Gail Vaz-Oxlade's Blog, page 78
July 1, 2011
The Sharing Game
So said Frank Buchman, and I agree whole-heartedly. Sharing doesn't play as large a part in our lives as it used to. When I was growing up, it was easy to see examples of sharing: neighbours greeting new neighbours with pies and a warm, smiling welcome. Friends helping friends through the tough spots in life. Families sticking together, sacrificing individual wants for the needs of the whole, and for the needs of those around them.Life is so busy now, and we are all so consumed with just getting to the end of the day, we have little time to share ourselves with others outside our immediate family.
I like the word "sharing" much more than the word "charity" which has taken on a far less personalized connotation. Charity is something you give. Sharing is something you do, and children respond much more positively to the things we do than to the things we say.
The earlier you start to build the habit of sharing, the more likely it is to be accepted as a natural part of life. Alex's initiation was when she was just three. I explained that we would be going together to buy toys for children who weren't fortunate enough to have a lot at Christmas. She carefully chose three gifts that she would love to get, we paid for them, and together we dropped them into the big gift box at the store. The following Christmas, Alexandra prompted our shopping trip. This time she wanted me to buy two of each toy she chose so that she could have one too. "No" I said gently, "we're not here for your toys today, remember. We're here for those little girls and boys who aren't as lucky as you. We're here to make sure they get something special." A small reminder made it easy for Alexandra to recall the purpose of our shopping trip.
Some parents don't see any validity in this exercise because since the child doesn't have to give up anything, since there's no "pain," there's no true sharing. But sharing isn't about self-denial. Sharing has always been about the celebration of our ability to reach out to others. And sharing isn't about stuff. It's about giving personally. It's truly about love.
One way to help children see opportunities for sharing is to point out occasions when their help might be appreciated. Does Mrs. Wilson down the road need someone to walk her dog? Would Mr. Ginivitristis appreciate some help shoveling that long sidewalk? Would little Mary like someone older to walk to school with her?
Another way in which we can help our children learn about sharing is to ask them to consistently set aside a portion of their allowance each week for sharing. Just as we want them to get into the great habit of saving, so too we should want them to learn to share. Setting aside 5% of their allowance — and deciding how that money should be allocated — is not only a great habit, it gets kids thinking about other people (outwardly focused) and about how lucky they are (gratitude). Can you imagine giving your child two more wonderful gifts than the gift of empathy and the gift of gratitude.
Absolutely the best way to teach about sharing is to let your children see you doing things for others. As you pack up last season's clothes, those out-grown toys or too-often read books, tell your child why you offer their out-growns to the Salvation Army or Goodwill. When you volunteer at the hospital, school or food bank, explain where you're going and why. If you can, take your kids along so they can experience how it feels to reach out to others. Don't try to insulate them from the more difficult realities of life. Use those opportunities to teach your children how to reach out to show they care.
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Today is Day Five of the giveaway of Casssie Howard's (MrsJanuary.com) Money In Your Pocket, which focuses on saving money on your grocery bills. To enter answer the question of the day in the comments. Today's question: What do you do to teach your children about money and how it works?
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June 30, 2011
The Ways We Save 8
Today is the last installment in The Way We Save series that came from y'all. Thanks again for sharing your fabulous stories and ideas. And here's hoping that everyone got a new idea or two from the stores in this series.
Saving doesn't always mean giving up something you like to buy. Sometimes you can buy the things you really want just be being aware of how you're using your money. Andrea says:
When I reach the maximum EI and CPP contributions for the year, I take out those amounts each paycheque and put them into a short-term savings account. I got the idea when I realized that there was a maximum yearly contribution because I don't want to get used to having the extra money in my chequing account, only to have that extra money go away when the contributions restart in January.
