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The Psychology of Money – Sarah Milton

The Psychology of Money – Sarah Milton

Why is the psychology of money important? We ask that question of Sarah Milton, a Pension Account Manager with Clearpoint Benefit Solutions. Sarah is committed to delivering quality financial education sessions to help empower people to take control of their financial future. She is also a regular contributor to the Retire Happy website

She is also the co-author of Take Control of Your Money, a just released book on personal finance.

The Psychology of Money

We started the discussion by talking about the psychology of money.  Sarah says that

Everything we have ever heard, seen or experienced in relationship to money is what influences our ability to earn, hold and grow it.

Our previous experience with money impacts our attitudes towards it.  If you grew up believing that it’s difficult and stressful to understand money, and that wealthy people are arrogant idiots, it’s not surprising that you don’t want to put a lot of effort into something that is difficult and complicated.  As Sarah says, “you’re not going to work your butt off to become an arrogant idiot”.  We create our own barriers, and self-sabotage our efforts to be better with our money.

The first step to changing our attitudes towards money is awareness.  If you are aware that you have certain harmful beliefs, you can take steps to change them.

The next step is understanding.  If you can understand how you got into debt, you can take steps to change your approach to borrowing and money.  Then you set a goal and come up with a plan.

Sarah’s personal finance philosophy was influenced by two books:

The Wealthy Barber: The Common Sense Guide to Successful Financial Planning, by David Chilton

Secrets Of The Millionaire Mind by T. Harv Eker

Secrets of the Millionaire Mind focuses on the psychology of money, and is based on two concepts:

  1. Everyone has a money personality, and
  2. Everyone has a money thermostat

The way you handle your money is influenced by your money personality, and your ability to manage and grow your money is influenced by your money thermostat.

Money Personalities

There are four different money personalities:

  1. Spender
  2. Saver
  3. Avoider
  4. Money Monk (people who feel guilty about having money, and want to give it away)

Once you are aware of which money personality you have, you then must understand how your money personality impacts you, and you can then make changes to improve your financial life.

The key is to have a plan to address your issues, and that reduces the stress caused by financial problems.

Money Thermostat

We all have a money thermostat, which is a level of money that we are comfortable having.  If you are comfortable with $2,000 in your bank account, you will reduce your spending if your balance dips below $2,000, and if you have more than $2,000 in your account you may spend more to get back down to that “comfortable” level.

The key planning point is to adjust your thermostat to an appropriate level.  You can even trick yourself to adjust your thermostat.  Instead of leaving money in your main bank account, put it in a savings account, or TFSA, or through a work place savings account, so you don’t see the cash building up, and you aren’t tempted to spend it.

The key is to understand how your habits may be sabotaging your best efforts, and take action to fix those issues.

If you like to read about money management, here are 10 more personal finance books we recommend.

FULL TRANSCRIPT show #15 with Sarah Milton

psychology-money-transcriptDoug Hoyes: Welcome to Debt Free in 30, where every week we talk to experts about debt, money and personal finance. That’s exactly what we’re going to do today. I’ve got a great guest on the line, so let’s get started. Who are you? Where do you work? What do you do?

Sarah Milton: Hi Doug, my name is Sarah Milton and I am an account manager with Clearpoint Benefits. Essentially my job is to get people excited about their money, which is fundamentally what I’m passionate about. So, my job is financial education. I get to go into companies who have group retirement plans, educate the employees on the plans, and be a resource for them if they have questions about retirement planning, debt management, money management, so essentially everything I love to do as a financial advisor with no requirement to sell anybody anything in order to eat, which makes me very happy.

Doug Hoyes: Wow. So, we’ve had a number of guests on the show where we have addresses this exact question, that what most advisors are out there are really sales people.

And in fact it’s my belief that everybody is biased, we all have to eat and in your case it’s not a direct relationship then, it’s obviously your bosses want things to keep going on. But when you’re meeting with one of the employees that you work with, all you personally care about is giving them good advice because you’re not selling them anything. They’re already part of the plan is what you’re saying.

