Gail Vaz-Oxlade's Blog, page 16

Books, Books & More Books

Between the Bridge and the River by Craig Ferguson made me laugh out loud in so many places. What a way with words he has. If you’re easily offended by sexual themes, skip this one. Ditto, if you’re uncomfortable with bad language. Ferguson, who is a Scottish comedian, gives us a tale of two childhood friends from Scotland whose lives intersect with two illegitimate half-brothers from the deep South. Along with these main characters, Socrates, Virgil, Carl Jung, and Tony Randall, are all along for the ride. Ferguson takes aim at the entertainment industry and religion and especially where they converge, and throughout the romp he wants us to think about life and death, and human gullibility. Cynical and poignant, in turns, the story telling is unconventional – a little like Christopher Moore’s writing.

True Detective by Max Allan Collins was terrific. Not to be confused with the TV show, this novel is Set in the days of Al Capone in the mob-chocked Chicago of 1932. Nathan Heller who has quit a crooked police force to set up his own shop as a detective encounters an array of crooks and clients. With lots of plot twists, this novel was highly entertaining. Heller must come to terms with his involvement in a hit on Frank Nitti, the successor to Al Capone who is jail on tax evasion charges. Hell winds up in the middle of a real-life historic event, the fatal shoting of the mayor of Chicago as he’s chatting with President Roosevelt. The characters are rich, the plot keeps you guess until the very end. If this is your genre, this is your book.

Damocles by S G. Redling surprised me because it hit a lot of things I enjoy. I love sci fi, but not all sci fi has met my expectations. This one did. It starts with the premise that Earth has uncovered evidence that extraterrestrials have seeded human DNA throughout the universe. So off sets an expedition to see what can be seen. The crew stays in stasis until the ship’s computer finds an appropriate planet. When their ship, the Damocles, comes upon the planet Didet, Meg Dupris who is a linguist, is put at the centre of this story along with Loul Pell, a young Dideto. They must find a way to bridge the communication gap. It interesting to see how another humanoid specie would perceive us through the filter of their own physical and societal differences.

Strip by Thomas Perry Manco Kapak is an aging strip-club owner who has been robbed by a masked gunman. He sends his goons after a guy called Joe Carver, who Kapak believes was the robber. He’s not. And he’s not to be messed with. Meanwhile the real culprit has a new girlfriend who is totally jazzed by her new beau’s “career” and wants to escalate the excite when they head out for some fun. There’s a brewing gang war and the ending is perfect.

The Telling by Ursula LeGuin is such an interesting story. Imagine a world here books are banned. Technologically advanced, the inhabitants have resorted to telling their stories to each other to keep their culture alive. When an official observer from earth discovers a group of outcasts who still practice The Telling – they’ve raised it to the level of religion – she joins them on a sacred pilgrimage to the heart of their community and the source of their knowledge. I discovered Ursula LeGuin when my daughter was quite young; we both enjoyed her books. It’s lovely to have rediscovered her.

The Dark Monk by Oliver Potzsch is a terrific read. There’s the dark monk himself, the town hangman and his daughter, the town physician – before there were physicians – love, deceit, and the hunt for the treasure of the Knights Templar. Set in 1648 in Bavaria, it begins with a town priest discovering he has been poisoned and leaving behind a sign that will lead a group of unusual partners on a quest. The characters are compelling, the story keeps you engaged. And since this is book 2 of a series, I’m adding another to my shelf right away. And I’m going back to gobble up book 1.

The Irresistible Henry House by Lisa Grunwald tells the story of a baby raised in a educational setting, back when home economics was a thing and there was a course for raising babies. 1946, Martha Gaines, program director of home economics at Wilton College, receives her twelfth “practice” baby, Henry— an orphaned child ready to be raised by students in the course as practice for their future as mothers. But Henry is different from the other babies that have come into Martha’s care: she falls for him and decides to raise him as her own. Thing is, she’s not prepared for the psychological impact on Henry of watching caregivers come and go every school year. Henry is handsome, charming, universally adored… and totally incapable of connecting meaningfully with any one woman; this curse follows him his whole life.

Itchy?

Ever had an itch you just had to scratch. And scratch. And scratch. Remember when your mother said, “Don’t scratch, you’ll just make it worse.”

Well scientists have finally solved the mystery of why once we start scratching we just can’t stop. You’ll never guess what the culprit is. Never.

Serotonin. Yup, the very thing that supposed to stop us from sinking into a miasma of depression makes us want to rip our skin off when we get itchy!

Turns out scratching causes the brain to release serotonin, which intensifies the itch sensation. Well it does in mice. And the same cycle of itching and scratching is thought to occur in humans.

We all have had the feeling of joy/horror as we scratch an itch only to discover that it itches more, so we scratch more – oooo it feels so good, even if it does hurt too.

According to Doctor Zhou-Feng Chen, director of Washington University’s Centre for the Study of Itch, that mild pain temporarily stops the itch by getting the nerve cells in the spinal cord to carry pain signals to the brain instead of itch signals. The brain produces serotonin to help control that pain and that serotonin can spread into the spinal cord, moving into the itchy nerve cells. Researchers bred a strain of mice that lacked the genes to make serotonin. When the poor mice were injected with a substance to make their skin itch, the mice didn’t scratch as much as their normal bros.

Know what happened when the genetically altered mice were injected with serotonin? Yup, they scratched as much as their litter-mates.

Serotonin is involved in a lot of our brains’ activities regulating everything from growth and ageing, to bone metabolism and, of course, mood. So blocking serotonin would have far-reaching consequences.