The amount depends on how much I get paid every year, but the EI saves me about $500-550 and the CPP about $250-300. The EI money is earmarked for Christmas; I figure out how much money I will save from EI and that becomes my Christmas budget. When the bills come in January, I just have to transfer the money over. It's a really nice feeling. The CPP money is for splurges. Sometimes I have a specific goal in mind, but usually it turns into pretty dresses and shoes. 
When you have kids, the money you spend can seem to be endless unless you keep a firm hand on your budget. Save in one place so you can spend somewhere else that's a bigger priority, like Anna does:
We have a family of four and $500 per month for all groceries and personal care items. Because 2 of the 4 are toddlers and very messy, I do a lot of laundry so I found a recipe for homemade laundry detergent.I calculated that it costs less than a penny per load. I found the recipe online while looking for cheap recipe ideas, it was in one of the side bars and I had an epiphany. We end up saving about $21 per month with this strategy. We're able to afford infant cereal so I worry less about them getting the correct nutrients and every so often we buy me a pack of Boost when it's on sale.
Teaching children to save is an important part of their financial education, especially if you want them to be smarter about their money than you were. So says Melanie:
My husband and I had to learn our money lessons the hard way. We are determined not to let that happen to the girls, we are trying very hard to empower them to make smart money choices. When we give them money for chores, they have to put some in a special trip piggy bank (to save for road trips), they have to put some in a saving bank for their bank account and then they can spend what is left. Last May when we took a trip to Montreal, they both had lots of spending money and were motivated to save even more when they hot home. Wish we had learned that at their age.
Saving is also all about knowing what's important to you. Trying to have it all at the same time can destroy your financial plan; knowing what you can do without… that's key to getting what you think IS important. Here's Michele:
Okay, call me old-fashioned but I have so far resisted getting a 'smart phone'. I just can't stomach the cost of the contracts. My husband has an iPhone with a minimum monthly charge of $60 and a contract of 3 years, at a cost of $2160 overall. I on the other hand, have a phone that only costs me $25/month and an iPod Touch. The only thing I give up is the 3G connection – I have to be somewhere with WiFi to get the internet. And I'll have saved about $800. And I've had this phone long enough to run out my contract and Bell still has to honour those same charges. I don't think they even offer contracts that cheap anymore! So that's one way I save money.
The other is to avoid getting a fancy car. We got a great, reliable Hyundai from the repo lot. Saved a heap of money, about $3500 because we also found one that had been scratched up – we suspect it was done by the original owner, when he discovered his car was being repossessed. By paying less than $7000 for a 5 year old car, we saved a heap of cash. And we were able to pay cash for the heap! We live in Calgary, where hail is a guaranteed annual occurrence. And hazard. We haven't repaired the hail damage to the top of the car, since the scratches were already there. So, yes the car looks a little like some college student's beast, but it's paid for, runs like a top, and nobody's going to steal it!
These are not glamorous ideas, but they've worked for us. And by the way, our total debt less than 30% of the value of the house we live in – and we've lived here for only 3 years. Plus we have another house, of equal value which is rented out right now.
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Kelly, you won Tuesday's prize. Tara, you won Wednesday's. I've given your emails to Cassie to contact you directly.
Today is Day Four of the giveaway of Casssie Howard's (MrsJanuary.com) Money In Your Pocket, which focuses on saving money on your grocery bills. To enter, answer the question of the day in the comments. Today's question: What's the biggest single savings you made on something you bought, and what did you do with the "savings"?
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June 29, 2011
Poll Results: How You Doin'?
Whenever Joey says this on the sitcom Friends, girls' bras unsnap! It's become a running joke in my household. It alludes to the impact emotions have on our ability to think straight.
So I asked, "How do you FEEL about your debt?"
28% of you said, 'm pretty confident I'll have my mortgage paid off by the time I retire. Well done!
44% said, "I've got some debt but I'm working on it." Keep it up!
13% said, "I know I'm carrying too much debt, but I'm not sure what to do." Seriously? I have written thousands and thousands of words about how to get to DFF and you still can't figure it out? I think you need to try harder.
