Forget the latte lectures—financial expert Terry Wright, CIM, Partner, LT Wealth Management Partners | Raymond James Ltd., is here to debunk the biggest money myths keeping Canadians broke. With inflation, skyrocketing housing prices, and everyday essentials creeping up in cost, Millennials and Gen Z are facing economic challenges like never before. Yet, the blame game still falls on brunch habits instead of real financial traps like lifestyle creep, hidden money leaks, and outdated wealth-building advice.
In this Q&A, Terry breaks down the truth about why young Canadians are struggling and shares actionable strategies to take control of their finances—without giving up the little joys in life. —Noa Nichol
Q. Let’s get straight to it—why do you think the narrative around Millennials and Gen Z being bad with money is completely off base?
Let’s dive straight into this: the idea that Millennials and Gen Z are poor money managers because they occasionally splurge on lattes and brunch is not only outdated, it’s an oversimplification that ignores the broader economic pressures these generations face. Since the pandemic began, we’ve witnessed a sharp rise in inflation, significantly affecting the cost of basic needs like groceries and housing. In cities across Canada, the soaring rental market has pushed the dream of homeownership out of reach for many, as wages fail to keep pace with rising living costs.
We have to acknowledge the psychological toll these economic pressures are taking. Young people today are not only trying to make ends meet but are also dealing with the anxiety and stress brought on by an uncertain financial future, exacerbated by global issues like climate change, pandemics, and political instability. This constant pressure can overwhelm anyone’s capacity to make sound financial decisions.
In my experience working closely with young professionals and influencers, I’ve seen firsthand the resilience and savvy many Millennials and Gen Zers bring to their financial lives. They are not just sitting back, they are actively seeking ways to become financially independent.
So, instead of simplifying their struggles to a few lifestyle choices, we should be equipping them with the tools and knowledge to build a stable financial future. This means offering guidance on smart investing, effective debt management, and strategic long-term planning.
The focus should be on empowering them to make choices that align with their personal values and realities, not on critiquing their spending on small pleasures. It’s about enabling them to navigate their unique financial landscapes successfully, fostering a sense of agency and competence in their financial lives. Overwhelmingly, in today’s culture, young people are bombarded with endless spending opportunities—many of which are difficult to track—from digital subscriptions to social media-driven experiences, adding another layer of complexity to managing finances effectively.
Q. You talk about the “Raise Trap”—why do so many people feel like their salary increases don’t actually make a difference in their financial situation?
When you get a raise or a bonus, there’s often an initial burst of excitement about what that extra income could mean for your financial goals—whether it’s saving for a downpayment, paying off student loans, or just climbing out of debt. However, the reality can feel quite different once it lands in your account, especially after the government takes their cut.
The psychological impact here is significant. Before seeing the actual increase in their paychecks, many people calculate their new budget based on the gross increase, not taking into account the tax implications. When the paycheck arrives, and it’s less than expected due to higher income taxes, it can feel defeating. This can make the raise seem insufficient and not as impactful as initially thought.
For younger generations, who dream of financial milestones such as buying a home or achieving debt freedom, the journey can feel particularly daunting. The cost of real estate in many areas has skyrocketed, and student debt continues to be a significant burden. Even a substantial raise can seem like a drop in the bucket against these financial goals.
This can lead to feelings of stagnation or frustration, as it might seem like despite earning more, you’re not really making financial headway. It’s so important in these cases to set realistic expectations and develop a financial plan that accounts for taxes, expenses, and savings. This helps in making the most of the raise while maintaining motivation and financial morale.
Q. Lifestyle creep is something we often don’t notice happening. What are some common signs that someone has fallen into this trap, and how can they course-correct?
Lifestyle creep can sneak up on you, especially after you start earning more. It’s like one
day you’re budgeting every dollar, and the next, you’re upgrading everything from your phone to your car without even thinking about it. Suddenly, you might find yourself dining out a few extra times a week, opting for that extra side of guacamole, or springing for the more expensive cable package, because, why not? You deserve it, right?
But here’s the issue: even though your paychecks have gotten bigger, somehow your savings haven’t. You might feel like you’re living just a bit more comfortably, upgrading your lifestyle in ways that seem justified by your hard work. Yet, you find that at the end of the month, there’s not much more left over than there was before that raise. That’s lifestyle creep in action, subtly shifting your spending habits without you even noticing.
And let’s talk about those justifications we make. Every big purchase comes with a mental pat on the back: “I earned this.” But while it’s great to reward ourselves, if we’re not careful, we can start mistaking wants for needs. The biggest tell? You stop looking at your budget because you assume everything fits. And maybe you’re taking on a bit more debt than you’d like to admit, telling yourself it’s manageable because of your higher income.
