It was early on in their marriage when Monique and Stuart Madan’s investment advisor first dubbed the couple The Happy Savers. While neither Stuart, a chartered accountant, nor Monique, then a psychology researcher with Toronto’s Hospital for Sick Children, were making megabucks, they knew the value of a dollar and the importance of saving. The satisfying result was a major down payment on a home.
“We had both learned lessons from our parents on how to live within our means,” says Monique Madan, now a certified financial planner. “I’m shocked to this day that more people didn’t get those lessons from their parents or our school system.”
The subjects of saving and erasing heavy debt are subjects so crucial to her that she incorporates these two basic messages as part and parcel of her private practice.
“People have lost sight of the connection between the money that they earn and the money that they spend. It’s not through any fault of their own. It’s not that people [intend to] spend frivolously. It’s just not the same kind of discipline that previous generations might have had.”
As an example, Ms. Madan said her parents realized that if they wanted to send Monique and her brother to private school and university, they would have to forego some trips or renovations to the house or a new car. “I don’t see people now necessarily making those conscious decisions. I don’t mean to be judgmental about it. Interest rates are so low now people think they can do everything at once,” she says. “What I have been developing over time [are ways] to help people get that discipline so that they spend consciously and enjoy their money but not get themselves in a position of overspending or ultimately indebtedness.”
She has created a program for her private clients using affordability guidelines and heavy debt management. But she took the message to a broader audience this past November by creating a No Spender Challenge on her blog. The name is in reverence to Movember, a campaign to raise funds and awareness of men’s health, specifically prostate cancer, during the month of November. “Seeing how well people took to a finite challenge that raised awareness about prostate cancer, I wanted to create a program that is again finite, not like a never-ending diet, but one that will keep people aware of their own spending habits. “
No Spender Challenge
She set about creating some rules for the challenge. Participants were asked to give themselves an allowance of $150 per adult per week and $50 per child per week – in cash. Credit cards could be used for any automatic withdrawals already on credit cards, as well as one trip to the grocery store a week and one fill-up of gas per car a week. Everything else – even going back to the grocery store to get another item, personal spending, birthday parties and toiletries, had to come out of the weekly cash allotment.
At first, she says, people thought this was an extremely generous budget, but towards the end of the first week people couldn’t believe how much money they had spent. “It created a connection between our spending habits and the fact that money is finite.” They thought they couldn’t participate in some regular activities, like going out for dinner or to a movie with friends, because they had other things to buy. “But within a couple of weeks, instead of deprivation, it turned into: how do I optimize this money? So people started thinking ahead of how and what they could accommodate. And people began being more creative and efficient. Any time anyone goes on a cash-only regimen, they become much more conscious of their spending.”
Ms. Madan intends to continue with the No Spender challenge in the future.
Like many other advisors, she didn’t begin her working life in financial planning. In fact, when she went to the University of Toronto, the financial planning industry was in its infancy and she believed the only roles in the financial world led to being either an accountant or stock broker. Wanting neither of these, she earned her degree in psychology and took a research job at Sick Kids.
After about six years there, she decided to take the Canadian Securities Course (CSC) purely out of interest. “I had always been good with money,” says Ms. Madan. “I always knew that I could do more with less than the people I saw around me. I didn’t appreciate that that was because I had a different kind of discipline.” While taking the CSC, she noticed a chapter on financial planning “and I just ate it up. I didn’t even know at the time that that was a profession.”
She then worked for RBC Dominion Securities for a year creating financial plans for affluent clients, before moving on to the Office of the Public Guardian and Trustee, which protects the legal and financial interests of mentally incapable adults in Ontario. Three years later, she earned her CFP and set up her own practice.
Ms. Madan also has two other designations: the Financial Management Advisor (FMA) and the Certified Divorce Financial Analyst (CDFA).
She says she often has to be the bad buy with some of her clients when it comes to budgeting, but insists it can be done stress free if people prioritize. “We all like nice things, but we can’t all have them at the same time.”