Gail Vaz-Oxlade's Blog, page 7
January 31, 2016
When Parents Need You to Step In
I am getting quite a few letters from people who are concerned about their parents or other aging relatives. More and more adult children must get involved in their parents’ financial affairs. This letter is typical and it makes me sad because I’m sure these ‘children’ are beside themselves.
Dear Gail. We don’t know what to do. Our father is in a horrible mess. Ever since mom died things have gone from bad to worse. She took care of all the details. He literally handed her his paycheque every week. She passes four years ago and he’s just gone from bad to worse. His health is failing. He has been sent to collections for a $15,000 outstanding debt. We – his three daughters – are beside ourselves. What do we do? Will we inherit his debt? Do we sell the house we grew up in and put him in a home? How do we even go about doing that? Two of my sisters live some distance away and I have four kids of my own and a job. Help!
First, if he’s gone to collections his credit history is already in ruins. If there is money available to pay this debt, wait for the next call and offer $7,500 to settle the debt. Get their agreement in writing before you send a penny. Keep in mind that “debt” cannot be inherited. If your father dies in debt, those debts will be paid out of his estate. If there is not enough money to pay the debt, the lender has to eat the loss.
You don’t say whether your father has any equity in his home. If he does, then you’ll want him to gift you some money to a) get it out of his hands before you seek an assisted living situation since his income/assets may affect his ability to get into a space and b) have it available to use by you for his care. I would not recommend this willy-nilly since some children can be quite selfish, but if your intention is to help him with payments anyway, getting that money to you for his future needs may be a good thing.
There is no gift tax in Canada if your father wants to give you a gift of cash (as per Revenue Canada Agency Miscellaneous Receipts NO: IT-334R2 section 4) so amounts received as gifts, are not subject to tax in your hands (as long as you’re not a spouse or a minor child).
Okay, onto the care issues. Provincial governments provide in-home care through a regional health agency like the “health authorities” in B.C. or “community care access centres” in Ontario. You’ll need a referral from his doctor or you can contact your local health agency directly. They’ll send a case manager to assess your father’s needs but you shouldn’t expect more than 2 hrs a day in help. If you intend to pay for a personal care worker for your dad, it’ll cost you $20-$28/hr if you go through an agency. Full-time help can $1,800-$3,000/mo plus room & board (or add another $1,500 to $2,000 a month if you don’t provide room & board.) These costs will add up fast, so make sure you’re prepared before you take this route.
If your father agrees to sell and move, then you’re looking at a retirement home. He can have his own space put will share meals, housekeeping help and social activities with other residents. Costs associated with “assisted living” help – help with bathing, taking medicine and the like – are substantially higher. Private retirement/assisted living resources can run from about $2,800-$8000 a month. The difference in cost is the difference in facilities, location and services provided. Publicly subsidized assisted living services are charged based on income and vary by province. For those whom the rate would cause serious financial hardship, reduced rates are possible.
Since facilities and costs vary dramatically from region to region (even within a province) you’re going to have to do some legwork. Start by researching the assisted living facilities in the area you want your father to live. Get recommendations from friends/family/co-workers. The Internet is a great place to gather basic info, but won’t give you a feel for the place. For that you’ll need to do a visit. Pay attention to things like cleanliness and how the staff seems to be interacting with residents. Do the rooms look comfortable? Try to go for a visit around mealtime so you can see the quality of the food.
January 28, 2016
Toxic Friends
My daughter and I both have a low tolerance for toxic people. We have friends who have chosen to keep toxic people in their lives, and neither of us really get it. We figure there must be something we’re missing since so many people seem willing to be pushed around by bullies or disdained by people who claim to love them. But for the life of us, we can’t see it. Our way – simply refusing to put up with BS, particularly when it is horrendously harmful – seems to make so much more sense.
Explain this to me? Why would you choose to hang around with someone who is always criticizing you? I don’t care how flawed you are, those flaws are part of your wholeness. I’m loud and pushy. And I have a tendency to not see whatever is in the way of me and my goal. I’m working on that one. But if the people in my life constantly criticized me, it wouldn’t help me to be less loud or pushy. It’d just piss me off. So why don’t other people get royally ticked when they are uselessly (and constantly) criticized?
And then there are the people who don’t have the time of day for you when the going gets tough. Hey, I’ve had some serious crap happen in my life. The people who have been missing when I need them most need not come back when things get all rosy again. So why do people keep folks who won’t stand beside them when life becomes difficult? I know having friends is important but, seriously, why would you choose to work at a relationship that only wants to be strong when the sun is shining?
