Gail Vaz-Oxlade's Blog, page 9

What’s In Your Garbage?

Can’t find money to save? Hey, maybe it’s time to take a gander at your garbage. North Americans throw away gobs of stuff every year. You need look no further than those ads for Ziplock containers to see some startling stats on just how much money we waste. If you’re wasting money, shame on you. If you’re wasting the money you should be saving, you don’t have the good sense God gave a goose! Time to dive into your garbage to find the clues for where you could be saving.

One-use products: If you’re using paper towels, plastic cutlery, disposable cleaning wipes or plastic bags, you’re not only doing your environment a disservice, you’re wasting potential savings. Yes, single use products may be convenient, but reusable options are cheaper.

Take out containers: Eating take out cost ten times what it cost when you prep your food at home. Meal plan so you have something quick and easy for those busy nights. And cook big and freeze two portions for those nights when you just can’t be bothered to cook.

Wasted food: Here’s one that I think shows a decided lack of imagination. I get that your veggies and fruit may be moving close to their best-before date, but that doesn’t mean they need to go into the garbage. You can put all kids of veggies in a stew or a pot of chili, freeze it and have it ready for the night you just don’t feel like cooking. (Hey, now you’re saving on take-out too! Don’t say I never do nuthin’ for ya.)

Gobs of packaging: Much of the stuff we buy comes in all kinds of packaging. Pre-packaged food is expensive. So are tins of spaghetti or packages of snack foods. The home-made stuff tastes better and is better for you. And don’t get me started on all that packaging that comes wrapped around a small item like a zip drive or a DVD. If you’ve got loads of packaging in your recycling, you may have a wicked case if I-want-it-I-buy-it. Trim back to just meeting your needs for a while, and you’ll be amazed at how much that want-money adds up to in terms of savings.

Commercial cleaning products: They’re easy to use. They’re efficient. But if you’re paying gobs of money for brand-name detergent and household cleaners, you could make your own and save. This is becoming a trend as consumers recognize that home-made cleaners (vinegar and baking-soda) are not only cheaper, they can be better for your health. Don’t want to pass on the great smell? Go with an essential oil in your favourite flavor and you’ll still have money to save.

Single-use water bottles: Still? Really? Because your tap water sucks, or because you’re too lazy to fill a bottle and keep it in the fridge? Get yourself a Britta and you’ll save a ton of money rather than buying cases and cases of bottled water. And if you’re tap water tastes fine (you have tasted your tap water, right?) then let good enough be good enough.

Happy 2016!

I’m out and about this month while I’m on book tour for my latest book, Money Talks: When to Say YES and How to Say NO. I’m looking forward to heaps of hugs, so come on by and see me when I’m in your town. Here’s my city schedule but you should follow me on Twitter @GailVazOxlade if you want the most up-to-date info:

Jan 4, 5, 6 Toronto

Jan 10, 11 Winnipeg

Jan 12 Saskatoon

Jan13 Edmonton

Jan 14, 15, 16 Calgary

Jan 17, 18 Vancouver

Jan 25 Ottawa

Jan 27 Halifax

Jan 28 St. John’s

Feb 1 Brampton

Feb 2 North York Central Library

Feb 3 Toronto Reference Library

Feb 4 Caledon/Bolton

Feb 9 Toronto Public Library Fairview

Feb 10 Oakville

It’s a busy start to the year for me and I’m excited to see you all while I’m buzzing about. There will still be blogs this month (because I’m good at planning ahead), but I may take the summer off this year as I did last year because I’ve been having so much fun with the creative writing I’ve been doing.

I hope you have a wonder 2016 and that the new year brings new opportunities and fulfilled dreams.

Happy New Year

I’m heading out on a big, and I mean BIG book tour for Money Talks in January. Don’t worry, the Jan blogs are all ready to go. (Would I leave you high and dry?) I’ll be tweeting where I’m going to be as I’m moving around so make sure you follow me on Twitter for updates @GailVazOxlade. Hope you have a wonderful New Year. Be safe. Back January 4!

Mouse Song

If you’ve ever been wooed with song, you know that it can be a heady experience. Birds do it. Whales do it. We do it. And, apparently, so do mice.

