The Glass Half Full
Posted by Gail | Filed under Balance
Debt-Free Forever officially goes on sale today in Canada. A U.S. version will be available in April 2010. In celebration I’m giving away 3 copies to people who write Success Posts over the next week. It won’t be a random draw this time. I’m going to give away the books to the three people who write the funniest, most poignant and most useful (lots of tips) posts.
When you’re shopping for Debt-Free Forever, make sure you buy the one that’s appropriate to your country. The Canadian version has the Slice logo on the front.
BTW, I want to reiterate that I have not been involved with the Life Planner this year, for those who have asked.
We are funny creatures, we humans. We can take so much of what we have for granted. The home we own becomes less attractive as we stop seeing how wonderful it is because we insist on comparing it with the houses of our friends and family. The car we drive becomes less zippy as we become more familiar with it and stop seeing it as we did when we first drove it off the lot. Ditto the people we say we love; we’re willing to be so much more polite to strangers and acquaintances than to those with whom we live and work closely.
You probably know the saying, “familiarity breeds contempt.” Well, you may not be feeling exactly contemptuous but the blush may have gone off the bloom. It’s so easy to take for granted what we have and spend our energy wishing for what we don’t have. We need to find ways to keep looking at our world, what we have, what we’ve achieved with fresh eyes so that we keep seeing the beauty of our lives.
Lots of people tell me that they are tired of being in debt and want to do something about it. Few of them actually do partly because they like buying what they want when they want it. They work hard and they deserve it. Between watching what their friends are doing and succumbing to the images on television and in advertising, they’re filled with a sense of what they don’t have. This is exactly how they got into debt in the first place: wanting what they couldn’t actually afford. All because they don’t know how to be happy with what they already have.
While I get that it is part of our human nature to want – that’s what drives us as a specie to improve our circumstances – when that works against our own best interests, we need to put our logic to work over our innate drives. In so many instances, the instinct to want more, better, new isn’t making us happy. It’s creating a huge sense of dissatisfaction with what we have. And it’s driving us into the poor-house.
I’m a big believer in the cup-half-full. In my household we talk about seeing the donut and not the hole. But I’ve lived and worked with people who can’t see the upside to their lives no matter how good their lives actually are. They’re all about trying to top up the glass.
Ready to control the wanting?
Learn to avoid situations that trigger wants. Don’t watch as much television. Quit browsing the catalogues and shopping flyers that come in the mail. Skip the beauty and home improvement magazines. Stop comparing what you have with others. Don’t walk a mall as exercise or entertainment.
Finding more productive – income-generating, relaxing, or sharing – things to do with your time is a simple key to beating back the gimmies. Shopping with a list lets you focus on what you really need instead of responding to the shopping gremlins. And taking only as much as you need to spend – leaving the credit cards and debit cards behind – eliminates the means by which you could give into temptation.
Look at your life and take an inventory of what you do have. Getting the urge to buy a new pair of shoes? Reorganizing your closet and look at what you already own. This works for everything from kitchen appliances to tools, kids clothes and toys to pantry staples. When we look at what we already have we change our focus from what is missing to our sense of abundance.
So how do you do it? How do you keep seeing what you have as what you want? And how to you fight the gimmies when they try to grab hold of you?
December 15, 2009 at 6:19 am
Great post Gail. We have done several things now to fight the “gimmie’s”. The biggest thing is that we work on the jar system, if the money ain’t in the jar, we don’t get it! We don’t go to the mall anymore unless we absolutely need to. If there is something we want, we create an envelope, any extra money from the jars every week will go into that envelope until we have the money to purchase it. Sometimes, by the time we have that money, we don’t want the item anymore. We are trying to focus on all the wonderful things we DO have.
Right now we are trying to figure out how to teach this concept to our 9 year old son. We went out to dinner the other night with my co-workers. All were invited, so we took 6 of our 7 kids to the restaurant for dinner and to listen to the band that was playing. The only thing he could focus on was that he DIDN’T get to choose what he wanted off the menu (we looked at the menu before leaving and decided what we would get the kids)…he just couldn’t see past that to see that he got to go out to dinner in the first place and that he got to attend this function…lots of parents would have probably left the kids at home, lol. But he’s like that with everything…focuses on what he didn’t get to do. It’s a challenge in parenting him.
December 15, 2009 at 7:05 am
I use this ‘filter’ method before giving over my hard-earned cash:
1. Do I want it?
2. Do I need it?
3. Will I use it?
And anything over $100 I have to first double check with my husband (our arrangement). This ‘thinking’ helps to rein in our frivolous spending.
December 15, 2009 at 7:20 am
I like to ask myself how many hours I have to work to afford the item in question. That usually cures any impulse wants.
December 15, 2009 at 7:47 am
I’m always asking myself do I really need this? In our household the $20 we get per week for an allowance is all we can spend without checking with each other. it’s worked wonders at reining in spending and encouraging savings. Sometimes I’ll save up over the course of of a few weeks just to get something I want.