14% of you said, "I feel like I'm drowning." I am so sorry you are feeling helpless. But helpless isn't going to get you out of debt. You need to get some gumption goin' and make a plan. As long as you're feeling helpless, you'll be like One Duck Stuck in the Muck… mired in misery… paralyzed by procrastination.
As for the 2% who think that debt's snot a problem or that they'll deal with it later, all I can say is, "Oy!" Answer me this: WHEN are you planning to get the debt paid off? If you're taking it to retirement with you, might I point out that old, sick and poor are a nasty combination.
When I asked, "What % of your income goes to paying off debt?"
40% of you said, "I don't have any debt." How good does that feel?
19% of you said, "15% or less", so you're well within the guidelines (assuming you're getting the debt paid off and not just stringing it out.)
The remaining 39% of you either have too much debt or you're so determined to get to DFF that you're gonna do whatever it takes. Imma counting on the latter.
Y'know, if you're walking around with debt, you're just asking for problems. Every curveball life throws at you is harder to hit out of the park when you're saddled with debt. It's one of the reasons why I push so hard for people to take their debt seriously, make a plan and get the sucker paid off.
Money in the bank means you have options for dealing with whatever life throws at you. Debt means you're trying to row your boat to safety with one hand tied behind your back. If you feel like you're going around and around in circles, that's why.
The day you get serious about becoming debt free is the day you take control of your money and your life. It isn't easy. But it's pretty simple. You start with a spending analysis to figure out where your money has been going. Next you make a budget so you stop spending more money than you make. Then you make a plan for getting your debt paid off, and you snowball your payments. When you get to debt free, you jump up and down and scream your lungs out. You made it.
I'm rooting for you!
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Today is Day Three of the giveaway of Casssie Howard's (MrsJanuary.com) Money In Your Pocket, which focuses on saving money on your grocery bills. To enter, answer the question of the day in the comments. Today's question: Once you're debt free (or if you're debt-free now), describe how you think it will feel (or how does it feel) to owe nobody nuthin'.
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June 28, 2011
More Credit Score Misuse
Y'all know how much I hate the credit scoring system. I think it's a travesty that it's being used for things it should not. And I think it's only going to get worse over time as our lenders (and other financial gate-keepers) get lazier and turn more often to the score. When Liane Wood sent me this article she wrote, I asked her for permission to use it as a Guest Blog. Read it. Take your time to digest it. If you're as appalled as I am, don't just shake your head. Do something.
Most people don't know what their credit score is. And according to a poll conducted by MRP Market Research Professionals in November 2010, 75% of insurance consumers are unaware that credit score is used to determine how much premium a person pays for home insurance.
How does the use of credit scoring affect premiums? Well, the Insurance Broker's Association of Ontario (IBAO) recently sampled 54 property renewal policies from one insurance company known to use credit scoring aggressively. Of those 54 policies, the average premium increase was 73%, the largest premium increase was 155% or $762 annually, the smallest increase was 11% (interesting that they noted no premium decreases) and 7 policies included claims related increases and were excluded from the sampling.
The use of credit scoring as a factor for determining premium adversely affects those who use lines of credit such as single income families, seniors, newcomers to Canada, the unemployed and small business owners.
In 2005, the Ontario government banned the use of credit scoring in auto insurance and further strengthened that position in 2010 by banning the practice entirely at every stage of the auto insurance transaction.
Additionally, the provinces of New Brunswick & Newfoundland have announced that they intend to ban the use of credit scoring from personal property insurance.
Considering all of this, one would think that if the Ontario government feels it is not right to use credit scoring in auto insurance then it should not be allowed in personal property insurance. Thinking about the number of people who take advantage of package policies and extra discounts for combining home and auto insurance together, the question becomes: if the use of credit scoring is allowed on personal property insurance, is it even possible to prevent that information from being available or used on auto insurance when both lines are with the same insurance company? Personally, I don't think it is possible. To have the use of credit scoring prohibited in auto insurance makes it necessary to be prohibited in personal property insurance.
