Gail Vaz-Oxlade's Blog, page 23

Books, Books & More Books

The Husband’s Secret by Liane Moriarty is a series of stories all running in parallel and intertwining delightfully. If you had a deep, dark secret, would you put it in a letter to your love in the event of your death? (I would not. That sucker dies with me.) Well, that’s exactly what Cecilia’s husband does, except she find the letter before he dies. And that’s the end of her neat and tidy life. Tess also discovers a secret; her best-friend and her husband have fallen in love. She bolts back to Sydney, to her mom’s, to figure out what to do next. And then there’s Rachel who lost her daughter to an unresolved murder and just can’t let it go. These women’s lives all intersect as they deal with their pasts and their futures. Witty, real and thoroughly engaging, I’ve already put another of Liane Moriarty books on my self to read.

 

Contagious: Why Things Catch On by Jonah Berger was fascinating. Have you ever asked yourself why some products become all the rage – even stupid ones like pet rocks – while perfectly good products wither and die away? Why is it we talk about some products more than others? And how is it that word of mouth can actually be more influential than all those billions of dollars spent on advertising. Jonah Berger, a professor at Wharton, draws on his research to explain the six steps that make products or ideas contagious.

 

Speaking from Among the Bones is another in Alan Bradley’s Flavia de Luce novels. The narrator of this series is an eleven-year-old girl, part chemist, part detective, and all round smarty-pants. What a delightful character she is: confident, determined, and self-aware. In this story she’s hot on the heals of a murderer, for when the local patron saint’s tomb is opened – with Flavia holding her breath in anticipation – it is the body of Mr. Collicutt that’s found.

Bradley’s writing is clear and funny. His leading lady is irrepressible, and you will not be able to avoid falling for her hook, line and sinker. Living with her widowed father – she refers to her dead mother as “Harriet” because she never knew her as “mother” – and her two tormenting sisters at Buckshaw Manse, Flavia seems to attract trouble. Her father is weary of her turning up dead bodies, and is distracted by financial woes. Flavia cannot be reined in.

This is the 5th book in the series, and I’m relieved to see there is a sixth. Happily, I missed a couple in the middle and they are now in my library, just waiting to be devoured.

 

Bury Your Dead by Louise Penny. You already know this woman is one of my favourite authors. This book is one of the earlier ones in the Inspector Gamache series. After being badly wounded in a horrible shootout, Gamache is haunted by the young officer who lost his life while the Surete stopped the act of terrorism that would have devastated half the northern hemisphere. The good inspector is in Quebec City to visit when he’s drawn into the murder of a man who has been hunting for the remains of Samuel de Champlain. You just never know who the bad guy will end up being. And sometimes the bad guy isn’t who the Inspector thinks, which is the focus of the second story that runs parallel in the book. The Inspector’s right hand man, Jean-Guy Beauvoir, is sent to Three Pines to see if Gamache’s team overlooked some evidence when they locked up Olivier for the murder of the hermit (in a previous book).  This is all because Olivier’s partner Gabriel refuses to believe Olivier did it and sends a letter every day to Armand that says only, Why did he move the body? Wonderful, wonderful, I love Lousie Penny.

 

Joyland by Stephen King, was so good I stayed up all night! Not one of his truly scary books, it felt more like a coming of age book. Devin Jones is a student who comes to work in a small-town amusement park called Joyland. From working the regular shifts as a carny to saving a little girl’s life, the year is one full of challenges and changes for Devin. His heart has been broken by a girl and he just can’t seem to get over it. He’s told by a fortune teller that two children will cross his path, and one has the sight, but she’s not sure which. And then there’s the ghost that haunts the scariest ride at the park. No, the book isn’t just about the ghost, and how she got to be that way, though based on King’s other books you might think the horror was the story. This book is all about heart. And Devin will lose his to a little boy with muscular dystrophy, who sees life in a unique way and who has the heart of a champion. Good to the very last drop. Thank you Mr. King.

 

The Fallen Angel by David Hewson begins with a man’s fall to his death from the balcony of his apartment in Rome. Nic Costa happens to be close to the scene and arrives to find his beautiful 17-year old daughter, Mina, in shock, leaning over her dead father. As the mystery of how Malise Gabriel died unfolds, the whole thing seems to echo a sixteenth century tragedy.

The story is carefully plotted and the twists and turns leave you always guessing what’s going to be uncovered next. It’s a engaging, if tragic, tale that captures the deceit and treachery of a broken family and the dark side of Rome’s seedy underworld. Hewson’s description of the ins and outs of Rome, as he guides you through the eyes of his ensamble of characters makes the whole thing feel like a scary vacation. And his interweaving of the story of Beatrice Cenci and her lurid murder trial is brilliant.

