Why Are You In Debt? (Part 4)
Posted by Gail | Filed under Debt Traps
This is the fourth and final part of this series about how you may have dug yourself into Debt Hell. If you haven’t seen yourself in the questions asked so far, it may be that you’ll find yourself in these questions:
Have you educated yourself about money? It’s easy to make mistakes with your money when you don’t know the money rules to follow. For while the most basic money rules are dead easy:
- Don’t spend more money than you make,
- Save something,
- Pay off your debt
- Mitigate your risks, and
- Strike a balance
Everything after these basic rules starts to get complicated.
Not knowing, for example, that carrying even one dollar as a balance on your credit card means everything you’ve charged is racking up interest is one way to fall into a debt trap. Not recognizing that any credit is an invitation to debt – so, no, a line of credit cannot be your emergency fund – is another way to get trapped. And assuming that those “in the know” – like lenders who are offering you a pre-approved mortgage – have your best interest at heart is naïve and will lead to no good.
No matter where you are now, you can learn how money works and how to use it to your advantage. And no matter where you’ve come from socially, economically, geographically, you can have what you want if you can figure it out, and if you’re prepared to bust your butt.
Do you have a money-sucking habit? If you are wasting money on things that add no value to your life, you can stop. It may not be easy, but you can do it. Whether you have a wicked cigarette habit, you’re downing too much booze, your sniffing away your future, your playing the ponies, or you’re giving into other demon desires, you are the only person that can make it stop. Seek professional help. Fess up to family and friends. Get everyone on your side, helping you stay true to a happy, healthier life. It’s your money. It’s your life. You decide.
Are your hoping to get rich quick? Lazy people look for ways to make it big without breaking a sweat. My girlfriend, Nancy, says it’s a trend among her son’s peers to gamble for a living. Stupid. All the rest of us know that achieving financial stability takes effort. And it takes time. There’s no rushing it. If you leap before you look, grabbing at higher than normal returns, betting on a long shot, you have to be prepared to lose it all. Big returns come from accepting big risks. If you’re not into the risk, then you need a long-term plan to put compounding and time on your side.
Are you wasting your time? Some people go into a holding pattern, almost as if they are waiting for something magical to happen. I’ve known more than a few people who are waiting for the parents or grandparents to die because they know all their financial foibles will be forgiven. Pathetic. If you don’t have the energy, the motivation, the desire to do for yourself, you’re likely to end up struggling and bitter. But if you want to make it, then you have to make every minute count. Learn to manage your time. Use your time to increase your skills. Use your skills to increase your earning power. It’s all connected, and it all begins with you and how you choose to use the time you have. Focus on what’s important.
Are you enjoying the simple things in life? Some people believe that only expensive, complicated and intricate things are worthwhile. They take no pleasure from sitting in the grass watching a butterfly or listening to the birds sing. They need to be go, go, going, all the while spend, spend, spending. If it doesn’t cost a lot, it isn’t even worth considering. They are jealous of what their friends have, envious of another’s success, bitchy and bitter. I’m talking about girls who DEMAND engagement rings with hefty price tags. I’m talking about boys who think that the kind of car they drive is more important than their mate’s sense of security. Or the folks who want someone else to pay for their every whim. If you’re in this place, you should stop for a moment and take stock of all that you’ve been given that you may not be appreciating. You don’t want to lose those gifts only to realize what a fool you have been for taking them for granted for so long. Stop wasting your money – and your boyfriends’, mother’s, father’s, siblings’, friends’ money – on dumb stuff. Learn to play in the rain. Learn to sit still and watch the world unfold around you. Learn to say thank you for the blessing you do have.
You don’t have to be in debt. But you do have to understand what got you into debt if you ever hope to get out of debt. It’s the bahaviour that led to debt that’s keeping you in the hole. If you truly want to make things different, you must first accept that what you’re doing isn’t working and then CHANGE. I can give you the tools and the guidance. But only you can DO it. So DO it!
January 8, 2010 at 8:22 am
Well I have a money-sucking hobby does that count as something that is hindering my indebtness?
other then that I pass the other questions with flying colours.
regards,
Jason
January 8, 2010 at 9:24 am
Gail, I just discovered your blog today. This is SO much more than a financial info blog. Learning to enjoy the little things in life and not trying to ‘keep up with the Jones’ addresses the two main ‘illnesses’ of our modern society.
