Gail Vaz-Oxlade's Blog, page 25

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.

 

Napping

I love my sleep. It’s one of the biggest joys of not making TV anymore. Instead of surviving on six – or sometimes even four – hours of sleep, I get to have seven sometimes even eight. And when I know I’ll be going to bed late for biz or social reasons I usually nap.

I love a nap. They’re very good for you y’know. Dr. Sara Mednick, PhD, in her book Take a Nap! says so. She says, “A 30-minute nap has been shown to improve alertness and prevent unsafe driving nearly as well as coffee.” But apparently there’s a right way to nap.

Mednick’s book says that the best time to nap depends on when you wake up. Early risers up at 5 a.m. should nap at 1 p.m. Those who get up at 9 a.m. shouldn’t nap until 3 p.m.

It wasn’t until the late 80s that naps became something for everyone, as opposed to just babies and toddlers. Researchers found that the mid-afternoon slump is part of our natural cycle. It’s human nature to sleep once for a long period at night and again for a shorter period in the afternoon.

I always nap on a Monday since I’m up way past my normal bedtime to do my show on NewsTalk1010. Typically I try to grab about two hours. My instincts are good. Researchers have found that a nap of two hours or more can significantly improve alertness for up to 24 hours. Moreover, a preparatory nap counteracts the effects of sleep deprivation better than a nap taken after the missed sleep.

Ever had that nodding off feeling when you’re driving. Turns out sleeping only six hours a night can double your risk of falling asleep at the wheel. But a thirty-minute nap improves alertness so a quick snooze before you hit the road is a good idea.

Studies have tested a wide range of nap times, but for most individuals, it seems 10 to 20 minutes of sleep is best. Longer naps can cause sleep inertia, which is that period of grogginess and reduced performance caused by waking in the middle of deep sleep.

Here’s how I do it and apparently, according to Dr. Mednick’s book, I’m doin’ it right:

First I set a wake-up call so I don’t have to worry about whether I’ll wake up at the right time.

Next, I make my room dark and put a do not disturb sign on my front door and cell phone.

Then I follow the same routine I follow when I go to bed at night. Usually it takes me about 30 minutes to fall asleep.

I don’t have any trouble waking up. I guess it was all those years of napping with my babies. But some people just can’t stand that feeling after a nap. Consider drinking something caffeinated before you head for your snooze. Caffeine takes about 20 minutes to kick in, so drinking a cup before a 10 to 20 minute nap means the caffeine will start working just as you wake up, leaving you feeling refreshed and alert.

Just can’t fall asleep? Try meditation. Watching my breathing for 5-10 mintutes usually kocks me right out.

Of course, some people just aren’t good nappers. Don’t fight your nature. If napping doesn’t work for you make sure you’re getting enough shut-eye at your regularly scheduled bedtime.

 

Get Me Out of Overdraft!

I get letters every week from people seeking help to get out of debt. A lot of those people have overdraft protection and spend more time in overdraft than out. They see that OD as a barrier to getting started on a budget, typically saying something like, “How am I supposed to make a budget work when I’m already working with no money because I’m in overdraft?”

Overdraft is just like any other debt. Instead of looking at it like a cash flow issue, see it for what it really is: DEBT! And it’s very expensive debt that will bugger up your sense of being balanced financially. If you want to get out of overdraft and back into the black as quickly as possible, it’s gonna take some belt-tightening.

First, list your monthly Fixed Essential Expenses. These are the bills that you have to cover every month like your mortgage or rent, transit costs, your minimums on your debt and your childcare expenses. Total it up.

Next, list your monthly Variable Essential Expense. These are the costs that you simply can’t avoid, like food — we’re talking the bare minimums to get you through the month, so you’re going to use up every macaroni noodle, every freezer-burned piece of chicken, every cookie, rice grain and canned whatever you have in the cupboards. There’s no clothing, no movies, no extras at all on this list. Total it up.

Subtract these two totals from your income. How much do you have left? If you have barely enough to cover the essential expenses in your life you can see why you’ve been having a problem.

Now you have to decide how quickly you want out of overdraft for good. Six months? Then divide your overdraft balance by six and that’s how much you’re NOT going to spend each month so you start reducing your OD balance.