Sarah Milton: Absolutely. And technically I don’t even really want to give people advice. I want to give them information that allows them to make a decision on their own. Because my belief is that if I give advice, I’m creating a dependence. And when I’m serving 85 companies all the employees within those companies, the last thing I need is 2,000 people who need to call me every time they want to change their investment decisions.

Doug Hoyes: You don’t want to create a dependant. So, this is the whole thing about, give a man a fish, you feed him for a day, teach him to fish, you feed him for a lifetime or something like that.

Sarah Milton: Absolutely.

Doug Hoyes: Now I’ve become aware of you through some of your writing. Your stuff is peppered across the internet because you’ve done a lot of writing as well. Is that correct?

Sarah Milton: That’s true. I write a weekly post for which is one of Globe and Mail’s best personal finance blogs I believe in 2012. And I’m about to become a published author. So, I just finished a book that I co-wrote with Jim Yee, who also created Retire Happy and that’s called Take Control of Your Money.

Doug Hoyes: In the show notes I will put links to everything that we’ve talked about; both the website as well as this book. And we’ll see if we can’t turn it into a bestseller then for you.

Sarah Milton: That would be awesome.

Doug Hoyes: That would be totally cool.

So, let’s – I got a whole bunch of things I want to talk to you about, but why don’t we start with the whole education end of it which is what you were just discussing. So, tell me as a person who you know nothing about, where do my attitudes about money come from? Why is it that I think the way that I think? What are your thoughts on that?

Sarah Milton: That’s a great question. And I think the psychology of money is something that is not talked about enough when it comes to finances. Because the reality is that everything we have heard, seen or experienced in relationship to money is what influences our ability to earn, hold and grow it.

So, if you grew up in an environment where money is difficult and stressful and you believe that money is difficult and complicated, perhaps that wealthy people are arrogant idiots, it stands to reason that you wouldn’t put a lot of time and energy into something that’s difficult and complicated. And you’re not going to work your butt off to become an arrogant idiot. So, a lot of times we create our own barriers and we self sabotage along the way.

Doug Hoyes: So, we create our own reality to a certain extent then.

Sarah Milton: Absolutely.

Doug Hoyes: Okay, then so let’s say I grew up in a home where, what you just said is true, that I believe that all rich people are arrogant idiots. Or I guess I grew up in a home where I believe the opposite. I don’t know what the opposite of that would be. But I have some different viewpoint. So, what does that mean to me then? What do I have to do as a consumer, as a person armed with that knowledge?

Sarah Milton: So, the first step to change is awareness. So, if you’re aware that you might have a belief that is stopping you from getting where you want to go, I say you should look for reasons that you’re wrong.

So, if I believe that wealthy people are arrogant and disrespectful, I need to look for examples of wealthy people who are not those things, wealthy people who are generous or philanthropic or have achieved their wealth doing something that mirrors my values.

I think as human beings we have a hard time sometimes dealing with the fact that we might be wrong. But when we can get comfortable knowing that we don’t know everything, there’s a lot of opportunity for growth there.

Doug Hoyes: So, are you saying I don’t know everything? We’ll edit that part out cause that can’t be –

Sarah Milton: [laughter] That might be a bit of a shock to you.

Doug Hoyes: That is a huge shock. We will definitely edit that out. So, okay I have to start by being aware of what my preconceived biases and notions are and then what? So, I realize I’ve got this attitude towards money that only rich people have money and all rich people are bad. If I can find some people –rich is perhaps a bad word, people who are successful, who aren’t bad people, then that allows me to then take the next step, which is what? Where do I go from there?

Sarah Milton: So, after awareness comes understanding. So, understanding how what you believe is impacting your life either in a positive or negative way and then deciding to take an action to counteract that.

So, for example when I was growing up my dad is extremely good with money. But he grew up in a generation that just doesn’t talk about it. So, I understood the principles of you don’t borrow money, you don’t get into debt. But at the same time I’m looking around our house, I’m seeing the second hand furniture, I’m seeing the super hard work and I’m thinking you know what? I could just charge some money to Visa and I could have all the great things that I wanted.