This past November 2010, Liberal Member of Provincial Parliament, Mike Colle, introduced his private member's Bill 130: The Homeowners Insurance Credit Scoring Ban Act, 2010. This bill bans the use of credit scoring on personal property insurance, something a growing number of insurance companies are already doing.
In an effort to support Bill 130, the Insurance Brokers Association of Ontario launched a new website: www.soaringinsurancerates.ca on May 16, 2011. Through this website, insurance brokers across Ontario are encouraging members of the public to contact their local MPP's by using an online form to get the message to all MPP's that the use of credit score on personal property insurance needs to be banned just as it already is on auto insurance.
The use of credit scoring in insurance has nothing to do with the insured risk. This is something the government has already recognized in auto insurance because a person's credit score is not related to accident records or tickets. The government recognized that the use of credit score in auto insurance was unfair and not in the public's interest. It's now time for the government to support the precedent that was set with auto insurance by extending the ban for the use of credit scoring to personal property insurance.
For more information on Bill 130, the use of credit score in personal property insurance and to contact your MPP regarding this issue, visit www.soaringinsurancerates.ca.
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Kat, you won yesterday and I've sent you email to MrsJanuary.
Today is Day Two of the giveaway of Casssie Howard's (MrsJanuary.com) Money In Your Pocket, which focuses on saving money on your grocery bills. To enter, answer the question of the day in the comments. Today's question: What really ticks you off when it comes to the financial companies you deal with?
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June 27, 2011
Critical Illness Insurance Revisited
Did you know that the three most common medical conditions in Canada – cancer, heart attach and stroke – make up about 85% of all the critical illness insurance claims. Yup, The Big Three are the top causes of CI insurance kicking in.
But those aren't the only illness CI covers. Depending on the policy you choose, you could be covered for up to 20 sicknesses from brain tumour to MS, from Alzheimer's to blindness, deafness to paralysis. Look for a plan that covers the highest number of variables. And watch the definitions used for critical illness conditions, which also tend to vary from plan to plan. Don't let the medical terminology baffle you into buying something you don't understand. Be clear on when you'll be covered and for what.
Critical Illness insurance pays a lump sum on either diagnosis of the conditions you've bought coverage on, or their progress to an agreed state. While a heart attack is a heart attack and requires no further definition, multiple sclerosis might not actually impair your lifestyle for many years.
CI pays out a lump sum of cash that you can use to supplement you cash flow while you're off work, pay for treatment, or simply get you to and from the hospital. Of course, you have to survive your diagnosis by at least 30 days to get your CI benefit. (If you don't the policy refunds all the premiums paid.) You could use the money to hire a nanny or a housekeeper. You could use it to provide special equipment or modify your home. There are no limits. As long as you're diagnosed with a covered condition, you're in the money.
I often recommend people who don't qualify for disability insurance look into CI as an option. Since there's an income requirement for disability insurance that doesn't exist for CI, it's a good option for those who choose to stay home with the kids.
As with life insurance, CI premiums are based on the amount of coverage you're buying. Choose the amount you wished to be covered for, which can range from about $25,000 to the millions. Then provide medical evidence of your good health. (Be warned: a strong emphasis is placed on your family's health history and a tendency toward a heredity disease such as cancer could result in its omission from your coverage.) The insurer will asses that info along with your age, your gender and whether or not you smoke to figure out your annual premium.
If you think CI is too expensive and you'd rather have the money for your savings account, keep in mind that a unique option available with CI policies is the Return of Premium when the policy expires. Usually expiry happens at age 65 or 75, depending on your policy. If you haven't had a claim (in which case you would have been very glad to have the policy), the insurance company will refund the full amount of the premiums you paid. This is sometimes referred to as the "no regrets" clause.