I don’t care if you don’t have the funds to cover all the Nice-to-Haves – cell phones, cable, shoes, sushi – you’ve loaded into your spending. If you want to eliminate your overdraft – if you’re serious about living within your means – it’s time to cut back until you’re out of the hole.   Change your services to the most basic you can get away with or ask that they be suspended for a couple of months.

You’re not allowed to use your credit during this process. You are, in essence, having a No Shop Month. If a month of austerity doesn’t get you back into the black, you’ll have to live through this belt-tightening horror for another month (or four) until your bank balance can stay in positive territory.

Are You A Dreamer?

Sometimes the word ‘dreamer’ is used to indicate a person whose plans seem unattainable to us as in, “His head is in the clouds.” Sometimes we use ‘dream’ to dismiss an idea. “She’s dreaming if she thinks that’s ever going to happen.” But I believe dreaming is where all good ideas start. Dreaming is imagining something as it could be. Dreaming is the egg from which the caterpillar of an idea will hatch. With hard work and determination, that idea can morph into something truly beautiful.

Dreaming means being willing to see beyond your current reality. If it feels like family and friends are a tad disbelieving, so what? It’s your dream, not theirs. Go out and find people who understand what you’re trying to achieve and use them as your sounding boards.

So many of us have been taught to forget our dreams and deal with ‘what’s real.’ We’ve lost sight of what would make us soar because we’re so focused on being grounded. Yes, you have to take care of today. But being responsible and making sure you (and your family) are safe, healthy and happy doesn’t mean giving up on your dreams.

If you’ve forgotten how to dream, ask yourself this question: What would you do if you weren’t afraid?

Fear is the hugest of Dream Thief. We fear we’ll fail. We fear we’ll succeed and then we’ll have to leave behind the things that are important to us. Hey, you don’t have to follow dreams to places you don’t want to go. But being afraid to dream means you never get to explore the opportunities that might take you to wonderful places.

Have you ever asked yourself, “What’s my purpose?” Have you ever felt there was something you were supposed to do but that you just could quite put your finger on? Those are your dreams trying to escape the prison of rationality you’ve locked them away in. Open up those doors and let them out!

Of course dreams aren’t where you stop. Dreams are the beginning. Plant those seeds, carefully tend to them so they produce, feeding your spirit by growing tall and strong. Martin Luther King, Jr said, “Take the first step in faith. You don’t have to see the whole staircase. Just the first step.” That’s what it takes to make your dream come true.

I have spoken with so many people who created something wonderful because they were dreamers. Old and young, they imagined what it could be like and then they made it so. Open yourself to the possibilities. Think about what would truly make you happy.

If a genie appeared right now and granted you one wish, what would that wish be?

Can you be your own genie?

This & That: Crazy Mates Edition

A Wrote: Some years ago I wrote you and you gave me the best response ever. I did end up buying a new car after paying off my student loans and repaid the car in full before 3 years as you suggested. Since that time, I’ve saved for a home and now I’m on my way towards home ownership and RRSP savings in the bank. I’m topping up my emergency funds religiously, have a fantastic job where there is a significant savings plan for my work related retirement income and frankly I’m doing ok except for one MAJOR relationship issue.

I am now in a relationship with a man who after 2 years has refused to show me his credit score and discuss in detail as to the debt he owes. I’m having a very tough time in this relationship as I have a very good credit score, little debt and as previously indicated, I’m months away from possession of my new home. He would like to move in with me and has indicated interest in marrying me. My lawyer has suggested a co-habitation agreement to be sure he does not try to take me to court for my home. What would you advise here?

I have asked him on several occasions for detailed information regarding his finances and he refuses to provide me any significant detail. We actually had a big fight about it tonight. I told him that I will not marry him if he does not reveal what debt he is carrying. We are going on 3 years as of February and that is my deadline for everything. Gail, despite loving him, his lack of planning, transparency and goal planning and lack of a detailed budget is a serious issue for me. As much as I’d like to believe in love, my mother always told me to put myself first.