 

Memory Hacks

I don’t know about you, but my memory isn’t what it used to be. If I don’t write it down, I’m sure to forget it. Doesn’t matter if it’s a deadline or an appointment, a telephone number or a bill to be paid, there’s so much going on, well… something’s gotta give.

Sometimes there’s no pen or paper… damn, I hate that. I used to drive around with window writer markers in my car so I could take notes on my window. They dried out too fast. Course, you could type a note into your smartphone. But maybe you just want to remember a few things and can’t be bothered to write it down.

Want to improve your chances to recall that list of things five things you have to get at the grocery store? How about that telephone number just rhymed off to you? Here are some neat tricks.

1. Say It Out Loud: Research shows that if you say it out loud you create a distinctive memory since you’re bringing your ears into play. It’s called the production effect and it because the words you speak aloud are now translated into speech so you have knowledge of producing the words as well as a memory of hearing them.

2. Use the Visual Peg System: My dad taught me this one when I was a kid and I still use it. You associate each number to a visual “peg” that rhymes with the number, like hive for five or shoe for two. You memorize numbers by creating a drawing in your mind: a hive in a shoe hanging from a vine in a tree of a vine translates into your new PIN: 5293.

3. Clench Your Right Fist, Then Your Left: Research out of Australia shows that clenching one hand increases the neuronal activity in the frontal lobe in the opposite hemisphere. About 90 seconds of hand clenching can boost your memory. While memorizing something, clench your right fist. When you’re ready to recall that piece of information, clench your left fist.

4. Make your body work for you: You probably already know that not enough sleep interferes with memory function. But did you know that walking 10,000 steps a day – that’s a little under a mile – improve gray matter volume, which is necessary for good memory?

5. Chew Gum for 30 Minutes: Chewing gum while doing a task allows you to better focus on a task and improves your short-term memory recall. The biggest payoff comes between the 20 and 30 minute time frame.

 

Holes in your Savings Plans?

Made a budget? Set aside money for savings? Constantly transferring those savings back to your chequing account to cover your overspending? It’s an old story.

People have all kinds of reasons and excuses for not saving money. And then there are the people who act like they’re saving, only to end up tapping those savings to cover their butts.

From the tired mommies and daddies who can’t find the energy to create a meal, to the fun-loving singles who can’t say “no” to an outing with their buds, people have a b’zillion excuses for why they’ll tap their savings. “I didn’t expect…”, “I work hard…”, and “I didn’t think…” are some of the words that start those excuses.

Every quarter a new report comes out pegging Canada’s household debt at a record highs. They try to make us feel better about our avarice by telling us that we’re not going into debt as fast as we have been in the past. I am always horrified. Why are Canadians digging their holes deeper and deeper? People’s responses: “But that includes mortgages, right? So that’s not so bad.”

See, we can justify anything. We’ll set a budget for food and when we go over we’ll blame rising costs. We’ll set a budget for transportation and when we go over we’ll site the record-high costs of gas and the increases in insurance premiums. And then there are the people who just will not give up their bad habits, no matter the cost.

Hey, if you aren’t saving, regardless of what your excuse may be, you’re an idiot. Yes, houses cost a lot of money, but you don’t have to own THAT house if doing so means you make yourself house poor. And you may need a car to get to and from work, but you don’t have to own a car that’s gobbling up more than it’s share of your budget.

If I had a penny for every excuse I’ve heard about why a body “just can’t” I could buy PEI. Honestly, people, excuses are for wussies. If you’re serious about making your life into what you want it to be, lose the excuses and make a plan.

Responsible people don’t spend more money than they make for any reason. Responsible people make sure their families are safe and well protected regardless of what happens next. Responsible people know they have to balance today’s wants with tomorrow’s needs by saving.

Saving shouldn’t be the thing that gets eliminated from a budget because you don’t have enough money. Saving isn’t a nice-to-have. It’s a must-have if you expect to be able to deal with emergencies, cope with life’s curveballs, or eat more than noodles and tomato soup when you retire.

If you aren’t saving enough, and you wish things were different, make them so. You are in control of your life. If you don’t like it, change it. But, for heavens sake, stop making excuses.

You Are What You Believe

I believe in the power of self. I believe that whatever we think rules our existence. I believe we can have anything we want if we just take the time to figure out what that is.

There are heaps of people who believe differently. And, very often, it is their beliefs that disable them. Do you have limiting beliefs that stop you from achieving what you want? Are there scripts that run through your mind, thoughts that stop you from rising up, little voices in your head that tell you ‘you can’t.’

