Max Shabalov (00:05)
Max Shabalov here and welcome to another edition of Financial Literacy Canada podcast. Most personal finance books focus on numbers, like budgets, investing and strategies. But what if our biggest money challenge isn't about numbers, but more about our mindset? My guest today is Jessica Moorehouse, a financial educator and the author of Everything But Money. For over a decade, Jessica has helped Canadians understand not just how money works, but why we behave the way we do with money. In our conversation, Jessica explains how we unconsciously repeat or overcorrect our parents' financial mistakes, how culture and family history shape the way we save and spend, how trauma can influence our financial decisions. We talk about three common toxic money patterns, the natural human biases that affect our money choices and how corporations use those biases to encourage us to spend more. In the end, we talk about how to build a solid financial foundation and how a shift in mindset can make a difference.
I'm Jessica Moorhouse, welcome to the show.
Jessica Moorhouse (01:33)
Thanks for having me.
Max Shabalov (01:34)
So you wrote a book Everything But Money that talks about how our childhood, where we come from and our human nature shape our relationship with money. What made you interested in this topic and what made you inspired to write this book?
Jessica Moorhouse (01:51)
Yeah, mean, it's I've been doing what I've been doing is a kind of a financial educator content creator since 2011. So I've been doing this for a while and I've had the privilege of being able to talk to, mean, probably at this point, thousands of people throughout North America about their money stories and, you know, hearing their struggles, their issues, what kind of solutions they're looking for. And so when I had this opportunity to write a book, my first inclination was to write kind of a more instructional, prescriptive personal finance book, which you can find on any kind of in any bookstore, any library, just because that's initially what I thought maybe this is what people would want to read. it ⁓ was actually my publisher who kind of pushed me in a different direction based off of just a little thing that I put in my proposal talking about money stories and the connection between financial success and trauma, generational trauma, societal barriers, behavior, all these other kind of more deeper issues that I thought would just be maybe a section of my book, not the entire book, but that's what really kind of caught their interest. And I was so grateful for that. was my editor who's like, oh, this is actually, think, what we need to be talking about. This is something that you can't find on bookshelves right now. And I'm like, okay. So kind of revisited what my intention was. And honestly, as I kind of tell everybody, the book, as I was, I was like writing the book or figuring out what the book was about while I was writing it. I had obviously an outline, but I had to kind of go through some stuff in order to write the book as it became what it is today. And so part of that was, me doing a lot of introspection, me doing a lot of different forms of therapy, me digging deep with my own money story that I never really had, I guess, even thought that I needed to, because I always thought I was going to come at this as I used to do, as like, I'm the money expert, so I'm going to be telling you what to do instead of me realizing, I need to do some work on myself. And I think we can all learn from that because no one's perfect and no one has all their stuff together. There's always something. And so I kind of start off the book kind of going through my money journey, but then I start to integrate other stories. I interviewed a number of people who've been following me for years. They listen to my podcasts or watch me on YouTube or just been following me since my blogging days. Interviewed them about their story. So really with the intention of if you're reading the book, likely there's at least one story that you're like, that's me. That's exactly me. Or I went through something similar or that sounds like my family. So no matter where you come from or what your life experience has been or your childhood has been, you'll probably find some connection to somebody introduced in the book. And that should really just show us that, you know, we all have some sort of connection to each other and we all have something, we all have a story. And if you feel like kind of isolated or alone or no one's ever gone through this, you'd be surprised actually. Most people have probably experienced something like that or someone in the world has. So you're not alone and it's not unique, which is kind of a nice thing because you're like, oh, that means that there is a path forward for me. And so really it's, guess, it was digging deep into myself, but then also digging deep into other people's stories that was really the inspiration for what this book ended up being in the end.
Max Shabalov (05:15)
Yeah, and one of the parts what you did is you served it and you asked people how do they feel about money and you noticed some common pain points, some themes there. So you notice shame, guilt, fear, anxiety, envy and despair. Those are the six common pain points. Could you talk a little bit about each of these?
Jessica Moorhouse (05:42)
Yeah, mean, what I kind of recognized early on, mean, most people who are seeking some kind of financial advice or learning to educate themselves, it's because when they think about money, they don't necessarily have a good feeling about it. And the few people I have met, they're like, no, you know, I'm fine. I'm like, then I don't know why you're reading web. If you've got it all figured out. But most people have some sort of there's some sort of negative feeling when they think about money, whether it's something like shame or anxiety or guilt or whatever the case. There's something kind of nagging them and they can't figure out why and they don't want it to continue. And I was one of those people. I thought I had a relatively healthy relationship with money until I started really kind of asking myself some of those really difficult questions. How does money make me feel? And what I came to realize was, shame is the prominent feeling. And I can't believe shame has been the thing that's been driving me and on my financial journey over this past decade, I thought everything was fine. Again, I thought I had it all figured out. And really, I had this very toxic relationship with money that I realized, my gosh, I don't feel good about that. I don't want to come from that place and that perspective, especially as I'm educating others. I need to figure out why that is. Where does that feeling come from? How can I kind of break down the narrative I've been telling myself about money and my potential and everything like that? So ultimately, I can kind of zoom out and see, ⁓ well, now I can see where this is all coming from and how maybe this isn't great to carry with me into the future. I need to break it down so I can rebuild it and rewrite it. And that's ultimately kind of the journey I take people on is we need to dig deep so then we can rebuild. And so I have a number of exercises in the book and the first couple of exercises are really getting to know your first money memory. And that's to kind of set the tone for, okay, where did everything start with me and money? And, you know, it may surprise most people, but their relationship with money started very young when you were a young child, because you were hearing, were listening, you were observing, and you likely had some sort of interaction with money. And it was probably negative if you still feel about money in a very negative way today as an adult. And so for me, I share my personal story of know, stealing something from the grocery store and feeling shame for what I was doing, but also shame for putting my family in kind of an awkward situation and making us look bad. And I've carried that feeling of shame in kind of different formats and different life experiences up until I was writing my book and realized that's what I was doing. Instead of really recognizing, okay, you know, we can't do that anymore. Shame is such a powerful feeling, that will cause you to behave in ways that probably aren't healthy or will push you in certain directions that aren't helpful that are going to harm you in the future. And so you need to recognize that so you can stop doing it. Otherwise, you're just going to be repeating cycles for the rest of your life and asking yourself why.