On the other hand the glass is mostly full at our house. Sure I don’t have the vacation property or the speed boat or about a billion other toys that I can think of, but I’m also not left going hungry or without a roof over my head. we have all our needs satisfied and some of our wants. I am perfectly content with a glass that is mostly full of water.
regards,
Jason
December 15, 2009 at 9:16 am
I’ve noticed in the past couple of years that the more content I am, the less I want to buy. Mind you, I am not adverse to buying though I make sure I am doing it for myself, not because I’ve been led by the nose by a commercial.
Growing up, going to the mall was a weekly family hobby. Not talking and being creative. Having moved away from that one habit alone has probably saved me tens of thousands of dollars. It also protects from other peoples’ frantic energies when they are searching for their “more”.
December 15, 2009 at 9:51 am
My two dearest friends lead glamorous lives filled exotic travel, magazine-worthy home renos, private schooling, etc….so when we all get together I can feel the little green-eyed gimme gremlin waking up, even though I already have a very abundant life. But by the end of our visits, I hear tales of marital unrest, fighting etc, my gremlin goes back to sleep and I once again appreciate all that I have around me.
It always serves to remind me that sometimes all the shininess on the outside is only camoflauge (sp) for the sadness or disappointment inside.
December 15, 2009 at 10:26 am
If it is an unplanned purchase, i ask myself a few questions (depending on the item)
1. if it wasn’t on sale would i even think about buying it?
2. do i really really love it? (most of the time i just like it, or i think it is nice)
3. if i am not sure, i tell myself i will come back for it. 9/10 times, i stop thinking about it by the time i get home.
December 15, 2009 at 10:48 am
If I really need it I buy it and pay cash for it.
If I don’t eally need it I never buy it in the first place
But I am cheap being a former hvac contractor.
December 15, 2009 at 10:51 am
Even in my darkest, highest debt hour I always say the glass as 1/2 full. I am optimistic by nature and knew that we could get out of this situation.
Judi……I too have a 9 year old son and a 11 year old son. Both have gone through the negative stage. I think that is just what it is a stage. My 9 year old wants everything he sees and feels that we don’t buy him anything. We have started giving him an allowance that he has to save up to buy an item. The tone changes some when it is his money coming out of his wallet.
When the negative attitude starts we let them know that it is not allowed and to see the good side. They have to think of the good side and tell us so that it is not just another lecture from us. We also mention that if they are so unhappy that they can go home or sit in the car and miss out on what ever we are doing. After a couple of times of this, they normally stop complaining.
December 15, 2009 at 11:16 am
If I get the urge to buy something I only have to ask myself one question to stop it: Where will I put it? If I can throw out something else to make room, and it’s in the budget, then it’s ok.
If I am ever tempted to compare what I have to what I don’t have I remember something my mother explained to me when I was quite young. She owned an old, beat up but extremely reliable car and we were in town when a fellow in a Jaguar drove by. I asked her why we didn’t have a car like that. She explained maintenance costs and car theft and the very important fact that our car was paid for and could never be taken from us and his car most likely wasn’t paid for in full.
Knowing that what you own is yours and you can tell people to go to hell if they don’t like it is a true power that can make you feel richer than money.
December 15, 2009 at 11:24 am
When I think about purchasing another ‘trinket’ or ‘bauble’ I just have to stop for a moment and think of the smile on my grandchildren’s face when my husband and I step off the airplane and they see us.
We live thousands of kms from our kids (you teach them to be independent and then all of a sudden they are – and they move!). My husband and I have always agreed that we would see them all at least twice a year – either we visit them or we bring them to us. With four kids and three grandkids it takes some planning!
Setting priorities and goals is the most important thing my husband and I do, and because we review them often and keep them at the forefront of our thoughts, its not so difficult to avoid the shopping trap. We have everything material we could possibly need – and lots that we don’t actually need if push came to shove.
Anothe pair of shoes?……Another gadget…? Or a visit with my children…….? Not a hard choice to make.
And that’s what its all about, choices. As Gail has said “you can have it all, just not at the same time.”
December 15, 2009 at 11:46 am
I don’t miss shopping at all. I am quite happy with what I have, and when we collectively decide to purchase something (this year we need a new computer to replace the 8 year old beater and we’d like to get a home entertainment system) then we put aside the money until we can pay cash. So I can purchase a new computer when the post xmas sales happen with cash, and I’m halfway to that 52 inch screen tv and entertainment centre – yes I know we don’t NEED it but we really want it, I have my 8 months emergency fund, I have my planned spending fund, I have my vacation fund and I have my home repair fund. Most of my savings now goes into retirement savings. So we can afford it.
We made the decision together that we wanted the entertainment system and decided how much out of each pay needed to go towards buying it.