I have a girlfriend, we’ll call her Jo, who has a couple of so-called-friends I just can’t be around. Every time Jo starts to talk about something she wants to do, they do everything in their power to hold her back. One is great at belittling what Jo wants to accomplish. She’ll say things like, “Oh, come on Jo, you know you won’t follow through.” I’ll hiss and spit quietly. Quietly because Jo doesn’t want a scene. This girl has been her friend since the day of dot, and Jo thinks their history is enough to justify their continued friendship. The other always finds a way to derail Jo’s plans. When Jo was moving to new apartment, this girl promised she’d come up with a van to help Jo move. Come the day, no girl, no van. (I have a van, so I stepped in, which is how I heard the story.)
I know people who stay in relationships where they are being used and, often, emotionally abused. From the guy who is living with a girl who thinks his paycheque is hers to do with as she pleases, to the girl whose boyfriend thinks she has no business going anywhere without him, these people become prisoners of their friends. What is up with that?
Not all toxic relationships are blatantly hurtful. Some are suffocatingly needy. If you have a friend who won’t make a decision without your input that’s not a healthy relationship. And if you have a friend who leaves you sighing with relief when she leaves, heads up, that’s not a healthy relationship. Ditto the friend who always seems to find something to fight with you about. Or the friend who lies to you or betrays your trust.
While it may be hard to end a toxic relationship – you may even miss your toxic friend – know that your life will be better for having eliminated this toxicity. After a while, you’ll realize how great it is not to be humiliated or drained by your friend. It’ll be nice not having the body that constantly undermined what you were doing or made you feel bad about yourself. It’ll be a relief not having to interact with a friend for whom everything is about them!
It seems to be a thing that toxic people – people who are the most demanding while the most unwilling to give – draw friends to them like flies to honey. I’m not sure why, but I’ve seen it again and again. So what is it in us that makes so many of us willing to put up with being mistreated by the people who claim to love us?
January 27, 2016
This & That: Get Real Edition
F Wrote: I read your article about “how much down?” and I was sad to see your “tips” to save up and avoid pesky – and costly – mortgage insurance. I have no assets, investments or insurance policies on anything, my tax return is about $3-400 a year, my family firmly believes “we saved for it on our own, how hard is this?” so they will offer no help, I get nothing on my birthday (except a back rub) let alone cash, I was fired twice for asking for a raise (company saw I wanted more money and decided to outsource to India and China), my expenses include food and water, and I work 10 hours a day minimum with 2 hours transit total time, for $13 an hour. Which is actually a career in my field that had 5 interviews total because of the demand. I already have 2 roommates, and can barely break even. What can you suggest?
Gail Says: Are you trying to tell me that even though you make $13 an hour, have 2 roommates and can “barely break even” you’re considering home ownership? I know that times are tough for a lot of people, incomes are low, and jobs are hard to come by. So why would you even think about putting that kind of financial strain on yourself. Have you worked out what it would cost to carry a home? I’m not just talking about a mortgage payment… I’m talking all the costs associated? It scares me a little how much home-ownership trumps common sense in terms of being a “goal.” Please reconsider.
A Wrote: My husband and I are debating extending my parental leave for an additional 12 weeks. Six months into my leave we are breaking even, zero savings. But the year before my leave we were saving 20% of net income each month and have zero debt (other than mortgage). For those 12 weeks we would lose the additional income of $400/week but we have enough cash in the bank to cover the gap to avoid using credit. (Over $25k in the bank). When I return to work our savings will return to 20%. Is it irresponsible to take this extra leave given we are going to eat up savings even though we “over saved” and will not need to use credit debt?
Gail Says: I don’t think it’s reasonable to expect to be able to save while you’re bringing in far less money because you’re on mat leave. If you have no debt, you’ve managed your cash reserves carefully and still have enough money to buy you another 12 weeks home with baby, you needn’t worry about the savings part right now, particularly since you say your savings will return to 20% when you head back to work. How could it ever be irresponsible to make the choice to stay with your wee one given that you’ve made financial provision for that choice?
A Wrote: I am ready to throw up with stress about a mortgage decision and I am hoping for your advice. I have watched you for years and I saw you speak in Milton last spring – you are my financial guru!
We live in a wonderful home in GTA suburbia and are very happy, but want to make the move closer to downtown for the walkability lifestyle that comes with an inner-city move. As it stands, our current mortgage payments are very comfortable, and we would be taking on a considerably larger amount of mortgage debt to move. We have a huge down payment (lots of equity in our current home) though; we’d be putting $410K down and spending $875K on a house, meaning we’d end up with a $465 mortgage. Our combined annual income is $166K, and our monthly mortgage/property tax/home insurance, gas, and hydro would be $3100/month. We fall within all of your “can we afford this” guidelines, but I feel SICK to my stomach about having a $465K mortgage. Should I just be focusing on the monthly housing costs rather than this huge looming number with the bank??? Eeesh. Any advice would be appreciated. Thanks in advance.