Have you ever said any of the following to yourself?

I’m not good enough
I’m a bad… parent, sister, son, friend
I will never….
It’s too late for me to…. change my career, go to school, learn to [whatever]
I can’t change
I’m too lazy, too bad with numbers, too disorganized
I will always be… fat, poor, not that smart, not good enough
I’m a procrastinator
My dream will never come true

Beliefs are the stories we have written for ourselves based on our experiences. If you came from a family where your parents ignored you or abused you, you may believe that you’re unworthy. If you had repeated experiences where you were asked to do something you didn’t have the skills to do, you may believe that you can’t ever succeed.  And if your every whim was satisfied without you ever having to make a real effort, you may believe you’re entitled.

Those beliefs – those stories – colour everything in our lives. They are the lenses through which we see our reality. Believe that you are shy and you will be shy. Believe that people won’t respect you unless you dress in all the latest fashions, and that’s how you’ll perceive people’s responses to you.

You have the ability to change your beliefs and your story. It won’t be easy; none of the really important lessons in life come easy. But you can do it if you really, really want to.

The first step is to expose the belief. What are the thoughts that run through your head and stop you from moving forward? Whose voice to do hear telling you that you can’t? When you feel unworthy or incapable, pay attention and call it out, write it down, shine some light on it. Until you recognize the negative thoughts seeping through you and purposefully stomp on ‘em, your limiting beliefs will continue to wind their way through your cells, stopping you from being all you can be.

Belief only has power because of the emotions attached. So step two is to recognize the emotions that accompany the limiting belief and call them out too.  That calling out must come with compassion. Your objective here is to find some way to heal the Swiss cheese of your beliefs by filling in the holes with kindness and love.

Mantras are a great way to do this. When you recognize a limiting belief, and you feel the sadness, anger, depression that comes with, stop and say something that makes you feel better. It might be a line from a poem. It might be a quote from a self-help book. It might be something a friend has said to you that puffs you up and gives you some juice. Swathe the negative emotion in the positive mantra.

The final step in the process is to rewrite the story. How do you want it to be? What’s the outcome you’re striving for? How determined are you to achieve it? And what agreements will you make with yourself to create a new story for yourself?

Your beliefs aren’t truths, no matter how much they may feel like it. As Dr. Wayne Dyer says, “When you change the way you look at things, the things you look at change.” So what limiting belief are you going to change today?

 

This & That: Investing Edition

S Wrote: We have 60% of aggressive investments in our mutual funds. However, we are now at an age that requires us to be a little more conservative (about 60). Now we want to adjust our investments to 40% aggressive and 60% balanced. How are we going to make this adjustment? Is it better to move some portion out of the sum of the aggressive investments, or to reallocate the ratio of the monthly contributions? For instance, if we have $100, 000 in our mutual funds investments, which are made up of $60,000 in equity investments and $40,000 in bonds and money market investments, is it good that we move $20, 000 from equity investments to bonds investment? Or is it better just to adjust our monthly contributions ratio, say changing our 60% for equity and 40% for bonds and money market to 40% for equity and 60% for bonds and money market? Or do we have to do both, i.e. to move some portion out of the sum of the investments and at the same time to change the ratio of the monthly contributions. Without enough knowledge of investments, we cannot have a clear picture of the results of these options. We would appreciate it very much if you can assist us to make a wise decision.

Gail Says: Why not look at your portfolio to see where you’ve had the biggest wins. Move 50% of that money to the more secure investment options. Target the remaining mutual funds (the non-winners, if you have them) so that as they ‘recover’ or hit the marks you’ve set for them, you move that money to investment options more in keeping with your higher need for security. In the meantime, readjust your investment contributions so that you will hit your new asset mix goal by a specific deadline.

 

K Wrote: Currently, a large portion (60-70%) of my RRSP investments are invested in guaranteed GIC’s. The interest rate is very low however the investment is safe and guaranteed by CDIC.

My financial advisor is encouraging me to invest solely in mutual funds as the funds offer much better returns. The mutual funds are not protected by CDIC.

I am 45 years old and looking at working and investing for another 20 years. Should I leave my investments in low earning GIC’s where they are protected by CDIC or should I move them into mutual funds where there is more opportunity for growth?

Gail Says: This is a question only you can answer. The CDIC thing seems like such a huge deal for you I’m going to guess that the idea that you might lose money is pretty scary. If you’re contemplating investing in anything (including GICs) you must answer 3 questions for yourself.

The first, “How long until I need to use this money” is easy because you’ve already told me you don’t need the money for 20 years. That’s a long-term investment horizon and let’s you go with just about anything you want.