We also made a collective decision that if we were to purchase something new, something of equivalent size had to go, otherwise the house would just get cluttered up like it was before. We took control of the clutter that was ruling us and now are quite happy with our simple life following two fundamental rules:
1. if you want it, save for it to pay cash (generally the want dies down before we’ve saved enough for it)
2. if you buy it, something in the house has to go (so you have to make a decision about what you’re willing to part with in order to have the new purchase)
Seems to be working for us. Instead of giving each other stuff now as gifts, we give each other things to do together and spend time with each other – like theatre tickets, restaurant gift cards, etc.
December 15, 2009 at 12:09 pm
I have friends that have money & I have friends that are single parents etc that have very little money. When I start to think of my cup as half empty & look longingly..jealously.. at my friends with money & the things they do & buy,I look at my not so fortunate, (money-wise), friends that would love to have what I have & that usually puts me in the proper frame of mind. Also, I have friends who live in other countries ( Russia) & the conditions they have to live under reminds me how fortunate I really am. (And they usually live better than the locals ). As a matter of fact, one friend won’t show pictures of her parents, very nice but modest,house here in Canada to the locals there, because they would think she is very wealthy. They aren’t. Also, losing a few friends to cancer at a ‘young’ age reminds me of what is really important. I ask my self- will this (purchase) help me to laugh more ( or harder), will it add enjoyment to my life? Will not having it cause me to laugh less..? That being said, I am taking a trip to the Dominican Republic this March. Will it make me laugh more. YES! Because my whole family ( they are in NS & I’m in SK) are going, including my 84 Year old father. They all went to Cuba last year & I didn’t go because I felt I “couldn’t afford it ” This will be the last time they do this & I’m not missing out this time!
December 15, 2009 at 12:14 pm
Got the new book yesterday in my mail! I was so happy!
Look forward to the “tough love”. I think I’ll make a cup of tea as I read it and pretend I’m having a conversation with you.
December 15, 2009 at 12:20 pm
I have had two major struggles in my life: weight loss and debt. There are so many parallels between the two that 9 times out of 10, you can apply the rules of one to the other. I strongly suspect that it all boils down to treating the addiction, and like you said, avoiding the triggers.
Recently, I’ve found a way to face these two issues simultaneously and put spending money in perspective. There is nothing wrong with spending as long as what you get is worth it and the benefits will last a long time (car, home, household computer). It’s the nonsense (the extra car, the expensive home theater system, the two extra laptops you don’t use) that eat away at you. I joined a gym a few months ago to get my weight under control. I had no more excuses as the gym is only a couple blocks from my home. I also decided to spend the money I no longer spend on Payday Advance loans (that’s another long story) and invest it in myself with a trainer. I’m not afraid to spend that amount as I know my other expenses are now under control, I have money to save, have hardly any debt left (paying off the last couple thousand on my credit card) and the benefits of taking care of myself will allow me to be alive longer and enjoy my future.
December 15, 2009 at 12:23 pm
I really wanted to buy your book, but my credit cards were all maxed and was living in overdraft. Fortunately a new card application showed up in the mail, so I filled it out. My first purchase on the new card will be your book. I feel debt free already!
December 15, 2009 at 12:24 pm
Kidding!
December 15, 2009 at 12:26 pm
Riann:
I hope this is a bad joke. Cut up ALL the credit cards and any new offer. Use the many online tools to organise your budget. Ask for the book for Christmas. Live off cash.
Best of luck!
December 15, 2009 at 12:38 pm
What I want out of life isn’t things. I want to live a happy and a healthy life – enjoying my time with my spouse and my family. Occasionally there are things I want – but most are linked to needs. I lost weight – needed new clothes – but I have taken my time purchasing things that I love to wear and can wear forever (I am not a slave to fashion – I don’t care if things are out of style as long as they look good on me) and are on sale. I think I almost have a wardrobe that all fits me properly – I still have a few pairs of pants that are a little large – but they will work till I find replacements that I love and I can thoil. We do spend money on vacations – but we don’t buy birthday or Christmas presents for each other – we save the money for the vacations and then have wonderful experiences together that will live in our memories forever.
Others around us have more stuff – newer cars, newer/bigger homes, more gadgets, etc. – that is their life – this is ours – we make the choices that keep us happy. Others make the choices that keep them happy – to each their own.
December 15, 2009 at 12:56 pm
Shame on you Riann!
