Gail Vaz-Oxlade's Blog, page 6

Plan Your Future

About 28 years ago a band called Timbuk3 had a hit song called, “The Future’s So Bright, I Gotta Wear Shades.” A little like Beck, Timbuk3 fused alt rock with home-spun eclectiscism and won a Grammy for their efforts, opening for people like Bob Dylan, Sting, and Bonnie Rait. And like Commander Chris Hadfield who took David Bowie’s Space Oddity into space, Timbuk3’s hit went to space courtesy of Commander William Walker on the space shuttle Endeavour. Why was the song such a hit? Not because of it’s stellar lyrics. But maybe because it’s what we all want from our lives: a bright future.

Have you thought about what you want from your future? Do you imagine that it’ll be so bright you’ve got get yourself a pair of really good dark glasses?

You can make it so.

Or not.

It’s a choice you’ll make.

Whether you’re planning to buy a home, start a family or travel the world, how you use your money will be part of how bright your future is. Use it sensibly, watch where every penny goes and work towards specific goals, and you can plan on putting on those shades. Blow through your money like a fool and your future will be as dull as you are.

It is easier to save a dollar than to earn (and pay taxes on) another dollar, so spend some time and effort reading, learning, and improving our knowledge of the sassy, sexy world money.

Make a plan – it’s called a budget – for what you’ll do with your money. Then track your spending in a Spending Journal so you’re aware of where every penny is going. You work hard for that money. Knowing where it’s going is how you prove you’re serious about your future.

Balance today’s wants with tomorrow’s needs. Don’t be the dope that takes a pass on a company pension plan when the company is willing to match your savings just because you don’t want to have to forgo the spending money. And don’t be the money moron who doesn’t think twice about taking out all credit you’ll qualify for, to rack up debt that will strangle you down the road.

Huge debt is not inevitable.

The next time you’re tempted to do something boneheaded like use your credit card so you can buy a new somethin’ somethin’ without having the money in the bank to pay off the balance, stop and think. Impulsive behaviour doesn’t bode well for a bright future, so don’t just push the thinking part aside. What will you end up paying when you add in the interest cost? How long will it take you to pay off the debt?

Having access to credit is good. Turning credit into debt is a dim move. Use your card to buy groceries and pay the card off in full every month to establish a record of regular use and repayment. That’s putting credit to work for you.

Even relatively smart people are not so smart when it comes to managing money. When you do something that makes money go away, you have to weigh what you’re getting against what else you could have done with that money.  Are you drinking your bright future in beer or coffee? Could the money spent on games or snappy outfits be better used to achieve a goal? Looking forward even as you enjoy your present means you’ve got your eye on the future; a future so bright, you’ve got to wear shades.

 

Myths and Misconceptions

People have all kinds of ideas about what will make them happy. As children, we think if we can get what we want, we’ll be happy. Whether that’s a new bike, another Lego set or the latest Xbox game we just have to buy, we measure our happiness by what we can get our parents to buy us.

Some people never outgrow that idea; they become adults who measure their happiness by how much stuff they can accumulate. Instead of appreciating the things they already have, they look at what’s missing.

But happiness doesn’t come from stuff, stuff, and more stuff. Happiness is a byproduct of enjoying each moment of your life, whether you’re cooking a meal, reading a book or chatting with friends.

Success is another of those elusive things that we find hard to measure but are drop-dead sure will lead to happiness. In striving to live up to others’ expectations, we sometimes make ourselves miserable. Witness the number of young people who have gone to university without their own clear desire simply because their parents have told them to or because they’ve been led to believe no university equals failure.

Success is about waking up every morning and being able to do something you love. If you’re trying to live up to other people’s ideas of success you’re going to end up disappointing yourself. But if you find a way to make a positive difference that you can be proud of, the amount of money you make or the accolades you get won’t matter a whit.