While I have been able to respond with a resounding ‘NO’ to most of your questions, one or two did give me cause for pause, and have identified areas where I can make changes, despite the fact that I am actually in fairly good financial shape.
Thank you.
January 8, 2010 at 9:45 am
I’ve heard of adults who hold part-time, low-paying, easy jobs describe themselves as “waiters” . . . as in “waiting” for their inheritances . . . what a sad way to live.
January 8, 2010 at 9:54 am
This was a great series. Trying to get out of debt without looking at what got you there is like bailing on a sinking boat without plugging the hole, or exercising for 2 hours a day while continuing to shovel in the Oreos.
Of all of the causes mentioned, I guess I’m probably most guilty of wasting time. Sometimes I know I need to make a change that will help, but I get bogged down with the details and fail to get started. Time is money.
I’m getting better, though. On Tuesday night, I noticed that ING Direct had a great rate on a 90 Day GIC for RRSPs (3%). Normally, I might have put it off, telling myself that “it’s only 90 days, and it won’t make a big difference”. The difference may not change our lives, but it’s more money in our pocket for very little effort. I transferred the money from our 1.2% savings account the next morning.
January 8, 2010 at 9:54 am
Yes Jason, a money sucking hobby hinders indebtedness. Take it from someone who knows – every time you turn around there is another expense – whether its new shoes for running or paper for scrapbooking or parts for the motorcycle. I’ve been there and occasionally still am. However, some of my hobbies allow me to spend time with people I really like and keep me out of stores most of the time – those ones I want to keep. I hope, at least, you are enjoying yours.
January 8, 2010 at 9:55 am
Gail – I discovered your site recently and love it. I am in the Financial Services industry and love finding tips and advice I can share with clients.
I find it hard that people are still counting on an inheritance as an alternative to saving….with our parents living into their 90’s we will have to wait a long time…plus, who knows what will be left? People are living longer. Our parents supported us for the first 20 years of our lives (some may have longer)…why do we expect them to pay for the last 20 years of our lives as well?
January 8, 2010 at 10:25 am
fabulous series Gail…Thank you.
January 8, 2010 at 11:04 am
The waiters comment is pretty funny, I have had personal experience with that and I laugh because those people are forgetting how easy it is to change a will. There were 2 “waiters” in my family for my grandfather’s estate and he got annoyed at their attitudes and changed the will so that there was significantly less funds for them and more for the people who were self-sufficient and who he thought would better manage the funds. The 2 people spent a lot of time on their butts thinking this would be their retirement and now everyone else is getting the last laugh.
Money-sucking habits are funny, mine is coffee, but it is built into my budget and since i am consumer debt free I figure it is my one small splurge then it is OK. I do heavily self regulate it, there is a set amount for every 2 week period and once it is gone, that’s it no more on coffee until the next pay.
January 8, 2010 at 11:19 am
I often find myself envious of my sister because she has it easy. Her mother in law bails her out ALL the time. Oh were going to disneyland curtious of her mother in law. who paid for her wedding; gave her a 2nd hand van as a baby gift; paid for her debt and all of which she never has to pay back. I try not to be jelous its hard to think that her mistakes just being paid for and starting over she never learns from her mistakes. So as much as it would be nice to have someone just pay off my car loan or my $1900.00 in cc debt I get a better sence of direction on my finances with help of Gail and all you of course and learn to make better choices of where my money is spent and taking the time to bail my self out knowing at the end of the road It was all me and no one else. Thanks for all the great advice Gail I appreciate it happy 2010 All
January 8, 2010 at 11:28 am
@ Emily – in the end you win…you know your finances, you know where you stand and it’s on your own two feet. When I find myself being jealous of people that are always getting bailed out by others, I remember the sense of pride and accomplishment I feel when I know that “I” did it myself.
I have a hobby that takes a bit of money (scrapbooking) but we’ve learned to be frugal with it, shop at sales and use a lot of what we already have. We stash extra money from the jars for all day crops, or we budget it from the ‘entertainment’ jar.
Otherwise, I passed all these questions!
January 8, 2010 at 12:10 pm
Great series Gail! It was really a lot of awesome information.