December 15, 2009 at 1:43 pm
I’ve been looking at your site and have been officially on a debt reduction plan now since mid October. I have always been concerned with my debt and tried desperately to pay it off. I often would pay large amounts off for a few months, then I would get tired of never having any cash and end up racking most of that payment back up. This cycle was going on for over two years. Then I got your plan and started SAVING and paying off my debt. Yes, paying off the debt and saving at the same time means paying off the debt slower, but thus far I have not missed a single payment that I scheduled into my budget (I lowered the payment for this month for unexpected Christmas expenses, but planned this in my budget!). Any how, I’m happy to say that I used my savings to buy gifts for my family for Christmas (had 1000 to spend). I spent only 550 of that 1000 and managed to get everything with out charging anything to my credit cards and I have money left over! On top of that, I’ve managed to pay off about $1500 of my debt since October and keep it off. I’ve learned that saving while paying off debt is like rewarding yourself for sticking to the plan but without going to the mall. I got my first payment from the bank for interest on my savings $0.42! It seems funny to be excited for less than half a dollar but I can’t tell you how excited I was to have the bank pay me for once! My new way of staying away from what I don’t need is “If I buy that now, I won’t have as much money in my savings account”. So far it has helped. I have it set up so that in the new year I will be able to purchase a new cell phone, since mine is dying. Rather than buying it now and paying it off, I’m researching the phone I want and putting the money away so I can get it without charging my credit card! The excitement of having money in the bank or paying for something big with cash is more then enough to keep me away from buying useless junk I don’t need. Thanks Gail!
December 15, 2009 at 1:55 pm
I received my book in the mail today Gail!
It’s actually for my mom because we appear to be truly on the way now. We are out of debt, have an emergency fund, saving for stuff etc.
The way I’ve been keeping away from the gimmies is…. staying out of stores, not reading flyers, etc like you said but also reading blogs on money and watching the Suzie Orman show too. I’ve seen all your episodes but I know I need to keep seeing as it helps me get over the gimmies and the ‘poor me’. I grew up poor and so for years we spent every cent we had and then some. Never got so deep in debt we couldn’t get out but still, it’s scary what a slippery slope that is.
December 15, 2009 at 2:00 pm
Ya know, I’ve been thinking about these wants and things lately. My partner and I moved out on our own in September, and since then I’ve been rediscovering items that were packed away at my mom’s while I figured out the next path to take in my life.
I’m so content over finding our own place that I truly don’t want anything. There is a picture I am getting framed that will go on the empty wall space in the dining room, and other than possibly deciding to paint a room or two later, I can’t think of a single thing I want! and this is even AFTER purging quite a bit of the items that were once holding storage space. It’s quite amazing to see things from your past and decide you no longer see them the way you once did!
I had wanted to move out for so long, that I truly am content now that we have our own place. I want to spend time enjoying a book, cup of hot chocolate and cuddle time with my partner in our new place more than I want to do anything else!
December 15, 2009 at 2:42 pm
I keep lists of items I need to buy and try to look for them in the shops, rather than idly browsing to see what catches my eye. If something DOES catch my eye and it’s not on the list, the 24-hour rule comes into play. After that if I’ve bought an item, it is there to be enjoyed.
This time of year it is great to get together with friends and family, definitely a half-full situation. Well, actually, it’s usually a full glass — of wine…!
December 15, 2009 at 2:56 pm
Rianna: My jaw dropped, too funny!
December 15, 2009 at 2:58 pm
YES!
Taking inventory is a fantastic way to put things in perspective!
Chucking the flyers into the recycling bin without looking at them is the best way to not “need” anything!
Keeping the TV off is very effective too!
Another thing I do when I have to get things like presents for special occassions, is thinking carefully about what I want to get them, what I want to pay, then looking for it online first. Then get it shipped to me (usually shipping is less than fuel to the malls anyway) That way I avoid the stores and the “extra” things that seem to happen while we are out. Saves me a fortune (and time) and keeps me focused on what I’m buying for.
December 15, 2009 at 3:08 pm
Money is powerful. For me, understanding money was philosophical. How is it that we can allow money to destroy relationships, set askew our priorities and even deteriorate our health and well-being? As Ralph Emerson has stated, “money often costs too much”. Our steady pace on the hedonic treadmill of Capitalist living means a perpetual rat-race with no end in sight; no recognition for what we accomplished and no gratitude for what we possess. It’s a dangerous and empty life: money with no wealth. Upon realizing the difference between money and wealth and finally understanding that one can have real wealth with little money, I stopped and felt completed ashamed of what my goals and house were saying about ME. By deregulating the authority of money in my life, I’ve striven for simplicity, practicality, freedom from debt and balance in my life — what I’ve come to see as wealth. I still struggle from time to time, especially with Christmas so close. The difference now is that I look about my house and life and can see where my priorities lie: not in the accumulation of things, but in the accumulation of wealth as I have defined them for my life.
December 15, 2009 at 3:19 pm
I have the wants a lot of the time, but I’m also really, really cheap. It helps.
If I see something I want, I put it on my want list. My parents or sister always want to know what I want for Christmas or my birthday, and I usually have no clue if I don’t have a want list.
Then I usually get some things off my want list, and enjoy!
December 15, 2009 at 3:29 pm
Boy do I have the wants – I want this – I want that, etc… especially now that I am debt free it is even worse. For me wanting things and actually buying things are 2 different stories. I think of wanting things like a speaker system for my mp3 or a condo, things I can dream of – its fun dreaming, and I don’t see the harm. As for actually buying these want things I do various things to stop me.
