Gail Vaz-Oxlade's Blog, page 86

This & That: Relationships Take Work Edition

I wrote:  My husband and I are in our middle 50's.  We have a $150,000.00 mortgage (house is valued at about$ 475,000.00).  We make approx. $5000.00 a month NET.  We have $5000 on our line of credit and no credit card balances.  My question is we want to retire in 5 years.  Should we sell our cabin in the mountains and pay down our mortgage.  (I think the cabin would bring in maybe enough to pay off the mortgage or fairly close.)  My husband wants to keep the cabin, I want to sell and get rid of the interest we are paying to the bank each month.  What would you suggest?

Gail says:  No way am I wading into this argument.  Do I look like I was born yesterday?  It sounds to me like your hubby may be more emotionally attached to the cabin that you are.  And you may want him to have that cabin when he does retire and you need a place for him to go for a few days.  I know you want to retire early, so you both have to decide if having the cabin is worth a few extra years of working.  Your first priority should be to get that line paid off.  Interest rates are on their way up and you want to be free of that sucker.  You can then use the money you were using to pay off the line to pay down the mortgage.  Make sure you're on an accelerated weekly payment.  Maybe there are other things your husband has that he's willing to get rid of to keep the cabin.  Or maybe you agree together that the cabin isn't being used enough (nor will it be in the future) to justify keeping it.  This should be partly about getting to debt free before retirement.  But it should also be about what you really want, and what else you're prepared to give up to get what you really want.  Both of you.

S wrote:  My husband is a spender.  I can make buffalo howl (rubbing buffalo nickels together).  I let him spend his money-his allowance.  My allowance (for me to me) is $20 every 2 weeks.  How can I get him to come to my way of thinking without nagging (doesn't work, been there, done that) and ruining the marriage?  I pay the bills and we are not deeply in debt-about 2K on credit cards.  I pay $50 extra on the mortgage.  I would like to have no debt.

Gail says:  Marriage is about figuring out what's important to both people in the relationship.  Why don't you think of something that's really important to your husband that he requires your cooperation for?  Then sit down and talk about how he would feel if you didn't cooperate.  Then tell him that the money thing is as important for you and that is for him.  Now you want him to commit to cooperating because this is so important to you.  Tell him you're not going to nag or bug.  He's a big boy and perfectly capable of monitoring his own behaviour.  If he does not meet you half way on your need, you back off on his.  He'll figure it out!

Malikum wrote:  Dear Gail, I've just finished graduate school and I'm currently between jobs (i.e. I'm not earning at the moment).  I am a 35-year-old woman and I'm in romantic relationship with someone who says they're serious about our future (and he is earning at the moment, he is a fireman).  I would like to get serious too, but his spending seems so impulsive and excessive, I'm afraid of merging accounts, and therefore lives.  I am a saver, I buy what I need, and I try to invest my savings, and I admire people who are also savers.  I have recently introduced my beau to your show, but he doesn't seem to be taking the hint.  He is critical of those on the show, but isn't thinking about applying those tips.  In truth, I am only *guessing* that he is spending more than he is earning.  How do I broach this subject with him without him becoming defensive and pointing to my current unemployment (which I am working on, and which is a touchy subject!)?  I don't want it to appear that I'm a gold-digger or nagging him, but I am concerned that there is not a day that goes by without his spending on restaurants, beverages/snacks at work, and entertainment, like magazines, music, posters, or kitschy goods.  I feel like his consumption is a matter of self-worth and esteem?  I would like to raise this issue and sort it out before committing my life to him.  Is that fair?

Gail says:  It most certainly is fair.  You should be able to talk about the money because it is going to be something that affects you both as individuals and as a couple your whole lives.  In our culture of consumption, being secretive about money is the name of the game.  We don't want our partners to know how often we hit the ubiquitous ATM, click the "buy now" online or accept one of the many credit card and line of credit offers that come through the mail slot.  But if we don't talk about the money — including what we're bringing to the relationship in terms of assets and debts — then we're not being upfront and honest with each other.  And that lack of openness and honesty can hurt people long after a relationship bites the dust.  So I encourage you to talk to your future "life partner" about this.

First, tell him that this isn't about what's gone on in the past.  This is about building a future together.