It wasn’t until down the road that I realized the second hand furniture was a choice. They didn’t want everything wrecked while the kids were small. Soon as we moved out they had great furniture and a new kitchen.

So, it’s understanding that. And money was never important to me until somebody pointed out to me that I could do far more good in the world if I had money than if I didn’t. And that resonated with me, that’s my driver to build wealth, that I can create a better life for my niece, for my nephew, for other people, if I have more money available to me.

Doug Hoyes: So, you’re attitude towards money really informs your decisions. If I think money is a bad thing in and of itself then I guess either I don’t want to have it or I want to spend a lot of it. Or as you said I want to borrow a lot of it because it doesn’t have any real value to me. And I’m assuming you’re in the camp that a massive amount of debt is not a good thing.

Sarah Milton: Absolutely.

Doug Hoyes: So, what advice do you give people who are starting out with a massive amount of debt? Perhaps they’ve got student loans from when they were at school. Perhaps they had that bad attitude towards money that you just talked about and they were hey I want it and I’m going to charge it and who cares what the consequences are. So, when you encounter someone like that, what’s the thought process that you go through with them?

Sarah Milton: So, for me and I think part of what makes me a good advisor when it comes to debt management is that I have been down that debt path. And I have fallen into some pretty large holes and I have dug myself out. So, I understand exactly how A, you can get into it that situation. But I also know that it’s totally possible to get yourself out.

But I think the first step is understanding how you got there in the first place. Because life throws curves, life is unpredictable, things happen. But I know from my experience, the hole I fell into would not have been as deep had I done things differently in the lead up to that. So, you know if I had more of a reserve, if I had more of a contingency fund, if I paid more attention that I wouldn’t have been hit quite as hard as I was.

Doug Hoyes: So, understanding, knowledge is always the starting point. And you said someone who has been through this in the past, okay what’s next then? Okay, I get it, maybe it was through no fault of my own, I got laid off, the company got closed down. I got sick. I wasn’t able to work for six months so I had to use credit to survive. I’ve now got a bunch of debt so what’s my thought process now to try and recover from that?

Sarah Milton: So, then it’s just about setting a goal and coming up with a plan. So, if you know – the first thing to do is know your situation. So, you have to be able to take a good hard look at your situation and know exactly how much debt you have. And then you’ve got to look at your situation and say well how much money do I have coming in every month? How much money do I have coming out? And hopefully the difference between those two numbers is positive. If it’s negative, the first step you have to take is you’ve got to figure out a way to cut your expenses or make more money.

Doug Hoyes: Yeah as I say to people, you’re not the government of Canada. You can’t spend more than comes in forever and ever. You can’t print money. So, until you get that budget under control than nothing else is going to be possible.

Okay, that’s very good information. I would like to talk about a bunch of other things. But let’s take a quick break. I’m here with Sarah Milton and we’ll be right back on Debt Free in 30.

Segment #2

Announcer:       You’re listening to Debt Free in 30, here’s your host Doug Hoyes.

Doug Hoyes: We’re back on Debt Free in 30. My guest today is Sarah Milton and we’ve been talking about the psychology of money and I’d like to explore that a little bit further. And perhaps we can take a step back Sarah, and you can tell us about some of the influences and what’s got your thinking to where it is today.

And I assume you‘ve spent most of your career reading everything I’ve written on the internet, every blog I’ve written and that’s probably been the most profound influence on you. Is that correct?

Sarah Milton: You have stuff on the internet?

Doug Hoyes      Oh yeah, okay. So, it isn’t me that has profoundly helped you out. So, what have been your influences then? Where did you come to the thinking that you’ve got today?

Sarah Milton: I think my grounding in finances initially came from the book The Wealthy Barber by David Chilton. And probably the book I would credit with turning my own life around would be a book called Secrets of the Millionaire Mind by T Harv Eker. And I read that one probably about four or five years ago and it literally changed my life. It’s always hard to say that cause it sounds like such a cliché but honestly it’s such a different reality now compared to what it was.