While Mickey’s song is too high-pitched for human ears to hear, when heard at a lower frequency, the song sounds something like a cross between birdsong and the noise of clean glass being scrubbed.

According to scientists at Duke University in North Carolina, male mice woo females with ultrasonic songs and those songs vary depending on the context. So Mickey sings louder and more complex songs when he can smell Minnie but can’t see her. His songs are longer and simpler when he’s singing directly to her.

If Minnie is placed in a tunnel with the two types of song playing through speakers at opposite ends, she’ll move towards the “calling” serenade. The good doctors believe that Minnie may be using the quality of Mickey’s song to decide if he’s good daddy material.

Of course, this isn’t all about mating. Scientists believe that since mice are capable of complex vocalizations that could make them a useful in studying conditions involving language problems.

Isn’t it fascinating how what we learn about animals helps use to help ourselves? The world is, indeed, a fascinating place. And scientists… well, they’re some of my favourite people!

ID Theft Risks

Michaels in the U.S. was the second major retailer to warn customers of a possible data breach. Target reported a breach a few weeks previously and then Michaels was compromised. And now it seems to happen so frequently no one even raises an eyebrow anymore.

Identity theft and fraud are problems that are growing so quickly that an entire industry is springing up to help people deal with them. Question is, are you prepared to lay out $180 a year or more to have someone “watch” your ID, just in case?

While it is a good idea to check over your credit report to ensure you haven’t unknowingly become a victim of identity theft, you don’t need someone to do this on your behalf. You’re entitled to review your own credit history for free once a year. And make sure you get ‘em all so you can see everything.

If you decide to order your report through the website, don’t use a public computer, and double-check the URL to make sure you don’t fall for an impostor site — there are lots of them. If you’re receiving a credit report by mail, have it sent to a secure address where curious eyes and sticky fingers can’t get at it.

You would think that in this day and age of rabid cynicism few people would fall for the “You’ve won a big prize” or “it’s a once-in-a-lifetime investment” or “this lottery ticket pool can’t lose,” but fall people do. Puhlease. No one is going to give you money. Don’t be a sap.

Here are some other things you can do to protect yourself:

Invest in a shredder and shred all old bills, bank statements, credit cards, personal notes, anything that has your personal information or address on it.

Watch for changes in your mail. If a bill stops arriving, someone may have changed your address.

Always review your credit card bills and bank statements for suspicious activity. Sign up for online bills and bank statements so there is less paper with your identity printed on it.

Make sure your computer is secure. Be careful about downloading free software since  “free” sometimes comes with spyware to offset their costs.

Be careful about signing up for sites like Mint.ca if they ask you for your PIN #s. Giving them out invalidates your fraud protection at your bank so if there’s a breach you’re screwed.

Pare down your wallet and carry only what you absolutely need. Don’t carry your SIN/SSC, birth certificate or passport in your wallet. Leave the original of your health card somewhere safe and carry a colour-photocopy.

Enter your PIN discretely. “Shoulder surfing” is a common way crooks get your private numbers.

Never give your credit card number over the phone unless you initiated the call.

Legitimate charities will be more than happy to send information rather than demanding a donation. Don’t give on the fly.

Before making a purchase online, make sure the site is secure. The address bar should begin with the words “https”, meaning the page will encrypt your information when you send it.

 

Merry Christmas

I hope your holidays are lovely, that you get exactly what you want from Santa. Happy ho ho ho! Back Monday.

Stuck in a Traffic Jam

Every now and then when I’m commuting from My Little House in Brighton to The Big City (or back again) I get stuck in a traffic jam.  I work really hard to avoid these, commuting during the off-peak periods, like 4 a.m., to miss the mess. But sometimes it’s unavoidable. Life happens.

The last time I was trapped on the highway, going slower than a kid heading to the principal’s office, I was surrounded by people who could not accept that they were stuck. I was listening to a good book and sipping something cool so I was chill. Others couldn’t stand idea of going nowhere.