I feel VERY financially unstable with this guy because he does not reveal a thing. I would like to get married and start a family. How can I do this when I do not even know how much money he makes or how it is spent? I feel very in the dark. I’ve never seen his budget, he’s angry when I mention debt or a discussion about debt and now here we are 2.5 years later and he’s still refusing to tell me his credit score and show me (visually) the financial picture. I don’t know what to do. On one hand I want to drop him and on the other I want to help. I just don’t think I trust him enough to continue on. What would you do?

He went to a credit counselling bureau here in Calgary who informed him to consolidate the debt and pay it off in less than 5 years. He refused their advice and instead chose to go back to school (U of C) and now he’s regretting not taking action. He’s afraid that he won’t be able to borrow money and will have to get rid of his credit cards. He does not listen to me when I say he has to cut back on everything and make the sacrifices required from dropping his cable television and more. I’ve counselled him to sell his car and motorbike to pay down his debt and make the sacrifices required for what appears to be a huge financial debt load; he refuses. I’ve counselled him to earn more money by working 2-3 jobs; he refuses. Gail I’m at my wits end…what would you advise? HELP!!

Gail Says: Jeezus girl, why would you invite a man to live with you who a) doesn’t trust you enough to share his details and b) doesn’t respect you enough to acknowledge what’s important to YOU.

Just imagine for a moment being married, with a baby and one on the way when Dude comes home from work to tell you he’s been laid off. You’re about to go on mat leave, he doesn’t have a job, and that’s when he tells you he’s got $45,000 in credit card, line of credit and car vehicle debt. Oh well, you’ll just have to go back to work right after the baby is born or maybe you can consolidate all that debt to the mortgage you worked so hard to pay down… hey, everyone’s got debt, right?

If this man won’t share his information, won’t listen to your counselling, won’t do the hard work YOU did to get yourself to a solid place financially, why would you ever consider him as mate material? I don’t care how much you think you love him now, love won’t feed you or keep you and your babies safe.

Kick him to the curb. I’m sorry.

 

S Wrote: I’m in my mid-30’s and in a relationship that I would like to take to the next level by moving in together. My boyfriend lives with his mom, who is single and owns her own home, which is mortgage-free and has her own income. He has never lived anywhere but her house. I asked him when we got together if she depended on him financially and he said no, but that because he lives there he helps out. Now that I have approached him with moving in together it seems he is trapped, by his own choice, to help with bills and renovations. When I ask about saving money he says he can’t but then is spending $1000’s on her house, no wonder he can’t. I own my own home and want to move into something bigger with him, as we both have the intention of marrying. He now says he will always have to help his mom as she is on her own. How should I approach this situation? While I find it admirable that he wants to help his mom I feel that if he wants to start a life with me he has to start making decisions and moves that benefit us? Please help!

Gail Says: You are not the first woman from whom I have heard this. I had a very good friend whose boy was so committed to his mom — she was single and raised him on her own — that he never left her. When mothers make their children feel as if they are dependant on their financial support it can be crippling for the “children” who don’t know how to say “no” after years of saying “yes.”

I remember when I was growing up a common wisdom was “look at how a man treats his mother for how he’ll treat you.” It was unmitigated hogwash. Sometimes men who are still tied to their mother’s apron strings make the worst partners because they always feel like they’re being torn between two women.

You can’t make him choose. He must want to be with you more than he wants to be with his mother of his own accord. And if he is determined to help his mother financially, you must be confident that your own family will not have to go without as a result to confidently get hitched, particularly if you plan to have children.

You’ll have to decide if you’re prepared to take the package — boy and mother — or if you will move on to find someone who is more independent and capable of building a life with you. Or you can stick it out and see what happens next. But if you’re in your mid thirties and hope to have children, waiting for this boy to grow up might take a while.

 

A Wrote: My friend found out 2 days ago that he owed $600 to MasterCard, instead of paying it off, which he could; he purchased a $300 vacuum for his car. He ignored me and his girlfriend on paying it off before this purchase. What can we do to keep him from starting a debt hole?

Gail Says: You could calculate how much he will pay in interest on that $600 balance if he uses only the minimum amount as his payment option. Here’s a good calculator to use.

As you will see, assuming an interest rate of 18% and minimum payments, it would take 7 years and cost almost $400 in interest to pay off that $600 balance, so everything he bought on that card would cost that much more!