Doug Hoyes: Okay, so I have to admit that I am totally ignorant here. I am not familiar with this book. And I ask a lot of my guests what book do they recommend. And a lot of people have mentioned The Wealthy Barber of course, David Chilton who of course lives here in Kitchener where I am today. You’re in Edmonton so you’re a little farther away from where he is. But this book I am not as familiar with. So, give us the background. What’s the basic concept? What is it that you learned from that book?

Sarah Milton: Secrets of the Millionaire Mind really focuses on the psychology of money. And I would guess the key concepts to that A, everybody has a money personality and B, everybody has a money thermostat.

So, the idea is that the way you handle your money is influenced by your money personality and the amount of money that you’re able to hold and grow is influenced by that money thermostat.

Doug Hoyes: So, a money personality, I have no idea what that means then. So, are there a number of different money personalities or what are we talking about there?

Sarah Milton: There are four different money personalities. And this information was based on research done by a lady called Olivia Melon and she identified four different money personalities.

So, the first one is the spender, the person who loves to spend their money. These are the people who tend to have best friends named Visa and MasterCard. They love to spend. On the opposite end of the spectrum you’ve got the saver, the people who love to save, are very comfortable saving. But often the challenge with being a saver is that you’re not very comfortable taking risk with your money. So, your money tends to grow in a chequing account versus an investment account.

The avoider is one of the more common money personalities. These are the people who prefer not to have anything to with their finances. They never know how much money’s in their bank account, their bills tend to stack up in a pile on the microwave or in a drawer. A couple of days before pay day, they’re paying for things with their fingers crossed cause they’re not 100 percent sure if it’s going to go through or not. And the fourth personality is the rarest one and that’s the money monk, the person who doesn’t feel right about having money when other people don’t. So, they tend to give their money away versus keep it for themselves.

Doug Hoyes: That’s a very interesting and in my business – I mean I’m a bankruptcy trustee so I run into a lot of people who are avoiders. Many times over the years I’ve had people come into see me and they’ve got a stack of envelopes that they haven’t opened.

Sarah Milton: Absolutely.

Doug Hoyes: So, I ask them how much money do you owe?

I don’t really know. I don’t really want to know. It’s all here so we literally open the credit card statements and figure it out.

So, going back to the discussion we had in the first segment, the first step is to understand who I am. I guess, the starting point then is what is my money personality, which of those four categories do I place myself in? And I think if we’re honest it’s not that hard to figure out which category we’re in.

Sarah Milton: No, not really.

Doug Hoyes: This is not a complicated thing. So, once I determine, okay, yeah I am an avoider, I don’t want to talk about it. I don’t want to deal with it. I just hope it will all go away. What’s next then?

Sarah Milton: So, then it becomes – that’s your awareness piece and then the next piece becomes understanding how it impacts you. And then it’s about making a choice.

For me I was classic avoider. I think I started out maybe originally as a saver and grew into being an avoider just because of circumstance. But for me it was understanding that if I just stepped up and paid attention, that is what I needed in order to turn my life around. And once I started doing that and I started seeing the results, it becomes a lot easier to continue that behaviour because you’re seeing positive reinforcement all the time.

Doug Hoyes: That’s an interesting point. Because if I don’t see results, I’m not going to do it and that is true in every area of life, right? If I’m going to start a new diet because I need to lost weight and I’m on this diet for two weeks and I don’t lose any weight, I’m probably not going to stay on it for the third week.

And it’s the same with money I assume too, right? And so as the classic avoider, what kind of results was it that you were starting to see? Was it cutting your spending, were you paying off debt? What were the types of tangible results you were able to see?

Sarah Milton: For a start there was a lot less fear. So, I think when you don’t really know exactly what’s going on, but you know that it’s not good; you don’t want to look at your credit card statements. You don’t want to look at your bank account because you don’t know what it’s going to be like and chances are it’s not going to be a very happy thing.

Once I had a plan and I knew exactly how much was coming in and how much was going out and I was managing it, there were fewer surprises. And any extra-large bills that would have completely knocked me to the floor before hand could be dealt with because I had that little bit of a cushion. And once you get comfortable, now I’m happy to check my bank account and look at it because I know that there’s money in it.