So, what’s the game plan to tackle this? It’s all about striking a balance. It’s great to enjoy the fruits of your labour but keep an eye on your long-term financial goals too. Make sure those splurges are really bringing you joy and not just fleeting satisfaction. Sometimes, taking a moment to reflect before making a purchase can make all the difference in keeping your financial goals on track. It’s not about cutting out fun, but about choosing which pleasures are truly worth it and which ones are simply impulses that might derail your financial health.
Q. Subscriptions, auto-renewals, and hidden fees are quietly draining people’s accounts. What’s the easiest way to identify and cut these ‘invisible money leaks’?
Managing those almost invisible expenses from subscriptions, auto-renewals, and hidden fees, along with sneaky banking fees, requires a systematic approach. Start by doing a regular audit of your bank and credit card statements. It’s important to identify any recurring charges, especially for subscriptions you might have forgotten about (it happens more than you think) or no longer use. Apps like Rocket Money are fantastic resources, as they not only track all your active subscriptions like Netflix, Crave, Amazon Prime, DashPass, and UberOne but also help manage or set a budget.
Stay sharp about free trials and banking fees. Free trials are designed to roll over into paid subscriptions if they’re not cancelled in time, so setting reminders to review or cancel these subscriptions before the trial period ends is important. For banking fees, moving to accounts with lower fees or better terms, like high-yield accounts or online banks, can make a significant difference.
Don’t shy away from negotiating with service providers. Whether it’s for a subscription service or your cell phone company, asking for better rates or promotions can lead to savings. This is particularly effective if you’re considering cancelling a service; sometimes just indicating this can prompt providers to offer you discounted rates.
And here’s a simple yet incredibly effective tip: switching your recurring subscription payments from your credit card to your debit card can change how you view your spending. It ties your purchases directly to the funds you have available, which promotes a more mindful approach to managing your money. When you pay with a debit card, the money comes straight out of your bank account, making each transaction immediate and real. This visibility can sharpen your awareness of your spending habits and encourage better financial decisions. Using a debit card also helps sidestep the psychological pitfall often associated with credit cards—the “out of sight, out of mind” mentality. With credit cards, it’s easy to spend now and worry about the payment later, which can obscure the true impact of your spending choices.
Q. Upgrade culture is everywhere, from bigger apartments to luxury gym memberships. How can people differentiate between smart spending and unnecessary lifestyle inflation?
The first thing that we need to do is acknowledge that upgrade culture isn’t just about physical items; it’s pervasive in our digital and social lives too. Constant exposure to seemingly perfect lives can distort our view of what’s necessary and what’s extravagant. Start by critically assessing these upgrades. Is that bigger apartment going to enhance your life, or will it stretch your budget too thin? Does the luxury gym membership significantly contribute to your well-being, or could a more modest facility provide the same benefits at a lower cost?
“Add to cart” culture and using shopping as “therapy” are real phenomena, especially when online storefronts are always just a click away. This behaviour often stems from the immediate emotional gratification that buying something new or upgrading what we have can bring. While retail therapy might offer a quick emotional fix, it can often lead to feelings of regret or financial stress if it becomes a habit.
The emotional aspect of this culture is tied to how purchasing makes us feel. When we buy something, our brain releases dopamine, a neurotransmitter linked to pleasure and reward. While this can feel good in the moment, it’s usually fleeting and can lead to buyer’s remorse or financial strain if it turns into a regular coping mechanism.
One unconventional way to fight impulsive spending is by incorporating what some of my clients call a ‘luxury fund.’ Instead of immediately upgrading your lifestyle when you get a raise or come into extra money, why not funnel some of that cash into a designated savings account? This fund is for those big splurges—a nice watch, designer bag, or even that luxe vacation. But here’s the twist: you only dip into this fund after you’ve met certain financial milestones, like paying off a credit card or reaching a savings goal. This method helps to curb impulsive spending and makes those luxury purchases feel like true achievements.
An added tip? Why not challenge upgrade culture by celebrating cost-saving wins? Share your own stories about scoring great deals, choosing sustainable options, or how you refurbished something old to make it new again. Making budgeting a shared challenge can transform it from a chore to a lifestyle choice that you and your peers can rally around.
Q. You mention the concept of ‘stealth wealth.’ What are some key habits of the wealthy that everyday Canadians can apply to build long-term financial security?
First, everyone’s least favourite advice. One of the fundamental habits of the wealthy is spending less than they earn. This allows them to save and invest the difference, building wealth over time. Shifting to a mindset of spending less than you earn doesn’t mean cutting out all the joys and ‘little treats’ in life. It’s about prioritizing to ensure you’re getting real value from every dollar. Mindful spending starts with understanding what brings you the most joy and satisfaction. Is it a weekly coffee with friends, a monthly concert, travelling or gear for your next hike? Identifying what you truly value allows you to prioritize these experiences or items in your budget, without feeling like you’re giving anything up.