January 8, 2010 at 12:40 pm
to all you scrapbookers
The one store in my town has a $25 membership and with that all year you can borrow stamps just like the library its a great $$$ saver because I know that I never use the same stamps enough to pay their $$ price (garage sales) but its a great idea and its definatly worth taking advantage of
January 8, 2010 at 12:40 pm
Note to those above:
If you have a hobby that costs you money, it’s ok to spend the money if it fits in the budget and does not take away from savings. If my understanding is wrong, my dogs will get bored!
January 8, 2010 at 12:51 pm
Great community and a great series! Like 2 cents I too am guilty of wasting time. Perhaps it is the fear of seeing what it is I owe in student loans and being jobless! But my resolution for 2010 is to “Go out and get it!”
January 8, 2010 at 2:52 pm
I second Marie’s comment-my hobbies allow me to enjoy the simple things in life (music, reading, loved ones) and are worked into my budget as entertainment.
Overall, though, this post and this series were a great self-assessment. Thanks Gail!
January 8, 2010 at 3:28 pm
Educated about money: I wasn’t, but I am slowly learning how to manage my budget and all the dollars I’m saving. I tend to be risk-averse so anything that threatens my investment is not something I’m too comfortable with, so in order to maximize my returns I need to grow outside of my comfort zone, and the best way of doing that is to learn all I can about investing, so that’s what I’m doing.
Money-sucking habits: I can firmly say I don’t have one of these. It makes me kind of boring, but I’m okay with that… and so is hubby, and that’s all that counts.
Get rick quick: Welll, I don’t even buy lottery tickets, let alone gamble or take chances with high-risk investments, so I definitely don’t expect to get rich quickly.
Wasting my time: I might be guilty of this one. But I hope I’m doing better now that I’ve formulated a budget that includes saving about 15% of our net income, but there were years (decades?) where I saved less than 2% so I’d say I was definitely wasting my time waiting for *something* to happen that would change my bank accounts for the better.
Simple things in life: I do need to work a bit on this one as I find my life is sometimes a bit joyless. I really do enjoy the simple things in life and I rarely pine for the things my friends, family and neighbours might have that are not in my budget… except for one thing… the one thing I pine for that I don’t get enough of is personal “me” time. I’m envious of other parents that have close family to help them with everyday family life. I guess it’s hard to sit back and enjoy the simple things in life when you are bogged down the complexities of life. But that’s not really what this part of the blog message is talking about. So, I guess I do enjoy the simple things – music, birds chirping, sunshine, QUIET moments, bubble baths, a nice glass of wine… it’s just hard to find the time for these things…
January 8, 2010 at 3:29 pm
Jason, Joanne, I wouldn’t worry about your hobby wasting money as long as the money is budgeted for. You do have to have some fun or you’ll go nuts.
Like many others, my hobby is scrapbooking. There is $10/month in the budget for this hobby so I have to save up and be really creative. For instance if I want a lovely new box to hold a few odds and ends, I can buy one ($$$) or cut the bottom off an empty cracker box and cover it in pretty paper (free).
Emily, I agree with Judi. When the Bank of Mother-in-Law closes, your sister won’t know what to do whereas you do know how to be a grownup.
January 8, 2010 at 3:32 pm
I definitely fall into the ’stuck in a holding pattern’ category. Though not because I’m waiting for someone to die. That is a rather disgusting side of humanity. Nope, I watched my parents get into debt recognizing all the things they did wrong. Then I moved out, and have committed the exact same mistakes they have, plus a few new ones. All the while, plainly able to see what the course of action was going to cause while continuing down that disastrous path. The rules of personal finance are easy, the psychology is not.
This month has been about taking stock of where I am. It’s not pretty, but recoverable with time and dedication. It’s about implementing small achievable changes in lifestyle and making them stick. Even more basically, it’s about implementing a basic budget, following that and then identifying where it needs to be tweaked. Did I budget too much for food, or not enough or am I eating the wrong stuff? I need clothes but that isn’t in the budget, what does it really cost me. House insurance comes once a year, every year. Why is that not being set aside monthly for.