The myth that makes me want to pull my hair out is this: I am entitled. Entitled to respect because I’m your elder or your boss. Entitled to be obeyed because I’m the leader of the pack. Entitled to your unwavering support because I call you friend. Hey, if you act in a way that creates respect you’ll get it. If you lead in a way that makes sense, your directions will likely be taken. And if you give unwavering support, that support will likely be returned. But nobody’s entitled to anything. If you want love, trust or support, you must work hard to earn it.

The misconception that most often gets in the way of achievement is the idea that “I’ll know when the time is right” to do anything. The law of inertia says otherwise. If you are at rest, in all likelihood you will remain at rest until you do something to propel yourself into action. Waiting until you feel it’s the right time will likely keep you right where you are indefinitely. Inertia is comfortable. Stepping out of that comfort zone is hard. But if you want to achieve anything in life, you must be willing to be uncomfortable, nervous, even scared silly.

This & That: Retirement Edition

O Wrote: I’ve just become a fan of yours! I need some expert advice. My question is this: My wife and I have just paid off our mortgage and I am turning 47 this month and my wife is 46. We both have company pensions, mine will be $1300.00 per month at age 55 and my wife’s $1100 per month at age 48 with her magic 80 from the hospital. We roughly have a combination of $220,000 in RRSP’s, TFSA’s, and RESP’s. We are also currently saving $7,200 a year. Do you think it will be possible for us to retire at age 55 on our current savings plan or do we need to increase our savings in order to achieve our goal? Any advice would be greatly appreciated!!

Gail Says: You’ve paid off your mortgage — great work! — so that expense is gone. But home ownership comes with many other costs and you need to figure out what your carrying costs are so you can figure out a budget for retirement. My home is paid for, but costs me about $1200 a month to carry, with insurance, taxes, utilities and maintenance (I currently have a bathtub sized hole in my basement ceiling…it’s always frickin’ something).

You have $220,000 saved (though you shouldn’t be counting the RESP money because you have a specific purpose for that) and are saving $7,200 a year. If you retire at 55 at your current rate, you’ll have added another $57,600 to your stash to bring it up to about $277,000.

You’ll get a combined income of $2400 a month from your pensions. But you currently have a joint after-tax income for about $6,500 a month, give or take. With $277,000 in savings, assuming you live 30 years in retirement and spend the principal as you go, that savings will give you another $770 a month. I know you now have the money from your mortgage payment, and the money you’re saving, but I have a feeling you’re still going to fall short if you don’t save more or retire later.

You don’t say how old your kid(s) is and how long you’re going to be providing support, but that’s another figure you have to work into your equation.

Okay, so in your current situation, you’ll have an income from pension and savings of about $3170. Your job is to go through your budget and decide what you will live without during retirement so that the $3170 works. (Remember, it has to work for 30 years, so you have to take cost of living increases into account too.) If you can’t make that work, then you can:

a) work longer, so you have less time living on your fixed income,
b) save more money (if you saved half your old mortgage payment until 55, how much more would you have?)
c) a combination of the 2…you might find that working until 60 and saving that extra money puts you in a much more stable position for retirement. If this also coincides with the kid(s) becoming independent, it’s a win-win-win.

 

S Wrote: My Husband and I are both recently retired with moderate company pensions; we make a little over 60% of our past income which is now approximately a little over $43,000 combined. We purchased a new vehicle three months before we retired, not our brightest idea. Thankfully this is our only debt.

The interest is 4.24% over 7 years, we have 6 1/2 years to go. The payment is $540.00 a month. The balance is $36,500. In order to free up cash flow we are thinking about paying most of it off intermittently using our RRSP’s that total $25 000 combined; he has $19,000 and I have $6,000. We were considering this in the New Year withdrawing $5,000 from his and $5,000 from mine until it is depleted. We would do this so we only have to pay 10% withholding tax??

In the meantime before we do this we are considering switching it to a secured line of credit which would be 2.70 prime plus .50% while trying our best to keep the payments the same. Are we nuts on both counts?