Dr. Chen thinks that it might be possible to interfere with the communication between serotonin and nerve cells in the spinal cord that specifically transmit itch by getting between the serotonin and the GRPR neurons that relay itch signals from the skin to the brain. So, maybe we’ll eventually stop scratching our skin off.

In the mean time, put some ice on your itch instead of scratching yourself raw. It’ll help.

Debt Vs Savings

Folks always think they’re going to have plenty of time to save… later. There are so many other demands, from student loans still dogging our steps to mortgages recently acquired. It’s easy to push savings to the back burner. But when you ask 40- and 50-year olds what they would have done differently with their money, they say, “I would have started saving earlier.”

We love to pay lip service to how important it is to save. And we all know that getting our debt paid off should be a priority.  So why do we delay taking steps to making savings and debt repayment happen? Perhaps it’s because we haven’t made the things we say are important into things urgent enough to do something about.

If you start saving in your early twenties, you need only put away about six percent of your take-home pay to end up with enough to maintain the lifestyle you enjoyed before you retired. Wait until you’re in your thirties to start and ten is percentage of cash you must stash. Procrastinate until you’re in your forties and you’ll have to sock away 18 percent of your after-tax income to have what you’ll need.

So would you rather save six percent of your cash flow over your working life or have to come up with 18 percent just as your kids are heading into university?

Saving doesn’t mean ignoring your debt. If you’re carrying a balance on your credit card or line of credit, getting it paid off must be a priority. But, as long as you are “not saving” you will find it too easy to continue not saving. Creating an automatic savings program with as little as $25 a month will put momentum on your side. It also puts time on your side so you won’t have to take as much out of your cash flow to have what you need later.

But Gail, I can hear you whining now, the kids need new everything, the fridge is about to give up the ghost, and my sister is getting married in a month!

If you let spending get in the way of savings and debt repayment, you’ll get to the end wondering where all the money went. Paying down your debt or ramping up your savings may not be as sexy as a sunny vacation, but the benefits will last longer. And it doesn’t take a lot to make a big difference. Add an extra $100 to your monthly payment on your $250,000 30-year mortgage at 4.5% and you’ll knock almost $33,000 off your interest costs over the life of your mortgage. You’ll also get to mortgage-free four years faster.

People come up with all kinds of excuses for delaying their debt repayment or not setting aside any money for the future. Usually it’s because we just don’t want to stop doing what we’re doing: a muffin and tea on the way to work, lunch with our workmates, dinner out with friends a couple of nights a week. From the small expenses like that smartphone’s data plan, to buying $5 cups of coffee or dropping the odd $40 on takeout, we find it far easier to keep doing what we’ve always done. In the moment, consumption feels more urgent than the need to save or pay down debt.

Believe it or not, you don’t HAVE to have cable. And if you already own 2 pairs of runners, the next pair is an indulgence. So is that new DVD or the beer after work. Whether you’re a newbie Gran who is determined spoil your picture-perfect grandchild, or a fast-foodie who drops a ton on crap food because you can’t find the time to make your lunch, your spending habits are all distractions from savings and debt repayment.

Eliminate a bad habit or three, forgo an indulgence, eliminate a bill or cut an essential cost back and you’ll have some money to throw at your debt. Round up, accelerate, pre-pay and you’ll be able to say, “I’m mortgage free” that much sooner.

Choosing to prioritize mortgage repayment or paying off that line of credit over consumption of something new, sparkly or luscious can feel like settling for salad when you’re in a gourmet restaurant. But being disciplined enough to put your financial security above your need to scratch your consumption itch is what being responsible is all about.

If you’re want to be “urgent” about savings and debt repayment, here’s what you’ll do:

Set a goal. Decide how much you want to have saved and by when. Or create a debt repayment plan with an end-date for your debt. Write it down and post it on your fridge, on your office wall, on your bathroom mirror.
Go over your spending and decide what you’re going to stop spending money on so you have the money to save or pay down the debt.
Do it.
Track your success and reward yourself for each milestone you hit.

The last thing you want to do is head into retirement still owing money. Mortgage pay-down and saving for the future won’t be sexy unless we make them sexy. Calculate what you’re saving in interest costs and in time by getting to mortgage-free faster and post it where you can remind yourself of your goal. Track what you’re accumulating in savings as you go and you’ll have the satisfaction of knowing you’re ready to retire because you can see the results of your hard work.

Say What’s On Your Mind

Nice people don’t like to make waves. The coffee isn’t quite right but instead of saying so you attempt to make it acceptable or you just dump it and chalk it up to a bad experience. The meal comes late, isn’t exactly what you ordered or isn’t hot and you eat it and tip the waiter for a job well done. Your child’s teacher is abrasive and unconcerned about Little One’s perpetual state of fear and you shrug and say, “Well, the world’s a tough place, she better start learning now.”

Why is it that we see ruffling feathers as tantamount to a physical altercation? Why are we so unwilling to tell people what we really think?

More than a few people have been upset by my honesty. You know who doesn’t walk away griping or feeling duped? Me. I say what I think. When one of my children was faced with a teacher who had made more than one student cry, I made it clear that I would not only go to the school board, I would go to the newspapers if she did so to mine.

Yah, but that’s you Gail…

No, it’s not JUST me. I have a young friend who was at a university where a professor was teaching anti-vaccination bull. The daughter of a doctor, she was appalled that the university let one of their professors spread crap “information” that leads to bad decisions. She called out the professor and the university. She did it on social media. Every major media outlet picked up on it after she posted the professor’s slides. She spent 24 hours responding to media and making the story as big as it should have been. The professor was subsequently suspended. The young woman stopped taking interviews even though she was asked to comment further on the result. “My work here is done,” she said on Facebook. This young woman was a mere 21 years old. She spoke her mind.