It is easier to give advice, then heed it yourself. =)
January 8, 2010 at 3:40 pm
Hello All~Sorry I’ve been AWOL. My answers are:
Part 2: No, No, Yes
Part 3: No, No, No
Part 4: Yes, No, No, No, Yes
I agree about hobbies. If it is worked into your budget then it is fine. Any knitters out there know about a ’stash’. Stop me if I’ve told you this already (sometimers) but I just purchased 26 balls of yarn. However, they will make two awesome afghans as gifts. So, it is a win/win situation.
Off topic:
1. Just got my Costco mag. and love your picture Gail! It is going up on my bulletin board above our computer so I can see you sweet face any time. Hope you will be coming to Kitchener Costco at some point so we can maybe meet up!
2. If any of you have term insurance…check your policies. I was looking at ours the other day and hubby has till 2012 and I till 2014 to apply for permanent policies. Our original agent had retired, another agent took over and left just before Christmas, and so we were rudderless…with no agent. We did not know any of this had taken place. Nice eh? That has been rectified by me and our new agent is coming next Thursday. I digress. So, back to our policies. When we took them out 20 some odd years ago we thought they were for life. Nu-uh. They are in effect till we are 74. If we don’t make them permanent by 2012 and 2014 when we hit 74 SURPRISE! we have no insurance whatsoever. A real eye opener for us. So, this is just a headsup to all of you….who probably don’t have insurance agents who lost you in the shuffle.
3. A while back there was talk about fees by banks for them looking after your investments. I had said…no….we have TD Waterhouse and there have been no fees. I was correct. Until I got a letter this week stating that as of March 15th hubby and I will be charged $50. each for their services. Very perturbing after
all these years.
January 8, 2010 at 3:45 pm
@ Catherine – why do you think you’ll need life insurance past age 74?
Also, TD Waterhouse is not looking after your investments for free,and not for $50 a year either. Can you look at your investments, and find out what the Management Expense Ratio (MER) % is? This won’t show up as a “fee” line item, but it’s the cut they take. So if your fund returns 5%, and you have an MER of 2%, you’d see a return of 3%. But your returns will only show “2%”. You may have to ask or find out it buried in your prospectus somewhere.
January 8, 2010 at 3:46 pm
Sorry typo above. Return will only show 3%.
January 8, 2010 at 3:49 pm
Forgot!
@Emily…hard to sit by and watch your sister being ruined I’m sure. Her MIL is not doing her any favours. If your sister and husband have children, what will their way of life teach them? You are well out of it all. Be grateful. You are an independent, strong, persevering financial wizard and mark my words…some day, your sister will come to you for guidance. Just be sure that if she has her hand out….you slap it.
January 8, 2010 at 3:51 pm
@Geoff – geez you want me to die off at 74? Yikes! I had rather thought I’d like to hang around a bit longer. You must be young. When my hubby was 16 he told me he didn’t want to live past the age of 30 because by then you would be ancient.
Will check into what you suggest about the MER – it will take some investigation on my part.
January 8, 2010 at 3:55 pm
Catherine:
TD Waterhouse charges you $50 directly. You pay the MER for each mutual fund. There is a transaction fee for purchasing stocks and bonds. They have to pay people to make these transactions. BTW, I thought the charged $100 per account per year.
Try:
https://www.tdcanadatrust.com/mutualfunds/prices.jsp
and select ‘Details’. Look at the column MER.
January 8, 2010 at 4:10 pm
Catherine;
what I believe that Geoff is getting at is that typically by age 74 (or approx. that age/retirement age) you don’t “need” the same extent of insurance that you purchased 20 years ago when you had a mortgage, kids at home to support, save for retirement, etc in the event that one or both of you passed away and were left with the need to replace 1 or both incomes to raise the children, pay the mortgage, save for retirement etc. While you may wish to make those policies permanent you may not need them in the same amounts, etc that you had back 20 years ago.
January 8, 2010 at 4:14 pm
Catherine:
I think that Geoff’s point about life insurance at 74 is whether it is needed. Do you have a dependent that needs for you to leave them money when you are 74yo? This insurance could be expensive. Will you have enough in your savings, RSP, TFSA… to cover the costs of losing you? I am not saying that you do not need it, I am saying that you must ask yourself WHY you need it at that age… Let me rephrase to WHY it is needed when you reach that age.
January 8, 2010 at 4:44 pm
Hey Amelia, those mandarin orange boxes from xmas might be a good idea too for storing your scrpabooking.