Gail Says: It doesn’t matter if the withholding is only 10%, at the end of the day you’ll owe tax at your marginal tax rate. We don’t work on combined income in Canada, (it’s an individual tax system) so I can’t tell you how high your marginal tax rate will go up if you make those withdrawals from your RRSP. But you will lose a whack of that money to taxes. Moving the loan to a line of credit will save you money, so that’s a good idea. But hauling hunks of money out of your RRSPs, not so much. I suggest you figure out what you’re real tax bill will be before you take the step of pulling money from your RRSP.

 

E Wrote: I’ve been watching your shows for years and am always astonished with the amount you’re able to predict a couple/individual will have when they’re ready to retire by putting a few hundred dollars away each month. I can recall a few episodes where you instructed the participants to put away $400/month and by the time they retire they’ll have over 1 million dollars. I’m 26 years old, currently renting but saving for a down payment, have no debt, and make a modest income (30K’s) which I’d like to think I budget well. I’m currently putting away over $300 into an RRSP (no pension plan through my employer) and wondering what I can do to even come to close to the 1 million mark at retirement.

Gail Says: The amount you have at retirement depends on three things:

How much you put away each month,
How much you earn on your investments, and
How long you have to let that money grow.

You have heaps of time on your side. At 26 you’ve got 39 years of growth. If you consistently put away $300 a month and earn a return of 4%, you’ll have about $337,000 when you’re ready to retire. So you will have put in $140,400 into your RRSP and the rest will come from the return you earned by investing.

If you want to have more you can:

a) invest to earn more than 4%, and/or
b) increase your monthly contributions.

If you were to increase your monthly contributions to $400, at 65 you would have about $450,000. You will have put in $187,200 into your RRSP and the rest will come from the compounding return.

If you were to increase the return on your investment from 4% to 6%, at 65 you would have about $746,000. So you can see how important the return you earn will be to the end result you achieve.

Having said that, you need to make sure you understand what you’re investing in. If you can’t explain it to a 12 year old, you can’t buy it. And if it makes you deeply uncomfortable to think you might lose your money, well, you need to think about that too.

I’m not sure why you’ve chose $1million as your benchmark since it’s an arbitrary number. It’s more important that you start early and invest consistently. That’s what will get you to where you want to be. And you’re doing that. As your income goes up, so too should your monthly savings. And as you learn about investing you’ll be more comfortable using options that have the opportunity to give you more return.

Slow and steady chick.

 

Books

The Evolution of Mara Dyer by Michelle Hodkin is the second in the trilogy and I already have the third ready to go. Mara Dyer isn’t quite sure what’s happening to her. Her “abilities” continue to be dangerous and she worries that she’ll end up hurting someone she loves. When Mara’s parents don’t believe that she saw her old boyfriend Jude – who supposedly died in the building collapse, she ends up being institutionalized. Mara realizes anything she says is going to convince them she’s more crazy so she pretends that she knows she has problems and she’s trying to get it together. And, of course, she has Noah – beautiful, brooding Noah who knows Mara isn’t crazy. Because whatever is happening to her, it’s happening to him too.

The Silent Sister by Diane Chamberlain was a good read. When Riley MacPherson was 2 years old, her much older sister, Lisa, committed suicide. She grew up in a sad house with a mourning mother, a distracted daddy and a brother who acted out. But Riley has virtually no memory of Lisa. So when her father dies and Lisa discovers a box of news clippings that indicate that Lisa was a murderer she is stunned. Did she commit suicide? Did she run away? Is she still alive? What Riley will uncover will shake her world.