Doug Hoyes: So, the most important benefit for you then was up in your head.

Sarah Milton: Yeah, absolutely.

Doug Hoyes: It was reducing stress because you knew you had a plan. So, that’s very interesting. I mean I’m an accountant. So, if you ask me I’m going to say well the benefit is the average interest rate I’m paying on my debt dropped from this to this and my savings came from this to this. I would give you numerical answer. But for most people what’s much more important than that is getting back to the whole psychology of it: What’s going on in my brain?

Sarah Milton: Yeah.

Doug Hoyes: And being able to reduce the stress is – and that comes from knowledge and having a plan, is what you just said, right?

Sarah Milton: Absolutely.

Doug Hoyes: So, that’s the money personality. And that’s easy to understand at least on a basic level, what’s this whole concept of a money thermostat then? What is that all about?

Sarah Milton: The money thermostat is the idea that there is a certain amount of money that you’re comfortable having. So, you might be comfortable having $2,000 inside your bank account. When you have less than $2,000, chances are you’ll reign in your spending until you’re back to that $2,000. But if you’ve got more than $2,000 there’s a really good chance you’re going to spend yourself down until you get there. If you’re comfortable being $3,000 in overdraft and you’re only $1,500 overdrawn, in your head you feel like you’ve still got $1,500 still to spend. It’s the reason that most lottery winners go broke within about three years.

Doug Hoyes: Yes, that’s absolutely true. And so do I need to adjust my thermostat then? Is that what you’re saying?

Sarah Milton: Absolutely. So, if you’re thinking about the whole idea of money being to build wealth, to grow, you have to be comfortable with being that person who heading into retirement has $500,000, $750,000 and a million dollars plus inside your retirement account.

And all your perceptions about the kind of people who have $500,000 or a million dollars tie into your own ability. So, we tend to get to a point where when we are comfortable, we plateau and then you need to readjust and kind of re-set yourself. So, set a new goal.

Doug Hoyes: And do you agree with tricking myself? So, let’s say my thermostat is set at $2,000 in my bank account, that’s my number. And so like you say, if I’ve got more than that, oh well I’ve got lots of money, I can spend it and if I have less than that I can adjust. But really what I need to do is begin building funds for retirement. I need to be generating extra money to pay off debt, or whatever.

Would it therefore make sense to have a second bank account, a savings account for example? So, that as soon as the balance gets to $1,800 in my account, I move it over, I don’t see it, it’s out of the way. Maybe it goes into a TFSA or a GIC or something but it’s gone and that way I always see the number and that’s going to motivate me to do the right thing. Or is that cheating?

Sarah Milton: No, I don’t think that’s cheating at all. I think a lot of success in finance comes from doing things that your brain’s not totally aware of.

So, for example saving through a workplace savings plan because it comes straight off your cheque, it never hits your bank account. It just grows in a little space that you’re not really aware of or putting your contingency fund in a different – with a different institution so it’s not linked to your debit card. You can’t accidently spend your emergency fund cause there’s a great shoe sale at the mall.

Doug Hoyes: There’s a great shoe store at the mall?

Sarah Milton: Not that’s never happened to me at all. [laughter]

Doug Hoyes: See and I’m a guy so I just don’t understand that concept. Although I do have 57 shoes to go running so I guess you’re exactly right.

So, to wrap up this segment then, the practical advice that you’re giving people is specifically what? Is it a question of awareness? Is it a question of setting a goal, a target, a plan? Like what’s the take away piece here?

Sarah Milton: I think it’s understanding how your beliefs and your habits can be sabotaging your best efforts. We have great intentions. If you’re in debt you know that you really should be out of debt. But sometimes you just have to find those reasons, those motivators that are strong enough to get you out.

For somebody who’s quitting smoking, until they decide that they really want to quit, that’s the point where they’re able to quit and make it stick. If they’re not a hundred percent committed to the goal then the chances are they’re going to lapse.