Maybe you don’t speak your mind because you think it won’t make a difference. How much of a difference is your silence making?

Maybe you don’t speak your mind because you think it’s rude. Wasn’t whatever dissatisfied you worthy of attention? Or are you of no real account so it’s best to not make a stir?

Maybe you don’t speak your mind because you’re afraid of the other person’s reaction. Ah… maybe. But if you’re letting fear turn you into a doormat, know that it is your own unwillingness to stand up and be heard that’s creating that dynamic.

A friend of mine posted some jokes on Facebook that were clearly racially based humour. I responded with “You do know that’s racist, don’t you?” She can get angry. She can be embarrassed (that would actually be a good thing). She can choose to de-friend me. All are fine with me. What’s not, is watching her think she’s funny when she isn’t. I’m no friend to her if I just think, “What a jackass.” I have to give her the opportunity to see from another perspective. I have to say what’s on my mind.

Speaking your mind is not about trying to ram your beliefs down someone else’s throat. Speaking your mind isn’t about being malicious. Speaking your mind isn’t a tool to make people do what you want.

If you are really speaking your mind, your intention is to let someone else know that you are uncomfortable, unhappy, unsure of why things are as they are. You want to make it clear what your boundaries are and how they have been crossed.

It takes practice to get good at speaking your mind. I have a young friend who isn’t particularly good at thinking quickly about how she should respond. She takes her time. She imagines herself in situations and practices how she will respond. This lets her assess what she will say if she isn’t concerned about the reaction. Then she can play through how she’ll respond to different reactions. It also lets her be very clear on the results she expects by speaking up. If all you’re doing is venting, keep it to yourself. If you want an outcome, you have to be prepared to say what the outcome is that you’re looking for.

Remember, the intent is not to be mean. The intent is to say what you’re thinking and mean what you say.

This & That: All Kinds of Questions

C Wrote: How (mathematical formula?) can I figure out how much income tax should be taken out of me at the source? If too much is being taken currently, can I simply request a reduction via my employer, or is it more complicated than that?

Gail Says: The best way to do this is to use this website, which I go to all the time: http://lsminsurance.ca/calculators/canada/income-tax.

If you think too much is being taken, you can ask your employer to look at the numbers. Perhaps you did not fill out your paperwork correctly and too much is being deducted. The government actually has a site you can use to see what your deductions should be. If you’re making RRSP contributions or there are other things you pay for regularly that reduce your taxable income (like daycare), you can fill out a form T1213, which you must get approved by the tax man. Then you present it to your employer and they’ll reduce the amount of taxes they are withholding.

 

L Wrote: I am 66 years old, married and we are comfortably living on a government pension and have no debt at all. I recently received a bequest of almost 90 thousand dollars. How can we invest this money so that some is available when we want to travel and small (+or- $10 000) indulgences for the improvement of our property? We have only a small amount invested in RSP’s and little else.

Gail Says: While the interest rates are low now, and that makes them feel like no investment at all, you have to ask yourself how you would feel if you lost 10%, 30%, 50% of your $90K because of a market downturn. At 66, waiting 10 years for your investments to recover might feel like a punishment. So your first question: How much of a chicken are you? Big chicken: Find a high interest savings account (try Manulife Bank, Achieve Credit Union, Tangerine) and get the best interest rate you can. Medium chicken: something like a mortgage-based mutual fund will give you a higher return, but there is some risk attached. Brave like a lion: Hey, the world is your oyster. Just make sure you know what you’re buying and are fine with lose the money if that’s what happens next.

 

S Wrote: I was hoping to get some unbiased advice, my wife and I have recently come into an inheritance that would allow us to be mortgage free, however I keep hearing conflicting information about the best way to handle this money. A little about us:

there is approx. $250,000 left on the mortgage
we have a newborn son, with the possibility of having another
aside from our mortgage, we have no debt
my wife has a very good pension through her job, I’m self employed so I have an RRSP that I should start taking more seriously
we are both on our early 30’s

We have a financial advisor who we will consult, but I wanted to get input from someone who doesn’t stand to gain anything from this.

Gail Says: Ah yes, I expect you’re hearing all about how much money you could have if you invested that money in the markets and let it grow. So nice in theory. In reality if you aren’t knowledgeable about investing, plunging 250K into the markets at once could end unhappily. If it were my money I’d pay off my mortgage. That should give you heaps of cash flow because you no longer have a mortgage payment. Before you go hog wild with all that extra money make sure you establish a healthy emergency fund, set aside some money for the next mat leave, and ensure you are maxing out your RSP/TFSA. You’ll also want to set aside some money for kiddo(s) for school; budget $2500 a year per child to get the max free money (Canada Education Savings Grant) from the government. After that, spend away good man, and have a great life.

 

S Wrote: My 53 year old brother recently approached me for a $2000.00 loan and I’m wondering if it’s a good idea to lend him the money. He says he’ll be in a “better position” in a couple of months to repay the money at $200.00 a month. Not sure exactly why he’ll be better off then. He came to another brother a couple of years ago with the same request. I’m wondering if it’s a good idea to simply hand over a sum of money and hope to see it again. Might I be better off offering to pay a bill or two for him instead? Would you have any general advice when it comes to lending money to relatives?