The second question, “Can I explain this investment to a 12-year old” speaks to how knowledgeable you are about investing. You should never buy anything you do not completely understand. A cursory understanding as in, “This is an investment that may make me more money,” isn’t really “understanding”. You need to know how mutual funds work, what kind of mutual fund you’re buying (there are thousands of options), how the underlying investments in the mutual fund react to things like changes in interest rates and other economic conditions, what the fees are both in terms of commissions and management expenses.

The third question, “How big a chicken am I” is the one where people often delude themselves. Go a get a copy of Never Too Late from the library and review the questionnaires I’ve created there to see just how much of a risk-taker you are, or how safety-oriented you are. The book will also help you decide how high up on the investment pyramid you can go.

 

J Wrote: I have spent most of my life being financially irresponsible. Over the past couple months I have created a budget that only needs minor tweaks and a debt repayment plan that will have me in the black within 18 months. I am also contributing to savings but would like some of that money to be invested. And this is where the problem is. I know nothing about investing. I have RRSP’s that my company matches and had a good return last year but I have no idea how they were invested. It is a subject I would like to learn about but have no idea where to start. Is there a short list of books that you can recommend?

Gail Says: A lot of people think that The Intelligent Investor is the most important and influential book written about value investing. Originally published in 1934 by Ben Graham, this work has been heralded by such notable investors as Warren Buffett. Graham presents two types of investing styles – one for every day people who don’t want to think about their portfolios (“defensive”) and the business man or woman who wants to enjoy maximum returns (“enterprising”).

One up on Wall Street is a good second book for a new investor. Peter Lynch teaches you how to use what you already know to make money in the market.  

The Essays of Warren Buffett has been edited by Professor Lawrence Cunningham and is a great reference tool to have handy. Learn about management, business valuation, investing philosophy, the use of stock options, economic and accounting goodwill plus more.

The Bogleheads’ Guide to Investing is another good basic explanation of the different kinds of assets and how they work but skip the stuff on retirement accounts tax strategies because the rules are different in Canada.

There is a lot of information on the internet about investing. You can start with the stuff on my website and branch out from there. Go to the blog and look on the right side of the page for Categories. Go down to “investing” and you’re away to the races. Enjoy.

 

K Wrote: What is capital gain and should I take it now or later? I have owned a profitable rental property for approx. 3 years now. Other then the mortgage on my residence and on the rental property I do not have any debt. I have regularly paid into RSP’s for years as I have no pension plan and I save a little cash every pay.

Gail Says: A capital gain is the increase in value of capital. So if you buy a stock or a piece of property for $1,000 and sell it for $1,050, you’ll have a profit — or capital gain — of $50.

Typically you get a capital gain when you sell your investment, so you can’t just “take it.”

 

E Wrote: I’ve been approached a few times by friends and family who have gotten involved with direct selling. They’ve tried to recruit me into their “business opportunity” and I’ve listened to their “how much money I can make”, “how I can make my own hours”, etc. One of them is from Herbalife, and the other one is from Primerica. While I’m not really interested, they are VERY pushy. I’ve researched the companies a bit but it seems to me they succeed only if you recruit and recruit (as you need to have people under you). My question is; how do I tell them I am not interested? These are people that we love a lot — not family but they are part of a very close community at church. Although they have good intentions, I am not interested in their businesses but I don’t want “friction” to cause problems within the group. I already work hard and have little time for these types of endeavors. Not sure if you can get my drift on this question, but how do you think I should approach them

Gail says: Sure, I get it. Simply tell them that you are already fully committed time-wise doing the things you love, and that between those passions and your life as a dad and a husband you don’t have an iota of time left. You love their passion about what they do, as you’re sure they love yours about your life right now. It’s great they want to share with you, but you’ve just got your hands full, so thanks, maybe down the road sometime, but for the next couple of years you’re dance card is full.

 

A Wrote: I’m 31 years old, single and recently my consumer proposal has been accepted. Finding your books, TV show and blog has helped me look at my finances in a different view. As I can’t afford a financial advisor at this time and a newbie in investment, I was hoping you can guide me on next steps. I’m so overwhelmed by all the financial info out there and I know you said don’t invest in something you can’t explain to a child so I’m probably not looking at mutual funds or EFTs etc. I managed to save $5000, guess it’s my emergency fund/savings…since, I filed my proposal but it is sitting in a very low interest savings account. Feels like I should park it elsewhere. I have no TFSA at this time (did years ago but withdrew to pay down debt). I have about $7000 in RRSP’s and no other assets. What do you recommended for me to build up my retirement and emergency funds? I make about $36,000/year. I feel behind in my finances and saving for the future. I’m more of a low to moderate risk taker based on your book.