If you can't get disability insurance, or the premiums are just too high to be affordable, consider a CI policy to provide you with some protection against a future health crisis. Remember, however, that your CI policy only covers the conditions listed in the policy. If you develop a serious health condition not covered, you won't be eligible for a payout.
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Casssie Howard of MrsJanuary.com has written a new e-book called Money In Your Pocket, which focuses on saving money on your grocery bills. I've had a look at her book and liked what I saw. Cassie is giving away copies of her ebook to five lucky people here. I'll be awarding one copy a day this week. To enter answer the question of the day. Today's question: What one money lesson do you wish you had learned earlier in your life?
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June 24, 2011
The Miasma of The Nothing
I'm on a children's story roll this week. I've been sorting through the kids' picture books as I pick out titles for Tash's baby, Toni. Now I'm in deep mommy mode.
Have you ever seen the movie (or read the book), The Never-Ending Story? The majority of the story takes place in the parallel world of Fantastica, a world being destroyed by the Nothing. As The Nothing creeps across the land, everything is consumed, leaving behind desolation and emptiness. The protagonist is a young warrior, Atreyu, who is charged with finding a way to stop The Nothing.
I've met people who have The Nothing in their lives when it comes to their money. They are living in a miasma of inaction, the desperation of their circumstances paralyzing them. They're afraid to look too closely at the mess they've made because that'll crystalize just how dire their circumstances really are. Sometimes they feel helpless. I've actually had people say and write to me, "Gail, help me. I can't do this myself." They may even avoid seeking help because they're too embarrassed by the mess they've made to fess up and get help.
If you're sure that what you're doing now isn't working for you then it's time to face up and make some changes. For as long as you remain mired in The Nothing, you will be eaten by the misery you're feeling. Be strong like the warrior Atreyu and face The Nothing head on and you will not only overcome the fear and the embarrassment, you'll no longer feel helpless. You'll be moving forward.
It won't happen quickly. It'll take some time. It took time to make the mess, so it'll take some effort to fix what's broke.
And you're going to have to set aside the excuses you've been using for why you're in a mess. Here's one of my favs:
"Gail, I want to make things better but I just don't know where to start. How can I take money out for the jars if I'm always in overdraft?"
I get this questions ALL THE TIME. Hey, just because you're in overdraft, does that stop you from buying groceries? I don't think so. And that's the money you're putting in the food jar. Using the jars isn't about finding "extra money", it's about taking the money you'd normally spend out of the bank (yes, even off your overdraft) and putting it into your jars, and then not spending any more than that.
Eventually, if you've done a budget and you're cutting back on your expenses, you'll have the money to pay off that overdraft because you're watching where your money goes and you're focused on getting ride of the OD.
Here's another excuse I hear pretty frequently:
"I can't figure this out. I just don't really have a brain for money. It's too hard. Where can I go to get someone to help me?"
Seriously? You don't own a pen and a piece of paper, and you can't add and subtract. (If you really can't add and subtract, I'm not talking to you.) So many people see the "math" of money as overwhelming. It isn't. It's Grade 4 math. That's all you need. Well, not all you need. You also have to have some self-control.
You can change your life. You can work out your money problems. But you have to want to do it. And you have to be willing to get up off your ass and do the hard stuff it takes to figure out where you are now and where you want to go. If your distrust of the industry, your sense of being overwhelmed, your lack of time or willpower get in the way, The Nothing will eat you.
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June 23, 2011
Gertrude McFuzz
Some of Dr. Seuss's most poignant stories are those found in his compendiums, like this one that comes from Yertle the Turtle and Other Stories. (I'll talk about Yertle another time.) This is the character Alex played in the musical Seussical. I had never heard of her before I watched Baby Girl bring her to life. But she's quite something in the musical. Loyal. Brave. And a little obsessed with her less than fabulous tail.