Next, ask him to share what he feels is important to him, and ask him to listen to what you think is important to you.

Then talk about what you want, need, expect from each other.

He should not be throwing your "not working" into the mix.  If he does, ask him if he would feel angry or sad if you ended up making more than he does when you do find work. How will you deal with the arrival of children, and the drop in income that usually comes with?  How will you both share expenses so it is fair and so you can also build your own savings and achieve your individual goals?

I believe very strongly that the way a couple deals with their money — handle it, cope with disappointments, negotiate disagreements — is a pretty strong predictor of the long-term success of their relationship.  Since disagreements about money tend to be intense, if you can swing those with civility and with a focus on solutions, just about everything else will be easy.  If you can't talk about money, or if one partner uses money to control or manipulate the other, then the relationship is doomed, so just don't go there.

If you or your partner are entering into this relationship thinking that you won't have to (or be able to) speak freely about money, that says something.  And if you don't have a sense of security about the future, that says something too.   While you may want to maintain some financial independence – don't share credit! — you'll also want to work together to deal with the day-to-day costs of living and to achieve the goals you set as a couple.  And you'll have to talk about it to do that.

Alison wrote:  Hi Gail, Thank you in advance for your time – I know it's valuable!  I love your show and watch almost daily to find useful tips to incorporate into my life.  I am married x10years, 3 kids (ages 7, 5, & 2.5), own a house and 2 vehicles.  My husband and I have no debt except for our mortgage.  I have two credit cards, my husband has three.  My husband would like to save every penny that we make and pay down our mortgage in record time, and I like to enjoy life and some of the sweeter things that it has to offer.  Our take home income per month is approx. $7000.00.  We have tried to use a budget but have never been successful with sticking to it.  We do not carry a balance on any of our cards and try to use cards that "pay us back" something.  Our monthly expenses pretty much break us even, but we stay in the black and manage to save a small amount each month.  We share our money – we have one account that pays for all and we pretty much make the same (him working full-time and me working part-time).

My question/problem is this:  I think that we are doing well – this is probably the most expensive time for us in life with a young family, paying a mortgage, me having to work part-time, etc. and I feel that we should be proud of ourselves for the way we have handled our finances.  On the other hand, he is in a constant state of anxiety about our finances.  It is a major problem in our marriage – I can't spend anything without causing him anxiety and in turn, me feeling a certain amount of guilt about it.  I don't know that I can convey to you the enormity of the problem that this causes, but I am very concerned that we are headed for disaster because of his unrealistic fear that I will spend our family into the ground (even though I have long since proved that I will not do that).  How can I get him to realize

that we are on the right track?  Do you have any suggestions for couples who are in a saver/spender relationship that find themselves at odds, despite no actual financial problems?  What percentage should we be trying to save with our income (currently save about 5%, not including RESP $)?  Please help!!!

Gail says:  If you are saving 10% of your income and you have six month's worth of essential expenses set aside, you should tell your husband to stop worrying so much.  If you're behind on either of these scores, it's time to come up with a system that satisfies his need for safety and your need to have a good time.  Life has to be about joy and pleasure.  But it also has to be about responsibility and protection.  Look over what you have been spending, and on what.  Talk about what your needs are, and what he wants.  Negotiate the things you will spend money on and the things you'll cut back on to make sure you're saving enough and have a emergency fund.  If this is as huge a problem as you indicate, you need to start talking about it.  Perhaps you'll decide to use an "allowance" system where you each get a specific amount you agree upon that you can blow any way you want, no questions asked.  It may be $100 a month, or an amount that is more or less depending on your financial situation.  Then you'll have some money you can use to have a great time and he will know there's a limit on your "frivolous" spending.

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Kids & Advertising

From footwear to hair care, big business is making its pitch to little consumers and scoring billions of dollars. Marketers know that kids influence consumption and their focus has moved from the traditional toys, candy and cereal to computers, clothing and cars.

If you're worried that commercials are having an undue influence on your children, you're not alone. But wringing your hands or banishing TV isn't the answer. Instead, talk to your child about marketing and how often the "promise" and the "reality" differ. Kids need help to see that what's promised isn't always what they get. When your child says he wants the latest action figure, ask him if he thinks said figure will move of its own accord. When you take him to the store to buy the product, take it out of the packaging (another buy-me ploy) and ask him if it lives up to his expectations.