Gail Says: If you want to be comfortable with this decision you actually have to work through the math. You haven’t told me your individual incomes (it makes a difference in your taxes) so I split the income 50/50 and see that you have an joint income of about $11,000 a month, which should be more than enough to deal with your mortgage. You haven’t said how old you are so I don’t know how much time you have until retirement. But you should be aiming to be mortgage free by then. Also, what have you been doing with all the income you’ve been making (without this mortgage payment) up until now? Taking on more debt will mean changing your priorities in terms of spending. If you dot all those i’s and cross all those t’s, you’ll feel better about your decision.
B Wrote: I am looking for advice on how to help a step grand-daughter and my own daughter’s family. The marriage is mixed with 3 older children from 1st marriage and a 2 and 4 year old from my daughter. My daughter is only 12 years older than the step daughter. I will call her Perdue. She is 22 years old and back home. She lost her job due to daycare closing and has racked up $3000 dollars in credit, even though she knew she was given 3 months advance termination notice. She is a lovely young woman with the perception that her dad should always bail her out. It puts a stress financially and emotionally on my daughter’s home and marriage. How can I help Perdue learn how to budget her money, which she spends on make-up and eating out? Perdue is in love and wants to get married, but I am worried that her boyfriend will drop her because she rarely chooses to cook, clean or budget her income. Speaking in old terms, how do I light a fire under her butt for her emotional well-being as well as the well-being of my daughter’s family? She takes offense at even carefully worded redirection.
Gail Says: You might want to try asking her for some advice because you have a young person her age who needs some help. Raise the issues this “young person” is facing, and ask the step-daughter for her take on the situation. So something like this,
You: I’m wondering if I can pick your brain for a couple of minutes. I have a young friend who seems to be a little lost and I’d like you’re younger take on what’s going on, if you have some time.
SD: Shoot. (We can hope it will be this easy.)
You: So, Tamara has been working and on her own for a couple of years, but she’s told me she’s a little concerned because she’d been counting on her mom to bail her out of a mess she’s gotten herself into and her mom has just told her no. So she’s really mad at her mom. You see, she ran up her credit card, and since her mom makes a really good living — she lives at home with her mom right now — she thought her mom would pay the card off for her. But her mom’s been telling her she has to stand on her own two feet and she’s not bailing her out. So from your perspective, what can I say to Tamara to help her see that being an adult means her mom may be right and she has to learn to stand on her own two feet?
SD: Well, her mom should help her!
You: Why do you think that?
SD: Her mom has enough money, why wouldn’t she help her?
You: Doesn’t she have to accept responsibility to using the credit cards?
SD: Yeah, but her mom has plenty of money.
You: Is that really the point? Suppose your dad said to you, “You’re making more than me right now, so I want you to pay the mortgage,” would you be okay with that?
SD: It’s not my house, besides, I don’t make more than him.
You: Just imagine. Your dad gets sick, say, and asks you to find a way to pay the mortgage, even if that means getting two jobs, how would you feel about that?
SD: (She may be silent. Or she may say something like,” It would be his wife’s responsibility to take care of him.
You: Because they are a team?
SD: Yes, exactly.
You: So back to Tamara. She and her mom aren’t a “team” so why would she expect her mom to bail her out?
I’m not sure how this will work since, in the end, it really is about following the conversation where it goes. The point, however, is to use a similar situation to try and bridge into a conversation about what’s really going on.
As for being in love and wanting to get married, sometimes only blunt will work, as in “Why the dickens would dude want to marry you? You can’t cook. You don’t clean. You’re a lot of work. If you were picking you for a mate, would you?”
January 26, 2016
Roasted Red Pepper Soup with Lime Sorbet
Alex and I were down in Niagara-on-the-Lake taking in the smell of fruit growing and a few shows last summer. We had dinner at a nice little restaurant that served us roasted red pepper soup with a dollop of lime sobet in the middle. It was delicious.
Then last fall Alex was heading home for a couple of days and when I asked her what she wanted for dinner she pleaded with me to make the roasted red pepper soup. This is what I came up with and it is delicious. Don’t skip adding the dollop of lime sorbet.
Roasted Red Pepper Soup with Lime Sorbet
6 large bell peppers roasted and chopped
1 cup sweet onion chopped
1 clove garlic
900 ml chicken stock (or vegetable stock for vegetarian option)
1/2 cup coconut milk
1 tbsp butter
½ cayenne, salt and pepper to taste
½ tsp Zaatar
1 tsp sugar
Lime sorbet
Heat butter in a large soup pot over medium-high heat. Add the chopped onion and sauté for 2-3 minutes, stirring occasionally. Add the garlic, zaatar and roasted peppers. Stir and sauté for another 2 minutes.
