3 financial challenges holding Canadians back

October 30, 2020

Ever feel like your wallet’s not getting you anywhere? Going on that trip of a lifetime seems so far out of reach, or saving up for a home just keeps getting pushed back. Financial goals shouldn’t feel impossible to meet, but they often do. 

Just thinking about money can cause stress. But if we had the tools and the modern tech at our disposal, we could be improving our everyday spending and saving habits. Without them, we’re overspending, undersaving and making costly mistakes.

In fact, two-thirds of Canadians admit to having poor financial habits that block them from reaching their goals. How we make our financial decisions is often connected to what’s available from our Big 5 banks. 

With little to no competition though, our banks haven’t innovated their products and provided us with the experiences we expect in 2020. Inevitably, Canadians are given the short end of the stick and develop poor financial habits in need of breaking. 

Here are three key areas that hold Canadians back.

Problem #1: Paying unnecessary banking fees

Canadians pay an average of $220 in bank fees per year, just to keep their money somewhere safe. That’s among some of the highest banking fees in the world and more than what many high-interest savings accounts earn from interest in a year on a $10,000 balance.

You can expect to be charged a fee for almost anything you do with your money. Having a chequing account comes at a cost, so do the annual fees of a credit card, and even sending a friend an e-transfer to cover your share of a meal. The list goes on.

This problem with fees grows worse by the generation. Canadians aged 24 to 38 have paid an average of $760 in banking fees over the course of their lifetime, while older Canadians more focused on retirement have paid $2,800 in their lives. These are significant portions of your hard-earned money leaving your bank account for no other reason than to keep your money in a bank. How backwards is that?

Despite these lifetime fees in which Canadians have had little choice but to shell out, they still want to earn more from their daily spending and from the places they buy from the most. In an effort to earn rewards and save more, many of us look to credit card rewards and loyalty programs for getting something back in return of our spending. This brings us to the next big problem.

Problem #2: Missing out on rewards

The idea of good deals are hard to pass up. Just think of our history with coupon books and more recently, the number of one-off brand apps we download on our phones. That’s why the average number of loyalty programs Canadians subscribe to is so high. We belong to 12 different loyalty programs, but what does it say about our behaviour when less than half of these programs are used? 

We want to cash in on offers as much as possible if it means getting a better deal and saving where we can, but we’re not fully taking advantage of what’s on the table. 

While Canadians are quick to sign up for one loyalty card or app after another, these programs largely go unused because of their limited, outdated functionality. Points that expire, cards you forget at home and confusing ways to redeem rewards are how these programs lose us. 

Since traditional loyalty programs aren’t made with convenience in mind, we’re letting $16 billion worth of points in Canada fall by the wayside. The worst part is we don’t even know about the mountain of rewards we’re sitting on. These are points that could go towards your next travel destination, covering hundreds of dollars in groceries and gas, and other experiences that make your spending even more valuable.

To offset poor spending and saving habits, many of us lean into technology for solutions. But as with most things, not all tech is made equal.

Problem #3: Lacking the tools to spend and save better

Technology has improved almost every aspect of our lives, from healthcare to fitness, education and more. Yet somehow, our financial health still suffers despite the majority of us now banking online. Research shows that 6 out of 10 Canadians still struggle with their money management skills. Despite embracing tech-driven banking solutions, confidence in our financial literacy is lower than it should be.

When people don’t understand the financial products and services they use (and pay for), they lack the basic knowledge needed to make good decisions with their money. 

Take credit cards for example. Most of us use them–even carry multiple cards–but we don’t really understand how interest rates work. And when we miss a payment, we don’t get notified about it until after the fact, when it’s too late and we’ve already been dinged for an oversight that could have easily been avoided.

We make these costly mistakes simply because we don’t know better. We need proper tools to help us make healthier financial decisions, but they have to be easy to understand and use. 

So where does that leave us? 

People are spending money on unnecessary banking fees, signing up for loyalty programs that go unused and are missing the everyday spending and saving insights needed to better grow and manage their money.

At Neo, we’re solving these problems 

We recognize the challenges that Canadians face, and we improve your relationship with money. 

Your money stays with you - no monthly or annual fees

What feels like a required cost, doesn’t have to be. Instead of putting your money towards unnecessary banking fees, Neo empowers you to earn more out of your everyday when spending and saving. 

We’re replacing a lifetime of bank fees with a rewards-filled credit card and high-interest savings account that doesn’t charge you any pesky annual or monthly fees. In fact, we pay you for keeping your money with us.

Get rewarded automatically

With Neo, you’ll never forget a loyalty or rewards card again. Get the most from your daily routine and purchases without having to follow a complicated process or carrying multiple cards.

We make it easy and seamless to discover exclusive offers from your favourite stores, with up to 20% cashback, and then earn rewards instantly when you pay with your Neo Card

No reward goes wasted when they’re personally suited to your needs and interests. Indulge your cravings at that neighborhood restaurant you’ve been meaning to try, fuel up on gas, stock up on weekly groceries, add a new outfit to your wardrobe. The more you use your Neo Card, the better the rewards become.

Simplify your finances

We’re as easy as they come. Spend, save and earn rewards, all in one digital experience. The Neo app allows you to seamlessly manage your money, discover worthwhile experiences and reward yourself in doing so.

Our technology was developed with the needs of all Canadians in mind, and the experiences we deserve today. Open an account from your phone in minutes and control your Neo Card right from our app. Always stay two steps ahead with proactive alerts, as well as real-time spending and saving insights. 

A more rewarding life

Everyone struggles with personal finance from time to time, but there’s no reason why we can’t make our financial lives easier and more rewarding. To break these financial habits that hold us back, it’s all about having smarter everyday spending and saving solutions at your fingertips that fit your daily lifestyle. 

Neo helps Canadians get the most out of their money, earn more out of their every day and live a more rewarding life.