentioning and kind of learning with her mortgage experience, like not all lenders report to both of the bureaus.

They only have to report to one. They're obligated to report to one. So they actually don't have to report to any. But the major banks all report to both. And major lenders, like Capital One reports to, and major lenders like Capital One reports to both, and major lenders do. But if you are getting a loan from a smaller lender, most of the times it's loans.

I think every credit card reports. I've never seen a credit card that doesn't report to both Equifax and TransUnion. Cell phone accounts, there's a few companies that don't report to both. Bell, for an example, doesn't report on one TransUnion. So there's some that don't. And then some of the smaller lenders will only report to one or the other. And most banks for credit card companies will pull both, but some of them only focus on Equifax or TransUnion.

So when you go and apply for a loan, let's say it's with TD, they will pull an Equifax. If it's RBC, they'll pull a TransUnion. So sometimes, like you were saying, they're not showing up on your report. And if you are banking with a certain bank and trying to get a loan from that institution, and that's the only credit you have, or that's a really good account that you want on there, then really you want to make sure that you're either going to the right bank or it's reporting on the one that they're actually going to be using. I want to talk a little bit more about kind of building your credit

score. We touched on some things. I remember when I had you, Richard, on the show, you talked about how actually it is important, unfortunately, to have a credit card because even though they can be kind of detrimental, you know, harm a lot of people getting into credit card debt, they're also, unfortunately, something that really does help you boost your credit score. Yeah, I would love to say that, you know, just stay away from it all completely and just- Just live with cash.

Just cash. Cash is king. Well, unfortunately when it comes to financing, credit do more damage or more positive to your credit score than all other types of credit combined. So you take your cell phone, your mortgage, your loan, whatever it is, a credit card affects it more than all of those put together. So what you're doing with your credit card is really, really important. And if you're looking to rebuild your credit, then the credit cards are one of the most powerful tools.

And not because they're sponsoring, but Capital One actually has one of the best for rebuilding. Do you want to talk a bit about what you mean by rebuilding? Because I know we haven't really touched on this, but secured cards, I honestly didn't know that was a thing because I'd never had bad credit and I never was not approved for a credit card. But these are a certain type of card that could help you

if you're not approved for a credit card, but you want to use that credit card as a tool to help you boost your credit score. Well, it feels more credible coming from you, Richard. So I'm happy to fill in the gaps. Patrick's okay. Well, let me tell you about the Capital One Secured Credit Card. Well, it's an annual fee of $57.

And it's actually there. Yeah, so there's a small annual fee with the Secured Credit Card. And it works just like a regular credit card. So other than, and don't get it confused with a prepaid. So a prepaid credit card is a terminology that always gets confused with secured cards. Prepaid, you load it like a gift card and anyone can use it. A secure credit card actually goes through the application process. They check your credit, although they're in the market of rebuilding credits, so they're very, very good at actually approving people.

And what I like about the Capital One Secure Card, there are others. There's a couple others. There's not many in Canada. There's not many. I did some research. There's not a ton out there. Yeah, there's only one other

that is really in the space still. And so what I like about the Capital One secure card is that the application for the secured and the unsecured are the exact same. So you just go on the link, Capital One, it could be bad credit or whatever, secure credit, and that application, you apply for it, and a lot of times you don't have to do a security.

And sometimes you do. And that security can be $150, can be $300. It all depends on what they approve you for. And then that card comes out. And it works everywhere. So you can rent cars, hotels, travel. It's a real credit card with the Capital One logo. Yeah, I'm glad you shared that because honestly, I didn't know what a secured card was like a few years ago because I'd never come across it. And maybe people just don't want to talk about that

because they don't want to tell people that they're trying to build up their credit, I guess. So the reason I actually met Richard was I was, I go to this financial fitness forum, as it's called every year to get my continuing education units as a financial counselor. He was speaking there and a lot of the event was actually debunking a lot of myths about building up credit. And one of them was how a lot of people think that getting an installment loan or just a loan and then paying it back will boost your credit. But I feel like we talked about this and you're like, no. So she wasn't listening. No, sorry. Was I? I don't know, correct me if I'm wrong.

No, it does. It's not as good as a credit card. So a lot of the commercials and ads out there will promote a loan as if it's the most amazing thing ever. Here, let's charge you 29% on this vehicle loan so that you can rebuild your credit. And in a year, we'll lower it. But the credit card just is much better if you use use it properly is it because it's revolving credit so so it's revolving but even it beats a line of credit which is also revolving and the reason why is because if some the scoring algorithm we're gonna get real fun here we're gonna talk about scoring algorithms but before you go to sleep, really the simple is because of how Equifax and TransUnion value

your reporting on a credit card, they put a lot of weight on that. And so what you do with your credit card just outperforms everything else as far as on your credit. So it sounds like credit cards, we love them or hate them, you need them in order to eventually get approved for a mortgage or a car loan in the future. Yeah, and then on your podcast, we actually went through some ways that if you are kind

of freaked out about credit, there's some ways that you can have credit cards but not actually be, you can protect yourself with it so that you can have credit cards, but not actually be like, you can protect yourself with it so that you're not going crazy with the spending. And that's something that you'll just have to watch. Just listen to the podcast. So I want to wrap things up because I think it's time for our Q&A. What is one piece of advice or an anecdote you can share about either tackling debt or credit education? So it's pretty broad. So you can kind of either tackling debt or credit education. So it's pretty broad.