Gail Says: If you are a financial position to help your brother, give the money to him as a gift. The expectation of repayment is what usually creates frustration. If you cannot afford to give him the gift, you cannot afford to lend him the money, plain and simple.

 

N Wrote: Are personal health benefits a smart financial choice? I don’t have any health benefits through my employer & doesn’t look like in the foreseeable future that will change. I have looked into several companies with a wide range in coverage. I guess bottom line is cash flow is king so I am a little worried about making a monthly commitment especially when I find in every benefit package there seems to be lots of stuff I don’t really need & the things I do need are capped at pretty unrealistic amounts such as dental.

Gail Says:   You know what babe, I looked into them as well because I’m self-employed. I never could justify the premiums based on the limitations they set. So I “self-insure” putting a specific amount away each month for medical costs. In the years I don’t use as much, the pot builds for the years in which I am constantly forking out money for one thing or another.

 

J Wrote: My husband and I are both now 50 years old and have been contributing to RRSP’s for quite a few years. He also has a provincial government pension (assuming it’s still there when he retires). My question is whether we would be better to maximize our TFSA’s (I have one, hubby has not set one up yet) rather than continuing to put the money into RRSP’s given our age and that he is eligible to retire in 7 years. We like having the nice tax return that comes with the RRSP contributions, but I am worried about what will happen re: taxes when we have to transfer RRSP funds into RIFF’s as we will be receiving his pension at that time as well.

Gail Says: If you’re still deriving considerable benefit from the RSP in terms of tax savings, then you could continue to do so slapping the tax savings into the TFSA. Since you’re prepared to “give up” the tax savings, save them instead using the TFSA. Also, if your honey has a pension and you don’t, consider making all the contributions to the RSP in your name. You could contribute your money, while Honey puts money into a spousal RSP for you. Honey will get the tax benefit, but the money will be in your hands to take out as is most appropriate tax-wise to supplement the pension you receive.

 

N Wrote: My husband and I have a 13 month old son and just found out we have another baby on the way. We were in the process of looking at doing a consumer proposal for our debt but now we are unsure if we should continue with the proposal or file for bankruptcy? We have $92,000 in debt which is a combination of old student loans, our wedding, relocating across the country and job loss. We are not extravagant people but we relied on our credit to survive. We both work part time to care for our son so our net monthly income is only $3500. Soon we will be a family of 4 and we don’t know what the best solution for us will be. We want to own a home one day and save for a down payment, retirement and our children’s education. The proposal estimate is $400 per month for 5 years. Any advice you could offer would be greatly appreciated.

Gail Says: Consumer proposals are best when you have assets you want to preserve like a vehicle on which you own more than you owe or a home that you’ve built up some equity in. If you have no equity to preserve bankruptcy is usually the better option. Remember, with a CP, that $400 is payable every month whether you have a job or not… there’s no wiggle room. Fail to pay and you’re back at square one.

 

K Wrote: We have a mortgage and a large line of credit should we combine the two and close the line of credit? $510k + $110k? The line of credit was used to renovate the house and pay off car loans that were at a much higher interest rate. This is the only credit we have. Our credit card is paid off monthly and is used for gas and items that require credit card payment. We pay $1000/mo on the line now but at this rate it will take ten years to pay off. We are unsure of what to do and would appreciate your advice thank you!

Gail Says: I can’t answer this question because you haven’t told me how much equity you have in your home. If you have enough equity that the bank will consolidate without putting you in CMHC territory, yes, as long as you swear you will a) not use any credit again — cancel the line, and b) put every extra penny you have to paying off that $110K lickety-split so you don’t end up carrying it until you’re old and grey.  

 

P Wrote: My question is that I am going to be 60 soon and I have some RRSP’s. Do you think that it is a good idea to transfer them into a TFSA? Also, I am going to be taking my CPP at 60 as well.

Gail Says: You can’t “transfer” RSP money to a TFSA. You must withdraw the money and pay the tax you owe on the RSP money and then contribute it to the TFSA, assuming you have that much TFSA contribution room. If the RSP withdrawal is heavily taxed because you take out a lot at once, you’ll have totally defeated one of the benefits of the RSP: to move money from high tax years to low tax years. You should take out only as much as you need from the RSP (or a little more if it doesn’t push you into a higher tax bracket.)

 

B Wrote: Are car lease payments considered debt payments for the GDSR calculation in consideration of buying a home?

Gail Says: You betcha baby.

 

M Wrote: I read your column religiously and I want to know if age 30 is a good age to start estate planning. I wish not to be resuscitated and I have had a bout of serious illness in my twenties. For me, it will be a medical document more than a financial document. Is it still good to have so early?

Gail Says: It is never too early to execute personal care powers of attorney including a document that makes clear what your wishes are for medical intervention. Make sure you give the power of attorney to someone who will follow your instructions.

 

L Wrote: I’m currently putting $200 bi-weekly into a TFSA and $200 bi-weekly towards a $10,800 credit line debt. I also have a mortgage payment of $464. Ultimately, my plan is to pay that credit line off as fast as possible so that I can then put extra money on my mortgage to reduce the years I have left to pay – while still contributing to my TFSA. Should I stop funding the TFSA for now and put all that money on the credit line debt?

Gail Says: Once you feel like you have enough accumulated in your TFSA to handle any emergencies, put all the money you can towards paying off the line. Once the LOC is gone, split the payment you were making towards it 3 ways: 1/3 to savings, 1/3 to mortgage pay down and 1/3 to your current budget. If you don’t need extra in your budget, just split it two ways.