There was the guy who, impatient to get to the next off-ramp, drove up the inside shoulder and then tried to cut across all the other traffic. He succeeded in ticking off a whole bunch of folks who refused to let him in and he watch helplessly as the tide of traffic took him past the cut-off.  The woman in the lane beside me had her head on the steering wheel. When she looked up she looked like she was going to cry. No doubt she had somewhere important to be.

Thing is, no matter how upset, how stressed, how overwrought that woman got, she wasn’t moving any faster than I was, chilled out in my living-room on wheels, listening to a story and sipping slowly. Yes, I had somewhere to be too, but winding myself up wasn’t going to get me there any faster. Some days you crawl.

The same is true for money management. People get themselves all worked up because they’ve waited too long to save for the future and then they want to step on the gas and make up for lost time. When interest rates are low, as they have been for so very long, they feel like they’re stuck in traffic. Some, like the guy on the shoulder, decide to zoom up the inside lane, picking investment options they’re neither familiar nor comfortable with to boost their savings. Things don’t go well and they’re stuck in a worse-off place.

There’s no need to get desperate, turn yourself inside out, or bash your head against the steering wheel. If you’ve left the savings thing a little late, don’t make it worse by over-reacting or by believing everything is hopeless. You aren’t retired yet. And taking it slow and steady is going to eventually get you to where you want to be. You might end up a little late to the retirement off-ramp, but you’ll get there, in one piece and with your sanity intact.

Debt is a Four-Letter Word

You know what really dills my pickle? It’s when people who have some influence start spouting pure unmitigated clap-trap because they are a) too dumb to know better, b) need to say something no matter how ignorant it is or c) don’t know when they’ve drunk the koolaid. There might be a fourth: d) want to lure people into bad decision-making. No, that can’t be right! Who would do that?

Last spring Rob Carrick wrote an article in the Globe & Mail in which he said: “No more shrill warnings about the dangers of high household debt levels. I’m moving on.” He goes on to say, “But today’s high debt loads are not as dangerous as once thought.”

And… “The case for not worrying quite so much about debt was laid out by the chief economist at CIBC World Markets earlier this year in a note issued with the headline: Debt is Not a Four-Letter Word. ‘There’s no reason to raise alarm bells over household debt,’ Avery Shenfeld wrote.”

Okay then.

I don’t actually believe Rob Carrick is an idiot, so is this must have been a case of needing something new to write about. Or having drunk the koolaid. And in the case of Avery Shenfeld, it’s definitely d)  want to lure people into bad decision-making..

The most-often quoted gauge of Canada’s indebtedness is our average debt-to-income ratio, which just ticked up again to almost 165 percent up another percent from last year. While bankers want you to believe it’s not a big worry, my question is, “Not a big worry for whom?” Maybe not for the BANKER who is about as happy as a tick on a fat dog.

Carrick ended the column with “Let’s can the shrill warnings about debt and leave it at that.”

NO, let’s not. With the U.S. just having raised it’s prime rate by a quarter point — it’s economy is doing well while ours is in the crapper — will Canadian debtors end up being the ones that feel the pinch? American’s were scared out of their rampant consumerism by their economy retracting in 2008, but Canada hasn’t seen that retraction yet. Canada hasn’t seen a change in direction in the housing market as a country… yet. To keep ratcheting up debt because even our media doesn’t want to talk about it any more means to give the hell up and let the banks have their way with us.

Do you know that Canadians are juggling debt on 74 million credit cards. That’s just Visa and MasterCard. And those mythical prime rates experts like to quote as the justification for why debt is okie-dokie are available to almost no one you know. Despite the lowest central bank rate ever, mortgage rates have started to tick up again.

Owing money is dangerous. What if you lose your job? What if someone in your family gets sick? What if anything else in your life changes? If you can’t afford to pay for it today, why is putting it on credit the answer? Debt is the mother of FOUR letter words.

Your Choices to Make

Everything in life has a price. When we work, we pay for the income we get in the time we spend away from our family or from the other activities we love to do. When we stay home to care for our babies, we exchange money for the experience of being with our children so we can teach them what we know. Nothing in life is free. And this is, perhaps, one of the hardest things for people to wrap their heads around.