 

A Wrote: My husband tells me I am “too cheap” and “too controlling” when it comes to money. Since getting involved and following Gail, we stick to a budget and are almost consumer debt (besides our mortgage) free! So my question is: is there a point at which one becomes to obsessed and controlling with money? I find myself constantly thinking about next payday and where money is going to go to be as smart as possible. I don’t feel that I am “obsessed” with our finances but I do wonder when my husband comes home to tell me about his friends getting new “man toys” that maybe I should ease up a bit for his sake. Please give me your words of wisdom!

Gail Says: If new toys mean going into debt or staying in debt longer than absolutely necessary that’s childish. Grown-ups, people who accept responsibility for living within their means, know that wants come after needs are met. And being debt-free is a NEED.

As far as your husband’s perception of you as being too cheap or controlling, that’s likely because you’ve taken on all the responsibility for accomplishing the goal. He is sitting there twiddling his thumbs, waiting to go shopping as soon as you take off the bridle. You need to get him on board with the goals so you’re working towards them together. If you take all the responsibility on your shoulders, you are treating him like a child and shouldn’t be surprised when he acts like one.

 

D Wrote: Both my husband have run into some major debt problems. Partly from our own stupid actions, plus from acquiring our daughter’s student loan of $25K. Every month, I’m trying to figure out how to pay the monthly bills and find that I’m digging into credit cards and lines of credit. Now, they are all maxed and I can’t obtain any more credit. Every time I approach my husband about our debt problem, he listens and doesn’t give any input. He’s a truck driver and has the opportunity to do long distance and earning double, but he doesn’t want to do that drives locally and sometimes home before I am. I am also on a long term sick leave and my pay has been cut down by about $300 every pay or $600 each month. I’m trying to get back to work, but my doctors are taking their sweet time on what is causing my severe pain. We have about $65K in debt that I want to get rid of and we only have about $30K in home equity that we can use. Can you help?

Gail Says: No, I can’t help. Your husband can help. Your daughter can help. And you need to take care of yourself. One of the reasons I caution against carrying debt is because we don’t know what life holds in store for us: illness, layoff, death. Those things are made all the harder to handle when we have debt putting pressure on our cash-flow.

There is no easy way out. Your daughter needs to take responsibility for her student loan. Your husband needs to get off his ass and make more money while you’re off work. You need to figure out how to get your money in order so you don’t end up right back here again  

There are tools on my website at gailvazoxlade.com, and a road map at mymoneymychoices.com. You can use them.

 

M Wrote: My common-law partner and I live in his 40 year old bungalow. Although I pay half the bills each month my name in not on the mortgage, title etc. The house needs several thousands in updates (finish a basement, new windows, bathroom and kitchen).

I’m 32, have recently doubled my annual income, and am in the process of paying off all my debt this year, and really do want to contribute to updating our living space. However, my concern is the “what if”:

What if we break-up? What if he dies? What if we sell the house?

If I contribute big bucks to this (his) home and any of my ‘what if’s’ come true-I’ll be up a creek with no money to get anywhere! How do I protect myself financially without coming across as though I don’t want to contribute to our future 

Gail Says: A lot of people do not realize that common-law is not the same as married everywhere in Canada except BC where they’ve brought in new laws to protect common-law partners in the event of relationship breakdown. It’s fine that you pay half the bills; you’d have to put a roof over your head somewhere, and if you were renting you wouldn’t see a penny of that money back, right?

But when it comes to putting big bucks into a property that is not yours, you are very smart to think twice. You could solve the problem by adding your name to the title of the home. Or you could get your partner to sign a promissory note (make sure you both have independent legal advice so it holds up in court) for any amounts you “put into” his home. That way, if the relationship ends, the home is sold or he dies, you have recourse to recover your money. If you want that “investment” in his home to grow, you would add an interest rate that reflects current lending rates to the promissory note.

Chickpea–Sweet Potato Burgers

I have never been a fan of chickpeas in their natural state. I love hummus, when it is made with skinned chickpeas. But there’s something about the texture of this very nutritious veggie that gets in the way of a deep and abiding friendship.