The Book of Life by Deborah Harkness was the third in the trilogy featuring the witch Diana Bishop and her vampire mate Matthew Clairmont. It’s been a fiery romance, and now the two have broken all the rules by getting married. It’s been a complicated journey with a bewitched manuscript at the centre. Back from the past, in Shadow of the Night, they are reunited with many of the characters from the first book, A Discovery of Wtiches, which I just loved. Now Diana and Matthew’s lives, and the lives of their still unborn twins, rest on discovering the root of the blood rage, which plagues Matthew. Will Diana finally find the missing pages for Ashmole 782 – otherwise known as the Book of Life. Well, of course she will. But what happens next I did not see.

Us by David Nicholls is the first book I’ve ready by this author, but it likely won’t be the last. It tells the story of Douglas Petersen’s marriage and it’s dissolution. At 54, the biochemist is a stolid man who is a bit of a square. In remembering back to meeting his spontaneous and somewhat unconventional wife twenty five years early, he says “My wardrobe at that time ran the gamut from taupe to gray, all the colors of the lichen world, and it’s a safe bet that chinos were involved.”. So when his wife, Connie, tells him she thinks she’s done with him and the marriage – hey but let’s take one last great vacation with our son – Douglas is gobsmacked. He loves Connie. This can’t be happening? So he turns the vacation into a campaign to change Connie’s mind. The story flips back and forth between present and past, but does so smoothly. Snappy dialogue, great characterizations, no wonder the book was longlisted for a Man Booker prize.

The Best Man by Kristan Higgins is a love story that starts out with our heroine, Faith, being left at the alter when her husband-to-be chooses that moment to come out of the closet. Faith beats it, leaving behind the whispers. How could she not have known her perfect man was gay? And how could that horrible Levi Cooper have talked him into coming clean at exactly the wrong time! So when Faith has to return to her family home, she’s forced to deal with her past and reconcile with the two men who she most wants to avoid. It was a fun read, fully of laugh out loud moments, like when Faith gets stuck trying to climb through the bathroom widow of a local restaurant and Levi must come to her rescue. You can just feel your face burning for her.

What Einstein Told his Cook by Robert Wolke was a delightful read. I love it when I read a book and learn new stuff. Did you know, for example, that the red stuff in meat is not blood? Have you ever wondered how they take the caffine out of coffee? Robert Wolke delivers clear and funny explanations for a whole slew of foodie type questions. Like this: What does clarifying butter do, chemically? Answer: “gets rid of everything but that delicious, artery-clogging, highly saturated butterfat.” Wolke, is a chemistry professor and syndicated Washington Post columnist particularly likes debunking misconceptions and calling a spade – or in his case, “salt” – salt! So, should you avoid aluminum pans? Are microwaves dangerous? And is it okay to eat the green stuff when potatoes start to turn? I’ve already added What Einstein Kept under His Hat to my To Read list.

 

RRSP Test Yourself Answers

1. The deadline for RRSP contributions for the 2015 tax year is March 1, 2016.

FALSE. The RRSP contribution deadline is always 60 days after the end of the previous year if you want to be able to claim the deduction for the previous tax year. So, for 2015, the deadline is February 29, because it is a leap year.

2. If you want to make a contribution for 2016, you must wait until after the 2015 deadline.

FALSE. A contribution made in the first 60 days of the year can be applied against your 2015 income or any income you earn in 2016 and beyond. You get to decide when to claim the deduction.

3. If you’re turning 71 in 2016, you must make your contribution before the end of the year.

TRUE. If you are turning 71 in 2016, this is the last year in which you may contribute to your own RRSP since you must convert your RRSP by December 31.

4. People over the age of 71 do not have RRSP contribution room.

FALSE. While you’re not able to contribute to your own RRSP (because you can’t have one any more if you’re over age 71) if you have a younger spouse, and you continue to have earned income, you can contribute to a spousal RRSP up until your spouse turns 71.

5. You must be over 18 to contribute to an RRSP.

FALSE. This rule applies to TFSAs and has raised some confusion around RRSPs. Anyone who has earned income, a social insurance number and who files a tax return can contribute to an RRSP up until the end of the year they turn 71 (or their spouse turns 71 in the case of a spousal plan). A child can have an RRSP.