Add the stock, stir and bring to a simmer. Cook over medium heat for about 20 minutes.
Purée the soup using an immersion blender (or in small batches using a regular blender or food processor).
Return soup to the pot set over low heat. Add the coconut milk and cayenne. Add salt and pepper to taste. Simmer until the soup reduces by half.
Serve with a dollop of lime sorbet in the center of the bowl.
January 25, 2016
Home Remedies
Hey, who amongst you believes in home-remedies? Com’on, I bet there are some things passed down in your family that you just swear by. I swear by home-made chicken soup. Swear by it. It’s the go-to food whenever anyone gets sick at my house. But it has to be home-made, with lots of onions… and the chicken fat stays IN.
Loads of people think home remedies are nothing more than bunk. But if you’ve ever wrapped your warts in duct tape or sipped ginger tea to fend of nausea, you’re a believer. Well you’re hopeful anyway.
Do you bite your cuticles? I do. Sometimes it’s ridiculous how I’ll gnaw away at my own fingers, only to end up with an infection. In the old days they said to soak your hands in a little vinegar and that would take care of the problem. Turns out they were right. The natural antibacterial properties of vinegar can eliminate infection. Combine white wine vinegar with warm water and soak your hands for about 15 minutes a day.
Vinegar’s acidity is also good for killing the bacteria that results in painful swimmer’s ear. Dilute it with an equal amount of distilled water and put three drops in each ear up to three times a day until the infection is gone.
In my household, if you got nausea, you were immediately handed a tin of ginger ale. In my grandmother’s day it was a cup of ginger tea. Ginger doesn’t just taste delicious, it helps break up and release intestinal gas so sipping on ginger ale or ginger tea, or slowly eating a few candies made with real ginger, can help ease digestive problems. A study in Digestion found that licorice root and peppermint leaves eased indigestion too. Licorice increases mucus production to soothe while the peppermint relaxes the sphincter in the esophagus.
Why wrapping your warts in duct tape works may come down to the combination of the airtight environment and something in the adhesive that is toxic to warts. In fact, according to research published in the Archives of Pediatrics & Adolescent Medicine 85% of warts were eliminated with the tape compared to just 60% when the warts were frozen off. Replace the tape every 6 days for 2 months, or until the wart disappears.
I was happy to pass this next tip on to my daughter, Alex, who is always motion-sick. While I spent both my pregnancies in a state of constant morning sickness, it was Alex who told me that just before she throws up she experiences excess salivation. Well, it turns out that tannins – those bitter or astringent plant compounds — found in lemons and olives dry out the mouth, eliminating saliva and, in turn, easing nausea. So if you have a tendency to motion sickness, pack a small bag of olives or cut lemons for the road.
Hey, did you know you can heal cracked heels with Krazy glue. Soak your feet in water for a few minutes, then apply moisturizer and dab the glue on any remaining cracks. Just one application should do the trick. I don’t have to tell you to wear gloves to avoid getting it on your hands do I?
And if you suffer with corns, coat the corn with a mixture of licorice and oil, and cover it with plastic wrap and a sock while you sleep. Apparently that gives licorice’s estrogen-like substances time to work their softening magic.
I’ve heard more than one solution for “sore throats”. Everything from lemon and honey to marshmallows to sage tea. (I hate sage, so I’ll suffer with the throat if I must.) But for those of you who don’t object, a study in the European Journal of Medical Research found that a spray containing 15% sage offered significant relief within just 2 hours. DIY sage tea: Pour 1 cup of almost-boiling water over 2 tablespoons fresh sage or 1 tablespoon dried. Cover and steep 10 to 15 minutes, then strain.
I have a couple of girlfriends who suffer with migraines and people always have great ways to alleviate the suffering. Turns out, applying ice to your temples or the back of your neck for 10 to 15 minutes numbs the nerve that’s sending the pain signal and constricts blood vessels.
My ex-husband had a terrible problem with athlete’s foot, which his doctor could never cure. I gave him a bottle of oregano oil and it took care of the problem. A study in the Journal of the American Academy of Dermatology reported that an antifungal compound found in garlic, can also help. Either way, you’re going to smell like a bowl of spaghetti.
January 24, 2016
What Would You Say?
I get 400-600 questions a month through my website. I spend about 4 hours a week answering 30-40 questions, which I use on my Q&A or to make the This & That blogs. But some questions… well, some… I just don’t know what to say. Or my first response is something like, “Buy some condoms,” or “Get a job” or “…
So what would you say?