 

M Wrote: I live in Alberta, and I am on the AISH (Alberta Income for the Severely Handicapped) program.

I receive $1500 per month to live on and I do live in low income housing. I do my best to make ends meet and make a home. My question is, how can I save with so little and for retirement, and how much should I be saving per month? I do worry that if I am able to save, they will take money away from me and then I will have less to live on. I am not able to work, hence the reason for being in my position in the first place, but I do keep trying to get better.

I love the jars you use and would like to know how you would divide mine. I can’t do math to save my life, so I do need you to spell it out for me.

Gail Says: People living on really low incomes do not have the money to save; their primary objective is to make ends meet. If you can squirrel away a five here and a ten there for emergencies that may crop up, that’s a good idea. As far as retirement goes, between OAS and the Guaranteed Income Supplement, you’ll likely get as much income during retirement as you have now. So learning to live within your means is your goal, and figuring out how to be happy without buying the stuff everyone else is scrambling for is your challenge.

 

S Wrote: I watch your show every morning and I would like help in reducing my RBC interest rate. I have called the Royal Bank of Canada to ask about this and they pretty much laughed at me. My interest rate is at 18 percent and as you have told us we make large payments. We just got married in November 2014 in Las Vegas and our rings cost us $13,000.00 and we have paid off $5600.00 and with our payments of $2000.00 per month we will be paid off in July 2015. Is there a way to get the bank to lower our interest rates so that we are able to have it paid by June?

Gail Says: Unless you have a fabulous credit rating and can apply for another form of credit (like a line of credit or low-interest CC) you won’t likely be able to get your interest rate down. Lenders have realized that they have over-extended themselves — lent too much money — and need to keep charging high interest rates (in their minds) to offset the risks they’ve created for themselves. That being said, what were you thinking putting a wedding, a trip to Vegas and $13K in wedding rings on credit? I face palmed and then decided that what’s done is done. Get that debt paid off lickety-split.

 

L Wrote: I am a medical student and although I managed to go into medical school debt free, I have accumulated about $100,000 worth of debt through both government student loans and my bank line of credit. I will be graduating from medical school this summer, and as a resident I don’t think I will be earning enough to pay down my debt, about $50,000-$60,000/year for the next 4-6 years depending on whether I specialise. Fortunately as a resident I will still be considered a student and my government loans will not accumulate interest over this period of time.

My question is: how would you suggest I plan my budget for the next few years? I understand that debt repayment is important, and I will first focus on paying off my line of credit as that is accumulating interest, but I wasn’t sure whether it is worth trying to allocate a portion of my income to repaying my government loans? The amount of money that I can expect to contribute to debt repayment will probably be minimal compared to the overall amount of debt and I wasn’t sure whether it would be a better use of my money to allocate my salary to housing/transportation/savings etc and focus on repaying my debt once I finish my residency? I am a pretty conservative person and I feel a bit panicky when I think about my debt, but I know that it is worth it to invest in my future, I just don’t know how best to balance being comfortable taking on “good debt” with being financially savvy.

Gail Says: Congrats on finishing school. You’re right to put your initial focus on the bank line of credit. Since the interest clock is ticking, this is the one that needs your attention. I did not know that a being a resident keeps you in “student” territory for your government student loans. That’s good news. Since those loans are accruing no interest, make no payments now. Instead, focus on building up your emergency fund (and paying down that icky line). You should be able to live quite comfortably on $50K. By the time you’re ready to start tackling your student loans, you should have a higher income. If you’re used to living on that $50K, you’ll have lots of money to use to pay down your student debt.

 

Crispy Coconut Chicken

This is one of Alex’s favourite dishes. When I make it for her, I have to kill about a dozen chickens, and she eats it for days and days, nuked for breakfast, lunch and supper. She acts like a starving child when you ask if you can have a piece of her coconut chicken. This recipe takes some time and dirties up a lot of dishes, but the end result is so, so worth it.

 Crispy Coconut Chicken

 4 chicken breasts (cut in quarters or thirds depending on size)
2 cloves garlic, minced
1 tsp ground ginger
1 ½ tbs Dijon-style mustard
2 tbs olive oil
1 ½ cups all-purpose flour
1-2 tsp salt
1-2 tsp black (or white) pepper
2 cups sweetened flaked coconut
2 eggs


 Combine garlic, ginger and Dijon mustard. Put the chicken pieces in a bag and add the combined mixture, making sure the chicken is well rubbed. Let marinate for at least 4 hours, or overnight.
 You’ll need three separate shallow bowls to dredge the chicken.
 In the first bowl add the flour, salt and pepper and mix evenly.
 In the second bowl beat the eggs along with 2 tbs of water.
 Put the coconut in the third bowl.
 Heat a skillet with 1 tbs of olive oil.
 Dredge the chicken in the flour, shaking off the excess. Then dip it in the egg wash and then thoroughly coat with the coconut, pressing the chicken piece into the coconut to make the coconut stick. Saute the chicken for about 2 minutes on each side, until the coconut is golden. Add chicken to a baking dish. (You’ll likely have to add more olive oil about half way through.)
 Finish cooking the chicken in the oven at 375 degrees for 15-20 minutes.
 Serve with the Roasted Bell Pepper Sauce. (below)

 

Roasted Bell Pepper Sauce

 1 red pepper roasted, seeded and chopped
1tsp lemon juice
2 tbs apricot jam
Scotch bonnet pepper to taste

Combine all the ingredients in a blender and puree. Serve on the side.