6. There’s no point in making an RRSP contribution if you aren’t paying much tax.

FALSE. If you make a contribution when you don’t have to pay much or any tax don’t claim the deduction. You can do so later when your income and your tax rate go up and get a bigger bang for your buck. If you think your income will never go up, an RRSP may not be for you. But if you expect your income to go up, making the contribution and holding the deduction until later will get you saving now and saving on taxes later.

7. You can contribute up to $24,930 for 2015 to an RRSP.

FALSE. You can contribute up the lesser of 18% of your earned income from 2014, or the maximum annual contribution limit, which is $24,930 for 2015. If you belong to a company pension plan, your RRSP contribution limit is reduced by a pension adjustment or PA. The PA represents the value of any pension benefits accruing from participation in a registered pension plan or deferred profit sharing plan.

8. The best place to find your contribution limit for 2015 is on your 2014 Notice of Assessment.

TRUE. Your Notice of Assessment shows both your 2011 contribution limit and any unused contribution room you may have built up. Can’t find your Notice of Assessment? Call the TIPS number (blue pages in your phone book under “tax services”); have your SIN and last tax return handy.

9. If you go over the contribution limit, the tax man will let you claim the deduction the following year?

FALSE. Trick question. As long as you’re over 18, you have a $2,000 lifetime over contribution allowance to help manage slip-ups. You can claim the deduction for this overcontribution in future years. However, if you go over the $2,000, you’ll get hit with a wicked penalty of 1% per month. So do the math before you contribute.

10. You need to have cash on hand to make an RRSP contribution.

FALSE. You can contribute a security, like a mutual fund, stock or GIC you already own to a self-directed RRSP. The contribution is equal to the fair market value of the security when you stick it into the RRSP. The security is deemed to have been disposed of – meaning that it’s treated as if you SOLD it to the RRSP — at time of contribution, and this can have tax consequences.

 

If you don’t have the cash handy to contribute, borrowing always makes sense so you don’t miss out.

FALSE. Borrowing to contribute to an RRSP only makes sense if you meet ALL of the following three conditions:

you’re in the highest tax bracket, AND
you can pay off the loan within one year AND
you can make monthly contributions to your 2016 RRSP.



RRSP catch-up loans are a great way to put a whack of cash into an RRSP.

FALSE. No no no no no no no. Go read this: Booo! Hissss! to Catch-Up Loans http://gailvazoxlade.com/blog/archive...

RRSP Test Yourself

I still meet people who don’t know what an RRSP is or how it works. No, an RRSP is not an investment. No, RRSPs don’t mean you pay double the tax. An NO, an RRSP is not something everyone should have. But maybe YOU should.

How many of these will you get right? Answer True or False.

The deadline for RRSP contributions for the 2015 tax year is March 1, 2016.
If you want to make a contribution for 2016, you must wait until after the 2015 deadline.
If you’re turning 71 in 2016, you must make your contribution before the end of the year.
People over the age of 71 do not have RRSP contribution room.
You must be over 18 to contribute to an RRSP.
There’s no point in making an RRSP contribution if you aren’t paying much tax.
You can contribute up to $24,930 for 2015 to an RRSP.
The best place to find your contribution limit for 2015 is on your 2014 Notice of Assessment.
If you go over the contribution limit, the tax man will let you claim the deduction the following year?
You need to have cash on hand to make an RRSP contribution.
If you don’t have the cash handy to contribute, borrowing always makes sense so you don’t miss out.
RRSP catch-up loans are a great way to put a whack of cash into an RRSP.

 

Answers tomorrow!

Are Your Thoughts Making Your Life Harder?

Life is busy. It seems like we’ve only just got one thing taken care of when another leaps to the top of the pile. From crap at work to bills that arrive when there’s not enough money to pay them, there always seems to be something to worry about. We make matters worse by sleeping and eating badly. The stress mounts and we wonder when the hell we’ll catch a break.