M wrote: I have one child am expecting another still live under my mothers roof and am on financial assistance. I’d very much like to move but I want to know how to get started as a single mother. I’m looking for advice as to how I can make a move and not have my children suffer in the same breath. I’d like to have financial stability. How can I work out my finances so I know that moving isn’t a bad idea. There won’t be space here for me +2. I’m due in the beginning of fall.
J wrote: I am on pension and recently I have been having problems living on my salary of about 4000 a month I have ben taking out the odd payday loan to make things meet to pay my bills recently seems like when I try to get ahead something comes up , I have credit card debt and am almost at the max on them plus I have a personal loan to any help would be appreciated thank you.
E wrote: I wanted to ask, How can I pay off my credit card debt of 3,340$ Because recently i lost my job and ive been looking for a job for 2 months what else should i do?
S wrote: I started a business in July 2011 as an event planner after losing a job at a venue. I’m a private event planner and have had some successful events come my way but not enough to make a profit or steady income. Unexpectedly, I got pregnant in March 2013 and also became a single mom. I did not have the hours to collect any sort of maternity leave, so I’ve been on Social Assistance in the meantime. I’m actively looking for work and still trying to promote my event planning company. I want to purchase the townhouse that my mom and I are currently renting, but would like to know what my chances of getting a pre-approved mortgage would be? I was dismissed from a bankruptcy five years ago. I’m unemployed at the moment but looking to earn 45,000 gross.
A wrote: I have a very very difficult question. I am $80,000 in debt, $60,000 is student loans and $20,000 other debt like credit cards and cash advances. I only make $33,000/yr and pay $1000 a month in rent, I am also supporting two kids. I can’t file bankruptcy because it wouldn’t make sense as my student loans are at 6 yrs old not the 7 they need to be to get wiped off. I have collection people harassing not only me but my landlord and family. I’ve been putting off filing bankruptcy also because I keep telling myself it would be better to keep ignoring collectors and just pay a couple hundred dollars every month and avoid the word bankruptcy in my credit report. Prior to 3 years ago I had great credit but I still couldn’t lease a car because my student loans were so high. I’m a bit lost now, I’m completely overwhelmed
J wrote: Do you have any recommendations for a 75 year old low income with medical and dentals needs who has to get by on 1700.00 month for everything? My home is a trailer which I own. No family, no help. Can’t afford both drugs and food.
T wrote: My partner and I are in our late 50’s and we have no assets, no savings, neither of us have retirement plans through work and we live paycheque to paycheque. We try to save, but find it difficult. We do not live a lavish life style by any means, unable to take vacations, barely making bill payments at times, etc, etc. Other than being royally screwed and having to work until we are 100, do you have any suggestions????
January 21, 2016
Doubt is Natural; Learn to Put It Away
Everyone experiences doubt. We wonder if we can do it. We question whether it’s the right thing to do. We hear from others that we may not be able to. Uncertainty, skepticism, hesitation are siblings of doubt.
You’d be a fool if you always were cocksure of what you’re doing. Doubt makes you check. Doubt makes you think twice. Doubt keeps you from leaping before you look. But doubt becomes a problem when you get stuck in the negative ruminations, the constant “but what if…” statements that go around and around in your brain.
The remedy for doubt isn’t surety; we can never really be completely sure of anything. The cure for doubt is belief. After you’ve sifted through all the what-ifs, after you’ve developed your Plans B, C and D, you must believe that what you are after can be.
If you have stopped believing in yourself, if you are stuck in the muck of doubt, the first lesson you need to learn is that failure is not forever. It is completely normal for things not to work the first or second or fifth time you try. We live in a world where judgement comes quickly and “failure” is easily assigned. But mistakes aren’t failures. Mistakes are the opportunity to fine-tune a plan so your chance of success goes up the next time you try. But there must be a next time.
Remember, too, that if you are doing something that goes against your culture’s norms, against your society’s acceptable limits, you will experience doubt. But that doesn’t mean you should stop.
You have to learn to push past discomfort and trust yourself. You have to quiet your worse-case brain and replace the incessant negative chatter with positive self-talk. And you have to know that you are strong enough to do things that might not work, learn from your repeated attempts and move forward.
It is so easy to become stuck in fear and doubt when people around us are telling us just how much of a mistake we are making. It is so easy to give up and drift with the current when we let ourselves be convinced that our “doubt” is our “intuition” telling us to be careful.
If you stay in that place of doubt, you will continue to be riddled with fear. Your stagnation will continue to breed doubt.
Believe you can and you’ll find a way to dig down deep for the courage you need to get busy doing. If you find you don’t have a lot of self-confidence, then you must build it by looking at the things you’ve accomplished. Make a list of what you’ve done that you’re proud of and keep adding to the list as you think of things. They don’t have to be world-changing events. The first time I managed to complete a knitting project without dropping a stitch I was elated. You betcha that went on my list of accomplishments. Ditto the first time I spoke publicly and didn’t puke first.