Kids need guidance when it comes to distinguishing a sales pitch from television's non-commercial content. You actually have to teach your kids that advertising exists to sell products, that special effects can exaggerate a toy's operation, and that the ads don't always include all the information about a product. I remember the first time Alex and I watched Barbie swimming and I asked, "Do you think she can really do that?" Alex looked up at me, eyes wide and nodded. We had to have a little chat about what is real and what is "salesmanship", and we've been having the talk ever since. My girl has grown up to be a pretty smart (yes, and a little cynical) as a consumer.

The next time you watch TV with your son or daughter, take time to point out the difference between the programs and the advertisements. Talk with your child about the different types of commercials on TV and radio. Watch or listen to several ads together and have your child label the ads.

Wannabe Ads: Beautiful people having scads of fun doing things we would all love to be able to do: rafting, skiing, skateboarding, dancing. Buy the product and you'll be part of a group of fun-loving, popular achievers.

Famous People Ads: Athletes, movie stars, musicians, famous business people, even politicians appear in ads. The message is if someone famous uses the product, shouldn't you?

Cozy Ads: These ads depict warm, comfy pictures, usually in an intimate setting. A grandpa and grandson chatting on the telephone or best friends sharing secrets over a tub of ice cream. These ads want you to relate their products to love and contentment.

Facts Ads: Four out of five doctors, six out of seven dentists and nine out of ten mechanics all say this is the best product available. Could all those experts be wrong?

The Great Offer Ads: These offer you a not-to-be-believed, too-good-to-pass-up opportunity to get more for less — eight CDs for a dollar, 12 tapes for a penny, buy two get one free, buy one and the next is half-price.

Once you and your kidlet have labeled the ads, make a game of finding four or five examples of each type of ad. Ask your child:

Is the product better because a famous person says it is?
Will you be happier, safer, warmer, cozier, if you buy that product?
Can you figure out what the product is really like from the ad?
Is the deal being offered a good deal? Do you know all the facts? Are there any catches?
Are your buying decisions being influenced without you being aware of it?

Then the next time you're at the supermarket, ask your child to choose a food product he or she saw advertised. You choose a similar no-name product. When you get home, do a blindfolded taste test so your child can experience firsthand whether the advertised product lives up to its claim.

Given the constant barrage of messages to buy, buy, buy, it's not surprising that children are the consummate consumer. Maybe it's time to start making your kids smarter about how they spend their, and your, money.

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Do You Use Your ATM?

I was standing in the line for the banking machine the other day, when the guy in front of me motioned for me to go ahead. "Aren't you waiting for the machine?" I asked.

"Nooooo," he said, shaking his head. "I never use those things." He was waiting for the branch to open.

He might have been a bit older than me, but he was no old coot. It made me scratch my head. Really? You'd rather be limited by banking hours than learn to use the banking machine? Whazzup with that?

In Canada, in 2007, we logged about 33 transactions per person, about the same as Sweden, and a lot more than France. It might surprise you to learn that of the 57,000 ABMs in Canada, only about 17,000 are bank-owned.  The rest are gonna juice ya out of as much money as they can grab, if you're stupid enough to use them.

Only 17% of Americans use ATMs for their transactions and ATM transactions have fallen consistently since 2004 (except in 2007 when they skyrocketing and then fell again) and American's logged 11.8 billion ATM transactions in 2008.

Not long after my encounter with the gentleman at the bank, I was visiting my cousin in Florida. Their "drive through" banking is completely different to ours. Her bank used pneumatic tubes to move the paperwork to the attendant behind the window, who returned receipts and whatever else to her in the same way. Pneumatic frickin' tubes! OMG!

So I asked my cousin, "Don't you have a bank card and use the banking machine."

"Noooo," she said, shaking her head. She's two years younger than me.

I'm not sure why people resist using the more efficient banking machines. While age may have been true for my parent's generation, it certainly isn't true now when virtually everyone is virtually connected. My cousin is totally computer-literate: she's got a smart phone, a desk-top and an ipad. So why no ATM card?