And it’s exactly the same with your finances. If you’re not 100% committed to your goal and you understand why it is for you that you’re trying to achieve that goal, then your chances of success are much greater than if you’re just doing it cause you think you should.

Doug Hoyes: Perfect. That’s a great way to wrap it up. I’ll be back to wrap it up. Thanks Sarah, we’re here on Debt Free in 30.

Segment #3

Announcer:       You’re listening to Debt Free in 30. Here’s your host Doug Hoyes.

Doug Hoyes: Welcome back. It’s time for the 30 second recap of what we discussed today.

My guest today was Sarah Milton and she gave a great explanation of the four money personalities and explained how we each have a money thermostat. To improve your money management skills, understand which money personality you are and then adjust your money thermostat to an appropriate level for your unique circumstances.

That’s the 30 recap of what we discussed today.

So, what’s my take on Sarah’s message? I found the scenario of money personalities and money thermostats quite interesting. I’m an accountant and I tend to look at everything in number terms. Her approach of focusing more on the psychology of money is a great idea and I think if you have any money challenges, it’s a great place to start.

That’s our show for today. Please subscribe to this show on iTunes and visit for full show notes. Thanks for listening. Until next week, I’m Doug Hoyes, that was Debt Free in 30.

Bonus Segment

Announcer:       Thanks for listening to the radio broadcast segment of Debt Free in 30 where every week your host Doug Hoyes talks to experts about debt, money and personal finance. Please stay tuned for the podcast only bonus content starting now on Debt Free in 30.

Doug Hoyes:    We’re back on the bonus podcast segment of Debt Free in 30.

We ran out of time on our discussion with Sarah Milton going through the whole psychology of money so I’ve asked her to stick around for a few more minutes, just to sort of complete her thoughts on that.

And I’m interested particularly Sarah, when we talk about the psychology as it relates to women. This is something you’ve written quite extensively on and in the show notes I will put some links to some of these articles.

So I’m a guy and I have a very simplistic view of the world. Everyone’s black and white to me. So, my view is, you know what male, female it doesn’t matter. If you spend too much on your credit card, then you’ve got credit card debt and it’s going to lead to trouble. It doesn’t matter male, female, tall, short, the problems are all the same. Why do we even have to get into this discussion about, well, things are different for women. So, tell me am I right or wrong in that viewpoint?

Sarah Milton: Well, you’re right in the sense that people might take actions that create consequences. So, if you spend too much, if you run up your debt, it really doesn’t matter from a debt perspective whether you’re male or female. But as an advisor and as part of my personal money journey, a lot of what I do is look at potentially where I’m vulnerable and then what steps I can take to limit that vulnerability.

And as I’m doing research, fundamentally there are things that affect women differently than they effect men. We look at statistics and we see that women live longer than men. Well, if you’re going to live longer that means you’re going to need more money going into retirement. Women are likely to be widowed earlier so if you’re going to be living into retirement and you’re living by yourself it’s even more important that you have money going forward and that you know how to manage it. Because if you depend on your partner to manage your money for you and they’re going to pass away, inconveniently 10 or 15 years before you do, then you’re going to have to take on the responsibility of handling that for yourself.

Women historically earn less than men and you can’t fix that because a lot of the reasons around women earning less than men is because they take time off to have children, they work part-time because they’re caring for elderly parents. So, circumstances dictate a lot of these differences that come in.

Doug Hoyes: So, what you’re saying is there are some very practical, tangible differences. It’s not just me as a guy being sexist saying well, that’s the way it is. There are actually tangible – and you’ve kind of laid them out, that women are often the ones that become caregivers for aging parents. That’s not something that men tend to get stuck with. Women do statistically do live longer. Statistically you’re right, they do earn less, they do typically take time off to raise children, a lot more than men do.

So, let’s tie this altogether then. We’ve talked about the whole psychology of money. We’ve talked about the fact that there are some differences in women’s circumstances, the ones you just laid out, so what does that all mean? What is the advice you would give perhaps more specifically to women?

Sarah Milton: Just that it’s really important to be aware.