It is only by putting your doubt away, by moving from thinking about it to actually doing it, that you’ll find the learning and confidence to know that you are strong. You can do it. I believe in you.
January 20, 2016
This & That: Think It Through Edition
E Wrote: I am ready to throw up with stress about a mortgage decision and I am hoping for your advice. I have watched you for years and I saw you speak in Milton last spring – you are my financial guru!
We live in a wonderful home in GTA suburbia and are very happy, but want to make the move closer to downtown for the walkability lifestyle that comes with an inner-city move. As it stands, our current mortgage payments are very comfortable, and we would be taking on a considerably larger amount of mortgage debt to move. We have a huge down payment (lots of equity in our current home) though; we’d be putting $410K down and spending $875K on a house, meaning we’d end up with a $465 mortgage. Our combined annual income is $166K, and our monthly mortgage/property tax/home insurance, gas, and hydro would be $3100/month. We fall within all of your “can we afford this” guidelines, but I feel SICK to my stomach about having a $465K mortgage. Should I just be focusing on the monthly housing costs rather than this huge looming number with the bank???
Gail Says: If you want to be comfortable with this decision you actually have to work through the math. You haven’t told me your individual incomes (it makes a difference in your taxes) so I split the income 50/50 and see that you have an joint income of about $11,000 a month, which should be more than enough to deal with your mortgage. You haven’t said how old you are so I don’t know how much time you have until retirement. But you should be aiming to be mortgage free by then. Also, what have you been doing with all the income you’ve been making (without this mortgage payment) up until now? Taking on more debt will mean changing your priorities in terms of spending. If you dot all those i’s and cross all those t’s, you’ll feel better about your decision.
J Wrote: Gail, I think you’re amazing and I love watching you help so many people with money issues. The thing is, my husband and I don’t really have an issue. He makes an incredible salary, I make a very good salary, and we have nearly no debt. The problem is, when we compare our annual income to the money in our bank accounts, there seems to be a lot missing. How are we unable to save when we should be saving a LOT??
Gail Says: You have no idea where your money is going so you should start by doing a spending analysis. Grab your last month’s bank statement(s), credit card statement(s), and line of credit statement(s). Now, break every transaction into one of the following categories:
shelter (mortgage, rent, hydro, heat, taxes, maintenance)
services (cable, telephone, security, home-cleaning, cell, internet, childcare, health, pets)
food (everything you put in your mouth and swallow, including restaurants)
shopping (any STUFF you bought for yourself and anyone else — EVERYTHING)
transportation (car payment, gas, repairs, highway tolls, taxis, bus, train)
entertainment (movies, books, magazines, hobbies, gym, club, sports)
bank fees (service charges, ATM fees, NSF fees, DON’T INCLUDE INTEREST)
interest costs (from everywhere)
debt repayment (don’t worry about splitting out interest and principal, just add all your debt repayment amounts together)
savings
In the best of all worlds, you’ll do this for six months’ worth of your paperwork since a half-year is just about enough time to catch all the things that only pop up periodically. Less than six months will give you some insight, but not clearest picture.
Now add it all up. Take and average and plop those numbers in a budget.
Once you know where your money is going, you’re in a much better position to decide how you want to spend it. Decide where you want to trim so you’re saving as much as you want to be saving.
K Wrote: My husband and I are debt-free except for our $300k mortgage on our home (comps in our neighbourhood are valued at $650k). We have three savings goals: to save for retirement (we have about $75,000 saved right now), to save for either a move or a renovation to our current home in 5 years when our mortgage term is up (we have a 3 year old and another on the way!), and to pay off our mortgage early (we have 14 years to go and we would like it done in 10). Though we’re excited and motivated, I’m a little concerned that we have too much that we’re trying to do at once, and that we might be better off concentrating on one goal, then moving to the next, and then the next. We have 6 months of expenses saved, and we pay in cash for our major expenditures around our house and so on. What would you suggest? We are 34 and 35, both working.
Gail Says: You are sending conflicting messages. Clearly you are conservative and want to have your i’s dotted and t’s crossed. But your goals are working at cross purposes: to save for retirement, to pay your mortgage off early are asset building objectives. To move or renovate will like deplete assets. So you have to figure out what is most important to you.