When we choose one path, we walk away from all the other potential roads we could take. Partnering is a choice. Parenting is a choice. Home ownership, going into consumer debt, and preparing for the future are all choices. Some of our choices help us move closer to what we really, really want. Some move us further away. But until we accept that it is WE who are making the choices, we can’t feel that sense of control, of power, of strength, we want.

No athlete comes to prominence without making the choice to practice. No musician achieves proficiency or acclaim without making the choice to skip something else to make the time to get better at his or her instrument. To become a good painter, you must paint. To become a poet, you must write. To become good with your money, you must manage it daily.

If what you’re doing with your life energy isn’t working for you now, clearly you need to make different choices. If you haven’t really decided what it is you want – I mean really, really want – that has to be step one.

So many people want it all, and they want it all at the same time. You can’t have the student loans, the mortgage payment, the big belly, the car payment and eat out three times a week all at the same time. You have to choose which one is most important, have that and then choose again. I believe you can have it all over time, but you have to choose and focus to achieve anything at all.

Some of us are greedy for experiences. Go ahead. Travel, eat out, go to concerts, play as much as you like. But you can’t have all that play and the stability of the person who prioritizes putting down roots. If you want to own a home, do you want it more or less than a vacation every year? If you want to start a family, do you want it more or less than a snappy wardrobe or a new car every three years?

Your life is a series of habits, things you’ve become used to doing. If you want to have a different outcome, you may have to change some of your habits. If you choose to get your student loans paid off, you may have to work a second job or eliminate unnecessary spending until you get what you want: to have those student loans gone so you can focus on the future (instead of paying for the past.)

Often when people look at the choices they must make, they focus on what they must give up. I have always kicked my own ass and turned my face to what it is I’m trying to achieve. In making the choices I make, it isn’t about what I won’t be able to have. I consciously choose to focus on what it is that I will be able to have.

Learning to make choices means growing up. Giving up things that are less important in the long term to achieve something you really, really want is a sign of focus and maturity.  So do you know what you really, really want?

This & That: If It Were My Money Edition

D Wrote: I have recently received $20,000 from an inheritance and I will be receiving approximately $60,000 in July from the proceeds of the sale of my home. I have a $30k car loan @ 5.8% which is from February and no other debt. I have moved in with my girlfriend and I will be paying half the monthly expenses. Would it be prudent to pay off the car loan and save myself $500/month or have $10,000 in my TFSA and $8000 in an emergency fund? I make $75,000 year and have monthly expenses of about $3000. I net $4000/month. You are the trusted voice of personal finance in my world. I watch your show all the time. I don’t want to be a Money Moron!

Gail Says: If it were my money, I would pay off the car loan and then make the same monthly payments as the car loan back to a high interest savings account  (likely inside a TFSA) until I rebuilt the money (saving myself the interest, but rebuilding the capital). 

 

C Wrote: I love your shows and watch one every morning while having my coffee. I have $10,000.00 saved up. The only loans I have are my mortgage ($200 000.00 @ 2.89%) and my car ($10 000 at 4%). My financial advisor says put it on my mortgage, don’t pay off my car, it will be better in the long run. I would like your advice on this please.

Gail Says: If it were my money I’d pay off the car and then use the car payment money to rebuild my savings. Each year I would take a portion of those savings and make a principal prepayment against my mortgage.

 

M Wrote: I’m hoping you can help me. I recently received a small inheritance of 55k. We are a single income family grossing 85k yearly. We have 3 years left on our mortgage 40k at 2.74% 5 year variable (up for renewal next month). We have about 25k in a savings account. We have two teenage sons preparing for post-secondary that we would like to offer assistance with. One this coming September and the other the following year. Do we pay off the mortgage with the inheritance or keep it in savings, so that the money is available to help pay for college? Feeling very confused!

Gail Says: If you pay off the mortgage, you’ll have about 15K left over that you can use to fund Boyo’s first year of post-secondary. You will also then have extra cash flow (those old mortgage payments) that you can use to save for the next round of schooling. And you’ll save on interest. Sounds like a plan to me. 