So, a lot of times historically we haven’t seen as many women in the areas of science and math. When you look at girls in school, girls don’t spend to speak out a lot in the science and math classes compared to the history and the English classes, because there is still this perception sometimes that women aren’t as strong in those areas or that they shouldn’t be as strong in those areas.

And I think that comes down to finances too, is women don’t feel comfortable going into what is right now a male dominated world. Most investment advisors are men. Most senior management are men. Most people who are actively investing and managing their money are men. So, when you step up and decide to take control of your money you have to be comfortable being in a male dominated arena and not every woman is comfortable with that.

Doug Hoyes: That’s interesting. I’m just thinking through in my mind the guests I’ve had on this show. And I’ll tally it up and put it in the year end wrap up show I do in a couple of weeks. But my guess is I’ve had more female guests than male guests. And I don’t know why that is, if it’s specifically because, well, there’s people like you out there who have grasped that this is a need and it’s a need that you have gone out to fill.

Someone like Dr. Leanne Davies who has done research into aging and is obviously a female or someone like Gail Vaz-Oxlade who is probably the most well-known on T.V person, writers like Ellen Roseman and so on, who have been on the show. I don’t know if it’s because they’re women that it’s because they’ve been so successful in this particular area. Maybe it’s because they’re speaking, not just to men but also to women, and something resonates there. I don’t know if that’s true or that’s an incomplete sample or not.

Sarah Milton: No, I think that’s true and I think maybe what’s interesting about that is maybe like you said Gail Vaz-Oxlade does extremely powerful but she’s also driven by a need to care for people, like her passion is driven from caring. It’s not because she can make a lot of money. Obviously she has done very well at what she does, but at the heart of what she does she’s helping people. And I think you find at the heart of my writing, the reason why I write is because I want to share information that helps people. And maybe you see more of that on a female side than a male side.

Doug Hoyes: That’s very interesting. I hadn’t pondered that. But I guess if I’m out there legitimately trying to help people, I’m going to help people. And that’s going to make me successful in this area. If I’m out there trying to sell people stuff, okay well I’ll make the first sale but that might be it.

So, do you think over time there will therefore be more financial advisors who are female than male, or at least that the playing field will become more level? Or is it more likely that the females will gravitate towards exactly what you just said where they can be more of a help as opposed to just making money. What do you think the future holds?

Sarah Milton: I think it’s hard because the financial services industry is one that’s based on commission sales. And for me as a financial advisor, what took me into the industry was that I wanted to help people. I wanted to be that resource for people.

But the reality is that I don’t make any money if I sit at your kitchen table and I spend three or four hours with you, analyzing your situation, helping you get out of debt. And in good conscience I can’t set you up with an RSP or in investment account because right now it’s more important that you get yourself out of debt and you get yourself stable. But I can spend a lot of time with you and not actually make any money from you because I couldn’t put a product or a service in place for you.

Doug Hoyes: And ultimately what is the solution to that then? And this is something that we have talked about many times on the show and I’ve struggled with it many times myself. We need people who are out there giving unbiased advice who aren’t just trying to sell me something. But it’s very hard to have an army of people like you who are willing to do that but don’t need to live. I don’t need to pay rent. We all need to survive as well.

We see it in the credit counselling industry. They’re not for profit credit counsellors, which is great. But they still have to make enough to pay the rent. And so as a result they have to, in some cases, put people into debt management plans where maybe some other option would have been better. Maybe not, maybe the debt management is the right thing.

What is the solution to that? Is there one? Is there a way to have more people like you? I mean the obvious solution that occurs to me is to have fee for service type of thing. Okay, I’m happy to come to your home and here’s the rate that I’m going to charge you. But if I’m not rich, and I guess if I am super rich I don’t need anybody because I’m already rich. So, if I have debt problem or I have income problems or I have expense problems, I don’t have the money to pay for somebody, what can I do?

Sarah Milton: I think this comes back to that whole idea of give a man a fish and he eats for a day, teach him to fish and he eats for a lifetime. And I think it hinges really on financial education.

And it needs to start in our schools. You know it blows my mind that people can leave school and they’ve never taken a class on money management. They don’t understand mortgages, they don’t understand credit cards, they don’t understand debt.