With just a small, plain tail, Gertrude envies Lolla Lee Lou who has two feathers. She goes to her uncle, Doctor Dake and he tells her about some berries that will make her tail grow. Enthusiastic about being gur-jus, Gertrude eats the entire vine. Ooops.
Sound familiar? Little bit Princess-like dontcha think? Hey, boob jobs, nose jobs, botox… that's not so far off from a tail. Just look at the billions of dollars we spend every year on diets and exercise programs designed to sculpt us into something we wish we were. With the strong focus on the physical appearance these days, it's little wonder our young women are distracted from becoming independent and self-sufficient.
Back to Gertrude. Her tail grows to massive proportions, the weight of which prevents her from flying. She's forced to pluck out her tail feathers. Ouch! Ooo! Yikes!
This is a story with multiple morals: from the "be happy with who you are" to "be careful what you wish for", Gertrude McFuzz is a lesson in knowing what's really important.
When we compare ourselves with others and find ourselves lacking, it's only natural to want to make up our deficits. But what makes one tail better than another? Some superficial standard. If we buy into the standard, can we ever stop buying potential solutions to what we feel is missing from our lives? Will the house ever be big enough, the car new enough, the tummy flat enough?
What price are we prepared to pay to have "perfect." In Gertrude's case the price was her ability to fly (her independence). Luckily she figured it out.
"And, finally, when all of the pulling was done,
Gertrude, behind her, again had just one…
That one little feather that she had as a starter.
But now that's enough because now she is smarter"
If we want to help our children to grow up strong and independent, we need to teach them that they must set their own standards; they must know what THEY want, and not measure themselves by external yardsticks. And if we want our children to learn this lesson well, then we must demonstrate in our own lives that we're quite content with our one feather and our ability to fly. It's what we have that's important, not what is missing. Time to count our blessings and say thank you for our unique gifts.
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June 22, 2011
Parenting on a Budget: Today & Tomorrow
One of the best ways to reduce the amount you're currently spending so you can find some money to save for Junior's future is to take advantage of what's free. Extricating money you would spend on family entertainment also means you'll have more available for priorities like tutoring or competitive dance.
There are lots of things you can do with your kids that cost little or nothing. Pass on the high admission prices at local attractions and go exploring neighbourhood parks with your family. Take advantage of free municipal pools in the summer and the skating rinks in the winter. Visit the local museum or art galleries on free admission nights to introduce your kids to the arts and history.
Being smart on your taxes makes sense too. Some parents struggle with meeting their kids' needs while staying afloat financially. If you're a single parent or your family is living on one income make darn sure you're claiming the eligible dependent amount on your tax return. There are lots of other expenses that may be claimed on your tax return to mitigate your kid-costs.
If you're paying for a babysitter, daycare, nanny, boarding school or camp, you can very likely claim child-care expenses. The person with the lower net income should make the claim to get the biggest benefit. Make sure you have the proper receipts with the business information or the personal information and SIN of the child-care provider to make this claim.
If your child participates in any fitness activities – everything from hockey to soccer, swimming to gymnastics – you can claim the child fitness amount of up to $500 per year per child 16 and under. The activity has to be ongoing for a minimum of eight weeks or a camp that is a minimum of five consecutive days.
If you buy a bus pass for your eligibly dependent child, you can claim it on your return. Since the bus pass itself is not a receipt, you'll need the receipt provided at the time of purchase.
Your kids' medical expenses form part of your claim for medical costs and there is a long list of approved expenses that include things like prescriptions, eye exams and glasses, and dental work.
If your kids are away at college or university, their tuition may be transferred to you if they don't have enough income to make the full claim.
Speaking of college and university, your kids' budget should include a regular amount set aside for educational savings. If you start early, you don't have to set aside a lot, and each dollar you save can help your child earn grant money if it's put into a Registered Education Savings Plan (RESP). You'll need to get your child a social insurance number to make him or her eligible for the federal government's Canada Education Savings Grant, which pays the equivalent of 20% on the first $2,500 in annual contributions to a child's RESP.