Max Shabalov (08:45)
Yeah, I like how you said that our childhood actually influences on how we feel about money today. And apart from the first memory about money, you also talk about how we as children listen, see our parents deal with money and we often repeat the mistakes of our parents, even if like, let's say they're not modeling the best, healthiest behaviors, we're still modeling them. Some of us do rebel and break those, but a lot of us repeat. What are some of the examples that people repeat their parents' mistakes?
Jessica Moorhouse (09:24)
Yeah, so it's interesting. So there's a part of my book where I talk about ⁓ based off of our childhoods, we will either repeat what our parents did or rebel against it instead of finding that happy medium of the balance of let's take what works and let's leave behind what's not working. Most of us over correct ⁓ on the other side. So we either just stick with what we know because that's what we're comfortable. That's what even if we know, that's probably not the best thing to do. I see my parents doing it and they're suffering because of it. That's all I know, so I'm just gonna do that. Or we have a really ⁓ big feeling of, I need to do the opposite. That's the only way I'm gonna succeed if I feel like that they're failing. So I'm gonna overcorrect though and go completely to the other side, which probably isn't the right thing to do either. For example, again, I was at this event. People love to just share a lot with me. like, wow, we just met, but wow, we were sharing, okay. And there was this girl who was talking to me about her family situation and grew up in kind of a low income family. And she was talking about her and her sister raised by the same parents, but completely different attitudes towards money. One of them, ⁓ the girl I was talking to, she kind of overcorrected and because there wasn't a lot, they live very frugally, there was a lot of talking about, no, we can't afford that. When she was an adult, she started spending a lot of money to kind of, I think, fulfill the need that she felt was not fulfilled as a child. She didn't get a lot as a child, so now she wants to get that stuff as an adult because now she has kind of that freedom to. But again, obviously the effects of that could be that you're getting to debt, you're not saving anything, you're not building any wealth, you're just focusing on trying to fill this need from your childhood. Whereas, her sister is completely the opposite, super frugal, maybe even a little bit too extreme, kind of following the template that her parents kind of laid out. But again, there's also some negative effects to that. If you're too frugal, then you may focus too much on staying out of debt, not taking any calculated risk because you're just afraid of anything bad happening. so neither of them really had the perfect path forward because they were taking things and either repeating or rebelling when really they should have taken, what did work for our parents and what didn't? And we're going to do what worked and leave behind what didn't. I think a lot of people don't realize this, but a lot of us are just in our own ways and we don't know how to get out of that kind of way of thinking. And so it's important to understand your childhood and your parents. And not even that, we go even further in the book talking about your grandparents, your great grandparents, your ancestry, because if you look at that kind of timeline, that family tree, you're likely going to be able to connect the dots to, okay, why am I like this and my parents are like this and my grandparents are like this? it's because we've been like this for hundreds of years. I mean, I give the personal example that on both sides of my family, my dad's side, my mom's side, we come from a long line of poverty. So we were poor farmers for generations and generations. So when no one had wealth historically and I'm so proud, know, how did we survive? But we just survived by being frugal and doing the best that we can and then hoping that the next generation does a bit better. But there's always something in the back of our heads because we do inherit this generational trauma. And if we just keep on doing the same thing, like repeating this cycle, maybe we'll get a little bit further ahead than the last generation, but not that much more. And we will likely continue to believe certain truths, know, air quotes here, about ourselves and our potentials, such as, you know, one thing that I recognize about myself is I never thought that I would have any kind of wealth because no one in my family's ever had significant wealth. We always had enough, just enough to meet our needs and then retire on a very basic fixed income until we die. And that's as good as we can always hope for. But I realized, you know, as I was educating myself about investing and personal finance and all that kind of stuff, I'm like, I don't want to have that kind of future. I don't want to retire at 65, exhausted from working my butt off and not earning that much money and then dying by 75 because I didn't take care of myself. or long stories like a lot of my family, no one's really traveled because there was no money to do that. I've always wanted to travel. I've always wanted to experience things that no one in my family ever has. And so in order to change my path, I needed to do something different. I need to look back in the past and see what happened so then I can make different choices in the future.