If you’ve allowed your brain to fill up with thoughts like, “Damn, if only…” or “Jeeze, I just can’t…” or “OMG, no, no, no…” you’re letting your thoughts make your life harder. And your frazzled nervous system is talking to your immune system so it’s only a matter of time before you add “illness” to the hot, wet mess that seems to swamp your life.

Aiming for stress-free is a fool’s game. But knowing when to catch your thoughts and move them in another direction can make dealing with stress easier.

Job one: Slow down your thoughts. As they race through your mind, your thoughts trigger spikes in your adrenaline and blood pressure. Slowing down your thoughts can help to ease that feeling of pressure on your chest. And it will lead to better decisions. Take a deep breath. Then another. Now a third. Stop your mind from racing by telling yourself to slow down. Say it out load so your brain can hear you. You might have to take a short walk, or sit for a minute just watching the leaves in a tree or your fish swimming in their tank, to get your racing mind back under the speed limit.

Next step: Learn how to strengthen your prefrontal cortex. This is the part of your brain that makes you stop and think, instead of just react. Your amygdala is what decides your emotional response: anger, fear, anxiety. You want to take the power out of your amygdala and put it in your pre-frontal cortex. Both meditation and exercise can help. Combine the two for a winner: Take a walk, focusing only on your breathing or the sound of the wind or the colours you’re seeing. Pick anything you want to focus on and keep your brain focused on that. When your mind wonders, catch it and return to whatever you’ve chosen to focus on. Keep your pace brisk but keep your mind slow, observing whatever it is you’re focusing on.

And then: Practice gratitude. Not only does practicing gratitude help you sleep better and improve your health, it increases mental strength. Studies have shown that practicing gratitude is a major contributor to resilience. The things that would make steam come out your ears have far less impact on you when you are saying thank your for healthy children, a loving puppy or the opportunity to learn and grow.

You can allow your thoughts to haul you over hill and dale or you can decide they’re your thoughts and they’ll do as you say.

 

This & That: Cringe Edition

S Wrote: My husband and I just won a lotto of $340 000, paid off our line of credit $89,000 and have a mortgage of $121,000. We would like to max our TFSA, and pay off our mortgage, however our financial advisor at the bank wants us to use our line of credit of $100,000 for leverage, and then invest $100,000 cash on top. Our ages are 57 and 54. I am working and make $55,000/year after taxes. I am concerned about borrowing to invest. Do you think this is a good idea at our age?

Gail Says: When I get letters like yours it makes my stomach lurch as I think about all the people getting — and taking — bad financial advice. Unless you are a very sharp investor who knows the ins and outs of leveraging, you definitely should NOT be borrowing to invest. The only person who will win in this scenario regardless of what happens next is the advisor who gave you this crappy advice.

Do what you plan: pay off your line and your mortgage, max your TFSAs. You’ll have to decide what you’re going to invest that TFSA money in, and you need to follow the rules of investing so you don’t get scorched:

Only buy what you can explain to a 12 year old,
Match your investment time horizon with your investments… in other words, if you plan to use that money in 10 years or less, you cannot put it into the equities market because you don’t have enough time. Go to my blog and search “time horizon” and read what comes up, and
Only buy what matches your risk profile. Again, there’s stuff on my blog about this.

You could also grab a copy of my book, Never Too Late, from the library and read that. It’ll help.

 

E Wrote: I have been working towards buying my first house, but I still have a lot of debt (including student loans and consumer debt). I have been making more than my minimum payments to my debt plus I have been putting savings into a TFSA and RRSP’s (which I am planning to use to buy a house). My question is should I use the money I have accumulated in my TFSA to help pay down my consumer debt first?

