How Understanding Finances Can Save You From Poverty

One of the main reasons why more Muslims are suffering financially is due to financial Illiteracy. Newcomers are allowed to drive and apply for jobs and credit cards, but they aren’t told what it takes to build a good credit history and avoid interest. People nowadays are oblivious to the basics of financial matters and end up making large economic decisions without knowing what they’re getting into. This is the general trend of the financial problems in the Canadian Muslim community, no matter what the root cause of the problem actually is, and there are quite a few root causes.

Inability to Save Long-Term

It’s not just millennials with a saving problem. Newcomer families are spending way more than necessary. Although millennials’ need to spend is a result of an accustomed feeling of instant gratification, immigrant families tend to spend money while thinking of the present, and not of the future. Even families that have that ability to save are spending beyond their capacity.

Continuing Education Instead of Working

Whether they are serving an apprenticeship, pursuing a diploma, or just wanting to get a taste of the “Canadian experience”, more and more newcomers are jumping headfirst into full-time schooling. This is a great idea for individuals who have a strong support system along with the required amount of free time to dedicate to their studies, however, in most cases, these decisions are made impulsively, resulting in the family needs being neglected. It may be wiser to consider some of the part-time courses and online classes offered by local universities and colleges. Our distribution team advises that a family look at all their options and consider what works best for them.

Reliance on Loans

Sometimes, it’s just bad debt. Newcomer families are often overwhelmed by credit card agreements, car contracts, and mortgages for homes as soon as they arrive. These families are led to believe that all these agreements are essential for a good life in Canada. What ends up happening a lot of the times is that these people haven’t found a steady income yet, but their expenditures have doubled, and even tripled. This causes their savings to run out very fast, and for them to be overwhelmed with debts. Our caseworker doesn’t offer budgeting advice, but we do guide families in the right direction by referring them to agencies that help with debt consolidation.

Low Computer Literacy

Our distribution team sees this issue specifically with the older population and newcomers who are unaccustomed to the internet and technological devices. When someone is not tech savvy, they inevitably fall behind the rest of society.  Low computer literacy can cause families to face difficulty in applying for jobs and necessary financial aid.

Placing Mental Health on the Backburner

With the influx of refugees and refugee claimants in Canada who are escaping from terrorism and other unspeakable horrors, the number of people dealing with trauma, specifically PTSD, has grown. Often, these individuals have no idea how to deal with their mental health issues and anxieties. Within the Muslim community and the rest of the world, mental disorders are still considered a stigma. Newcomers struggling with mental health issues fear being labelled, preventing them from seeking necessary help. Their untreated mental health issues can get so debilitating that they can prevent them from applying for jobs and caring for their families. Chronic or acute depression, anxiety, and bereavement are some of the conditions clients are suffering from when applying for Zakat. The solution to this would be to get help right away by calling 211 and being directed to the appropriate government service.

Written by: Aisha H.