3 financial challenges holding Canadians back

May 14, 2021
5 mins
3 financial challenges holding Canadians back
Neo makes powerful financial tools to help you grow and manage your money. Learn more.

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, under saving, 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, many banks lack innovation as their legacies outweigh the need to introduce modern technologies that function in the customer’s favour. 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.

You can expect to be charged a fee for almost anything you do with your money. Having a chequing account can come 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 for our spending. This brings us to the next big problem.

Problem #2: Missing out on rewards

It’s hard to pass up a good deal. From coupon books to discount codes and signing up for a mailing list just for that first time discount, we will do almost anything to save where we can.

This is why the average Canadian belongs 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 leave us missing out. 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.

To offset poor spending and saving habits, many of us look to 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.

Take credit cards for example. Most of us use them but we don’t really understand how interest rates work. And when we miss a payment, we might not get notified about it until after the fact, when it’s too late and we’ve already been dinged with an overlimit fee 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 unnecessarily on banking fees, signing up for loyalty programs that go unused, and missing out on 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 aim to 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 a high-interest savings account that doesn’t charge you any pesky annual or monthly fees. Plus, get more out of your money by earning instant cashback rewards with the Neo Mastercard® and 1.30%* interest on every dollar you save in a Neo Savings account.

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 when you pay with Neo.

No reward goes wasted when they’re personally suited to your needs and interests. Indulge your cravings at that neighbourhood 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 Mastercard, the better the rewards become. The same goes for a Neo Savings account: you earn more interest, the more you save, to grow your money faster.

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, and reward yourself in doing so.

Our technology was developed with the needs of all Canadians in mind, and the financial experience we deserve. Open an account from your phone in minutes and control your 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 and live a more rewarding life.

*Interest is calculated daily on the total closing balance and paid monthly. Rates are per annum and subject to change without notice. Neo Savings interest rate last updated May 17, 2021.

The Neo Savings account is provided by Concentra Bank, a CDIC member institution, and is eligible for CDIC deposit protection. Deposits held in Neo Savings accounts are combined with eligible deposits held at Concentra Bank, for up to $100,000 of deposit protection, per category, per depositor.

Card issued by ATB Financial pursuant to license by Mastercard International Inc. Mastercard is a registered trademark and the circles design is a trademark of Mastercard International Inc.

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¹ Average based on current offers. Cashback varies per offer and partner.
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