Don’t Dwell

When something’s bothering you, you know that getting your mind off of it is easier said than done. In fact, research shows that when people are instructed not to think about a specific topic, it makes it even harder to get that topic out of their minds. But rehashing negative thoughts over and over in your head, also known as rumination, can be unpleasant and counterproductive—and in some cases, it can even lead to chronic depression.

There are a few techniques that can help you stop dwelling and refocus your mind on something positive.

Go Shopping in Your Mind: Visualize yourself in the grocery store. Picture all of the items on one shelf in the store, and the order that you see them in. Or think about something else that requires concentration: the order of books on your bookshelf, or the order of songs in an album or playlist you like to listen to. You don’t have to do it for long—maybe 30 seconds or a minute, but the key is to be disciplined about it and do it each time that negative thought comes back—even if that means doing it 20 times an hour. “It may seem temporary, but if you reinforce these patterns enough, it can improve your mood and your decision making abilities. “Yup, you can actually train your brain to go in a different direction when negative thoughts come up.”

Keep Positive Company: In a 2013 study, Notre Dame researchers found that it’s common for college students to pick up rumination-like behaviors from their roommates. Because rumination often involves worrying and thinking aloud, it’s a habit that can be easily mirrored by other people, the researchers say. Avoid perpetually negative people when you can, or at least be aware of what habits might be rubbing off on you.

Physically Throw Them Away: Clearing your head of a nagging thought could be as easy as writing it down on a piece of paper and tossing it in the trash. According to a 2012 Ohio State University study, people who wrote down negative things about their bodies and then threw them away had a more positive self image a few minutes later, compared to those who kept the papers with them. Don’t want to waste paper? Doing this exercise on the computer, by dragging a text document into the “trash can,” worked too.

Have a Cup of Tea: If your negative thoughts are focused on feeling lonely, you may gain some comfort by warming up, literally. Yale researchers discovered in 2012 that people recalled fewer negative feelings about a past lonely experience when they were holding a hot pack. (They also found that lonely people tend to take longer hot showers.)

 

5 Ways to Pay Off Your Mortgage Faster

From the moment we sign on the dotted line, it’s a race against the clock. Some of us spend every waking moment thinking about how to get rid of our mortgages as fast as possible. Some people are so focused on repaying their mortgages that they do some pretty weird stuff. I’ve worked with people who have ramped up their mortgage payments and then been pushed to their lines of credit or, worse, their credit cards to make ends meets. They’ve effectively moved their debt from their cheapest to their most expensive lender.

While we salivate over our American cousins’ tax-deductible mortgages, here in the great while north our mortgage interest isn’t tax-deductible, which makes our mortgages very expensive. On a $100,000 at 7% amortized over 25 years, we’ll pay more than $110,000 in interest. That’s right. The cost of your home more than doubles.

But putting mortgage repayment above all other goals isn’t the most sensible way to manage your money. Sure, your mortgage interest is expensive, but setting aside the ever-important emergency fund or delaying retirement planning can come with big costs too. If you want to have a solid and stable financial foundation, you must put a little into each pot to achieve the long-term goal.

I heartily approve (what a surprise) of looking for ways to repay your mortgage faster, as long as you’ve got a solid plan in place and aren’t just knee-jerking to the idea of your mortgage debt. Every penny you save in interest is a penny and some that you don’t have to earn. But doing it slowly and steadily makes far more sense than putting your whole financial plan at risk because of a single-minded desire to be mortgage-free.

Here are five sensible ways to get to your mortgage burning party faster:

Increase the frequency of your payments: If you use the accelerated weekly or bi-weekly payments options, you end up making one extra monthly payment a year. And that extra payment goes directly to pay off your mortgage principal. On a $100,000 mortgage at 7%, just one extra monthly payment made each year will save you $24,000 in interest and have you celebrating in just over 20 years. And since that extra payment is spread over the whole year, your cash flow never feels pinched.
Round your payments up: This is another relatively painless way to get mortgage-free faster. By adding even a nominal amount to each payment, you’ll reduce the amount of interest you pay over the long term. Add $25 a month – that’s just five fewer lattés – to your monthly mortgage payment and you’ll save over $10,000 in interest. Will that be a coffee each afternoon, or would you rather save $10,000 in interest?
Pre-pay your mortgage to save big-time: Anything you throw against your mortgage above and beyond your regular payments will make a huge impact, particularly in the very early years. Put one extra $1,000 prepayment against your mortgage principal, and over the life of your $100,000 mortgage you’ll save $4,000 in interest. Do it every year and you’re in the money to the tune of almost $29,000. So where are you going to find an extra $1,000 a year? Why not…
Contribute to an RRSP and use your refund to pay down your mortgage: Yes, contrary to all those clichés your mother filled your head with, you can have your cake and eat it too. If you’re in the 30% tax bracket and you make a $3000 contribution to an RRSP, the taxman will refund you $900, which you can then use to pre-pay your mortgage. This is one of the smartest strategies you can use to achieve two objectives – retirement saving and mortgage-free home-ownership – with one pool of cash.
Increase your payment annually to the most you can afford: Whether you just got a raise or just finished paying off a whack of debt, if you’ve got some extra money in your cash flow, it’s time to increase your mortgage payment. No, I’m not talking about refinancing. I’m referring to the feature on many mortgages that allows you to up the amount you pay monthly, with the entire increase going to pay off your principal. If you’re holding off because you’re not sure you’ll be able to sustain the increase, don’t. Just make sure your mortgage will let you go back to your previous level if your circumstances change. Or pile up the money in a high-interest savings account so you can max out your annual prepayment option.