When banks whine about profits (right!) could it be that they're incenting consumers to use the most inefficient systems and then complaining about it.  An ATM has got to be more cost-effective than a pneumatic tube set-up and the accompanying body. And encouraging people to move to the ATM makes a lot more sense than having to staff up for extended hours.

And then that got me thinking about just how stupid it is that we have to pay transaction fees for using ATMs when all the teller services are free. This is particularly true when you're living in Small Town Anywhere and don't have the option of using your own bank's ATM because the only ATM available is the one belonging to a competitor. For while all the "save money" stories talk about only ever using your own bank's machines, I've had the experience of living in a small town where there was only one bank, and it was only open part-time. My choices were to drive 40 minutes to using my own bank's ATM or pay up and shut up at the local ATM.

Happily, I'd negotiated with my own bank for a service package that included two free "other" machine withdrawals, so as long as I kept my local ATM withdrawals to two a month, I was in the clear. But there were a couple of occasions when my planning wasn't spot on and I had to fork over that $1.50… Ohhhh, I hated that!

So, what's your preferred method of banking? ATM? Internet? In-branch? And what do you pay in service fees to use the services your bank offers? Have you even checked them recently?

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Claiming the Medical Tax Credit

Lots of people don't understand how to claim the medical tax credit on their returns. Not surprising since much of the information that's available is written in Taxeeze. Since most people don't speak Taxeeze, they're left scratching their heads. Let's see if I can simplify this for you.

First, the claim for medical expenses is a tax credit, not a deduction. See this blog for the difference.

The 3% to which the credit refers is the income threshold used to calculate the tax credit. What that means is that you take your total medical expenses (you should group them all together and make one claim for you, your spouse and the kids) and you subtract 3% (or $2024 for 2010, whichever is lower) of your net income before you can begin making a claim.

Since the claim is based on income, the lower income spouse should make the claim, providing they've paid enough tax to claim the full amount. So do both calculations and then decide. And remember, you can carry forward some of the expenses from 2010 to 2011 if that works out better for you. How?

Expenses you've paid in any 12-month period ending in the tax year for which you're claiming can be used. So you could use expenses from Jan 2010 to Dec 2010 or claim only some of the expenses in 2010 and the rest in 2011 (from say, September 2010 to June 2011) or depending on what's more advantageous.

Don't overlooked premiums you've paid for health insurance, including medical and dental premiums, even if it's through your employer. As long as you paid you can claim. And don't forget about eyeglasses. While they may be a fashion statement, they're also a medical deduction, as long as they've been prescribed.

You can only claim the amount of medical expenses you actually paid and were not reimbursed for. If you paid a co-insurance amount or a deductible amount, you can claim them on your taxes.

To see a full list of which medical expenses are eligible, go to the Tax Man's site. Since medical claims differ by province, pay particular attention to which medical practitioners are eligible by province or territory.

If you had to travel at least 40 kilometres one way for your treatment, you can claim that too. You have to log your distance and claim the per kilometre amount available in your province. Go to googlemaps.com and enter "your postal code to the facility's postal code" for the distance you've been driving. Take a print of this for your records, in case you need proof. Then get a letter from the facility showing the days you attended.

If you have to travel 80 kilometres or more one way, the claim can also include meals and accommodation. And if the patient is certified as unable to travel without an attendant, an additional claim for the travel costs can be made for a travelling companion.

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Thinking & Doing Can Be Different

Have you ever noticed how you can KNOW something and then be tricked into thinking something else. There are all those perception tricks, for example, like this one at Dan's Ariely's website, which clearly demonstrate that our brains don't always perceive the truth. (I have a HUGE crush on Dan Ariely. Such a brain!)

So why do we believe we should do one thing yet do something completely different? Why do we fail to exercise self-control or skip following through with a plan when we really know we should?

Robert Kurzban is an evolutionary psychologist, and associate professor at the University of Pennsylvania. He believes that instead of "one mind", we actually have a ton of different pieces and sometimes those pieces can be in conflict with each other.

His idea that the mind is modular is somewhat new and a little controversial. He likens it to a smart phone that has lots of great applications.

Not all the modules co-exist peacefully. Sometimes they have to fight it out to get you to behave in a way that best suits their agendas. That's why you end up turning into  McDonald to buy a Big Mac and two blueberry and maple pies; the modules in your brain which require highly caloric rich foods win over against the modules that are set on you losing that last five pounds.