This recipe came about when I had leftover hummus and a lonely sweet potato in my fridge. I only made a very small serving and when I decided to do it again, I was just discovering a love of dill (which I have always not loved) so I threw some into the mix.

I’ve made it with both tahini and almond butter and it’s come out great both times. I might prefer the almond butter just slightly.

I usually eat it with my pineapple salsa which I make in batches and then freeze in small serving sizes so I can grab it when I need it. The fig compote or tzatziki would be interesting accompaniments too.

 

Gail’s Chickpea-Sweet Potato Burgers

1 can chickpeas
1 tbs olive oil
3 tablespoons tahini or almond butter
1/4 tsp freshly ground black pepper
1/4 tsp baking powder
1 tsp salt
1 sweet potato, medium grated
1 sweet onion, finely diced
1/4 cup chopped fresh dill
 


In a food processor, process chickpeas and tahini (or almond butter) until well blended.


Put in a mixing bowl and add black pepper, baking powder and salt.
Stir in sweet potato, onion, and dill.
Form mixture into 4 burgers; place on baking sheet; cover tightly with foil; bake 20 minutes.
Remove foil; brush burgers with olive oil and bake until crisp and golden, about 20 to 25 minutes. Flip burgers; coat with olive oil and bake until crisp on other side, about10 to 15 minutes.
Serve burgers with pineapple salsa, fig compote, or tzatziki.

I’m OK, You’re OK

How much do you hate it when people speak in text-speak? When you hear a kid say, “LOL” or “OMG”, does it make you cringe? What if I told you that that we all do it. Yuppers, even if the hair on the back of your neck stands up when you hear some kid say, “ROFL “, you do it too. Don’t believe me?

Can you get through a day without saying, “OK?” In just about every language spoken, OK remains itself. And it’s not the short-form for “okay”. Nope, we made that up.

Have you noticed how useful OK is. It can be an enthusiastic cheer, as in , “Look, Lindor chocolate on sale, OK!” Or it can be far less enthusiastic, as in “My weekend was just OK.” It can even be used as a transition, as in “OK, enough of that chit chat, let’s get to the points we have to cover.”

OK was born in 1839 in Boston when the editor of a local newspaper published a funny story about a satirical orgabization called the “Anti-Bell Ringing Society.” In print he used the phrase “et cetera, o.k. – all correct”, with OK being a play on “all correct”… spelled oll Korrect. Yeah, I didn’t think it was all that funny either. Certainly not funny enough to make it stick as it has.

But then came along a presidential election when OK got a boost because one candidate, Martin van Buren, was nicknamed Old Kinderhook, and his supporters formed the OK Club, keeping OK in play. And then came the age of the telegraph. by 1870 OK became the standard way of acknowledging receipt of a transmission.

There may be more stories about the origin of “OK” than there are uses for it: it comes from the Haitian port “Aux Cayes,” from Louisiana French au quai, from a Puerto Rican rum labeled “Aux Quais,” from German alles korrekt or Ober-Kommando, from Chocktaw okeh, from Scots och aye, from Wolof waw kay, from Greek olla kalla, from Latin omnes korrecta. Other stories attribute it to bakers stamping their initials on biscuits, or shipbuilders marking wood for “outer keel,” or Civil War soldiers carrying signs for “zero killed.”

Allan Metcalf, the author of OK: The Improbable Story of America’s Greatest Word says, its ultimate success may have depended on “the almost universal amnesia about the true origins of OK that took place early in the twentieth century.

Some people claimed it came from Louisiana French au quai, Germans said it was from alles korrekt while Scots said it was from och aye. Stories abound from bakers stamping their initials on biscuits, to Civil War soldiers carrying signs for “zero killed. With the original source of OK forgotten, people could claim the honour of having ushered it into being from an expression in their native language.”

Get Your Imagination On!

Our saving rate sucks! As a natural saver, I’m at a loss for how to get though to my friends who are not that without some money set aside for the future, said future looks bleak. Very bleak. I have a girlfriend who MUST be in debt. It doesn’t matter how many plans we make, how much progress she achieves in the short term, at the end of the day there’s a whopping balance on her credit card and no money in the bank. And that’s with me for a friend!