Max Shabalov (14:16)
Yeah. And I can relate to this, how our ancestors impact on our money mindset now, because I come from post-Soviet Union country and you know, basically it was communism, right? And then people didn't have a concept of investing, right? There's no capitalism and that plays a huge role of culturally on the people. They don't know what investing is, the benefits of it. And they often mix up investing with day trading. They think, you know, like regular people should not invest because of that. So it is very important. Another thing that plays a major influence from our background is trauma that you mentioned. What are some of the examples of trauma?
Jessica Moorhouse (14:52)
So trauma, I think a lot of people may not quite understand what it means because when it's represented or talked about publicly, it's always a big thing. So we think of things like child abuse. That could be a trauma that you hold, but it doesn't have to be as big as that. So I think a lot of people may not realize they have trauma inside them because they're like, well, nothing that bad has happened to me. So why am I complaining or why am I struggling mentally? You know, it's just not adding up, but there are versions of trauma. There's big T trauma, such as those really big things. And it could be like you survived a war. It could be a really traumatic car crash and the other passengers didn't survive. Those are some really big T traumas, but there's also little T traumas. They're smaller in nature, but they may have as big of an impact as a big T trauma and also often they repeat. And so it may not just be a small thing that happened to you once, it may be a small thing that keeps on happening to you. As an example, you know, it could look like, yeah, I was bullied in school. A lot of people may dismiss that. like, we were all bullied in school. We've all had that experience. Well, it doesn't matter how many people have had that experience or not. If you've had that experience and it was regular in your upbringing or your childhood, that's going to impact you in adulthood until you really figure out a way to work through that and heal from that. And so most of us, I would say the majority of us on earth have some sort of experienced trauma that could be big or small, doesn't matter. It's still an unhealed emotional wound that we will carry with us forever until we recognize that it exists in us and then we do the work to work through it. And then we ultimately heal from it and maintain it. When you have trauma, it's always going to be kind of part of you, but you'll get the tools to react in a different way. You won't be maybe triggered and behave in the same way as you did before going to therapy. And how this relates to money, because most people are like, I don't see the relation here. If you have trauma inside you, if you are triggered, and what that means is you are reminded of that pain, of that experience, and you think it's going to happen again. We are going to behave in ways that may not be logical and may be harmful for us. And it may be in connection with our money. And that could either be that it's very connected to our money. For example, if you've had a financial trauma, such as I went through a bankruptcy and I've never been able to let that go, you're going to have a lot of issues with things like maybe trusting yourself with managing your money because maybe you made some mistakes in the past and that's going to have a direct impact on your money. But it could also have nothing to do with money, but money is still involved. An example is if you have some sort of trauma, whenever you're triggered, you're going to seek some way to soothe yourself, to try to get back into this place of safety and connection. And so you may result to spending money because you get a dopamine hit every time you do. So every time something triggers whatever trauma that you had, you go shopping, you get a dopamine hit to soothe yourself, but then you're going to have to keep on shopping and buying stuff to get that dopey main hit. So it's a bit of a bandaid. And what's the result? Again, you're depleting your savings and nothing left over for your future. Maybe you're getting into debt. That's the impact it has on your finances, even if the trauma has nothing to do with money itself. And so it's really important to understand, okay, do I have any of this? And if I do, what are my behaviors, how do I feel inside, and then what are my coping mechanisms? How do I cope with that? And does it have a connection to money? And likely it does. And for me, I recognize it wasn't something that I've never been a ⁓ spender. It's always, I would turn to money as a way to soothe myself by maybe being too frugal, maybe restricting myself too much. Really, there was a time where I just saved, saved, saved, was kind of a money hoarder and had a big pile of savings, but I was terrified of say, investing and doing something a little bit more logical with that money. that for me was, that was a ⁓ coping mechanism whenever I got triggered and lots of my trauma has to do with not feeling good about myself, lots of self-doubt, lack of self-confidence. And so if I saw, like, ⁓ how do I have some sort of self-control in the situation when I'm triggered and I feel out of control? I'm going to do this behavior, which is maybe put more money into savings or put myself on a spending ban or say no to going out with friends because I don't want to spend money. Which when I look back, I'm like, gosh, there is limits. Saving money is good, but not when it's to your own detriment. And so we all need to kind of recognize what's going on with us so we can make different choices moving forward.
Max Shabalov (19:54)
Yes, it is important to recognize and to have this clear breakdown, right, of toxic behavior that we might have. And you actually have a great breakdown of three main types of toxic behavior. And this is avoiding money, worshipping money and using money for relationship needs. So you already mentioned some of them in those categories, but let's talk a little bit about avoiding money. How does one avoid money toxically?
Jessica Moorhouse (20:22)
Yeah, there's a couple different ⁓ ways, one thing, kind of how I alluded to, I kind of avoided ⁓ money in one way in that I was just like, I can only understand money in this context, so I'm going to have control over it by putting it into savings. it could also be a little bit more ⁓ obvious in that a lot of people will avoid money by literally avoiding money. I'm not going to look at my bank accounts. I'm not going to look at how much I own my credit card. I'm not going to open up my bank statements or my credit card statements, I'm not going, I'm just going to avoid everything to do with money because when I'm confronted with it, I'm too overwhelmed to actually deal with what that means. And largely it's because you're afraid of what, what it's going to reveal. What's it showing that maybe you're not in the best financial place. And so if I avoid it, then I'm not going to have those negative feelings about myself and my financial situation. So I'm just going to completely avoid that entire segment of my life, which I see a lot of people doing, you know, as a financial counselor for eight years now, and that's a thing I see very common with people is their coping mechanism is just to avoid. Because if you avoid, there's no problem, because you don't see the problem, you're avoiding it.