Open Up to Optimism

Who was it that said that a pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty? Someone smart who had clearly faced his or her own tribulations, no doubt.

Not so long ago “optimist” and “pessimist” were just words that described one’s outlook or tendencies in framing events. Now there’s an enormous body of research in the field of positive psychology that says optimism not helps you cope when the crap hits the fan, it also improves your immune system and prevents chronic disease. Time to pay attention babies.

If you’re an optimist you believe that whatever the challenges you are facing, they are temporary and will not ruin your whole life. It may take some work, but those challenges are manageable. Think back to the last challenge you faced. Did you feel overwhelmed, out of control, despairing? Or did you think to yourself, “Crap! Okay, what do I have to do first?”

Here’s a simple test: You write a proposal for work or a paper for school. You get a heap of negative feedback. Do you say:

“Cripes that was a tough one! But y’know, that was just one miserable mess,” or
“I can’t believe how often I screw things up; I’m never going to …”

Psychologists call how you respond to setbacks your “explanatory style.” If you view events as external to you — it was a hard test — as opposed to internal “I always screw things up”, you’re optimistic. So, too, if you see things as unstable — you can change it — versus stable — this will always happen.

If you see your ineptitude as affecting all aspects of your life, as opposed to a solitary occurrence, you’re definitely a pessimist.

Optimists recover from disappointments faster. Optimists have a greater sense of satisfaction with their lives and higher self-esteem. And they’re more likely to engage in problem-solving when faced with a tough situation. Wouldn’t you rather be an optimist?

For some, optimism seems to come naturally. Whether it is in their natures or has come though lessons learned in childhood, their optimism radiates. They’re often referred to as “lucky.”

If you aren’t in the lucky group who sees the donut and not the hole, you can do something about it. The brain is a marvelously plastic thing capable of embracing great change. And if you want to shift yourself closer to the positive side of the optimism/pessimism scale, you can, if you’re prepared to do some work.

Whenever you catch yourself in negative territory around things like how you feel about yourself, how you manage conflict, or how often you give into peer pressure, stop the thoughts. Just say, “Stop thinking that way.”

About ninety percent of how happy you are comes from how you choose to perceive things. Instead of seeing things as your fault, reframe what is happening to move the blame to an external source. (No, this is not copping out! This is retraining your brain to see negativity as external to YOU.) Blame the difficulty of the test. Blame the stupidity of the people who didn’t understand the proposal. You want to move the locus of the negativity from inside you to outside you. Even if you are part of the problem and you must do some personal tweaking, the problem does not exist IN you.

Try again. Optimists give themselves many opportunities to succeed, framing their less successful attempts as practice. Pessimists give up. If you want to move yourself closer to the positive side of the scale you have to be persistent. Hard work leads to success, which puts you into the positive feedback loop.

There’s also value in pretending to be an optimist. You know the old saying, “Fake it till you make it?” Pretending to be optimistic can have a strong impact on sliding you along the scale. If you find it hard to pretend, find an optimistic friend and follow his or her lead. Socialize with cheery people. Bounce ideas of positive people at work.

You don’t have to believe these tactics will work for them to work — like an antibiotic, they just will — all YOU have to do is try them.

This & That: Watch Where You Take Advice Edition

H Wrote: I am trapped in the battle on weather I should pay off my debt (at a “low” interest rate of 6.5ish) or save for a down payment on my first house. I have been told my debt to income ratio and credit rating is good so that the only thing holding me back is that I am falling short on my down payment so that I should focus on that. The banks plan has me with my down payment within the year. Thoughts? Because seeing my debt not go down as much as it was is killing me!

Gail Says: Of course the bank wants you to focus on your downpayment. That means they can lend you money, all the while you’ll be paying interest on your debt. If you can’t afford to pay off your credit card now, how will you do so when you’ve taken on the added responsibilities and costs associated with home ownership. The bank is giving you very bad advice — which I’ve come to expect from banks these days. Pay off your consumer debt first. Then save for the downpayment.

 

C Wrote: $1800 penalty from Canada Revenue Agency for going over TFSA limit as advised by Scotiabank. I am Canadian but lived in France for several years before returning to Canada in early 2013. In April 2013, my advisor said I could put in $25000 in my TFSA as a Canadian. CRA says I was a non-resident and should have put in only $5,500. My penalty is $1800. Who is responsible, me or Scotiabank?

Gail Says: You should hold Scotiabank accountable for the bad advice. The tax man will only hold you accountable. Make a fuss. Make ’em cover your loss.

 

S Wrote: I have been struggling with this question and even my financial planner has been of little help. I am a pretty diligent saver, but am planning to actually spend a little bit of money now, and I can’t see my way through the smartest way to do this.

I am planning to make two significant expenditures: a new car, and a substantial renovation. I want to replace the car in the next few weeks, and the renovation would happen in 6 months.

I diligently max my RRSP contributions every year, pay my mortgage on an accelerated basis; have a regular savings plan and no other debt. There is $160K left on my mortgage, at 4% with 17 years amortization.

The car I am interested in would cost $45K cash, or approximately $600 per month to lease (I put on a lot of mileage, so that is a high-mileage lease).The renovation I am planning would be in the $100k range. I have been saving towards both and currently have allocated about $25,000 to the car, $25,000 to the renovation and have another $29,000 that could be allocated either way. I am planning to finance the remainder of the reno costs though my home equity line of credit, which I would convert to a mortgage at approx. 2.99%. The goal is to pay off both the original mortgage and the 2nd one in approx. 17 years.