January 8, 2010 at 4:50 pm
Thanks for all your input! I certainly meant no disrespect to Geoff…that’s not me.
I am looking into the insurance past 74 as I am a boomer. There will be 100’s of thousands of boomers all reaching old age at the same time. The costs will no doubt be high for maintenance for we creaky people. I want to make sure that my darling hubby is well taken care of in the event of my passing, and (God forbid) if a nursing home is in his future. As he is in very good health, I’d like to think he would be living the high life traveling the world….on my dime. I know he feels the same.
I do realize that Canadians are one of the highest insured peoples of the world. So, next Thursday we will look very carefully into what our new agent has to say.
@Marie – thanks for the link to TD Canada Trust. I looked and looked though and couldn’t find the MER column.
Also…here’s the letter we got: (good thing I have those two typing trophies in the attic…..whew!)
TD Waterhouse Financial Planning is committed to keeping you informed of any changes that affect your account(s).
I am writing to let you know that after a review of our fee structure, the annual administration fee for registered accounts will be reduced from $100 to $50, starting on March 15, 2010. At this time, any current fee waivers, on the basis of household or individual assets held in the account(s), will no longer apply. This means that for some clients this will be the first time this fee will be applied, while others will be getting a reduction on the previous amount charged. Please note, the annual administration fee normally charged on November 1, will now be applied annually in March, beginning on March 15, 2010.
January 8, 2010 at 4:53 pm
Catherine,
If one of your incomes disappears when that person passes away AND you need that income, then you need insurance (and for funeral expenses). Otherwise, why spend the money on premiums? If this is intended as an inheritance for your children, you should seriously consider asking them to pay the premiums. Presumably if you are in your 70s, your children should be self-sufficient by now.
January 8, 2010 at 4:56 pm
Okay, sorry, your post hadn’t popped up yet by the time mine was up.
January 8, 2010 at 5:44 pm
It took me awhile to to educate myself on “striking a balance” as Gail mentioned above. I don’t think its something your banker can teach you, and the only other people that did teach me about finances, my parents, had a different definition of what “balance” was. It took me some time to figure out my own personal “balance.” It wasn’t just about gaining balance io my daily budget (bringing lunch to work during the week so I can go out for lunch with a friend on the weekend and stay on budget) but also my general life balance.
Right before I turned 30 I found myself thinking I had wasted my 20’s because a large portion of what I had earned went to “experiences.” Mostly travelling. But in retrospect, it was an investment I made in myself, it gave me perspective on life and helped me figure out my values and priorities. (My husband travelled a lot in his 20’s too) And at the end, the experiences were priceless.
So, now, we feel we can focus on planning and saving for the other experiences we want to have (kids, pets, trips to see family, building our house) Plus, we ended our 20’s with little or no debt. The interesting thing is that we see a lot of our friends who went and got the big mortgage and brand new cars in their 20’s, that now can’t afford to go travel and see the world, buy new furniture, get family friendly cars, or more sadly, can’t afford to have kids.
Which leaves me grateful, to have educated myself on not only how to balance my chequebook, but my life too!!
January 8, 2010 at 6:06 pm
Catherine:
At the top of the table, there is a choice:
Prices Details Performance Yearly Performance Risk
(default is ‘Price’). Select ‘Details’ and then you will have access to the MER column.
January 8, 2010 at 6:47 pm
I think parents should teach their children good moeny habits and management. Unfortunately my parents didn’t do that actively instead teaching us by example all the wrong things to do financially. It is hard to be in your 30’s with all the life expenses and debt from the school of hard knocks teaching you through trial and error. Needless to say we are workingon correcting our finances and being proactive in setting our young family on the financial straight and narrow. Here’s to breaking the cycle!
January 8, 2010 at 6:48 pm
Also, many thanks to Gail for being here to help us on this journey of learning and life improvement.
January 8, 2010 at 7:09 pm
Regarding hobbies…
I would say they are a good thing if
1) you can afford them (i.e. they are in your budget and do not cause debt)
2) you love ‘em! I would chalk that up to “the simple things in life that make you happy”
January 8, 2010 at 8:00 pm
Regarding “waiters”: I’ve seen that once. After 30 years she finally inherited a fortune. And then squandered it in five years. She’s in worse debt now than ever before, about to lose the house and the dogs, and still spending as if there was a million in the bank, trying to make good for the 30 years of waiting. What a waste.