Max Shabalov (21:34)
Yeah, and in contrast is worshipping money category, you always talked about overspending, what else is there, Jessica?
Jessica Moorhouse (21:41)
I mean, worshiping can take the form of overworking, this whole idea of hustle culture, working yourself to the bone, having multiple jobs, taking extreme risks all in the pursuit of wealth and money and making it big. And you see all these people that have podcasts that talk about how to get rich quick, basically. And it could be that kind of form. You're chasing that as you're kind of way out of your situation, but then you're giving money too much power over you and you're basically worshiping it. And I see a lot of this, there's certain industries, you can even see if you're not ⁓ running a business or self-employed, you're just an employee. I see a lot of this, I used to work at a law firm and my gosh, the money worship there, because it was almost a badge of honor that you would work late into the night on a regular Tuesday. It's like, wow, you must be really amazing. And then when I left that industry, I realized how unhealthy that is, not just for everyone, but your mental health, your physical health, and what for? Why are we working so hard? Especially when you're working for some other person's company. It's not even your company. And you're working yourself to the bone to your detriment just to make maybe an extra little bit of overtime or whatever the case is. so that's, think, one aspect of money worship most people would never think because in our very capitalist society, you are praised and looked at, wow, you must be amazing if you work long hours, you work really hard. Like work is like, wow, it's a part of our identity that we think is so wonderful. And then we kind of judge others for taking time for themselves, taking a vacation, ⁓ know, taking care of their mental health. We're seen as like that's a weakness, where it's a strength to be a working person. It's like, yeah, we all need to work and make a living, but there's an extent that it gets really, really toxic and unhealthy.
Max Shabalov (23:33)
That's a really one. I think a lot of people can relate to this. Now, the third type of toxic behavior is to fulfill a need in a relationship. That's an interesting category. What are the examples there?
Jessica Moorhouse (23:45)
Yeah, most people may not really think of this, but it does happen. I mean, the data doesn't lie that money can be very ⁓ complicated when we recognize it's a big part of your relationship with someone. And that could be a family relationship, a friendship, or a romantic relationship. When money gets involved, depending on who is in this relationship, it can be weaponized. so I know also too, you talk about like attachment theory and its connection to money. And there's a lot of people, if you're like an anxious person and you're in a romantic relationship with an avoidant person, there's going to be a lot of conflict. And often that anxious person may weaponize money as a way to kind of reel that avoidant partner back in because they're not getting the attention that they need. And so maybe they'll take their shared credit card and spend a lot of money and then that partner will see, why did you spend $1,000 on our credit card? Well, now they reeled that person back into a conversation because maybe they were avoiding them or something like that. And so that's just one little example. But I think a lot of people may not realize that, you know, if money comes up in an argument, is it really about money or is it just you using it as a tool to get something that you need from your partner and you don't know the proper way to communicate that. So you're going to maybe blame them for your overspending or you don't know anything about money or why am I the one who's always managing the family finances? I'm tired. But then you never release the reins and give them an opportunity to manage the money because you want to have that control. And so it's important to also, yeah, in any of your relationships, I mean, even talking about family relationships, I know I give an example in the book of one woman, came from a legacy wealthy family for generations and money was always used as a way to control certain people in that family. Like, fine, you're not going to get your inheritance if you don't do what I want you to do or you have to go to the school, you have to marry this person. All of these rules and restrictions, all because money is being used as a weapon to get other people to do something that they may not naturally want to do. And so it's important to understand the role that money has, but why is it being used that way?
Max Shabalov (25:59)
That's fantastic. And all of that is basically how we perceive money based on our background. But you also argue that human nature plays a huge role and you have a great list of biases that we have and we need to be aware of those natural human biases. And first, let's talk about a loss aversion. What is that?
Jessica Moorhouse (26:22)
Well, we definitely all succumb to loss aversion. is the kind of psychological fear of losing, ⁓ which is natural because that's the survival. All these biases, all these heuristics that I talk about in the book ⁓ are within us because they were kind of put in place hundreds of thousands of years ago as ⁓ ways for us as a human species to survive. And so they're good. They're not bad things, when they are put into the context of money, they can actually be very difficult. They're not helpful. They actually can lead us astray. So loss aversion is we feel the pain of losing more than the joy of gaining. And so we will try our hardest to avoid losing money instead of realizing, there's also, but what about gaining money? What about building wealth? And this is why I see so many people afraid to invest, they're afraid of losing their money, but they may not recognize, well, you know, there's a risk of just keeping cash or just investing very conservatively. may end up in retirement and not have enough money to survive on because you were too safe, quote unquote. And so ⁓ because you were so afraid of dealing with the volatility that is the stock market.
Max Shabalov (27:40)
Another bias is status quo. And you mentioned the example of mutual funds and ETFs. And what a great example. Can you talk about that?