1. This is the most fun and it ends up being the most successful thing that works for me, since I never end up buying that item if I do this. When I see something I want, like the mp3 speaker system or a gold ring I saw lately, I get the sales clerk to give me their card with the item description, item number on it, item price without and with tax. It feels like I’m buying it without actually doing it. I then carry the card in my coat pocket and think and dream about that wanted item. After a few days or weeks I endup not wanting that item anymore so I thow out the card out. I actually have a card I want to throw away since I no longer want it.
2. Gail has taught me to prioritize my wants for the future. One of my important wants is to get a cemetary plot and all that goes with it. So I have been saving for that for a few years now. I think of this cemetary plot like a piece of land I’ll own and the government won’t be able to charge me annual property taxes on it! It feels great. Its like getting what I want and getting the government too! So when I want an item I ask myself “Do I really want this or do I prefer to save for my plot of land the government won’t touch.”. Well you know what the answer to that one always is. Getting the government is always a great incentive, but getting my number one want paid for is most important, as well as my number 2 want which is to go to Disney some day.
3. I too always ask myself “Do I need it?”, but more importantly I ask myself “If I didn’t get it would I be able to live without it?”. This is the clincher for me in terms of questions to ask myself. If I can live without it, then why buy it. A few years back I got car fever real bad. I w a n t e d a car. All of my male friends were willing to help me test drive every car in town – they all agreed with me that I needed a car. So I asked myself “Do I need a car?” I honestly answered “Yes”, but when I asked myself “If I didn’t buy the car, would I be able to live without it?” I also answered “Yes”. I haven’t had a car for many years and still don’t since I can still get around using public transportation and the odd cab. Relying on transit when you have chronic pain and use a walker sucks and prevents me from going out like I should at times, and a car would make life so much easier, but when I look at the price of a car, insurance, upkeep, registration, etc… I am always glad I can live without it. My male friends were disapointed but they got over it.
4. One thing I like to do as I mentioned earlier is dream about fun want items. I dream about using them, having fun using them, and then I get tired of dreaming of them and equally tire of wanting it. Its a great way to kinda get something without spending a single penny.
Now these things above don’t mean I never get myself anything. Once in a while I get myself items I want even though I could do without, and could use the money for my bigger wants, but these usually are small inexpensive things that make my life happier over a long period of time that don’t break my budget. I think its like life in that you have to pick your battles. And as Gail has said you have to budget for fun, which can include these little fun want items, like my singing, butt moving, electronic reindeer which always makes me laugh and dance every I press its button. I don’t need it and I can live without it, but why miss all the fun.
December 15, 2009 at 4:00 pm
I have a hard time with this sometimes. We have a couple friends who make more money than us and are constantly flashing their new this, bigger that, latest model item. For me, most of the time, its not hard to not be envious but my fiance has a harder time. Alot of his guy friends have dirt bikes, snowmobiles, etc and he doesn’t have any of those items. We looked into a used snowmobile and once we factored in the additional expenses with this item it really opened our eyes.
I basically keep myself away from temptation as much as possible. The malls are not enjoyable places for me. Plus I don’t have time to just go “browsing”
I am thankful every day for what I do have though. I am thankful for a farily new (paid in full) reliable safe car. I am thankful for a lovely house that keeps us warm from the -40C temperatures we have been experiencing.
I work with the homeless once a month and it really keeps you in check in what you consider a Need and a Want. I often end up feeling guilty because I have so much compared to them. So that does a fabulous job of keeping the “gimmies” in check.
December 15, 2009 at 6:20 pm
For me I find it best to do the following to avoid temptation:
1. I get rid of all if the flyers without opening them.
2. I have had my name removed for all catalogue mailing lists.
3. I stay out of the mall unless I have a very specific reason to go there.
4. I don’t read fashion magazines.
5. I don’t watch T.V. except Gail!
6. I don’t compare what I have with those who have more.
7. I count my blessings. Some days I have to dig deep.
So what in the heck do I do with all of my “free” time. Well I recently decided to dig out all of my unfinished projects – sewing, cross stitch, knitting, painting, jewelry making, you get the idea. I figure I have enought to keep me busy and out of the mall for about 100 years. A large cross stitch can take hundreds of hours!
December 15, 2009 at 6:22 pm
I used to spend buckets beautifying our home. Loooooved those decorating magazines. Thankfully that phase seems to have passed. Either the house got to a level I can consider “done” or I just lost interest. Either way I’m glad. For several years now my obsession is travel. After seeing several aquaintences become too ill to travel after retirement, I decided I wasn’t going to let that happen to us. There had to be a way to travel now with the kids rather than putting it off until after retirement. I can justify doing without virtually anything if I just see the money saved in terms of what it would buy on a trip. Nice pair of shoes vs. gondola ride in Venice… Dinner out for no reason vs family admission to the Colosseum in Rome…. everytime I can imagine something more memorable to do with the money. I have to remind myself that my family may not be nearly as driven by the travel bug as I am and I try not to be downright miserly. Used cars, 1/2 price meat, Salvation army clothes on one hand, and a month in Europe for the family on the other. Others might find my choices odd but it allows us to travel the world now while still living debt free and doing all the necessary saving for retirement etc.