Secondly, make your money work for you. Investing doesn’t have to be a complex ordeal reserved for the experts. Today, user-friendly apps like Wealthsimple or Questrade democratize investing, making it accessible right from your smartphone. These platforms are designed with beginners in mind, offering easy navigation, educational resources, and the ability to start with small amounts of money. This can be particularly appealing if you’re just starting to explore the investment world. By regularly investing small sums, you can watch your money grow over time due to the magic of compound interest, which essentially means your money earns money, and then those earnings earn more.
Take advantage of tax-free accounts like RRSPs and TFSAs. It’s like giving your money room to grow without taxes crashing the party. This simple move can significantly enhance your wealth over time, especially if you start early. Real estate can also be part of your investment portfolio without buying actual property. Look into Real Estate Investment Trusts (REITs), which allow you to invest in property indirectly.
Consider also investing in something priceless—your time. If you can outsource less desirable tasks for less than what you would earn doing your specialty, why not? This could free you up to focus on activities that boost your income or your well-being.
Speaking of well-being, don’t skimp on your health. View spending on your physical and mental health as an investment with invaluable returns, from reducing future medical issues to enhancing your daily productivity and happiness.
And never stop learning. The more you learn, the more opportunities you can seize. The world’s wealthy are often voracious readers and continuous learners, always absorbing information that could lead to their next big break.
Lastly, consider the benefits of philanthropy. Contributing to great causes can enrich your community and come back to benefit you in ways like tax deductions, networking opportunities, and…karma.
Q. Housing affordability is a major crisis. What’s your advice for young Canadians who feel like homeownership is out of reach?
Housing affordability is a huge challenge, especially for young Canadians who feel that homeownership is now just a pipe dream. But there are ways to approach this challenge that can make the dream more achievable, without feeling overwhelmed.
Consider broadening your horizons beyond the major cities. Places like Vancouver and Toronto are fantastic, but they come with hefty price tags. Looking into more affordable markets, outside of major urban centres, could be a more feasible option. These areas often offer the benefits of homeownership without the intense financial pressure of trying to buy in high-cost areas.
Government programs are also there to lend a hand. Initiatives like the Home Buyer’s Plan, and First Home Savings Account, are designed to help first-time home buyers make tax-free withdrawals or contributions. Staying updated on these incentives is key—they’re there to help and can make a significant difference in your buying power.
Another creative approach is co-buying. Joining forces with friends or other families can make purchasing a home more accessible. This method allows you to pool resources for down payments and share the ongoing costs of homeownership. It’s essential, though, to set clear agreements from the start. Legal contracts that outline everyone’s responsibilities and exit strategies can prevent headaches down the road and keep the relationship and investment secure.
For those who find that buying right now isn’t the right move, renting with a long-term investment plan can also be smart. Use the flexibility of renting to save aggressively and invest wisely—this can build financial security that doesn’t solely rely on real estate.
Lastly, getting involved and staying informed can help you make better decisions and influence the housing policies that affect affordability. Advocating for more supportive housing policies and staying engaged with market trends can empower you and others in your community to face these challenges more effectively.
Q. Social media constantly bombards us with spending temptations, from travel to luxury brands. How can people navigate financial FOMO without feeling deprived?
Firstly, let’s admit it—social media isn’t real. It paints a picture where everyone else seems to be living large, perpetually on vacation, or decked out in the latest fashions. But here’s the thing: those snapshots don’t tell the whole story. They don’t show the debt, the sacrifices, or the regrets.
The first step is to cut through the noise. Customize your feeds to support your financial well-being. If certain accounts make you feel like you need to spend to keep up, it might be time to press unfollow. Replace them with feeds that promote financial health and personal well-being, perhaps those that focus on saving tips or minimalist living. It’s about surrounding yourself with messages that support your financial goals and mental health, not undermine them.
Embracing the ‘Joy of Missing Out’ can also change your perspective. Enjoy what you have and find creative ways to have fun without spending a fortune. Love food? Try hosting a dinner party instead of eating out. Crave adventure? Explore local destinations rather than exotic locales. Celebrate staying in and discovering the pleasures closer to home.
Why not visually map out your financial goals? Creating a vision board can keep your eyes on the prize, whether it’s saving for a down payment or planning a dream trip. Having a tangible reminder of what you’re working towards can make it easier to skip the splurges.
Incorporate tech to keep your spending in check. Use budgeting apps to monitor your expenses and get alerts when you’re veering off track. It’s like having a financial planner in your pocket, nudging you to rethink potential impulse buys.
And don’t forget to budget for little luxuries. Allowing yourself a controlled splurge now and then can help keep you motivated. Whether it’s a latte once a week or a new book each month, these small indulgences can make budgeting more sustainable, and more enjoyable.