I have been saving $500 towards the car, $500 towards the reno, and an additional $400 per month, so continuing to devote that amount to those goals will be feasible for my cash flow.

I always thought buying a car outright made more sense than leasing. That would be fine if it wasn’t for the renovation plan. If I devote $45k to the car, then I have to take on more debt for the renovation. And with compounding interest on a larger mortgage, the interest costs would be higher over the long run. If I lease the car, then the debt I am taking on for the reno would be lower… which means lower interest costs… but I will be devoting the equivalent of my current monthly “car” savings to a lease payment instead and won’t be able to save that towards the subsequent car or to paying off reno debt. On the other hand, if the mortgage is paid off many years sooner, then I can start devoting that “house” monthly budget back to savings (whether to finance more house stuff, or the next car) sooner. Then again, if I buy the car outright, I have some trade-in residual value…

So… in my circumstances, would it be financially smarter to lease or to buy the new car, while still being able to accomplish my renovation goals?

Gail Says: I’m very surprised your financial planner couldn’t give you some help with this. Hmmm.

You have clearly put a lot of thought into this question. The two things you haven’t told me is what the interest rate is on the lease and how far from retirement you are.

Interest is interest is interest regardless of how you “term” it and the cost of leasing needs to be part of the factor. (I’m not sure why you’ve chose “lease” versus “loan” because leasing is often more expensive, but if you don’t know the up/downsides go read this: http://gailvazoxlade.com/blog/?p=3207 . Unless you are writing off the lease for business purposes, it almost always pays to finance instead of leasing.)

Okay, so your quandary: pay more for the car and carry the mortgage longer or pay less for the car, financing more, and evening out on the mortgage, right?

Back to interest is interest is interest. The point is to get the interest gone as fast as possible while paying the least amount of interest possible. To that end if the car financing cost is higher than the mortgage cost then you’re smarter paying for the car with cash and financing the renovations and then putting all your extra cash (by my account that’s $1,400 a month) against the reno costs. Since you have $79,000 available in cash to work with, you can pay for the car outright and still have $34K to put towards the reno. That would mean you’re only financing $66,000 (you will stay on budget right?) It should take about 4.25 years to get the debt gone with a payment of $1,400 a month, and you’ll pay about $4,300 in interest over those 4.25 years. At that point, you can start saving for the next car.

 

M Wrote: My question pertains to mortgage and HELOC insurance.

When mortgaging our home and obtaining a line of credit, a family member persuaded us that insurance on each of these was absolutely necessary. So, on our mortgage we pay a monthly insurance premium of $101, plus a disability premium of $45 (times two), for a total of $191 in monthly insurance premiums for the mortgage. Similar on the line of credit, $27 monthly insurance premium, plus another $46 (times two) for disability, for a total of $119. That means that in total, we are paying out $310 in insurance premiums every month.

With the benefit of time, I am starting to second guess these expenses. Both my wife and I are federal government employees we have life insurance through work, which in the event of one of us passing away would pay out enough to cover our line of credit. We also each have an additional life insurance policy that we purchased when our kids were born. In each case, were one of us to pass, the life insurance policies would be enough to cover the mortgage, line of credit (and then some). Through our employer, we also pay mandatory disability insurance premiums, so in the event of one of us becoming disabled we still would receive 70% of our income.

So my question is; are we over-insured? I feel like it would be wiser to cancel the insurances we took out with the bank, and just use the extra money to spend frivolously (just kidding!). I would maintain my same payments, with the additional funds going against the capital instead of towards insurance.

Would that be wise?

Gail Says: Mortgage life insurance is one of the most expensive forms of insurance. It’s actually a complete rip-off. Since you know you have enough insurance, cancel the mortgage/disability life insurance. Create a new “savings” account and have that $310 a month automatically moved to your new high-interest (Achieva, Manulife, Tangerine) account. Each year use that money to make a principal prepayment against your mortgage. NOW that money is working for YOU.

 

C Wrote: I recently received an offer for a pre-approved credit increase on my credit card on which I am currently carrying a balance. I am making biweekly payments higher than the minimum and hoping to have it paid off by spring. I don’t think I need the credit increase but wonder if it would improve my score since currently I am fairly close to the limit. I had thought I would ask for a limit decrease as I pay off the card.

Gail Says: Don’t take the credit increase. Keep paying off the balance. Don’t reduce the limit as you go. Once it’s paid off, use the card for things like groceries and pay off in full each month. That’ll give you a good credit score.

 

N Wrote: I’ve always enjoyed your show and value your advice. I never thought I would end up in the financial position I am in. I’ve always been smart about my money, but last year things got really out of control. I thought purchasing high end goods would fill some hole that was missing in my life and it became a vicious circle. I am now sitting in $200,000 debt made possible with a secured line of credit. I know this is ridiculous and I am so ashamed of myself. I know I have to sell off all the things that I’ve bought over the year, but it will not be an easy task and I will end up losing about 50-75% of the retail value. I’ve also bought your budgeting files to really work on my spending habits and try to find any extra money to help pay this off. Should I be moving the line of credit into a flexible mortgage? Or any other advice would be appreciated.

Gail Says: One of the reasons I hate those lines of credit so much is because it is so easy to access them for no particularly good reason. I’m sorry you had one. I’m sorry you dug such a deep hole. I hope you tell your story over and over and over as a caution to other people who think it’s great to have easy access to credit just in case. You’ve got a long journey ahead and I wish you the best. Make a plan and stay focused.