When shopping for an RESP, make sure you stick with an individual or family plan offered by most financial institutions. Steer clear of the group plans or "scholarship trusts", which have come under fire for being both expensive and inflexible.
Kids are expensive, no question. When I had my daughter, Alexandra, I had no maternity leave benefits because I was self-employed. I had to have a good nest egg saved to see me through my time off. And after I had my son Malcolm, I was in no position to take gobs of time off work. With a hefty mortgage to pay, my income was essential to our family's stability. But I could make adaptations. And I did, cutting back on the hours I worked, choosing to work when my children were asleep, and creating a schedule that let me spend as much time as I could with them. We sacrificed fancy furniture and vacations in those early years. And my entertainment was sitting and watching my kids learn about the world. Those were some of my happiest years. We had a ball together. I shopped garage sales and second-hand stores, shared what I had with friends, and chose one activity at a time for my kids, so they weren't overwhelmed and I didn't go broke.
It's all about the choices we make and about figuring out what's most important so we can prioritize those choices. Kids don't arrive in designer labels, and they don't much care about stuff until someone teaches them to be concerned about what other people think. Avoid that bullet, and you can save yourself a fortune!
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June 21, 2011
The Ways We Save 7
Anything you do that has you using your money in ways that benefit you more makes you clever! Are you listening to me Patricia?
Well, I probably won't have the most heart-warming, or clever saving strategy, but I've never been more proud of myself for following through with this and I am about the enjoy the rewards of my saving very soon, so I am at the peak of my excitement and would love to share it with you! After all, your advice has really been what has helped me achieve all of this.
It all started towards the end of last summer. My husband and I had moved into a brand new home on an acre lot the previous fall. Leading up the move, we had suspended our 'extra' debt payments, using the money instead to enhance the house we were trying to sell (it worked!) and then for moving costs. We planned to restart the extra payments once we were settled in the new place; however, it was about 8 months later and we had only partially gotten back on track (thank goodness this letter isn't about looking after your budget while buying a home, or else I wouldn't have much to brag about…but we all make mistakes right?). So it was near the end of summer and I had 3 goals in mind: 1) We needed to get back on track and finish getting the rest of our debt paid off ASAP (1 student loan, 1 student line of credit and 1 miscellaneous line of credit that had been paid off and then spent a couple of times), 2) Looking at this acre of land I owned that was inhabited by mostly weeds and a bit grass, I longed for a nice landscaped yard with an interlocking stone walkway up to the front door (may seem trivial for some, but this was my dream…whatever floats your boat right?), 3) My husband had a business trip to Italy planned for the following Spring, I love to travel and HAD to travel with him or else I would be miserable.
I employed 2 strategies: 1) I decided to make more money. I already work full-time in health care, specifically in public health, but I really wanted to put my clinical health care skills to work, so I took sought out an opportunity to work for a long-term care home on a contract basis…as a contractor I get paid for a set amount of hours each month and I make my own schedule (so I work a few evenings and a few weekends a month). Since we both already had well-paying full-time jobs, this income was all 'extra'.
2) I tried to use our 2 lines of credit as our own personal 'manulife-one' style accounts. First I calculated how much extra money we had available to use as extra debt payments and how much we could save per month for each of my 'planned spending' goals. I divided all of this money between our 2 lines of credit and put large extra payments on each of them every month. I also looked at our bank accounts at the beginning of each month and transferred all the money that was left over from the previous month into the lines of credit (we obviously cut back on 'life' where we could to end up having a bit of money left at the end of each month, but we didn't deny ourselves too much). Christmas was a very small event, and our tax refunds went directly onto the LOC's.