Gail Says: If you are a low to moderate risk taker, you need to limit your investments to those that will let you sleep at night. Keeping a healthy cash balance in an emergency fund is one step. Yes, the interest rates are low, but if you shop around you can get a slightly better rate than if you just default to what your bank may be offering.  

A TFSA is a great place to put money you want to set aside for an emergency fund and for your future. You can hold any investment in a TFSA that you can hold in an RRSP so feel free to build your cash for an emergency and take some of your money (lets say about 25% for now) and invest in a balanced mutual fund. You’ll get a little growth and a little fixed income, and build your risk tolerance as you build your asset base.

Don’t worry about being “behind.” It is most important that you start. As you become more comfortable building up your assets, you can learn about other options. If, down the road, you decide to take advantage of an RRSP to minimize your taxes, you can always use some of the money you’ve socked away in your TFSA to fund a contribution.

 

Gail’s Asian Flavours Fish Soup

Last winter I went through a soup phase. Man, I ate a lot of soup. Some of it was spectacular. Not a word you usually associate with soup, right? The thing I like most about this soup is how easy it was to freeze and then make “fresh” with the addition of the last two ingredients.

Not everyone likes cilantro. Based on twin studies, the preference for or distaste of cilantro may very well be genetic. For those who think that cilantro takes like bug or soap, feel free to substitute basil in this recipe.

I love cilantro’s zesty citrus flavour. Also known as coriander (the seeds, specifically) or Chinese parsley, cilantro is native to a huge area spanning southern Europe, North Africa and Asia. I often have it in my herb garden.

Cilantro leaves are rich in vitamins A, C and K. The roots are also used in many Thai soups and curries and have a deeper more intense flavour.

Cilantro goes well with avocado, chicken, fish, pork salads, tomatoes and salsas. I’ve also found that the cilantro paste is a good thing to keep in my fridge for those weeks when the fresh stuff is tough to find.

 

Gail’s Asian Flavours Fish Soup

2 tbs olive oil
8 cups veggie or fish stock
3 cups chopped sweet onion
3 cups cubed celeric
2 cups mushrooms, sliced
3 tbs ginger chipped very fine
2 cloves garlic, minced
1 cup cilantro, chopped fine or 2 tbs cilantro paste
1 can unsweetened coconut milk
2 limes, zest and juice
3 tsp ground flaxseed
skinkless white fish
vermicelli noodles

1. In a large pot, warm olive oil over medium heat. Add onions and stir for 2 minutes.

2. Add celeric, mushrooms, ginger, garlic, and stir for about 2 minutes.

3. Add stock, coconut milk, cilantro and lime zest and juice. Bring to a boil.

4. Reduce heat, cover and simmer for an hour.

5. At this point, you can decant some of the soup for the freezer. This makes about six hearty servings, so I usually put two away in the freezer for another day.

6. Before serving, add vermicelli noodles and cook until soft, about 10 minutes.

7. Cut white fish into medium sized pieces and add to hot soup. Cover. Cook another 5-7 minutes and serve immediately.

I like to add the fish at the very end so it doesn’t totally disintegrate in the soup. So make sure the noodles are almost done before you add the fish. When you’re reheating from the freezer, bring the soup to the gentle boil before adding the noodles and then the fish.

 

 

Frienemies Harm Our Health

You know that old saying “Keep your friends close and your enemies closer?” But what do you do with a frienemy? Do you have a frienemy? I had one once but I got rid of her. It actually made me very sad because I truly admired and liked this woman. But she was toxic. Turns out I did the right thing. While our work lives often mean we have to put up with people who act like friends but seek to sabotage us, keeping these people close to you can hurt you.

Here’s proof from an experiment: individuals were given a blood pressure monitor and told to take a recording whenever they interacted with someone. When they had to interact with “frienemies,” their blood pressure spiked. Yup, that’s what stress does to you. Even when the frienemy was in another room, the potential for awkward conversation created an increase in stress levels.

Frienemies aren’t just living in our workplaces. Sometimes we have family members we love who drive us crazy. If your conversation is full of sparring that leaves your head aching, your neck tight, or you rubbing your temples, you’ve got a frienemy!

Researchers believe it is our uncertainty about how an interaction with a frienemy will turn out that drives up our stress levels. And you know what? This anxiety is has an impact on our health. Julianne Holt-Lunstad at Brigham Young University in Utah, says that it’s rare to encounter someone who doesn’t have at least one ambivalent relationship. That’s what psychologists like to call frienemies: ambivalent relationships. Holt-Lunstad and Bert Uchino at the University of Utah explored whether the good traits of a frienemy outweigh the bad. Here’s what they found.