 

L Wrote: I am 52 years old. My husband recently passed away. He had about $600,000.00 in life insurance. We do not have any debt at the moment except for our mortgage and we are currently putting $2000.00 a month into our retirement funds. I have a net income of about $5000.00 a month. Currently our mortgage is $130,000.00. I am wondering if you would advise paying of the mortgage on our home and investing the remaining life insurance in retirement savings or invest the $600,000.00 in retirement savings and continue to pay down the mortgage on a monthly basis.

Gail Says: It if were my money, I’d pay off the mortgage to save on the interest. Please make sure you understand whatever it is you’re investing it. Don’t stick with the portfolio your husband built…you need to be fully in the know about what you’re buying and why. If you’re not, stay with conservative investments so you don’t end up losing money at this stage of life. As you grow more knowledgeable you can spread your wings. 

K Wrote: I’ve been watching for years and feel I have a great plan to maximize my spending and saving. My question is more a ‘life’ item. I have a great employer. I’m a 28 year old male, gross $54K, full benefits, laptop and cell phone covered, 5 weeks’ vacation + Christmas (we shut down for a week), and the easiness of taking a day or two anytime I want/need without hassle. Perhaps the best part, I have a permanent position and contribute 8.31% to the pension with my employer contributing 14.85%. (Yep, 23.16% of my gross income enters the pension every payday) I’m no financial guru, but I feel pretty strongly that I’ve got one of the best deals in town, on paper. The problem – the actual work I do every day is mundane, stressful at times, and I don’t enjoy it. I’m still at a stage in life where my peers are having crazy traveling adventures and I long for it badly. My only debt is a mortgage, and I do not have any intent on marriage or kids anytime soon (if ever). I want to break free! (Quarter-Life Crisis?) My primary hesitation is that if I give up what I’ve currently got, I’ll never get it again and my future self will have huge remorse. Can you offer what you might evaluate to make such a risky decision?

Gail Says: Wow, that’s a pretty big question dude. The best I can do is tell you what I’d do given similar circumstances. 

1) I’d make sure that in preparation of time off, a sabbatical, the search for new work, I’d make sure I have a big fat emergency fund: not the usual 6 months, but maybe a year’s worth of money at my fingertips.

2) I’d decide what the things are that I feel I’m missing: since you’ve got a great job with fabulous vacation time, if you want to travel you can even as you keep the job. So it’s got to be more than that. 

3) Remember that there are 24 hours in a day. I raised two kids, had a full time career, wrote books, read heaps, blogged, and had a wonderful life because I used all my time with care. Yes, I slept. (I love sleep). But I didn’t “waste” time. If I watched TV it was shows I truly enjoyed. If I had to drive, I listened to books along the way so it was less about the driving and more like sitting in my living room, sipping tea and listening to a great story. How are you using your time now? How could you be using your time to keep you stimulated outside of work?

4) What kind of work do you think will make your heart sing? Can you do that kind of work on a part-time (business or volunteer) basis to offset the boring job, even as you prepare for whatever comes next?

5) What kinds of contacts can you start making now so that when you are ready to transition, you have people who can help you a) find new work, b) create new challenges c) support you in your decision making. If you can leave a cushy full-time job with money in the bank and a part-time contract in hand, along with the potential for more opportunity down the road, that’ll feel pretty good.

How will you know when you’re ready to make a move? Same way I always knew when I was ready to leave a marriage: when the staying was worse than the going, the decision is easy peasy. 

 

A Wrote: I have an autoimmune disease and with my prognosis/family history, while I’m still working now I don’t think I will be able to work right up to normal retirement age. Does it still make sense to use an RRSP for my long term savings or should I focus on TFSA? Due to existing debt I put $50/bi-weekly into an RRSP presently but only have a little under $5,000 saved at almost 35. My mom and sister both have the same condition, mom was able to work until 59 and sister until 34. I think I’m more like my mom though as she always struggled through and kept going while my sister never handled being sick very well. I want to up my contributions to 10% within the year which would be about $70/week if based on net income or $90/week based on gross.

Gail Says: Unless you are making more than $45,000 a year and would benefit from the tax refund, you’ll be best off with a Tax Free Savings Account. If you do the RSP, use your tax savings to fund your TFSA so you’re ahead of the game.