December 15, 2009 at 6:55 pm
How do I fight the gimmies? I look at what I have. Here’s a good example: A coworker of mine and I were talking about debt one day, and she mentioned that her husband said that she could “retire” when their mortgage was paid and he would be the sole earner. This would be in about 20 years (based on the spending patterns, they would likely still have consumer debt, and their 20 years would likely be extended to 20+). Then I thought about it – if my husband and I planned to do the same thing, I could “retire” at 30 – in 4 years. I think about that when I’m tempted to spend money on something that I just want. My friend has several cars and toys and a boat load of debt (credit cards, consolidated lines of credit, their mortgage, student loans, etc), and I have my mortgage which will be gone by the time I’m 30.. I won’t be chained to my desk because I need the money – I get to go to work at whatever job I want because the salary isn’t the deciding factor; I can afford to take a lower paying job that I love. I will be able to comfortably help my children pay for their post secondary education so they can have a good start to adulthood – without piles of student debt burying them.
I may not have 4 cars, a huge house, snowmachines, ATV, boats, huge TVs and all the latest stereo equipment, but I have the luxury of having my life lead by my terms, not the terms and conditions as outlined in my loan agreement. I’ll take that over stuff any day.
December 15, 2009 at 7:10 pm
Wow! KimD that is quite the accomplishment! I am going to 30 in 4 years too and I can only dream of being mortgage free then!
December 15, 2009 at 8:12 pm
If ever I feel the impulse purchase bug sneaking up, I ask myself ‘Would Gail approve?’
And the answer is always no!
December 15, 2009 at 9:01 pm
Megan, being mortgage free is a great feeling. My mortgage was discharged today. My goal was to pay it off by the time I hit 30, but I missed it by three weeks since I turned 30 on Nov 21. But I only have a single income.
December 15, 2009 at 9:07 pm
I have just come back from Nepal and India and boy if anything makes me grateful to live in Australia it was visiting those countries.
I feel so privileged to be able to turn on a tap and have water come out of it, to be able to eat fresh fruit and vegetables and know they haven’t been washed in dirty water, to know that my rubbish is being collected and recycled and not burned in the street.
I feel so lucky to know that I’m not going to die of starvation, or cholera or any of a number of treatable diseases. I feel lucky to know that if I hurt myself I can go to a top class hospital and if I become disabled the government will help me and I won’t have to send myself out to beg on the streets.
I feel truly blessed that I was lucky enough to be born here and that I received a great education and have the ability to own a house and go to university, all things that a lot of the population of Nepal cannot do.
The trip has made me feel so so lucky to be where I am and who I am.
Sarah
December 15, 2009 at 9:14 pm
i recieved my copy of the new book in the mail today, can’t wait to dig into it!! thanks Gail, for keeping me inspired
Merry Christmas
December 16, 2009 at 12:30 am
When my husband and I graduated from university in 2005 we failed to learn a hard lesson – that when you graduate you shouldn’t like your parents do now – they likely lived a lot more modestly when they got out of school.
Fast forward four years and we were $31,000 in debt – we’d just gotten married six month earlier, had done some renovations on our condo, and basically were living “beyond our means.” We thought at the time that all 26-year-olds should have $200 dinners out several times a month!
We were setting aside money for debt repayment, but by the end of the month we were always short and relied on our credit cards to tide us over to payday. In April 2009 I was frustrated and fed up that our debt repayment was getting us no where. I felt like my partner wasn’t playing an active role in digging us out of our mess.
I had a serious “Come to Jesus” moment – and decided instantly that I didn’t want us to live with this crippling debt forever. My husband and I collectively make $120,000 a year – but I felt like we were drowning in debt. I decided it would come to a stop and we would make a plan to end the debt.
We undertook several steps:
1. Coming Clean: I had no idea we were carrying $31,000 a year – and when I added it up between our credit cards and line of credit, I was shocked. It was devastating – and looking back, I’m relieved I chose to continue this process. Many would have given up upon finding out that number, believing there’s no hope to getting out of this mess. My first piece of advice? Be honest! Look at all your sources of debt, take note of your payments, interest rates, and terms. Only when you are honest will you actually be able to “fess up” and move on.
2. Categorize, Categorize, Categorize: I didn’t know where we were spending our money – how much things what our true housing costs were (including insurance, utilities, cable, etc.) I did a one month snapshot of our expenses, and categorized everything so I could see where we were spending – or rather, burning – our money.