Clearly I’m not getting through to her. Some people you just can’t reach!

But wait, there’s hope yet.

According to research out of the University of Pennsylvania, having a good imagination may be the key to turning yourself from a non-saver into a saver. Turns out, when stuck in an fMRI machine and asked to imagine their future, people end up making better decisions about what to do with their money.

Turns out, rather than squashing our current desires, the key to setting aside a little sumthin’ sumthin’ may be to focus on the future outcome, using our imaginations to create those pictures with all the detail we can muster.

In another study from NYU’s Stern School of Biz, people who are able to imagine themselves in the future are better at setting aside some money to make that picture a reality. Turns out we have a tendency to see our current selves and our future selves as different people and, when we do, that can lead to our current selves being selfish. If we like what our future selves look like, if we feel close to our future selves as we would to a bestie, then we’re good at planning to keep that guy or gal happy. But if we don’t like what our future selves look like, if we have a sense that we barely know them, — BAM! — we spend their money!

Want to turn from a non-saver into a saver? Wish you could make yourself save more money? Make friends with your future self. Imagine what you’ll look like in the future, what you’ll be doing, how you want to be living, and get up close and personal with the future you.

Try this: Imagine yourself at age 65. Sit down and write your younger self a letter talking about your life at 65, what you have managed to achieve, and what you wish you’d done differently. Include an “if/then” statement like this:

“Hey there Baby Gail, look at all we’ve accomplished. Good going girl. But you know what? If you had skipped buying that Lexus and pouring all that money into the bank’s pocket for the loan, I’d be able to hang up my keys now, instead of having to wait until 70 to finally retire. It was a nice car, but based on the fact that it’s freezing cold outside, my arthritis is acting up and I’m bone tired from yesterday’s shift, I wish we’d gone with something a little less flashy and saved a little more instead.”

How Often Do You Say “My”?

Imagine that your lunch date shows up 20 minutes late and tells you that she’s lost her wallet. What would you say? You’d probably ask how much money she had. Damn! That’s a shame it’s gone. But it’s just money, right? Oh, the aggravation of replacing her health card will be a real pain. So will cancelling all those cards. You’ll probably reassure your friend that everything will be fine. You’ll likely pick up the tab for lunch. You might even offer to lend her $40 until she can get to the bank. After lunch, you don’t give much more thought to the loss of that wallet as you head home to deal whatever awaits you there.

Now imagine your lost your wallet. You fumble through your handbag searching for it. You just had it. When was the last time you used it? Maybe this morning? No. Yesterday? You had $200 in cash because yesterday you went to the ATM. Your health card is gone. Your license is gone. Your credit cards all have to be cancelled. And you’ll have to order a new chequebook. How do you feel? Take a moment to think about it. What goes through your mind as you wrap your head around the fact that you can’t just go to the ATM ad get more cash because your debit card is gone. What’s racing through your mind? What will you do first?

It’s a lot more painful dealing with the second scenario, isn’t it? You can probably feel your tummy rolling even as you think about what you’d have to do. Yet, when it came to dealing with your friend’s loss, a cooler head prevailed. Why?

Emotion. When you own the problem the emotion that comes with can be almost debilitating. My loss of wallet is so much more than her loss of wallet. Yes, it is partly because when you own the problem you also have to deal with the fall-out. But it’s also because whatever we experience we feel more deeply.

Suppose you could let go of “my.” Just suppose.

“My kid isn’t doing well at school,” would turn into “Josh isn’t doing well at school.”

“My mother is sick” would turn into “Marianne is sick.”

“My husband just lost his job” would turn into “Marc lost his job.”

I’ve watched people take on the ownership of problems in ways that lead to increased problems instead of working together to find solutions. “My car broke down,” is different than “The car broke down.” “The waiter messed up my order” is different than “The waiter messed up the order.” Make the problem a personal one by using “my” and you’ll add all kinds of extra emotional crap to it.

Recognizing when you’re personalizing a problem is the first step in depersonalizing the problem and dealing with it. Your car didn’t break down on you, it just broke down. The waiter didn’t mess up the order on you, the order just got messed up. And your son isn’t failing English for any other reason than he just can’t get his head wrapped around the subject.