@Emily, that’s an unhappy situation for everyone, except probably the MIL. But having control of one’s own finances (and life) is a good thing, and achieving that will be a lot harder for your sister. It’s *possible* to have generous relatives and still keep a clear head about one’s money, but as with a money-sucking habit or an expensive hobby, it’s requires even more determination that it would otherwise.
… I could be better educated and less procrastinating. With taxes and the low current rates of interest, my savings lose to inflation. There has to be a way to handle it better.
My hobbies are reading, music and traveling. Reading, even with the library being no good, is cheap, thanks to second-hand bookstores and the internet. Music is quite expensive at the moment, but budgeted for. And travel… probably not this year.
January 8, 2010 at 8:12 pm
@Marie ~ Thank you! It has been printed off along with Geoff and your comments about MER and duly handed over to DH.
January 8, 2010 at 9:20 pm
This column has listed my down falls.
Over the past two years, my boyfriend and I have gone through a crash-course in finances. We have made a lot of embarassing mistakes, and accepted more help than we really deserve, but the tide is changing slowly. Just wish our creditors knew and would have a bit more patience.
Money-sucking habits? Yes, coffee and bottled water, just not nearly as bad as before, and Tim Hortons instead of Starbucks.
Doesn’t everyone want to get rich quick? Now most of the people who are using this site know the odds and would rather invest in stocks than tickets, but who doesn’t allow their minds to wander from time to time with the thought of a windfall of cash? I do buy tickets, but it’s a cost of about $2 per month, and I regard it as entertainment, rather than an investment strategy.
I have been in a holding pattern most my life, with no justification. This has nothing at all to do with waiting for an inheritance, I would far rather have my parents than any amount of money. I just have problems with procrastination and finding focus, I don’t know what I want to be when I grow up. That’s got to be bad for a almost 30-year-old, right? I’m either going in no direction, or all directions, and I’m tired.
Now, the simple things, on the other hand, are my favorite things. My cats, a nice crisp salad with balsamic dressing, gardening in little pots on the balcony, walks among early summer trees. I don’t know how I would get through without an appreciation for what is already mine to enjoy.
January 9, 2010 at 1:00 am
@ Catherine
Yes, I’m glad the other posters got what I was asking. I was wondering why you’d need insurance past 74. I think the premiums are going to be whopping, and that money might be better off invested and/or saved. Also if your husband outlives you and needs to live in a nursing home, won’t your house be long paid off by then? But you should do what you feel comfortable. In my own case, when my wife and I were 30, we took 25 year term-life to cover us until I’m 55. At that point, I think our premiums jump 10x but by then my son’s education/mortgage paymetns will long be over. Disability insurance however, is very different from life insurance of course
As for MER. I suspect what you’ve been paying out in MER over the years far outweighs the $50/$100 fees that you’re being charged on top. I’m not against MERs though in principle, I think people who do a good job and invest your money well should get paid. But to earn 2% of your total investments, year over year, regardless of performance, well that’s another story. To see the impact of MERs over the years, use this calculator:
http://www.advisortek.com/free_tools/calcs/MERs_Returns.swf
TD offers e-series mutual index funds with MERs of around half of one percent (0.5%). Bing canadiancapitalist.com + e-series and you should find the articles about it on that blog which is very good.
January 9, 2010 at 5:28 am
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January 9, 2010 at 11:13 am
@Geoff~Good morning on this bright and beautiful sunny day!
I’ll wait and see what the insurance agent suggests on Thursday. I know it will be more expensive for permanent, but we won’t go nuts. Disability insurance is something I want to hear about. Our home was paid off years ago. Having said that, we do have a LOC which I’m trying very hard to pay off in the next year (from a wedding, renovations and a car).
We live in a podunk. Our home and double lot right on the river would sell for 10X more in the Big Smoke. I’m not expecting the sale of it to be our life’s cushion. We’ll probably go back to our early married days of renting once we leave here.