Jessica Moorhouse (27:50)
Yeah, I mean, I'm talking about, I feel like, mutual funds and fees. I mean, I've been talking about that for ages because that was one of the, I feel like, first things I really learned ⁓ when it came to investing was, okay, besides all the different avenues you can take, investment products you can invest in, it's important to understand the things that you can control and can't control. The one thing you can control is the fees that you pay. And in Canada, especially, we have some of the highest mutual fund fees in the entire world. I say on average, you're paying 2 % ⁓ on that mutual fund. And 2 % probably sounds like a very low number, but when you actually put it into say a mutual fund calculator, you actually see that it's 2 % of the value of your investment. And you have to pay that fee no matter if your investment goes up or down. It can mean over the course of a lifetime, hundreds of thousands of dollars you're paying in this fee. Whereas there are other investment products that are similar give you the same say diversification and exposure that a mutual fund would and flexibility and things like that. You can invest in a big broad market ⁓ basket of stocks or bonds just like a mutual fund. But there's you things like ETFs where the fees are significantly lower like 0.05 percent, 0.15 percent. ⁓ And the difference is that's more money in your pocket and the more money you know the less money you're paying in fees the quicker you can grow your wealth and reach your goals. there's just this idea that especially a lot of people, I was actually speaking of, I was at this event that was about ETFs and there were some data points they shared about mutual funds. Those are still one of the most popular products in Canada. And we're wondering, like, why is that when the data shows the fees are high, there's better products, cheaper products out there that do the same thing. And I think a lot of it is just people just don't want to change. And especially Baby Boomers who've been invested in mutual funds for decades, which I get at the time, mutual funds were an incredible product because before mutual funds, it was very difficult to invest on your own if you didn't have a lot of money. You one stock can be $500, you know? And so you can start investing for just a couple hundred dollars in a whole basket of the entire Canadian stock market or US stock market for very little money through a mutual fund. But then we've innovated, there's other products out there. And so why is it that people refuse to ditch their mutual funds for ETFs when they know they can save a ton of money and build wealth a lot quicker? Because people are just afraid to change. ⁓ It's uncomfortable. And there's the fear that if I do something different, what something bad happens? I'd see the same thing when it comes to bank accounts. There is in Canada, the big five banks, and largely they all charge fees for just having a checking account or a savings account, or they have a lot of restrictions. Like, okay, we'll waive the fee if you have minimum $10,000 in your checking account. Whereas like, well, but you're earning like 0.05 % or something really low, 0.50%. And if you just made a different choice, such as going with like a credit union, an online bank that have lower or no fees and typically offer higher interest, well, that's an obvious benefit. Why wouldn't you do that? Again, it comes down to the fear of change and the fear that something bad is happening. I still get to this day, people are afraid of leaving the big banks to go to a smaller bank. And most of these online banks, surprise, surprise, are owned by the big banks. They're afraid of making that change because, what if this online bank or this credit union goes bankrupt and I lose all my money? And then I explain, well, there are provisions in place for that. There's CDIC, there's things like that. So you're not going to just lose your money. My gosh, of course there's like things in place. But again, people are just so wrapped up into, no, I just can't even handle any of this. Basically their emotions are running too high. So they're just going to stick with what they know and do that. I see this too even just in, when it comes to like jobs and career, we're talking a lot about AI lately, and how it's gonna change the game. I mean, I'm a millennial. feel like there's nothing, there's been innovation every year and it's hard to sometimes keep up with what's going on now. For me, I'm pretty used to like pivoting and innovating and changing and evolving even with my career as a online educator and content creator. My gosh, what I do now looks significantly different than what I did six years ago, only six years ago. But again, there's a lot of people who kind of refuse to innovate and then they may lose their jobs or if they're self-employed, their revenue, their business revenue is going to go down. They're going to ask why. It's like, because you have to make change. You have to change when the tides are changing.
Max Shabalov (32:33)
Yeah, and there are more even biases in the book, which we should know to better understand our financial choices. Another thing that impacts our mindset, money mindset, is that businesses became really good at using our human nature and selling us different stuff. What are some of the psychological tricks they're using?
Jessica Moorhouse (32:56)
Yeah, that was actually, I really loved writing that section. It was funny, my editor's like, my gosh, I learned so much. I had no idea any of these things existed. But of course, businesses, retailers, corporations are going to use these biases to make them more money. And we're not even going to know that they do them. So one thing that I recognized while I was writing the book, one day was going to the grocery store, I was looking for a basket. There was no baskets. They just had carts. And I'm like, that's really weird. I can't believe they got rid of baskets. And then I did a little research and yeah, a lot of grocery stores, not all of them, but a lot of them are getting rid of baskets and just force you to have carts because we as humans have this inclination that whatever receptacle we have, whether it's a plate or a grocery cart or some luggage, we need to fill it up because that's when we know that we're done. Okay, great, that's when we can go to the checkout is when our cart is full of stuff. Or, you know, this is how we know when to stop eating when our plate is absolutely full. But if you get a receptacle, you know, instead of a cart, a basket instead of a big plate, a smaller plate, you're going to eat less, you're going to buy less. But again, that's not what they want. mean, I was just at Costco the other day and the carts are huge. They're huge and they certainly don't have baskets. And I see all these people walking the aisles, just put... you can even get these bigger carts where it's like, know, can just put crates and crates on there. And all these people are filling up their carts because that's the only way psychologically or behaviorally that they know that they are done shopping. For me, because I know that, no, you're the one that needs to say, am done, I've got everything on my list, or I'm full, whatever the case, you need to set that kind of boundary for yourself. Otherwise, again, you're going to be spending more, eating more, you're going to be doing more than you need to and again likely to your own detriment. You're spending more money than you have, you're eating more food than you should, you're doing more than you should because that's exactly what the retailers want. that's like an easy thing. Like one thing I think I share in the book too, I still do this to this day. If I have to go to the grocery store just to pick up one or two ingredients for this recipe that I'm making for dinner, I won't even get a basket. I will just walk in there, grab those items and go to the checkout. Because then again, my receptacle now is my arms. So whatever I can fit into my arms, when I'm full, there's no more room to carry these items. Even though I look kind of crazy at the grocery store, because everyone's like, why are you holding all these tomatoes or whatever? Yeah, well, that's when I know I'm done. So I'm done. I got the two items from a recipe. I'm going to the checkout. And I do this all the time, because when I don't, if I'm not paying attention, I'll just buy a bunch of extra stuff that I'm like, I didn't even come here for that.