3. Involve Your Partner: My husband and I didn’t really talk about money much, and when we did it was usually us arguing about getting out of debt. Once I tallied our true debt costs, coupled with our one-month snapshot, I presented it to my husband, and we were able to come to terms with our situation and begin to formulate a plan for getting out of debt.
4. Burn, Baby, Burn!: We looked at our monthly categories and evaluated where we could cut – where we could make sacrifices in our lives to ensure our long-term financial health. Home phone? Didn’t use it anyway – there’s $30 a month. Cell phone? Husband used it for work purposes, so got them to cover the $70 a month fee. The really dramatic change we made was selling both of our leased vehicles (which we sold for more than the lease-back rate and made a profit), and downsizing to one car that we finance. Doing this saved us: $350 a month on a car payment, $100 a month on gas, $150 a month on insurance, for a total of $700 a month cut from our budget. Now my husband drives me to work, I walk or ride my bike, or take public transportation.
5. More Money!: Simultaneous to cutting expenses is increasing income – our debt situation wouldn’t be complete without increasing our earning potential. My husband is a graphic designer who has taken on extra work in his spare time freelancing, bringing in extra money to pay down debt. And I work weddings and events for a wedding planner that brings in extra funds on my own. Collectively, between cutting our spending and increasing our income, we’re able to set aside an additional $2,500 a month to pay down our debt.
6. Hail to Gail: We stumbled upon Gail’s show on Slice accidentally – and now I PVR it every day! It’s such a treat to come home and learn more about how we can be financially successful and ensure we make good fiscal decisions. Gail has also inspired us to switch to … the jars and cash. We have our fixed expenses and variable expenses – miscellaneous (cat litter, toiletries, clothing, gifts, etc.), food (both for our cats and ourselves) and “fun” (entertainment). I’m thrilled to say that after just two weeks on the system, we’ve saved an additional $300 a month! The “pain of purchasing” has been very educational for us to see where our money is going – and how we can save for the future.
7. Make a Plan: I am thrilled to say that our debts will be paid off by the end of January 2010 – meaning we’ll have paid off over $3,400 a month to rid ourselves of debt! We already have a plan in place with what we’ll do monthly with our extra savings – putting money into an emergency fund, planning a trip to reward ourselves (which we’ll pay for using cash!), funds into retirement allocations, and paying down our mortgage. We have a comprehensive plan on how to look at the future. And the best part? The communication between my husband and I has improved dramatically – we are now both active participants in our financial future.
Cheers!
Lindsay
December 16, 2009 at 10:45 am
I’ve started a wiki on Gail because I decided to use her for a school assignment that I had and was very surprised that there wasn’t one on her already. So for anyone who is interested in posting, here’s the link.
http://tilldebtdouspart.wikispaces.com/message/list/home
December 16, 2009 at 12:38 pm
Ann, that would be such an amazing feeling. I have to say … I am quite jealous. I have crunched the numbers and there is no way we can do that unless we run into a hefty chunk of change! Our mortgage remaining is 262,000 and between the two of us we make 90,000.00 (I just took a pay cut from work). Housing here in Edmonton in not cheap. We got a house on a steal of a deal because it was a foreclosure at 282,000.00 (after downpymt). I figure the best we can do is a extra $500 a month and still able to have a life and that will get us mortgage free in 15 years. Unless interest rates go crazy high.
I can only dream …
Good for you!
December 16, 2009 at 7:28 pm
I’m in Calgary. Crazy stupid home prices here too. But I was lucky: my parents let me live with them after university so I could save up a decent downpayment. That $100k downpayment made a HUGE difference. It would’ve been more, but I couldn’t bring myself to live with IKEA furniture…and I made really agressive, really stupid investment choices. *sigh*
And 15 years is respectable. In the US, 15 years to pay off a mortgage would make you the hare.
December 16, 2009 at 7:49 pm
To keep me from impluse purchases:
1. I am aware of what is in the budget. If there’s not much in it and I feel like looking at expensive stuff, I go with a “window shopping only” mindset, where “buying it” isn’t on the table.
2. If something pretty is within the budget: How much care does it need? Where do I put it? Does it have follow-up costs?
3. For everthing that goes into the house, something has to go out. What will go? Where?
4. Will it still make me happy to use and handle that thing in a year, or will it have become a burden and a waste of space?
Sometimes, I have found, I just want to buy something nice — doesn’t matter what. A magazine, some fresh fruit, a postcard or a cookie will do. That does not happen every week, so I just do it. The budget covers it.
It is lot harder for me not to impulsively spend money on non-material things which, after all, do not gather dust. Great new restaurant, let’s try it. I always wanted to see that opera, why not get the best seats? Seven unexpected days off on overtime, how about going skiing? And you can always throw a party for all your friends… will be fun!
That’s what got me into debt when I started working and felt very rich.