It’s true that you learn something new every day. This whole MER business has me dizzy……
January 9, 2010 at 3:49 pm
Don’t get too dizzy or upset. It’s not reasonable to expect your fund managers to not get paid somehow for investing your money, it’s some work on their part. I don’t like how the mutual fund industry says ‘no fees’ but really it means ‘hidden service charges’. I’d rather they made it more easy to understand.
If you don’t mind, do post what your premiums will be (without revealing personal information) for others to know. I’m a bit anti-insurance, but that’s a personal choice.
And at least you don’t invest with insurance companies, who charge MERs of 3%+ usually.
January 9, 2010 at 6:49 pm
Well, I think I’m doing an excellent job of educating myself about money… I’m here, aren’t I?
Actually, for the most part I’ve done a good job of managing my money, and when I came to realize that my husband wasn’t on the same page, and probably would never be – ‘why would we want to put $100 on the credit line? It only reduces the interest fee by a couple dollars…’ He still doesn’t get it, but he’s not my problem any more!
Money sucking habit… I don’t have one of those. Used to be Timmies but where I work now has a coffee maker, so no need to buy!
God, wouldn’t I love to get rich quick! But I also know the wonderful feeling of satisfaction I get by having a 0 balance on my CC and knowing that I did it all myself! And when the lottery bug gets me, it comes out of the entertainment jar.
Wasting time… I think that was my biggest sin. Once I was on my own I just sort of sat back and rested on my laurels. I got myself a fair amount of debt – $15000 – but it was all spent on my new to me (built 1942) house because I didn’t know I was supposed to have an emergency fund. Who knew that houses were built back then with no insulation in the walls!!!
One thing though, I’d be crazy to wait for an inheritence to put me on easy street. My family have a habit of dying of old age… Would you believe that earlier in the same year my grandfather died, my grandparents celebrated their 70th wedding anniversary!?! They were the oldest living couple in England! My grandmother turns 99 next week and is still going strong…
January 9, 2010 at 6:50 pm
@Geoff~Thank you for your kind words. I guess I’m upset because my husband asked our fund manager how he got paid for taking care of our investments and we got the impression that there was no charge to us. Did not hear the word MER. 100% our mistake. We are too trusting. We should have delved further. I should not always think the best of people especially in business. I hate to be cynical. You can laugh, but, I’m from the Ozzie and Harriet generation, but, we do lock our doors and do not leave our car keys in the ignition.
Sure, I’ll let you know what the insurance agent has to say.
January 9, 2010 at 9:00 pm
It took us forever, while me at least, to not only understand debt and finances but to realize that being offered credit is one thing. To use it is another, and bank officers want you to go into debt. So, finally by again, reading your blogs and listening to your shows, I understand. We are no longer using our LOC and I’ve also been thinking about all the things that I can get done that don’t involve spending a cent. Yes, I want to travel, or buy stuff or get my kitchen redone on some level, but I really want to do it with hard cash. I want to have my Emergency Fund set up, so if anything happens we are covered.
It feels good to have made the decision.
January 10, 2010 at 10:00 am
I miss Gail on the weekends
This is off-topic, but I got rid of one of my CCs this week! I admit I didn’t pay it off completely, but I transferred the balance to the other card, and went from 24.99 percent interest to 11.99! Now to put the focus on paying off the one card!
January 10, 2010 at 10:36 am
Chubby Bunny…good move with the cc…I was just thinking the same thing about weekends but while we don’t have Gail we still have the rest of the gang here. I really enjoy coming here and have learned so much from everyone, it’s a great way to start the day!
January 10, 2010 at 10:57 am
@chubby bunny~ good thinking! Please make sure you total what you were paying on both those cc’s and put that amount on the one card (any extra pennies added to that amount would help too).
Yes, I also miss Gail on the weekends. Imagine…she has a life! LOL Glad everyone else shares on weekends.
January 11, 2010 at 3:19 am
Thanks for a great series, Gail. My husband and I have implemented our “get out of debt in 3 years” plan a few months ago, but consolidating our high interest credit cards into a bank loan. And we made out a bi-weekly budget, based on our pay days. Steps 1 and 2 complete. Now, if we can keep to it, things will be great.
January 11, 2010 at 10:06 am
@ Beth — great start. But be sure to not fall into the very common trap of consolidating your loans, paying off the balance on the cards.. and then running them back up again in 12 months time. Then people have twice the debt they started from.
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