Much the same theory can be applied to buying stuff on credit when you know you should really be working at paying off your debt; the pleasure centres which derive satisfaction from the acquisition of something new win out against the planning centres that want you to stop shopping on credit.

This conflict between modules in our brains can be frustrating, but they are also what make us so flexible and such good learners. And it is this very conflict that defines our humanity.

Self-deception takes many forms. There are the folks who consider themselves to be infinitely more attractive than are. Think of some of the Princesses I've worked with. Or the people who think they are better drivers than they actually are. Or the folks who consider themselves to be good with money, but don't have a nickel saved for the future.

As a rule, we also like to divert blame for our bad decisions to some external source, while we are very willing to accept responsibility for the things that turn out well. Kurzban says, "I think people are making use of what I would call psychological propaganda. So if I can claim credit for whatever it is that's good that's just happened, and someone else believes me, well that's good for me, because it's good to be held in high esteem and to be the bringer-about of good outcomes. That makes you popular and being popular is useful."

Taking charge of the context of our lives may be the key to doing what's right, instead of doing something that's in conflict with what we're thinking we should be doing. It's the old, "Don't go grocery shopping when you're hungry" rule.  When you're hungry, your fat and sugar and salt modules are running the show and so you're that much more likely to pull all the wrong things off the shelf. But eat before you go, and shop for only the things that are on your list – so control your context – and you're that much more likely to behave in line with your thinking.

If you're thinking that the mind's conflicting modules can let you use the old "The devil-module made me do it" excuse, think again. While your mind's conflicting modules exert a strong influence on you, you're still responsible for the action you take. So if you have a couple of drinks and get into the car and have an accident, you chose to do it. And if you're feeling a little blue so you grab your cards and head to the mall, you can't blame your conflicting module for the debt you ring up.

Knowing that there is conflict is the key to not letting the wrong module win the battle. As Kurzban says, "Changing our contexts can enable us to give some modules an advantage over others, particularly the ones that we want to have the advantages."

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Guest Blog: Barbi's Story (Part 2)

It just keeps getting better. g

Alright, so now we've got our budget all set up and ready to go. How do we stay focused and committed to it? How do we work together as a couple and stay on the same page? How are we able to pay off all the bills on a relatively modest income?

While we live very comfortably and don't feel restricted or limited by our budget, we are relatively careful spenders. We know our priorities and we don't nickel and dime on those things, but for the things that aren't priorities, we shop around for the best deals and we limit our spending in those categories. Let me use an example. For us, one big priority is where we live. Neighbourhood, safety, space (and closet space) and the condition of our apartment are very important to me, so we chose to live in a place with high rent. People balk at what we pay in rent and ask why we "waste" our money on it, but then I look at them and wonder why they "waste" their money on buying lunch each day instead of bringing their own, buying daily coffees, or going out to bars and buying drinks for $5 a piece. I wonder why people pay sometimes double the price for the exact same product at Loblaws instead of No Frills just because the interior of the store may be a bit nicer or because it has a certain reputation. I wonder why people spend $100 on pants when they could buy them second hand for $15.

But hey, everyone has their own priorities. The point is, you need to choose a few priorities; you can't make everything a priority. So for us, we spend a little extra on rent, we go to an expensive vet for our cats because it's a convenient location and has great hours, and as avid runners, we buy the best shoes that work for us without so much as looking at the price tag. Those are just a few examples but you get the idea. Budgeting doesn't mean you can't ever spend to get what you really want, you just can't do it all the time. To balance these things, we take lunch to work each day, we get just weekend delivery of the paper instead of daily, and we buy some of our groceries in bulk and some of our clothes second hand.