People have a tendency to say one thing and then do another when they do understand their core values. So I suggest you think about what weighs most heavily on your mind when it comes to what you want from your life. Is it that bigger/renovated home or is it money in the bank and being debt free? It might be a timing thing: you can have it all, just not all at the same time. It might be a priorities thing: the larger home is a necessity because of a growing family, but the idea of being mortgage free is just so tantalizing. You and your buddy should sit down a make a list of what’s most important to each of you, compare your lists, prioritize them, and then set some goals based on what comes out of the exercise. I have a whole chapter on figuring out your core values and getting started setting goals in Debt-Free Forever. Grab a copy from the library and do the exercise.
S Wrote: I am about to start the process of a separation after 8 long years of financial disagreements. Pre-partner I was debt free, and had enough equity in my townhome to avoid CMHC when I purchased it! Eight years later, I am $40,000 in debt and as we prepare to sell our home we will walk away with very little, maybe nothing once the debt is paid off. Of course, my partner did not believe in savings, RRSP, budgets or planned spending. Now with three kids in tow, I am leaving and am actually looking forward to starting over. I’ll have nothing but I won’t have debt and I will have full control of my finances. I have started a job where I will accumulate a pension (public sector), I have upped my RRSP contribution to a whopping $50 biwkly and had started a TFSA but had to deplete it for the separation so will be contributing to that soon at hopefully $50 biwkly. Now I feel pretty good about this fresh start but I am in my mid-thirties and am basically starting with nothing. Should I go for a higher risk investment as I will have time to let the money sit and try and get me back on track? Also, a friend’s husband has started with World Financial Group. I know they are tied to life insurance. Is this an avenue that is safe to explore? Would it replace the contribution to mutual funds offered through the bank? You’re the only financial person I trust out there. Everyone seems to mislead you to make their targets and push something on you. Thanks for telling it like it is. I can’t wait to write you with my success story!
Gail Says: I’m sorry you’re having a tough time of it right now, but I know you will be fine. You are a sensible woman and I’m happy to hear that you’re looking forward to your new beginning. Good job getting a pension plan, that’s going to help a lot. And coming out debt-free (even if you are starting over) is a bonus too.
To your questions:
When you ask should you go for a higher risk investment it makes me wonder how much investment experience you have and how comfortable you are with investing? I have a rule for investing: you’re not allowed to buy what you can’t explain to a 12-year-old. If you don’t understand what you’re buying, then you’re not “buying” you’re being “sold” and that’s not a good thing. While a potential higher return will mean your money may grow faster, it comes with the downside of a potential loss. So you have to ask yourself is getting 8% return worth losing 25% of my money? Please read these blogs: http://gailvazoxlade.com/blog/archives/1649 and http://gailvazoxlade.com/blog/archives/1633
Should you buy from a friend’s husband? NO. Never. Unless you don’t care to keep the friend. I disagree wholeheartedly with the sales systems that prospect friends and family because it’s often a sign that the product/service is weak and is counting on the relationships of the salespeople to make it go. If you are going to buy mutual funds, it should not be from a friend, but after significant time doing research and making a choice based on the holdings in the mutual funds, the management’s history and your objectives in buying.
I have some basic information on investing on my blog. You can start there. Buy a couple of books, read some magazine articles, get comfortable. Then “pretend” invest for a while until you think you have a good feel for what you’re looking at. Then dive in.
January 19, 2016
Claude McKay’s Poetry
Claude McKay was born in Jamaica in 1889 in the parish of Clarendon. The youngest of 8 his parents had both experienced slavery. At four years old, he started basic school at the church he attended and at age seven, he was sent to live with his oldest brother, a school teacher, to be given the best education available. He started writing poetry at the age of 10. At the age of twenty, he published a book of verse called Songs of Jamaica, recording his impressions of life in Jamaica in dialect. He adopted a “straight English voice” because he feared his poetry wouldn’t be taken seriously.
A Red Flower
Your lips are like a southern lily red,
Wet with the soft rain-kisses of the night,
In which the brown bee buries deep its head,
When still the dawn’s a silver sea of light.
Your lips betray the secret of your soul,
The dark delicious essence that is you,
A mystery of life, the flaming goal
I seek through mazy pathways strange and new.
Your lips are the red symbol of a dream,
What visions of warm lilies they impart,
That line the green bank of a fair blue stream,
With butterflies and bees close to each heart!
Brown bees that murmur sounds of music rare,
That softly fall upon the langourous breeze,
Wafting them gently on the quiet air
Among untended avenues of trees.
O were I hovering, a bee, to probe
Deep down within your scented heart, fair flower,
Enfolded by your soft vermilion robe,
Amorous of sweets, for but one perfect hour!
In 1912, he travelled to the United States to attend Tuskegee Institute. He remained there only a few months, leaving to study agriculture at Kansas State University. A seminal figure in the Harlem Renaissance Claude McKay wrote three novels. Home to Harlem was a best-seller that won the Harmon Gold Award for Literature. He also authored a collection of short stories. His book of poetry, was among the first books published during the Harlem Renaissance.