Max Shabalov (35:43)
Yeah, that's a nice little tip and you've got actually the whole section on how to design our financial life better. You call it healing. And there are different categories and methods that you are applying. I like two main categories. The first one is setting up financial foundation. And the second one is shifting our perception of money. So let's begin, with the advice on the financial foundation. So it is about setting up a spending plan, tracking your finances and being prepared for an emergency. What is your recommended approach for creating a spending plan?
Jessica Moorhouse (36:25)
Yeah, so spending plan is just, think, a nicer, less triggering word or term to say budget, because a lot of people do not like that word anymore, because it means maybe past failures I tried to budget didn't work. there's something wrong with me. So instead, I think it's more fun to think about, well, how do you want to spend your money? Like, I'd like to talk about that instead of like budget, which feels very restrictive and telling me what to do and showing that I haven't made the best choices in the past, spending plan is really just you outlining, okay, this is the money that we have coming in from our job. ⁓ Where is it going to go? And ideally, we want to kind of do it in a certain sequence to take the best care of ourselves in our future. And so that looks like making sure that we are saving first, spending second. The pay yourself first method is one of the simplest and most effective things you can do to improve your financial life. And then also making sure that you've got certain things in place so you are in a better financially secure ⁓ situation, such as having that emergency fund. I was actually talking to someone the other day who asked me, well, a lot of people online say it doesn't make sense to have cash in a savings account for an emergency fund. I should just borrow with a credit card or line of credit and then whatever money that would have gone towards my emergency fund, I should invest it. And I know when we crunch the numbers, that could make more financial or mathematical sense rather. ⁓ However, again, we need to consider behavior. Most people are not good at actually following through with some of these complex ⁓ strategies to optimize, get the most interest or get the higher return. ⁓ We just aren't good at it. It's not in our nature, quite honestly. And so I always tell people, yeah, even though mathematically you may earn a little bit more than again, having some cash just sitting in there on a savings account earning little interest. There is something that happens when you do have a certain amount of cash in that savings account as that safety net to make you kind of, you know, put down your shoulders and sigh and relax a bit because you know if something happens, I'm good and I don't have to rely on credit because also too, once you're borrowing money to pay off whatever this emergency fund and it could be, you know, a car or a job loss, whatever the case is, well, how are you going to pay that money back? When you have cash to pay for it, you don't have to worry about paying off a debt now. You have the cash that's already ready to go. You've done the hard work already. And so an emergency fund is essential for everyone's like mental health and financial security. Next, I want to, and I would say this to emergency fund first and then debt second. Now, obviously you can always pay off your debt, know, pay off your minimum kind of required payments while you're saving up that emergency fund. And again, too, you can kind of do it in layers, like, okay, I want to save up three months of my living expenses for my emergency fund, and then I'm going to continue to put some money in my emergency fund, but maybe, you know, put a little bit less in there so that I can square up a little bit more money to then pay off my debts quicker. So there's lots of different avenues you can take, but I do feel like emergency fund first, and then paying off that high interest debt second. And high interest, I'd say anything above 15%. Anything that's like higher than you can possibly expect to get a return from the stock market and then really focus on paying off those debts that are hurting your cash flow and probably giving you a lot of anxiety and you know you'd just be able to, again, be so much less worried about your finances once these debts are gone and they're not hanging over you. And then once we've got that nice plan in place, you don't have to be fully debt free. Again, it depends ⁓ on your personal debt situation. But I don't believe that you have to be fully debt-free before you start investing. Again, if you have like 20 % in credit card debt and you're like, should I start investing? I'm like, you should probably pay off that credit card because it is going be very difficult to earn 20 % by investing your money. but then, you know, then it's about focusing on building that wealth that gives you the sense of, my gosh, we're working towards something. We're working towards this exciting goal. Paying off debt can be very challenging mentally because even though you see the balance go down, you know that eventually you're just going to hit zero, but you're not building anything. You're just kind of fixing something that you should have fixed in the past. And so when you're investing, you're able to see that we're building something. I see the structure of that. We've got the foundation. Now I'm putting up walls. I'm putting some windows in there. I'm painting. You can kind of see where you're going. And it's a lot more exciting to see your bounce go up than your debt go down. So it's important to kind of I think having specific priority sequence so you know where you're going. Because otherwise, what I hear from most people is they feel so overwhelmed by all the things that they have to do, and so they do nothing because they just get overwhelmed. so there's analysis paralysis, and so they don't know what to focus on first. And so I kind of lay out, these are the things that you should do in priority. And then once you're doing them, then your job is just to stay consistent and keep going. And then if you mess up or something happens, again, a job loss, even if you have an emergency fund and maybe you're unemployed for a lot longer than you want, it's okay. Then we just have to change the plan and make some new, you know, okay, we'll do plan A and we'll do this and that. And that's okay. I think a lot of people think that a budget or a spending plan is a fixed thing, but it's not. It should be fluid and should change with you and your life and what happens.