Gail Says: ABSOLUTELY. You should NOT take on more debt (a mortgage) and more financial responsibility (a home of your own) until you have gotten rid of your consumer debt. And you should not be on the 10-year plan for your student loans either. Home ownership is a big deal…it’s expensive and it’s unpredictable. You need to have a solid financial foundation before you think about it.

Home ownership is much more than just getting into the house; it’s paying the taxes, the utilities, the insurance and the upkeep. I’m going to suggest you “practice” living on the reduced cash flow you’ll likely have once you finally do get into a home of your own and use the money you’re setting aside to get your debt paid off lickety-split.

First, you think about how much home you’re buying and what your monthly mortgage payment will be. You can go online and use a calculator to figure that out. For the sake of this example, let’s say you’re buying a $250,000 with 20% down, at 4% amortized over 25 years. Your monthly mortgage payment will be $1052.05.

Now the other costs. If your property taxes are $3000 a year, that’s $250 a month. And you’ll have to pay house insurance: estimate at $100 a month. And utilities, which we’ll estimate at $300 a month. And maintenance: we’ll plan on about $400 a month. For a grand total of $2,102.05 a month, which is what it’ll cost you to actually live in that new home.

If you’re currently paying $1200 a month rent, you take your housing cost ($2102.05) and subtract your current rent ($1200) to come up with your monthly savings: $902.05.

Hey, I’m not talking about if you can THEORETICALLY come up with the money. I’m talking about taking that money and using it to pay down your debt. Once it’s gone you can use that $900 a month to keep saving for your down payment.

You’ll learn to live on less disposable income, which you better start practicing before you buy your home so you’re ready for the adjustment in your lifestyle. Loads of people buy a home and then keep on spending like they did before they became homeowners going into debt on their lines of credit or credit cards.

If you can do that, then you’re ready for home ownership.

 

S Wrote:   I have 2 jobs, live on my own and plan to go back to school. Here’s the problem. For the past few years I have been borrowing money from Money Mart, Cash Money, etc. Every time I think it’s my last time, but then by the time I pay it off I will not have enough for rent so I borrow again. I’m already working 7 days a week but with low pay and cannot afford school. How can I get out of this?

Gail Says: What in heaven’s name were you thinking when you went into that pay advance store? I can’t believe our government even lets these places exist. With all the blah blah blah about wanting to protect Canadians’ futures, you’d think loan-sharking would be the first thing our leaders would be out-lawing.

The reason you can’t make any progress is that the interest and fees you’re paying are outrageous… sometimes the equivalent of 700%…and that leaves so little room for wiggling out once you’ve been trapped.

But you have to. And only you can do it. There’s no way you can go back to school if it’s taking 2 jobs and a pay advance loan to keep you afloat. So you’ll have to decide how important school is to you. Then you’ll have to do whatever it takes to pay off the pay advance loan AND NOT TAKE ANOTHER.

You say you’re working seven days a week now, so you may have to do this by cutting your expenses to the bone. Get ready to live on soup girlfriend. No spending on anything you don’t absolutely NEED. If you have a special day coming up where people give you gifts tell ’em you want $20 instead…debt-free is the best gift ever. Failing that, you’re going to have to sell some stuff or find a way to make more money. There are no easy answers to this.

 

M Wrote: What can I do if I’m in a lot of debt but own a condo? I’m locked into my mortgage till 2017 and will have to pay a penalty if I sell early. My Line of Credit and Visa are almost maxed out. Can you please help me?

Gail Says: I’m not sure what you’re expecting me to say. Do you think I have some kind of magic wand that I can wave and make this go away? About 20% of the letters I get from people are like yours, so you’re not alone. But you shouldn’t take too much comfort from that since it speaks to just how unwilling people are to take responsibility for their own mistakes and fix them. Did you do any research before you decided to leap into home ownership? Why are you spending more money than you make, which you clearly are because of your debt? At what point are you going to decide you’ve had enough of living on borrowed money and you’re going to do whatever it takes to fix the mess you have made. Whether that involves renting out your condo and moving into really cheap digs until you can sell, or getting a second or third job, or spending half what you’re used to spending so you can get your debt paid off, the only way to fix this mess is to do something differently.