They show up to University for frosh week and they get handed a Visa card with a $2,000 limit and they think they’ve just been given $2,000. The reality is there are a lot of people out there making a lot of money from people getting into debt.

And so maybe the slightly cynical answer is that there’s a lot of corporate dollars invested in keeping people in the dark. But if people were more aware and people were more educated, I think people could make more informed decisions for themselves.

Doug Hoyes: I think you’re absolutely right. That’s exactly right. And sure corporations exist to make money. And if I’m the big credit card company I’m not going to be out there showing you ways to reduce debt. My financial education will be things like how to prevent identity theft, which is still good for you as a consumer, but it’s also good for me. And there really is no one who has any vested interest in going out there and showing ways to reduce your debt and cut your expenses, all those kinds of things cause that doesn’t help.

Again, I’m a bankruptcy guy, so I guess ultimately if there was no debt in the world I wouldn’t exist. Now fortunately it doesn’t really matter what I do, there will still be debt in the world. But one of the reasons why I started this show was to actually get people like you on who would have a viewpoint other than my own that yes everyone should be out there in debt.

And I agree, ultimately the solution is education and I think ultimately it’s up to the individual person to do their own research and try to figure out what the answers are. Beause there really isn’t anyone else who’s going to put in on a silver platter and do it for you.

Sarah Milton: No, and the reality is if you’re going to buy a car, you’re going to go online and you’re going to research the cars and you’re going to figure out what features and what things you want. And you might not be a mechanic but you’re going to go out there and you’re going to find the information so you can make an informed decision. But people won’t spend the same amount of time that they research their car purchases, their vacations that to manage their own money.

Doug Hoyes: Which is sad.

Sarah Milton: It is sad.

Doug Hoyes: We’ll spend more money trying to figure out what toothbrush to buy than what investment product we need. Not that toothbrushes aren’t important but –

So, let’s close the show then by giving me then the commercial for your book that by the time this airs will already be out. What’s the title of the book?

Sarah Milton: The book’s called Take Control of Your Money.

Doug Hoyes: So, it seems pretty obvious what the book is about. But give me a flavour of one of two of the things that would be in that book that would be of interest to people who are listening to us today.

Sarah Milton: So, the book is a collection of articles that Jim and I have written for and it focuses on different areas.

So, we’ve got information about the psychology of money. We’ve got information about managing debt. We’ve got information about whether you should save in RSPs or tax free savings accounts and basically everything that you need to know as a road map for figuring out where you stand, where you want to go and how you’re going to get there.

Doug Hoyes: And is this written so that the average guy can understand it or do you have to have a PhD?

Sarah Milton: Absolutely. No PhD is required. No dictionary of financial terms is necessary. Jim and I are both very passionate about financial education and about giving good information and making it accessible to people.

Doug Hoyes: So, this is a book that is good for anybody.

Sarah Milton: Absolutely.

Doug Hoyes: And it’s not specifically targeted at any particular stage in life? This isn’t just about retirement or just about being a student? It’s very basic money management advice that frankly we don’t have which is how we get into all the trouble we’re in.

Sarah Milton: Exactly and it’s designed to be a resource. So, it’s designed to be something that you can read from cover to cover if you choose to. Or you can just dip in and read a chapter here, a chapter there, anything that particularly resonates with you or something that you’re looking for information on.

Doug Hoyes: Excellent, perfect.

Well, I will put a link to that book in the show notes and I think that’s a great resource for people. I haven’t had a chance to read it yet because I didn’t receive my advance copy yet but –

Sarah Milton: I will send one.

Doug Hoyes: There you go, okay. I’m happy to pay for my copy and it will be great to read. I really appreciate you being on the show today Sarah.

Sarah Milton: No problem, thank you for having me.

Doug Hoyes: Thanks very much.

Sarah Milton: Thanks for listening to the podcast only bonus segment of Debt Free in 30. For more information on today’s show please go to and type the word podcast into the search box for more information on every episode of Debt Free in 30.

Until next week, this was Debt Free in 30.


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