Our chromosomes are capped by a length of DNA called “telomeres.” As we get older, these telomeres shrink leaving a cell open to a range of problems, including cancerous growth. So telomere length is often used as a measure of cellular ageing. You know what? People with more ambivalent friendships also had shorter telomeres.

Most people hang onto to the frienemies out of a sense of loyalty or because they have known them forever. I have never understood this mostly because if someone’s behavior or language is hurting me, clearly they don’t value me as a friend as much as I have valued them. Eventually when my frienemy and I parted ways I was sad; sometimes I still feel the loss. But the relief from not having to deal with the stress of interacting with her on a regular basis far outweighs my sense of loss.

If you have one of these people in your life you’re going to have to develop some strong coping skills to not have them affect your health. Or you could cut and run. Neither choice is either. But one’s better for your health.

Renovations Aren’t “Investments”

People are under the impression — or is it the delusion — that their renovations are “investments.” People use this same train of thought — or is it justification — to rationalize why that new fridge, snappy new couch and fabulous hot tub are must-haves.

Hey, if you have to spend time justifying to yourself (or anyone else) why you’re spending your money, it’s a good sign that you should take two breaths and do some math.  Sure, you think it’s really a good deal, but have you added in what it’s going to cost in interest to see what the final cost will be? It may be 75% off today, but if you don’t have the cash flow to pay for the other 25% you’re slapping down — or if you’re robbing your savings to do so — that’s ridiculous. And if you use the word “investment” for a consumable, you’re just plain dumb. Investments are those things that increase your net worth over time. If it’s a consumable, it can’t also be an investment.

If you’re renovating your home for a quick flip, that’s when you have to make sure your reno dollars are all (or mostly) going to come back to you. some renovations pay back well, some not-so-much, and you should know which is which.

If you plan to stay in your home for five years or more, your renovation is not an investment. Hey, you know that fabulous new fridge you put in, those lovely new cupboards, that exquisite crown molding? In five years it won’t be new. Nope. And if you went with what was in fashion when you did your reno, you’ll have to stay in the home for 25 years to catch the retro-rebound.

The things you do to your home that you will use for five years or more before you sell are consumables. You’re getting the benefit from them, the next owner is just as likely to say, “Blech!” A brand new hardwood floor will look great for years to come, but it’ll hardly produce a big return on investment after 6 years of kids dropping toys and dogs scurrying to the back door to be let out. When you’re budgeting, stop thinking about return on investment and focus instead on how much pleasure YOU will derive from the changes. And, of course, you have to have the money in the bank to make those changes, just like if you were buying a new TV or a swishy pair of shoes.

Most people who rationalize their spending do so to convince themselves that it’s okay to part with the money. Hey, does it make sense to buy another coat, a piece of equipment you’ll use once in a blue moon, or a designer label when you don’t have any savings? 

The next time you find yourself rationalizing with thoughts like, “I work hard, I deserve it” or “It’s just…” referring to the cost, stop and think. Consider the short-term pleasure you derive over the long-term cost to your future. Also think about the opportunity cost of spending the money. (See Rule #61: Understand Opportunity Cost in Money Rules.) Then decide if you really, really what to buy that something.

And for heaven’s sake, if you want to upgrade your home and you’ve saved the money to do it, have fun. But if you’re justifying putting your upgrades on credit because they’re “good investments,” I have a slap right here waiting for your forehead. Be Healed Idiot!

Cultivate Happy

I’m a happy person. It doesn’t always come easy; sometimes life sucks. But I love the feeling of being happy and so I work hard at keeping the things in my life that make me happy. And I think happy thoughts. When I catch myself going down Negative Lane or Jealousy Circle, I kick my butt and redirect my thoughts.

I was once accused of being “a refugee from a Disney movie” because I’m such a believer in Happy. In fact, I believe the purpose of a life is to be happy and to make as many other people as possible happy.

If you’re determined to be happy, there are some things you can choose to do that’ll help sing along with the Bluebird.

Focus on the moments when you experience strong positive emotions. Those moments are vivid and detailed. They can be work-, home-, or love-related. It’s that feeling you get when your daughter cuddles up beside you, you put the finishing touches on a perfect meal, or you accomplish something that makes you yell, “I so rock!” While negatives are always working their way into our lives to bring us down, having pictures of our positives that we can flip to in our minds can help offset the chemical reactions that set us on a downward spiral. The next time you burn the chicken, flip to the picture of your puppy chasing her tail and make yourself re-live the moment. Smile.