It's because of being able to differentiate between these priorities, being able to know what will actually make a difference to our happiness and what won't, that we've been able to set a budget that is easy to live on without feeling constrained. In fact, sticking to our budget has not only been easy, it's been fun! That's because we've made it a hobby of ours by finding software we enjoy using to manage it. Some people may like best to use simple pen and paper, or an excel spreadsheet. But for us, we make it almost a game by using a program called MoneyWell (and that's just one example, there are plenty out there and I've heard particularly good things about a web application called Mint) where we can set up "buckets" (these work just like the jars on 'Til Debt Do Us Part), record our spending, and get fun little graphs to show us how close we are to reaching our maximum allowance in each category for the month. I won't get into the details of all the great features MoneyWell has, but the point is, we don't think of it as a chore. In fact, I enjoy the challenge of sticking to a budget and checking up on myself to see how well we're doing. Find what it is that will make budgeting and tracking your spending enjoyable for you.

One last piece of advice: No matter how much you get into the groove and start actually looking forward to managing your finances, things are bound to happen. So, keep it as easy and simple for yourself as possible, and make contributing to your savings automatic. For us, this means having reminders on my calendar that pop up once a month to say "Deposit money into RRSP". For people with less discipline, it might mean having an actual direct deposit set up on your bank accounts that moves your money into your RRSP each month whether you like it or not. Only you know yourself best and know how much guidance you'll need.

But, there's one thing that's for sure. You're not too young to be in control of your finances, and your future. So go grab a book, learn a little something, put it into action, walk with your head held high, and make sure to have fun while you're at it.

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Guest Blog: Barbi's Story (Part 1)

Y'know, every now and then I get a letter from someone who makes me see just how sensible some young'uns can be. When I got a letter from Barbi Lynn, I thought to myself, "Now there's someone who has the kind of focus it takes to keep everything in balance." So I asked her to tell her story so I could share it with you. Today (and tomorrow) I offer you a guest blog from Barbi Lynn who tells how she's managed to come to terms with money and have a great life too. Here's Barbi:

Before I start getting self-righteous and telling you how easy and simple it is to be financially stable in your twenties, let me start off by saying I know I've been very lucky. I've been raised since day one to be organized and to be a planner. It's ingrained in my personality and is reflected not just in how I manage my finances, but in all aspects of my life. I also lived at home during university, so I graduated and moved out on my own with no student loans or debt to pay off, and could start putting aside savings right away. My partner and I were also fortunate to move in together soon after graduating. We were showered with graduation gifts – whether purchased or hand-me-downs — from relatives, which helped us furnish our new home together on a dime, again allowing us to start putting any extra income we had to savings right away.

That being said, I'd still like to give ourselves a bit of credit for the fact that at the age of 26 and after having been on our own for just over two years, we've got an established emergency fund, no debt, established vacation savings that allow for 1-2 nice trips each year, and plenty saved for a down payment on a home. On top of that we max out our RRSPs and TFSAs each year.

So how do we do it? Or more importantly, how can you do it? How can you stay focused on managing your finances, saving some money for the future and still enjoy life in the here and now?

If I could give one overarching piece of advice, no matter what your personality or how far you want to take your budgeting process, it's to have pride and confidence in the fact that you manage your finances well and that it's a priority for you. Don't be ashamed to do things that you might think make you look "cheap" or "uptight". Just like on Gail's shows, we track everything we spend, and I mean everything. That means that when I pay for a loaf of bread that costs me $2.75 and there's a line of people behind me, I ask for a receipt. Sure, it feels embarrassing sometimes but I don't give a damn. I ask for it anyways because it's easier for me to get home with all my receipts than to sit down and try to remember each place I stopped at and how much I spent. It also means that if a friend asks us to go out for dinner when we've already spent all the money in our budget for dining out that month, I say, "We can't next week, but why don't we make a date for sometime in February?"  Do what works for you and do it without apology.

But how did we even get to this point where we have this budget set and we sit down routinely and track our spending? It's very simple actually: We read books, asked questions, and took advice. Really, there are people who do these sorts of things professionally for a reason. Once again, this relates back to taking pride in engaging in the topic and not being ashamed to ask for help. My partner and I are big fans of 'Til Debt Do Us Part, and we learned a lot from there. But before we even moved out of our parents' homes, we read books on saving, investing and budgeting, and we took the advice they offered. We simply followed their instructions, which were, well, simple.  Set up a budget. Pay yourself first by putting aside savings each month. Take advantage of RRSPs. Think about investing to grow your savings.