So, by the beginning of this month (April 2011), we totally paid of both LOC's ($16,543.43 in total). The money I would have paid on the LOC's in May and June is now allocated to my Italy trip and my landscaping: $7500 total! I have set aside some additional $$ from my monthly budget to go towards some more of the landscaping over the course of the summer if needed. I'll be leaving for Italy on May 20th to accompany my husband for 2 weeks, and I've already started looking into some landscapers. It's so amazing to actually see the end result of all my hard work!
What happens after June you ask? Well, the debt is not finished yet. I am planning to tackle my husband's student loan and increase the payments so that it is paid off by April of next year (we chose to save this debt for last because we get the interest back at tax time). I'm definitely committing to not using the LOC's anymore. I'm also going to use some of the extra money to bump up our emergency savings and start putting money aside for a vacation in Fall 2012…so that my husband can actually go on a real trip, not just a business trip Obviously, I will be keeping my extra job…planning to keep it at least a few more years until I'm ready to start a family.
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June 20, 2011
A Money Day
Life's busy, isn't it? And so often we feel like there just isn't enough time to get everything done. Between work and schlepping the kids to their activities, dinner, laundry, the lawn and getting the car tuned-up, where's the Me Time?
There's nothing like having a day off work. Whether we've booked it off to go on that school outing with the kids or to visit with a friend we haven't seen in years, we love those vacation days. Sometimes we have to take a sick-day to get over a bad bout of the weekend. And sometimes we need a mental-health day: a day to get ourselves out of the miasma that life has swirled us into.
Imagine if you had a whole day to focus on your money and get it back on track. It'd be the day when you look at all the things that aren't just humming along and look for ways to improve them. What'd you do on your Money Day?
1. Call your insurance broker and make sure you've got the best deal on your home and auto insurance. While you're at it, if you've been putting off putting life insurance, disability insurance or critical illness insurance in place, you'd get the ball rolling.
2. Add up your debt and make sure you're on track to get it paid off. Haven't done a debt-repayment plan yet? Hey, this is the perfect day to do it. Get a copy of Debt-Free Forever from the library and work through the process. (If your head starts to hurt, put it aside for a few hours as you tackle the other things on your Money Day list. Just remember to go back and finish up.)
3. Review your bank statements for your accounts and make sure you aren't paying too much in bank charges. And are you earning as much as you can on your savings? If not, look around at the options available to earn more money on your hard-earned savings. This is the day you stop settling for a pathetic return on your savings account.
4. Review your budget. Yup, you should do this at least once a year. Better yet, twice. Are you spending what you planned? Have some categories grown over the past few months necessitating that you trim back elsewhere? Are there expenses that have crept up slowly and are now eating more of your money than you'd imagined? Get out the paring knife.
5. Look over your retirement plan. Don't have one yet? Open up a retirement savings plan and start setting aside $25 a month for your future. Make a date (put it in your calendar) to up the amount to $50 a month because you've found a way to trim some money from your nice-to-have expenses. If you've been diligently saving for the future, review your investments and see if you're happy with the way things are going.
If you had the foresight to plan ahead for your Money Day, it'd be the day you also put your Will and Powers of Attorney in place (finally!) and had a visit with your money team (investment advisor, insurance broker, et al) to make sure they're keeping you front and centre in their minds. Hey, they're busy too. You have to make sure they're thinking about you. Whatever needed tweaking you'd tweak. And if you were right on track with where you wanted to be financially, you'd know that too.
Grab your daybook and pick your Money Day right now. If it's a few weeks from now that'll give you enough time to do some planning and gather everything you need. Won't it be nice having all those things you've been promising to do finally DONE?
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Thanks to all the well-wishers on my birthday. And thanks for all the jokes. I just loved reading through them all. I laughed and laughed and laughed. You're all so fabulous and I'm very lucky! Here are the winners: Sandy, Caroline, Doreen, Sylvie and Patrick. Send me your snail mail address to getgvo@gmail.com with "winner" in the subject line. If you want me to sign your book, say so (and to whom if it's a gift for someone else.) Imma wait til the postal strike is over before shipping.
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