Make sure you’re getting enough sleep. It is during sleep time that you lay down learning and memories, and your body repairs itself. But did you know that positive memories are processed by the hippocampus (while negative memories are processed by the amygdala), and if you’re sleep deprived, that’ll hit your hippocampus harder than your amygdala. Sleep – or a lack of it – affects your sensitivity to negative emotions. So a lack of sleep will make you more sensitive to the crap that happens, and more likely to remember that crap.

Accept what is. None of us is good at everything. Some of us don’t like to iron (me!). Some of us don’t like to dust (me!) Some of us don’t like to vacuum (me!). I do love to organize, to fold laundry and to cook. I love to write. I love to help people. And while I don’t love to drive, I love listening to audio books so I turn my driving into audio-book time and then I love getting into my car. If you’re always focused on what you don’t like or what you feel are your shortcomings as a partner, a parent, a friend, then you can’t possibly be happy. Accept that you’re no good at lawn-cutting and weed-pulling and either eliminate the need, or get someone else to do it.

Practice smiling. A study at Michigan State University says that if you think happy thoughts and practice smiling, you not only feel better about your life, you’ll improve your attention and perform better. That’ll make you even happier. Smiling can actually reduce the emotional pain of dealing with difficult situations. Psychologist Robert Zajonc published one of the most significant studies on the emotional effect of producing a smile. He asked people to repeat vowel sounds that forced their faces into various expressions. To mimic a smile, they made the long “e” as in “eel”, stretched the corners of their mouth outward. The long “u” as in “blue” forced the mouth into a pouty expression. People felt good after making the long “e” sound, and bad after the long “u.”

Say “Yes.” Some people have trouble saying, “No.” A mountain has been written about recognizing our limitations and not allowing other people to take advantage of us by learning to say “No.” But what of the people who have so much trouble saying, “Yes.” I know Negative Nancys who, no matter what you say to them, have a way to work “No” or “I can’t” into their response. If you want to be happy, you need to reframe your thinking so that you move from No to Yes. “Yes, I’d love your help.” “Yes, I’d really like to come out with you.” “Yes, please share that with me.”

Happiness is contagious… this is the “make other people happy” part. Since just smiling at people can pick up their mood, and feed back into your mood, there’s simply no downside to happy.

 

 

This & That: Doin’ Fine Edition

A Wrote: First, thank you so much for all the amazing advice on your shows, blog, website, etc. I have been watching and reading your advice for years and it definitely helped get me off to a good start financially.

My question is regarding retirement savings. My husband and I are both 26, debt free (minus the mortgage, which we are making extra payments on) and bring home about $100K combined, after tax. My husband’s employer has a defined benefit retirement plan, which is currently funded by about 7% of his income, although we expect that will increase in the coming years. My employer offers a defined contribution plan, where I put in 5% and it is matched by my employer. Additionally, we are each investing $250/month in our TFSAs.

The thing I struggle with is how to correctly account for my husband’s defined benefit plan? I would like us to be saving about 15% of our income for retirement, but I don’t know if counting his 7% input to the plan is really accurate, especially since that number could increase soon, without increasing the benefit upon retirement in any way. Since there is no guarantee that my husband will stay with this employer for his entire career, or that the company will not phase into a defined contribution plan down the road, I am struggling with how to account for this portion of our “retirement saving” in our budget. What’s your take?

Gail Says: I think you’re doing fine. You can’t manage EVERYTHING, you can only plan well for each eventuality, which you are already doing. Your company pension plan is, in essence a savings of 10% counting your employer’s contribution. And if you’re investing another $500 a month in TFSAs I expect that more than makes up for any “shortfall” in your husband’s future plan. If they do phase out the DBP and replace it, he will get credit for his contributions. Ditto if he moves jobs: a portion of that pension will be moveable as well. Relax babe, have a great life!

 

J Wrote: I follow your financial advice religiously and have read almost everything you have written. My husband and I are extremely happy with the progress of our finances and we are a year and a half to becoming debt free (only his student loans). There is just one problem. I am not a cheerful giver. Because of my obsession with our finances, every time there is a birthday, holiday, or a charitable need to give I struggle with letting go of the cash. In my mind, tangible items carry an invisible monetary amount and I just can’t let it go. If the person doesn’t appreciate the gift or I see that it goes unused, I feel like they just flushed my cash down the toilet. Money is tight (my husband stays home with our daughter) and my husband loves to give (generosity runs in the family). I am saver, he is a spender. How do you give generously (and cheerfully) while paying down debt and keeping your financial house in order?