We took advice not only from the experts, but also from relatives with their own unique experiences. We knew we wanted to adopt pets once we were settled in, so we included a pet category in our budget. But it wasn't arbitrary. I asked my mom how much she spent annually, on average, on vet bills and food for our family dog, Heidi, and we divided that number by 12 and used that as a starting point. I knew that my uncle was also responsible in managing his finances and kept a budget, so I asked him to send me his so that I could see the various budget categories he had.

Tomorrow: Part Two of Barbi's Story

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The A, B, Cs of Money: J & K

JEKYLL AND HYDE: If a company's financial statements seem to show strong performance but a close look reveals a weakness, it's said to be Jekyll and Hyde, from the book by Robert Louis Stevenson. And if a stock is fluctuating dramatically in price, that volatility is referred to as Jekyll and Hyde.  Your teenage daughter might also be Jekyll and Hyde.

JOINT: You can hold title to assets in a couple of ways: If you are joint tenants (on title to a property) then you have the right of survivorship so that if one owner croaks, the other gets the whole kit and kaboodle. If you hold title as "tenants in common" then if you croak, your share would pass to your estate. This same idea applies to joint accounts: by holding the account jointly, the asset avoids probate and passes directly to the other guy signed on the account. But it also means the other guy can empty the account any time she chooses if only one signature is required. And if you're jointly signed on debt and one of you goes bankrupt or skips town, the other is left holding the bag. NO ONE SHOULD HAVE A JOINT CREDIT CARD! EVER!

JUNK BONDS: Bonds that offer high rates of return with loads and loads of risk to your capital are said to be "junk."  Sometimes investment salespeople clean up the language to "high-yield debt" to avoid the flinch some investors have when they hear the word "junk." Bonds are rated from AAA on down to AA then down to A and then to BBB. Typically, anything at BB (speculative) or lower is considered "junk". You can end up in the junk bond market accidentally if the bonds you've bought are downgraded.

KICKING THE TIRES: If you do your due diligence on a new investment, asking your advisor about a company and doing indepth research before slapping down your money, you're said to be kicking the tires. If you aren't prepared to kick tires, then you should stick with indexed investing or have someone who will tire-kick for you.

KNOW YOUR CLIENT RULE: There is a rule that says Canadian financial advisors have to understand their client's investment objectives and make appropriate recommendations.  Rather than following the intent of this rule, this good idea has been replaced by the KYC form, which many advisors will have you update every year and then stick in a file and ignore the rest of the time. HOWEVER, if you've been put into an investment that goes into the tank, and that investment is contrary to the info on your KYC form, you have recourse with the securities folks.

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New to You

Looking for a way to get some "new" in your life without dropping any money. Why  not hold a "new-to-you" party. Get together with 10 or so friends and exchange what they have for what you have. In the old days these were called Swap Parties. They wax and wane in popularity depending on how the economy is doing and how "rich" people are feeling. The more frugality becomes fashionable, the more popular the New to You trend gets.

Not only are Swap Parties a great way to save money, they are eco-friendly falling under the "reuse" category of the 3-Rs. And all kinds of things can be swapped.

Baked goods and frozen meals. If you have a group of girlfriends who love to cook, why not start a dinner and dessert swap. Each of you makes something you're particularly good at. You stick one in your own freezer and then bring a half-dozen to the Swap Party. Bring a sample for everyone to try. You can go home with six new things for your freezer. I'm more likely to swap my savoury for someone else's sweet because I'm not much of a baker.  You can also do this with home-made jams and pickles to broaden your inventory.

Cards, wrapping paper, bags, and other stationary. People always seem to have a ton of this kind of stuff hanging around. As long as you take home only as much as you bring to the party, everything comes out fair. If, for example, you decide to swap cards, you arrive with your contribution and stick 'em in a couple of boxes and the passing around begins. If you brought 10 cards, you can take 10 new cards from the box.

DVDs, CDs, books and games. Have a bunch of games sitting on the shelf gathering dust? Done watching those movies? Time to put New to You to work. There's nothing more satisfying that getting a new set of DVDs or books that are new to you without having to spend a cent. Hey, it's a little like shopping second hand, but cheaper. If there's stuff left over at the end of the night, one person can take it all to the local library.

