By Will Ashworth
(Toronto) and Harley Lockhart (Kelowna) are financial advisors on opposite sides of the country. On the surface the two men have completely different opinions when it comes to the use of digital wallets. However, upon closer review, it’s clear they have more in common than you might think.
WP had the opportunity to talk with Godinho and Lockhart earlier this week. The gist of the conversation? Budgeting is a crucial aspect of financial advice that most advisors don’t spend a lot of time discussing with their clients. And that’s unfortunate.
Good spending habits developed early in life can be the difference between a decent amount of savings in retirement and a boatload.
Godinho feels the use of Mint.com, a free expense-tracking app from Intuit, is a simple way for clients to keep track of spending. When they first sign up for his firm’s fee-based financial planning services, he encourages them to install the app and begin tracking their expenses. Within a year of doing so the clients see remarkable changes in their spending habits.
Lockhart, while a firm believer in technology, sees digital wallets as a slippery slope. It’s not the technology itself but rather that credit card use (made worse by not paying the monthly bill in full) generally leads to increased spending over plain old cash. Further, with most advisors focusing almost entirely on financial products such as mutual funds to the exclusion of everything else, younger clients are unlikely to gain any understanding of the budgeting process. And that’s a bad thing in Lockhart’s opinion.
No matter the age It’s never too late to have this talk with clients. As Lockhart states, “The minute you spend $1 on interest, it’s lost forever.”