Gail Says: Sometimes we become so focused on one goal, the achievement of that trumps everything else. Unfortunately, it is not a very balanced way to live. In terms of not being a ‘cheerful giver’, are you happy when you give a gift that the recipient just loves? When you’re out looking for the gift, are you looking for the least expensive gift that ‘will do?” How do you feel when you give a gift to your husband? To your daughter? Are you still ‘unwilling’ or are they the exception?

Giving joyfully is for you, not for the recipient, but first you have to figure out why you feel as you do about giving. If it’s because you’d rather not give at all — really, you rather just plough the money into your financial plan — then what you’re doing is giving from the wallet, not the heart, and resenting every single dime you spend. Perhaps the first thing you need to do is decide why you’re giving.

Birthdays and other special occasions are often rife with emotional stuff…from trying to please, to competition with others in the gifting, to myriad other things that undermine the occasion. Have you had experiences in the past surrounding giving that were negative and have left you with some baggage of your own?

Pick a person to whom you give joyfully and ask yourself why you feel as you do about that gift-giving, but differently about other gift-giving. If you are giving because it’s the socially correct thing to do but your heart just isn’t in it, I’m not surprised you’re resentful of the money you’re spending. If it’s a case that you and your husband differ dramatically on how much of your overall budget should be spent on gifting, that’s something you can work out by making a list and doing some math. If you’re just singularly focused and can’t get outside your own goals, that’s something you have to work on because it doesn’t make for good relationships.

You and your husband should have a discussion about how much is appropriate to spend on the gifts for people in your lives. Make a list of them all: parents, siblings, young’uns. Then decide how much you’ll spend for each gift. Add it up, divide by 12 and put that money into your budget for gift giving. It can’t be spent on anything else. Even if you get a great gift for less money, you can’t reallocate the gift money elsewhere. Creating a pool of money with a specific purpose — gift giving — attached may help.

 

J Wrote: I was laid off from my oil industry job in October 2013 with an excellent severance package. Since I will turn 65 in June 2014 my financial advisor says I can afford to retire now and maintain a modest standard of living with monthly withdraws from my RIF that would leave about $100,000 in my RIF account by the time I turn 90. Income from OAS and CPP will be about $1500 per month. My home is paid off; I own a new car and have no debt, so I think I have done everything right. But I can’t get past a life-long need to save and plan for a financial future! How can I get past the need to be hoarding my money? I find myself frightened to spend anything!

Gail Says: The savings ‘habit’ can be a tough one to shake when it comes time to stop saving. When I went through a difficult time and found myself in “super saving” mode, I actually had to add a line to my budget called “Pleasures” and make myself spend that money. It took a little time, but my mindset adjusted. And that’s what you need: some time so your mindset can adjust. Hey if you’re going to have $100,000 left in your RRIF at 90, you’re fine.  

Do up a budget for retirement. Figure out how much of your income will go to “needs” and how much you’ll be spending on “wants”. Knowing that there are places you can trim back should you need to (if the caca hits the fan in some way) will help bring you some peace of mind.

Make sure you allocate for taxes on your income, maintenance for your home, and whatever else you typically include in “planned spending” like clothes, travel, property taxes and the like. Each month, put this money in a high interest savings account. You’ll feel like you’re saving, but you’re simply making sure the money earns some return while you’re not using it. When you need to pay your property taxes, buy a new outfit or fix a window, you transfer the money back to your chequing account.

You’ve worked hard, planned well and done a good job of taking care of the future. It’s here now, so enjoy it!

 

S Wrote: I have been following your tips and budget builder for a few years now, mind you with some bumps in the road along the way. We are still working towards being debt free FOREVER, but I have a budget type question for you.

Currently it is just myself, hubs, and our 1 year old living in our home. I am a huge couponer and I do save a significant amount. However I CANNOT for the life of me get our grocery bill under $100 a week. I feel like this is a crazy amount for two people. Within that amount I buy our weekly groceries, as well as stock up on certain essentials that are on sale to keep our pantry stocked. But that is never more then $10 or so dollars of our budget… What do you consider a reasonable amount for a family of 2 1/2? That isn’t including baby things, as I work very hard to not pay much for diapers, and we cloth diaper as well. We live off our stock pile of toiletries I get with sales and coupons for free, or nearly free. So the $100 really is FOOD, produce, meats, bakery items, and dairy items. So I feel $100 or so is crazy for just the food of our groceries… What do you think?

Gail Says: I think you’re doing great. I wouldn’t expect an individual to make it on less than $50 a week. Does this $100 also include cleaning supplies like detergent? Unless you HAVE to trim because you’re going into debt, relax. You’re doing fine.