Clothing. Whether you're a stay-at-home mom who is just re-entering the workforce, or you're simply looking to change up your style a bit, a clothing swap can work if the people involved are all of a similar size. Or maybe you want to swap clothes because you've gained or lost weight, in which case you'll want multiple sizes at your party!  If you're off-size, you can still play if your clothing swap includes accessories. Or maybe you want to focus on the one-wear outfits that have been hanging dejectedly in your closet. Think of all those outfits you bought for weddings or other parties that you haven't ever worn again. Swap 'em and have some fun.

Toys and baby gear. Getting together with moms is a great way to offer new-to-you toys to your kids. You each bring a couple of toys your kids no longer play with to the party, swap, and go home with something fresh and enticing for your young'un. Ditto clothes your kids may have outgrown.

You can have a swap party for anything you and your friends have similar interests in: plants, seeds, and perennials are great for gardeners in the spring. Recipes (with accompanying samples) and coupons work in the fall when the focus moves back to nesting. Scrapbookers can swap supplies. Sewers, knitters, quilters can share patterns.

Swap parties can be a great way to not only stretch your budget, but have some fun too. And if each invitee brings a guest along, it can also be a terrific way to make new friends.

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Sleep on It

Whenever I have a big purchase to make, I practice (online), and sleep on it for a few days.  I find that if I load up my cart online but don't cash out, and then sleep on it a while, I can decide with fresh eyes how much I really want what I've put in my cart, and whether I'm happy with the price.

Take the last 2 pairs of yoga pants I bought. Last purchased a couple of years ago and worn ALL THE TIME, the ones I have were looking a little ratty.  So I loaded up my online cart with the two new pairs that I wanted and then went away for a day. And another day. And another day. Eventually, almost a week later I came back to the cart. Yes, I did want those yoga pants.

This doesn't always translate into an online purchase. Sometimes I like to shop for whatever it is I'm considering in person so I can touch and smell and experience the item before I buy. Sometimes I decide that the things in my cart were "impulse" purchases that, after careful consideration, I don't really need or want. Then I just delete them.

Heaps of things can influence your desire to impulse shop.  According to research, 88% of all impulse purchases are made because the item is on sale. Yup, just the idea that you may be getting a bargain is enough to make you dig into your wallet. Thing is, if you're responding on impulse, how can you possibly know if you are getting a good deal? And if you're responding to a percentage off, what does that mean in real dollars you perceive that you've saved versus the very real dollars you've spent?

It's not just the numbers or words on the sale sign that'll grab your attention. Color can draw you in and keep you focused. Strong contrasts, like black and yellow, are key. In fact, bright yellow has been proven to be the most visible colour, and when we see black and yellow together, we have an instinctive reaction — an ancient collective memory – that keeps us paying attention.

Even your means of transportation can impact your impulse purchase. Not surprising really? We might be willing to fork over money and lighten our wallets, we're far less willing to carry our stuff. That's why shoppers who arrive by car instead of on foot are 44% more likely to make an unplanned purchase.

Emotions play a huge role in our desire to impulse buy. If we're angry, stressed, guilty or bored, we're way more likely to buy something we never expected to buy. No doubt that's why instead of buying useful or necessary stuff, impulse shoppers buy things that put them in a better mood.

And you know that old adage, "Don't go shopping on an empty stomach?" doesn't just apply to grocery shopping.

At the National University of Singapore researcher Xiuping Li had participants shop in a room with an unscented candle or in a room with a cookie-scented candle. The women exposed to the yummy smelling candle made more unplanned purchases. In fact 50% more women made purchases in the cookie room even though both groups were told that they had a tight budget. It seems stimulating the appetite causes people to crave immediate gratification, even if the actions aren't in their best interest.

When you realize you need something and then set out to get it — when you have something in mind that you already know you want to buy — that's purposeful shopping. Sometimes you realize it at home when you realize that you need something you don't have. Sometimes seeing something in a store triggers the idea. If you scratch the itch in the store, it's an impulse buy. If you recognize the need away from the temptation to shop, it's what psychologists call "problem recognition" and you're much more likely to shop smart.

That's where sleeping on it comes into play.

If you walk away from the idea of the buy, giving your brain enough time to weigh the actual benefits against the actual costs (money and missed future opportunities), you're moving from impulse shopping to problem recognition (and satisfaction).  Well done!

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