Max Shabalov (41:53)
Yeah, and you say tracking is important. Yes. What happens if you don't track your spending or your net worth?
Jessica Moorhouse (42:01)
Yeah, so that's the other element I think a lot of people miss is, you know, the budget, spending plan. That's the plan. This is what we'd like to happen. And, you know, you're going to maybe set up some ways with your bank accounts and, you know, went on payday. What are some actions you have to do abiding by this spending plan? But the other component that most people don't do is you got to track your spending and you got to track your net worth and your spending will show you, okay, are we actually doing what we set out to do? is the money going into our savings accounts, but then also paying for our necessities and we're not going over it. We need to know where the money's going to show us kind of our progress report. Are we in line? Are we doing okay? ⁓ And then the net worth component, which is my favorite part, I do it every single month, is seeing, how are we doing compared to last month? And I always tell people the first year that you start tracking your net worth, it will feel like the slowest year of your life. Like, oh my gosh, I'm barely seeing any progress. But then year two, you're going to see more progress. Year three, year four, and continued, you're going to see the big difference. I've been telling people, I've been tracking, me and my husband have been tracking our spending and our net worth for in January this year, it will be, or in 2026, it'll be nine years. Nine years. So almost a decade of tracking. And what's so exciting, I just do it in my budget spreadsheets that I have on my website. So keep it very simple. We can see where we were at financially back at the beginning of 2017 and compare it to now. And we can see the trajectory, which is so exciting because if you don't track it, you'll never really know how well you're doing, how well you've done. And to even just believe the numbers, like when I show my husband like, this is our net worth this month, can you believe it? He's like, I have a hard time sometimes wrapping my head around these numbers because it doesn't make sense to me. I'm like, well, the numbers don't lie. I got them from our bank accounts. Like, this is what's going on. And so it just proves to you that, this hard work that you're doing, all of these things that you know, you know, the emergency fund, the debt, the investing, the trying to increase your income, the being responsible with all of your money choices, this is why we're doing this because the proof is in the pudding. Your net worth is up this month compared to last month or your net worth is oubled in five years or whatever the case is, look what happened. This should prove that what you're doing is working. And so you need to have that data to back it up. Otherwise, you're just guessing. And then you may come to a moment where you're like, well, maybe it's not working. Maybe I should not do this anymore. But maybe it was working. You just didn't see the numbers.
Max Shabalov (44:39)
Yeah, know, Jessica, what I just thought of, it's gamification. Like, I'm not a big gamer, but why games are so popular is that there are all these points and the statuses and then the improvements and people get excited about it.
Jessica Moorhouse (44:53)
Yeah, it is of like that. And even too, when there's certain milestones you hit, whether it's like, we've paid off all of our debt or we paid off this amount of our mortgage or we've hit six figures in our investments, whatever milestones you want to set for yourself, that's exciting. You need to have these goals. You need to have something to work towards. And then you also need to celebrate in whatever way that is. Sometimes that's just as easy as going out for dinner and celebrating or, okay, finally, we're going to treat ourselves to a vacation or whatever the case is. You need to have a plan and then goals and then have these milestones you're working towards as kind of that thing to keep you going and motivated.
Max Shabalov (45:31)
Fantastic, another way to design our financial life better that I like this category is changing your attitude towards money and you encourage people to spend more on meaningful things. What do you believe is a better spending?
Jessica Moorhouse (45:46)
Yeah, no, that was such a fun chapter to write about really kind of getting to the root of the connection between money and happiness. And I think a lot of us have lost the plot when it comes to those things. We don't even recognize what makes us truly happy because we've let all these companies and retailers and social media and movies and TV shows tell us what should make us happy. And what those things is luxury and, you know, private planes or whatever the case of things that will likely probably never actually experienced, but we think, if only I had a lot of money and I could do this, I'd be so much happier. ⁓ Well, the data shows that that's not actually the case. There's a whole section in the book where I talk about this ⁓ way of thinking, this theory called PERMA plus, which really breaks down, these are the actual things scientifically that will make you more happy than say going out and buying something. It comes down to the things that are pretty much free or almost free or very low cost, things like spending time with family and friends and actually engaging, getting off your phone, but really spending time with the people you love, or doing things for yourself, whether that's like going to the gym or going for a run outside, which is completely free, you're going to finish your run and feel incredible because of the endorphins you're going to experience, or doing something simple like reading a novel or doing a puzzle. Like things that I think we discount a lot, ⁓ that's not that important. Actually, these things are incredibly important. You may not realize it. And I think for a long time, you when we were children, I think it was very clear what things we liked to do, what hobbies we had, what made us happy. And then as adults, I think we lost that somewhere along the way and thought that all these other things would make us happy. And so we're chasing all of those things, you know, whether it's luxury goods or, you know, going to fancy restaurants or whatever, getting fancy clothes. And realizing, well, it's weird. No matter how much money I spend, I'm still not quite happy. Well, maybe that's because we're focusing on the wrong things. We need to really recognize, okay, what actually brings me joy? What actually brings me joy? And for me, since I finished the book and did all that research, I've been trying to implement all of those things and reminding myself when I maybe get caught up in social media or see an advertisement, thinking, if I only had this for my kitchen, I'd be so much happier. like, no, I know that's not true. What makes me happy isn't like I need a new stand mixer that's this color. I actually should just bake some cookies. That makes me really happy. Or invite a friend over and we can do a baking day or something like that. So I think we just need to kind get back to the core things that are super simple that bring us joy and makes our lives worth living because I think we've lost that somewhere, we've forgotten and we need to remind ourselves. And spoiler, yeah, most of these things are free or almost free.