Whatever it is that pushing you out of your comfort zone is being DONE TO YOU, it’s just happening. And while is may be hard, even hurtful, as it’s happening, you need to distance yourself from the MY if you want to keep your perspective. Going into a tailspin doesn’t get you closer to a solution. Imagine you’re hearing the story from a friend. What would you tell your friend to do to deal with the situation? Now, go do it.

This & That: Money, Money, Money Edition

C Wrote: I am 28 years old and I’m a teacher. I owe $20,000.00 in student loans. Next year I will be getting a pay raise, which, after taxes, will work out to about $100.00/month (I’ll be getting pay raises for the next 9 years). I will have a good pension plan with my work, but still contribute $100.00/month to RRSP (I worry this pension plan could change as I have 33 years before retirement and I just want to be safe).

I would like some advice with what to do with this pay raise. Every other person gives me different advice and their opinions are split 50/50. Do I take that $100.00 and apply it all to student loans, or do I start a savings account for new living room furniture? My entire apartment is furnished with hand-me-downs and my living room furniture is well-used (ie: the buttons are almost all off the couch cushions, the stuffing is coming out of the loveseat and the chair has been broken/fixed so many times, it’s held up with wooden blocks…and it used to be a swivel chair). Plus, though the fabric matches, the pieces I have actually came from two different sets, the only difference being the colour of the piping. It has been 6 years since I saved this furniture from the dumpster.

I’m worried that if I don’t start saving for this furniture now, then in three years when my furniture is (potentially) unusable, I won’t have any funds with which to purchase new furniture. I have a stable job/income, so I’m not worried about not being able to make my student loan payments. I’m wondering if I can apply my pay raise to savings this year, and then next year use the raise to increase my student loan payments.

Am I crazy to want to save for this furniture now?

Gail Says: I’ll just bet you’re getting all kinds of advice. Okay, you don’t say what interest rate your student loans are at or how much you’re paying a month so for the sake of this I’m going to assume you’re on the default payment system, which is the minimum you can pay. If you’re on a fixed-rate plan, your payment is about $242.66 /mo, it’ll take 10 years to get the loan paid off and you’ll pay about $9,000 in interest. If you’re on the floating rate plan, your payment is about $217, again for 10 years with total interest of 6K, assuming the rates don’t go up because if they do so will your rate.

If you add the $100 to your payments, you’ll knock about 4 years off the loan, saving you about $2,500 on the floating rate and $5,000 on the fixed rate loans.

I get that you want new furniture, and you can do anything you want with your money, but if you can save $5,000 in interest on your student loans and be debt free 4 years sooner, how does that weigh against the desire/need for new furniture.

My recommendation would be to boost your student loan repayments. Then, ask family and friends to forgo gifts for birthday/holidays in lieu of contributing to My New Couch goal. Pick up some extra work on the side to boost your furniture savings.

 

J Wrote: I have recently settled a very long dispute and been awarded a very large amount of damages; I am in my mid 30’s.   I have paid off all of my debts and as such I am debt free. I work full-time in the legal profession in Alberta. I do not own a home or have a mortgage and am wondering what is the BEST way to invest what I have left to further my long term financial goals (of being, basically as rich as possible!) with the $55,000.00 that is left over? Based upon research, banks are not my friend. What do you suggest? I budget and live below my means, but interest rates are not great right now.

Gail Says: You have to first decide what you want that money for. What is it you want to achieve? Is it going to be partly your emergency fund? Then you need to keep it liquid in a high interest savings account. You can put the money in a TFSA (catch up for previous years if you haven’t made contributions) and ‘invest’ it in a high interest saving account. You can get as much as 1.8% if you shop carefully. Look at places like Achieva, Manulife bank, Tangerine. If you want that money to form the basis of your retirement savings then you’re looking at using an RRSP if you make more than $40K a year and don’t have a company pension plan at work. You’ll have to learn about investing. In the meantime you can buy an investment that tracks the market as opposed to trying to pick your own investments. I have a number of blogs on investing on my site. Look under “categories” and you’ll see “investing”. Start here.