I Know My Soul
I plucked my soul out of its secret place,
And held it to the mirror of my eye,
To see it like a star against the sky,
A twitching body quivering in space,
A spark of passion shining on my face.
And I explored it to determine why
This awful key to my infinity
Conspires to rob me of sweet joy and grace.
And if the sign may not be fully read,
If I can comprehend but not control,
I need not gloom my days with futile dread,
Because I see a part and not the whole.
Contemplating the strange, I’m comforted
By this narcotic thought: I know my soul.
Claude McKay loved to travel. He left American to spend 11 years touring Europe and northern Africa, all the while writing. He returned to the U.S. in the mid-1930s where he began an autobiography, A Long Way from Home. He died in 1948 at the too-young age of 59.
The Snow Fairy
I
Throughout the afternoon I watched them there,
Snow-fairies falling, falling from the sky,
Whirling fantastic in the misty air,
Contending fierce for space supremacy.
And they flew down a mightier force at night,
As though in heaven there was revolt and riot,
And they, frail things had taken panic flight
Down to the calm earth seeking peace and quiet.
I went to bed and rose at early dawn
To see them huddled together in a heap,
Each merged into the other upon the lawn,
Worn out by the sharp struggle, fast asleep.
The sun shone brightly on them half the day,
By night they stealthily had stol’n away.
II
And suddenly my thoughts then turned to you
Who came to me upon a winter’s night,
When snow-sprites round my attic window flew,
Your hair disheveled, eyes aglow with light.
My heart was like the weather when you came,
The wanton winds were blowing loud and long;
But you, with joy and passion all aflame,
You danced and sang a lilting summer song.
I made room for you in my little bed,
Took covers from the closet fresh and warm,
A downful pillow for your scented head,|
And lay down with you resting in my arm.
You went with Dawn. You left me ere the day,
The lonely actor of a dreamy play.
Subway Wind
Far down, down through the city’s great, gaunt gut,
The gray train rushing bears the weary wind;
In the packed cars the fans the crowd’s breath cut,
Leaving the sick and heavy air behind.
And pale-cheeked children seek the upper door
To give their summer jackets to the breeze;
Their laugh is swallowed in the deafening roar
Of captive wind that moans for fields and seas;
Seas cooling warm where native schooners drift
Through sleepy waters, while gulls wheel and sweep,
Waiting for windy waves the keels to lift
Lightly among the islands of the deep;
Islands of lofty palm trees blooming white
That lend their perfume to the tropic sea,
Where fields lie idle in the dew drenched night,
And the Trades float above them fresh and free.
January 18, 2016
Healthy Greens
If I see one more kale recipe, or hear one more person rant about the health benefits, I’ll puke. I hate kale. Hate it. Geeze, it’s right up there with radicchio (which I find bitter) and frisee (which I find prickly.)
I get that we need to eat lost of leafy greens to be healthy. But the whole kale thing has just been blown way out of proportion. There are kale chips, kale pesto, kale smoothies – all of which come with a health halo. Yes, I know kale has plenty of benefits like high levels of folate and loads of calcium.
But kale is NOT the healthiest green on the block. In a recent CDC report, kale placed 15th in terms of healthy. Fifteenth! It only got 49.07 out of a potential 100 points for nutrient density. You might be surprised at what beat kale to the finish line.
How about parsley… bet you never saw that coming. Parsley got a score of 65.59/100 so it’s not just a great decoration… put it in your food.
Then there’s plain old Leaf Lettuce that scored 70.73/100. Ha! Leaf lettuce beat kale. Joy of joys. Turns out 2 cups provides 100% of your daily requirement of vitamin K, which is great for your bones. One study showed that a daily serving of lettuce cut the risk of hip fracture by 30%. Even more reason to enjoy a salad.
While you’re salading, mix in some spinach, which scored 86.43/100. I love spinach and for every recipe that listed kale as an ingredient, I’d sub in spinach. It’s full of iron. Did you know that 180 gram serving of cooked spinach has more iron than a 6 oz hamburger patty? There are also compounds in spinach leaves called thylakoids that act as appetite suppressants.
Another of my fav leafy greens is Chinese or Napa cabbage. It scores 91.99/100 and is rich in calcium and iron. As a cruciferous vegetable it can also counteract inflammation.
The food that scored highest isn’t one of my favs… I hardly ever eat it… but I may just start. Ready for this: It’s Watercress and it scored 100/100. That’s right, watercress is the kingpin, the top dog, the big guy on campus. Eat it raw since cooking it destroys its goodness. Hey, I guess the English with their watercress sandwiches knew what was goin’ on.
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