I would love to be able to help all the people who need help. And I try. But sometimes, when I get a letter like this, I just want to throw my arms up in the air and run screaming from the room.

You are the author of your life. You control how you perceive things, what you do, and what you make of the time you’ve been given on this earth. You can feel helpless. You can act helpless. Or you can take the bull by the horns and figure out a plan.

There’s loads of info on my website and in my books. You just have to have the gumption to be willing to do the hard stuff to get from here to where you want to be next.

 

Orange Basa with Avocado/Tomato Salad

To call this a salad is a bit of a misnomer because, well, it just isn’t when you’re eating it!

Basa is a type of catfish that’s native to Indochina. Sometimes called “swai” or “bocourti” and is perfect for pan-frying. Farmed basa is a low-fat source of protein that is VERY budget friendly. That’s partly because it grows fast and is easily harvested. That being said, there is some conflicting info on this fish so if you don’t want to use Basa, feel free to substitute any white fish in its place. The recipe won’t suffer a bit.

This is a go-to meal in my kitchen because it can be doubled or tripled easily and it’s ready in about twenty minutes. I have never served this to anyone who didn’t respond with, “Wow! Sooo good!” Fast, delicious and nutritious. How can you beat that?

 

Orange Basa with Avocado/Tomato Salad

1 Basa filet
1 tsp olive oil
1 clove garlic crushed
1 tsp Old Bay spice
½ cup orange juice
1 avocado chopped medium
15-20 grape tomatoes halved or quartered
Juice of half a lime
¼ cup cilantro chopped fine (if you don’t hate it)
Grace’s scotch bonnet pepper sauce

Soften the garlic in the olive oil then remove. Add the Old Bay spice. Add the basa filet. (I often cook from frozen since that’s how I buy them. Just keep the temp low until defrosted and then turn it up to evaporate the water from the pan.)

When the fish is almost completely cooked, add the orange juice and let the fish soak up the flavor. The liquid should be reduced by three-quarters when you’re done.

Combine the avocado, tomato, cilantro, lime juice and scotch bonnet pepper sauce and mix thoroughly.

Top with the fish and eat up!

Quit Smoking

Are you still trying to quit smoking?  I used to be a two-pack a day girl way back when. I think it was one of reasons I was so damn skinny. Each time I got pregnant, I’d quit smoking. My body wouldn’t let me smoke because…well… it wasn’t good for me or the baby. And each time I was done breast-feeding I’d take it up again. Then one day when she was about three my darling little Alex turned to me and said, “Mommy, you know what?”

“What baby?” asked not ready for the two-by-four headed for my heart.

“You’re going to die and Malcolm and I won’t have a mommy anymore,” she said so matter-of-factly my heart winced.

I quit that day.

Not everyone finds the motivation to quit like I did. My girlfriend Dina had a baby girl the same time I did and even when her daughter hid her ciggies, Dina kept smoking. Some people find their addiction to nicotine powerful. And they’ll put themselves through all kinds of gyrations — rewarding themselves or punishing themselves — as they try to quit.

So which works better? Rewarding yourself for quitting or implementing negative consequences if you veer off course?

A study published in The New England Journal of Medicine supports previous studies done that show we tend to dislike losing more than we like winning. Similar research has been done around investing with the same results, which explains why so man people panic when markets are dipsy-doodling.

Back to the smoking. Researchers offered subjects two different smoking cessation options. Given the choice, most chose a reward-based program. Turns out fewer of them succeeded. When researchers required a $150 deposit that would be lost if the person failed to stay off cigarettes for six months, folks were twice as likely to succeed.

So if you’re determined that 2016 is the year you quit smoking, put your money where your mouth is and you might just come out a winner.