Switch out costly social activities for more wallet-friendly alternatives. Instead of high-priced concerts, check out local bands or community events. You’ll still satisfy your social butterfly without the financial sting.
Lastly, give yourself a moment to pause before making a purchase. If after a day you still feel it’s worthwhile, then it’s probably something you genuinely want rather than a fleeting desire spurred by FOMO.
Q. With inflation hitting everything from groceries to gas, what are some realistic budgeting tips that actually work in today’s economy?
Let’s face it: nobody wakes up excited about budgeting. It’s a necessary evil, especially when every scroll through social media is a parade of luxury brands and overconsumption. But with inflation touching everything from your morning coffee to your daily commute, having a realistic game plan for your finances is more crucial than ever. Here are some practical tips that can help without making the financial management process feel like a chore.
Start by tracking your spending. You can’t manage what you don’t measure. Use apps like Mint or YNAB (You Need A Budget), or even a simple spreadsheet to get a clear picture of where your money is going each month. This step alone can often reveal surprising areas where you can cut back without feeling deprived.
With prices on the rise, look at your essential spending with a fresh eye. Could you switch to a less expensive grocery store, or cut back on utility costs with energy-saving measures at home? Small adjustments in your daily essentials can free up more money than you might expect.
Decide what’s most important to you. Is it travelling? Buying a home? Saving for a big event? Prioritize these goals and allocate your funds accordingly. This might mean cutting back on less important areas to funnel more money into your savings goals. Make these goals specific and exciting to keep your motivation high.
Set up automatic transfers to your savings account right on payday. This way, you’re saving without even having to think about it, and you’re less likely to spend this money if you don’t see it in your checking account.
If you’re using credit cards for purchases, try using ones that offer rewards or cash back. Pay off these cards in full each month to avoid interest charges. This way, you can make money on your regular spending, but make sure you read the fine print to make sure it’s worth it.
Instead of impulsive splurges, plan your treats. Set aside a small fun fund that you can spend guilt-free each month. Whether it’s a meal out, a new game, or a small trip, having it budgeted in advance means you can enjoy it without any regrets.
Try the #nospendmonth trend on social media as a fun challenge. Consider setting shorter no-spend periods, like a week each quarter, or specific goals like no meal deliveries for a month. These mini-challenges help save money and make the process enjoyable and sustainable. They encourage mindfulness about spending, helping you discern which expenses are truly necessary and which you can easily let go of. This approach turns routine budgeting into an empowering financial strategy that enhances your savings without leaving you feeling deprived.
The more you know about personal finance, the better you’ll be at managing your money in a way that doesn’t feel restrictive. Listen to podcasts, read books, or even follow financial advisors online to grow your financial acumen. It’s all about making your money work for you in the most efficient way possible.
Q. What’s the biggest financial mistake you see young Canadians making right now, and what’s your best piece of advice for avoiding it?
One of the biggest financial mistakes I see among young Canadians today is reacting impulsively to their finances—whether it’s jumping into investments without proper research or racking up debt to keep up with an unsustainable lifestyle. The urge to ‘keep up’ not just with the Joneses, but with the carefully curated lives seen on Instagram and TikTok, can drive financial decisions that are more about instant gratification than long-term stability.
My best piece of advice? Don’t panic. Financial well-being is a marathon, not a sprint. It’s about making consistent, informed choices rather than reactionary ones. Start by building a solid financial foundation: create an emergency fund of three to six months’ worth of expenses to give yourself a buffer against the things that invariably come up when you least expect them. This one thing can provide a sense of security, allowing you to make more deliberate and thoughtful financial decisions.
Additionally, educate yourself about finances. Understanding the basics of budgeting, investing, and debt management can equip you with the tools to make decisions that align with your long-term goals. Resist the temptation to follow the latest trends or jump on investment (or crypto) bandwagons without thoroughly understanding the risks and benefits.
Lastly, learn to distinguish between wants and needs. This can be really tough in a consumer-driven culture, but it’s mandatory for financial health. Before making a purchase, ask yourself if it’s something you truly need or if it’s a want that can wait. Often, by pausing to consider the importance of a purchase, you can avoid unnecessary spending and save yourself from financial stress down the line.
Remember, the best financial strategy is one that allows you to live comfortably within your means while saving for the future. Stay informed, stay prepared, and above all, don’t panic.
Terry Wright is an experienced Portfolio Manager and Chartered Investment Manager who leads the LT Wealth Management Partners team, specializing in financial guidance for legal professionals and online influencers. Raised in rural Manitoba, Canada, Terry’s early experiences fostered a deep respect for the value of every dollar, shaping his commitment to impactful financial advising. Known for his empathy and dedication, Terry is passionate about helping clients achieve financial success through tailored, accessible advice.
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