 

H Wrote: We’ve recently earned 150K from the sale of a property. We’d like to contribute that amount to an RRSP. Do you recommend investing it in lump sums, i.e. 50K one year, 50K the 2nd and 50K the third? Or should we stagger the contributions further such as 15K the first year, 15K the 2nd and so on. My husband and I are 50 years old and hope to retire at age 60.

Also, we’ve been told that dividend funds are good and mutual funds are bad. What is the difference between the two?

Gail Says: First off, you need to have the contribution room available to smack $150K into an RRSP. And in doing so, you’ll just about wipe out the tax benefits of using an RSP. I would suggest that you put into an RRSP only as much as will give you a good tax break and max out your TFSAs (tax-free savings accounts) with the remainder of the money. If you still have money, you can invest it in a non-registered portfolio.

Okay, why?

If you whack all that money into an RSP at once, you won’t get the tax break that will offset the tax you’ll pay when you start taking it out again.


If you and your husband are in high enough tax brackets that you’ll save at least 35% on your taxes by making the RSP contributions, then spread your RSP contributions over several years to take advantage of those tax savings every year. Use your refund to contribute to a TFSA so come withdrawal time you’re coming out even.


Being so close to retirement, unless you’re getting a whopping tax savings, the TFSA is a better way to go in terms of preparing for retirement.

Okay, on to your second question. Dividend funds are a type of mutual fund. A mutual fund is simply a basket of investments that allow you to buy small units as opposed to trying to build your own basket. If you’re not familiar with investing get familiar before you start doing it. Would you get in a car and head to the highway without learning to drive first? Too risky, right? Same with investing.

 

K Wrote: I have been grappling with what to do with my mother’s inheritance money. She passed away a year ago and her estate is finally getting settled now. She gifted us money before her death which I used to pay down some of the mortgage ($30,000) and put some into my daughter’s RESP, and max out my TFSA’s. The inheritance money I have is $110, 000.

My mother’s will asked that the inheritance not be shred with my spouse, so I am having a hard time deciding what to do with the money as a result. I now have another daughter, so there are two girls. I contribute $2500 to RESP’s, but this year, for my newborn, I am contributing $5000 in order to max out the CESG grants. We have an emergency fund equivalent to four months of our salary, and I’ve maxed out my RRSP and TFSA rooms.

My question is: with the $110,000, do I pay down my mortgage (which is joint with my spouse), or purchase a rental/investment/vacation property? Or should I just invest it in mutual funds or something? I want to minimize taxes as much as possible.

Gail Says: If you put the money into your matrimonial home, you will be “sharing” the money since it immediately becomes a family asset.

You could boost your emergency fund (by adding an additional 2-months worth of salary), keeping the money solely in your name until you need to use it. Find a high interest savings account: Try Tangerine, Manulife Bank or Achieva credit union, all of which pay better than your typical bank.


You could allocate a portion of the money to fund future RESP contributions for the kids. Let’s say you take $30,000 and set it aside for the children, you’d buy GIC’s laddered so that $5,000 comes due every year for contribution to their RESP’s. So you would have a GIC for $10,000 with a one-year term, $5,000 with a 2-year term, $5,000 with a 3-year term, $5,000 with a 4-year term, $5,000 with a 5-year term. When the first GIC comes due, you’d invest $5,000 in the RESP’s for the kids and reinvest the remaining $5,000 for a 5-year term. Now you have 5 more GIC’s coming due once a year over 5 years for future contributions. The interest earned would be taxed in your hands, there’s no way around that, but we’re talking about maybe $400-500 in interest each year, nothing to get all heated up about.


I’m wouldn’t jump into rental/investment/vacation property without a thorough investigation into the long-term costs and benefits. Just because you have money, doesn’t mean you should immediately take on more real estate, especially if it will come with a mortgage. Y’know, there’s nothing much wrong with having some extra money in an investment portfolio for retirement. Since it’s unregistered, you can reallocate how you use that money as you need to.

Make sure you’ve taken care of all the other parts of your financial plan: disability insurance, life insurance, your wills and powers of attorney. You can afford to be a little self-indulgent too. Is there a goal you’ve had that you would be able to realized with a little of this money? Go for it!