So you can kind of share anything, either working with someone, someone you've interviewed, any kind of anecdote or advice you'd like people here to listen to. Anybody? I can start. Get into the habit of saving. That's my number one advice is that every time you get paid, save something. If it's $10, $100, $1,000, save something. Even if they're in debt, what do you think about?

Well, you have to decide what your financial goals are. If you're in high interest debt, you probably want to tackle that first. But even that is a type of savings, right? So if you've got a couple thousand dollars on a credit card and you're worried about how much it's costing you in interest payments, if you're thinking, okay, every time I get paid, I'm going to put $200 down, that is a type of savings because you're immediately, first of all, paying your debt down and you're no longer incurring interest on that debt. So really to get back to this idea of pay yourself first, pay your bills, spend the rest kind of thing, which is, again, a little bit old

fashioned, but I think that a lot of us have kind of gotten to the spend first and then think about what we can save after because the savings rates on fixed income are not very good and people are not very encouraged to do that. Stock market is scary for a lot of people. But really, even if you're saving in a high-interest account, at least it's consistency and it's getting into the habit of every time you get paid, you put a little bit away.

So for me, I'll keep it short. But I like the thought process of just try and don't be so hard on yourself when you screw it all up. That's where most of the learning comes from anyways. And so just try not to be so hard on yourself as you're going through this process because it can be overwhelming, it can be scary. And whether it's investing or saving or just you've got a heck of a lot of debt

that you're just overwhelmed with, there are options out there. But just don't be so hard on yourself because you're not the first person. Yeah, maybe it's by virtue of working in financial services, but I feel like a lot of people ask me for financial advice that I'm woefully ill-equipped to help them with. But the question I came up with to help myself is anytime someone asks me if they think they can afford a major purchase, I ask them,

well, how would you know if you could afford this or not? And then you see the wheels start spinning. Like, whoa, whoa, whoa, do I actually know how much money I have in the bank? Or do I know how much debt I have or how much I've saved? Or how much this is really going to cost? I mean, true story, my mother-in-law tried to gift us a reasonable sum of money after they won a slightly larger sum of money. And I just looked at her and said,

oh, how do you know you can afford to give that to me? And yeah, the money never came after that. That was 18 months ago. She hasn't answered that question. So maybe it's still hanging out there. But I think it led to a really powerful outcome where she's trying to figure that out. And maybe there's better use for that money. I'm certain there is a better use. Hopefully she'll find that. And that's it. That is the recording from the Millennial Money Meetup number six that I did uh this past november in toronto uh and make sure to check out the show notes jessicamorehouse.com slash 219 219 for some more details about this uh wonderful event um if you want to come to you know my next event which which is not planned yet, but it will be happening in the new

year. Make sure to get on my email list. That is how you will find out first when I'm doing events. You can go to jessicamorehouse.com slash subscribe to sign up. I will also of course be doing more speaking engagements. I've done a ton actually in 2019. So expect to do a ton more in 2020. And, uh, you know, if you want to know when I'm going to be speaking in places around Toronto or other cities, again, get on that email list, jessicamorehouse.com slash subscribe. Another thing I want to mention in case you have no idea about it, a couple things actually. Number one, if you do want to learn more about debt and credit, I have some great free resources in my free resource library on my website. If you go to jessicamorehouse.com slash resources, you can sign up and get access to all

of the worksheets, video spreadsheets, all of the kind of free downloads I offer to anybody. So you can, you know, get smarter with your money and just get started. Also, if you want to connect with other people, like people that kind of came to the event or just other like-minded people that want to better their financial situations, join my Facebook group. Again, it's free. It's kind of a closed group. So it's only for people that are, you know, nice, genuine people that want to help each other. It's a no judgment zone. It's all about kind of positivity and helping each other and, uh, just, you know, basically making you feel comfortable to talk to other people about money. Cause it's still kind of a hard subject to tackle. So if you go to facebook.com

slash groups, slash money, life balance, again, there's, there is like a, I think a thing on my, the sidebar of my website that you can click and go to the Facebook group, but, or you can just like search groups, money, life balance, you'll be able to find it. And we'd love to have you in there. So you can ask your questions. There's no such thing as a dumb question. You can look into past conversations people have had, and hopefully, you know, again, you just level up your money with the help of some really great people in this Facebook group. So that is it. Another big thank you to Capital One for sponsoring this event. It was a pleasure working with you and I can't wait to do some more in the new year. So thank you so much for listening to this episode. I will be back next

week with another episode and then I've got another week and then I'm done and then taking some time off for the holidays. So thanks for listening. Make sure to subscribe on iTunes or leave me a iTunes review if you like what you listen to. I'll see you back here next Wednesday with a new episode of the Mo Money Podcast. This podcast is distributed by the Women in Media Podcast Network. Find out more at womeninmedia.network.