Max Shabalov (48:37)
Yeah, I can relate as well because recently I picked up a hobby. I live close to the lake, Lake Ontario. And what I do, my friend and I, walk every Saturday morning to the lake and do cold water plunging, right?
Jessica Moorhouse (48:51)
My husband used to do that a lot. loved it. Yeah, and Lake Ontario. He did it Lake Ontario too. It's cold.
Max Shabalov (48:58)
Yes, and it's remarkable, right? The emotions that you get are totally free and the happiness that you get after you dry yourself and then you're warm again in the jacket, it's just fabulous and all of this is free and you know, the stand mixer that you mentioned, it doesn't give you this thing.
Jessica Moorhouse (49:17)
Mm-mm. No, exactly.
Max Shabalov (49:20)
What are some of the things that you do, that are free and that you really like?
Jessica Moorhouse (49:24)
Gosh, so the things that, and so I also had to recognize while I was writing, because you talked a lot about hobbies and how actually hobbies, again, people don't think that they have, they hold that much value, but they have incredible value for lives. That's actually what, you know, we need to have something outside of work. We need to have something that is just for fun, just for play. And that's actually, we need to remember as adults, we actually do need to play. And so for me, I recognized, my gosh, I don't really have that many hobbies. I should probably get some. And so for me, my big things that I like to spend time doing is being part of group activities. So I'm a part of a couple of book clubs. I go to a gym where it's all about like group working out and that makes me feel really happy and just being around people. I love to read books. I've also kind of forced myself after I finished this book, I'm like, okay, we read a lot of nonfiction and we wrote a whole nonfiction book. We need to read some fiction. We need to read some other genres and really just kind of get lost in a good book. And so I read probably 25 books so far, which I mean, for me is a lot. I some people are like, I've read 50 books. I'm like, hey, I'm doing pretty good, I'd say from my standards when maybe I'd read a couple books a year. ⁓ I just love to bake. I love to cook. I love a good cookbook and just trying a new recipe. ⁓ I like to do kind of crafts and stuff like that. And I love to travel. And that's the other kind of thing too is ⁓ outside of hobbies. We need to really understand that when it comes to buying a thing or paying money for an experience, you're always going to get more kind of bang for your buck when it comes to an experience. And that could look like a big trip or something like that. But it can also be as simple as like taking a cooking class or, you know, there's like, I did this with a bunch of friends last winter and it was so much fun doing like a painting sip or you're painting something and you know, something out of your comfort zone. Like none of us are great artists, but it was so much fun just to do, have a little wine and then paint something for a couple hours and just get lost and engaged in it and so much fun. And so I do feel like though that Gen Z millennials are pretty up with the, they understand the experiences are more valuable than buying things, but still, sometimes it's still just a good reminder that's like, yes, this is, if you want to know where should you spend your money for pleasure, for joy, it is those memories that you're creating and largely either, you know, it could be with yourself, but largely it's with people around you.
Max Shabalov (51:47)
Yeah, I like that. And all of that is possible when your financial situation is in order, right? When you control it, when you track your net worth and you see the progress, right? All of that. And that's such a fantastic book, Jessica, because it talks about us, first of all, as humans, because we're not numbers, we're humans and money with humans. That's a totally different thing. This has been a fantastic conversation. Where can people go and learn more about you and your work?
Jessica Moorhouse (52:17)
Absolutely. So, you my book is called Everything But Money, The Hidden Barriers Between You and Financial Freedom. You can find it at any bookstore. And you can find more about me on my website, jessicamoorhouse.com. I also have a podcast called The More Money Podcast and a YouTube channel under my name, Jessica Moorhouse. And you can find me on Instagram at jessicaimorehouse. So I'm excited just because, you know, this book was such a labor of love and literally changed my life writing it. And it's been the biggest joy, being able to talk to people who've read it and shared their money stories or how the book kind of made them think about their money and their futures differently. So I'm excited for people to check it out and do some self-discovery because just like me, you probably think you have everything figured out and then you'll realize, actually there's a few things that maybe I don't have figured out. should explore those.
Max Shabalov (53:09)
Fantastic, well, thanks for your time, it's been a pleasure.
Jessica Moorhouse (53:12)
Thanks so much for having me.
Max Shabalov (53:15)
Our guest today was Jessica Moorehouse, she is the author of Everything But Money, it's available on Amazon, you can find more information about her work at her website jessicamoorhouse.com
Well, that wraps up another edition of Financial Literacy Canada podcast. I'd appreciate you take one minute to give review of the podcast on Spotify or Apple Podcasts. It helps out a lot. If you've done that already, thank you. Please consider sharing the show with a friend or family member who you think will get something out of it. As always, thank you for the continued support. See you next time!