What I do with those, again, if they are within budget, fine. If not, the question is, “is it worth sleepless nights worrying over money”? And the answer, so far, is “no”.
December 16, 2009 at 9:52 pm
AHEM – I love IKEA. Just saying.
December 17, 2009 at 4:49 pm
Gail – I love your ideas and I love your direct approach.
In Nov 2006 I took a debt consolidation loan from the bank for a 3 year term, and I rounded up my monthly payments. This consolidation loan combined my car loan and my credit card debts – which was not too high but still I found myself robbing peter to pay paul and felt I was going no where before this. The total loan was $20,000. Since jars were too tempting to switch money around I changed my approach – I used envelops in the wallet each labeled for a specific purpose and for a specific week, and I tracked everything on-line and with a journal – I kept what was mandatory cash expenses in my wallet such as gas and food allowance – everything else I put into checking for automatic banking withdrawals and a savings account for everything else of the jar topics- including clothes, savings and emergency money.
When I went out I could only use the money in my wallet (cash money) – If I didn’t have the money I didn’t spend it – I did the three question need it? want it? necessity? and Do I already have it? Which I applied to everything.
Then a close friend and I added to the need it, want it – necessity – can I borrow from someone? What this included was can I borrow anything from any one. Example: clothes from someone? Instead of buying a new dress for a wedding/special event – do I know someone I can borrow it from?
In the journal I tracked the balances in the savings account for each of the remaining jar titles. What monies I did not need for the month (as calculated from your on-line spreadsheet) I dumped onto my loan – even if it was $10.00.
In the mean time I had received a raise at work – this additional income I put into the emergency account in addition to the money I was already putting in. If I learned to live on the previous income I can continue. Boy that emergency money came in handy when I need some major car repairs – yes I put the repairs on Visa for the points – then I went home and prepaid that expense to my visa bill through on-line banking. Nice feeling to do a visa transaction and see the payment on the same statement and the balance owing is $0.00.
It was great being able to save and pay things off – but I got tired of always asking my self questions and always looking at my budget so…I got a part time job. This was specifically for treating me. This hard earned money did not go into the bank accounts – did not go into the wallet – but went into a Jar. One Jar. I tracked the deposits into the jar and I tracked the withdrawals out of the jar. If we were going to the movies I would check the cost on-line, check the cost of snacks and take a little extra if we went out for coffee after the show. What I didn’t use I put back into the jar. If I wanted to buy a new pair of pants and a top I would pre-shop look on-line to see what I was looking for – budget the expense then take what I needed from the jar. Once I started a good routine I started to use my visa. I would take the money from the jar and take it to the bank and deposit it to my account and pay the visa off in full each time.
You are probably thinking YIKES VISA!! But I get points with my visa I can use my points for a lot of things but I am saving the points for a TRIP – to really treat myself. And the goal of this trip is to be able to go and enjoy myself and reward myself for a) learning to budget (Thanks to you Gail) b) learning to spend wisely and c) learning how to differentiate a need and a want and focus on necessity. Yes a trip is a want but it is also a necessity. I have family in New Zealand, Europe, Western Canada and in the southern States I will pick one of these relatives and visit them.
With all this hard work I paid my loan off 6 months earlier – 2.5 years of staring into a budget work sheet and planning my expenses and yes picking those pennies off the street paid off well. I have taken a little break from staring weekly and tracking my expenses but I still only put what I can spend in my wallet and an envelop for gas money.
And now it is a whole new world and a whole new game of budgeting – my next expense is a house. But I will wait until after Christmas.. and plan my attack. Any suggestions…I already have an appt with the bank to see what they suggest I can afford. But like I said it can wait until after Christmas.
Have a great day and thank you for all your suggestions and on-line guidance.
December 17, 2009 at 6:35 pm
Lisa:
Congratulations on your progress.
A house is a big change (lifestyle and financial). Search through the archives because Gail already wrote a REALLY good article for those looking into buying a first house, then look for the one on the cost of house maintenance.
My short version of financial preparedness before buying a house: have 30% of the amount saved (no loan). Use 20% for the down, 3-5% for the closing costs… and move, 2-4% for the new stuff you need to buy (or renovate), the rest to bump up your emergency fund (because that EF will need to be bigger than before). Also, split your EF from expected expenses. Keep the EF for cases of job loss and illness. Use the expected expenses account for car and house maintenance.
Have fun house hunting!
December 21, 2009 at 2:22 am
[...] Vaz-Oxlade talks about another great book for Christmas in The Glass Half Full (ok it’s her book, but it’s still good to get for [...]
December 21, 2009 at 10:15 pm
I just finished my copy of Debt Free Forever, and while I didn’t learn much for our situation – she’s preaching to the choir for us – I will definitely be spreading the word about this book far and wide. I plan on writing review of it on amazon and chapters – everyone here should too, if you have ten minutes.
I bought two extra copies for friends as Christmas gifts and I’m hoping they take them in the spirit they’re meant!