Comments on: Don’t Let ‘Em Scare You

By: GAJones

GAJones — Wed, 03 Mar 2010 05:36:28 +0000

Thanks you for this post. Feeling like nothing I save will ever be enough is a MAJOR reason why I have no savings to this point and have not made a serious commitment to eliminating my line of credit or student loan debts.
However, I am moving in a new direction and I am trying to make small, steady steps towards being more fiscally responsible. Knowing that its not hopeless makes it much less scary and depressing of a project. Your blog postings, show, general good humour and sensible attitude is also helping keep the “I am 32 and I have debt, no savings and am planning a return to school” despair at bay and allowing me to slowly plod toward a new approach to my money!

By: Jennifer

Jennifer — Tue, 02 Mar 2010 23:44:23 +0000

Wow! Financial advisers like that scare the you know what out of me! I still believe in the motto “a penny saved is a penny earned”. We’ve seen in the last year or so how fragile the economy can be. As a result I’ve changed my investments from aggressive to minimal? Why? Because no matter how low the interest rates get, at least I’ll know that my principal amount will remain relatively intact. I’ve lost enough by being aggressive, now it’s time to hunker down.

By: Kat

Kat — Tue, 02 Mar 2010 21:11:21 +0000

@80’s It’s very nice to have parents that support and love you, it’s really nice to have parents that support and love you and can give you a little help financially with school, but I assure you — it is AWESOME to have parents that love you enough to make sure that they don’t end up living in your basement with you and your spouse.

There is nothing wrong with working for what you want in life…. frankly, a lot of people that just get it handed to them don’t appreciate it.

And spending all that money on 1 day? *shudder* yes, they should be on their own.

btw, the beauty of a TFSA is that you can have savings that you can touch, so if you think you have enough money, then when the time comes, use some of your TFSA for their education.

By: tlily

tlily — Tue, 02 Mar 2010 21:05:03 +0000

You’ll be teaching them the right thing by taking care of your retirement first and letting them also partially work their way through college – the way you did.

By: 80's child

80's child — Tue, 02 Mar 2010 20:22:09 +0000

Thank you both for your feed back, it is greatly appreciated.
I have just research what a TFSA is and by golly I will be opening one up…..ASAP. not sure what I will be putting in it yet, but my Gail homework will eventually tell me.
I think I may have been unclear, I do have a College Diploma but as my career path had diverted me away from my origin of study and sadly without a BA, BS, BAA, ABCD, EFTH or any other acronym attached to my name I am having a hard time competing with it the young. Even with 20 years Professional Experience many of the job posting for which my experience would qualify me all ask for a BA, BS etc… etc… and I normally get, “we were much impressed with your resume, but have decided to go with a candidate that better matched our requirements” or “we were hoping for someone with a degree in Business – BA” these are actually quotes.
I refer to being a child of the 80’s within the context of my own experience and others that I had the pleasure of growing up with. Born in 68 and immigrating to Canada with 3 other siblings we struggled to make a life. My mom was my strength and I to this day do not know how she did it. It is threw her that I learned the value of appreciating what you have and if you want something you have to work hard for it. For myself and many of our neighbors in the big TO going to College and University was a dream. I paid myself threw College (I couldn’t afford University) and took a course I could afford (administration). When I came out I did find a job in my chosen field but no acronym. 20 Years later and surviving the school of hard Knox I worked by butt off to make it into Management but sadly find myself battling against the young (rightly so). But enough of that…. ?
I will say that, no, I don’t have a company pension (another reason why I’m still in career transition) my husband does, but has just started to contribute to it (he is new with his company as well). I struggle with the Idea that I get myself an RRSP and not worry about my children’s education. I don’t want them struggling to get that Education and starting of their life with this big dept that so many carry even years after they have finished school. I will try some kind of balance, even if I can only give a small amount. At least I tried to give them some help. College and University costs are sky high and so is the price of housing and I feel as a parent I owe my children at least to try. All I can do is what I can and teach them how to respect themselves and their finances……… For weddings (they are both girls) my dear they will be on their own…. ?
My only hope is that I am doing the right thing……

By: Geoff

Geoff — Tue, 02 Mar 2010 18:09:14 +0000

@ Kat +1 — there’s no scholarship for turning 65.

I know you’re not asking for help but I’ll throw in my two cents – one, do open up a TFSA. Particularly if your income is down.

Second, and I know it’s hard to think about it and really hard to pay for it, but if you need a certification|diploma|degree to get your job back, is there really no way to get it? 4 years sounds like a long time but in the grand scheme of things, it’s not. I know your debt averse but student loan debt isn’t so bad if you have a good job waiting for you on the other side.

Lastly, you should be commended for not having any consumer debt, other than your car loans. I’m a child of the late 70s, and do not think I’m any more privileged than a child of the 80s though

By: Kat

Kat — Tue, 02 Mar 2010 17:06:08 +0000

@80’s

RE: RESP — I have heard from many different financial experts that it is important to “save yourself” first — you mentioned not having an RSP, but not whether you might be eligible for any pensions.

If you are not eligible for pensions, before you save for your child’s education, you should first save to ensure that you and your husband have enough to get through the “golden” years.

People can survive without education, and they can also do student loans for the education they want….

At your age, you may not be able to afford to wait to begin saving for retirement.

By: 80's child

80's child — Tue, 02 Mar 2010 16:16:12 +0000

Hi Gail, I hope in telling my story I help another person of my generation or in a similar situation.

I have been reading your blog religiously for the last couple of weeks and I have purchased your book and am working threw reading it. My husband and I are not doing to poorly with our finances…. Our depts. are Mortgage, 2 car payments of which only 1 has interest charges. We have no credit card or LOC dept (I like to keep it that way). My husband and I are both 41 with 2 children ages (11 and 7) and 2 dogs. I am the voice of reason at home when it comes to spending and I try to only buy if we have the $. I enjoy working with money. But I am sure I am going to get the Gail kick in the %*% & pretty soon as I re-tell my story. I have enjoyed watching TDDUP for many years and always thought wow how “they” could not realize what was happening to “their” money. Last summer I was part of the economic down turn. I lost my Management position and found myself unemployed in an industry that no longer recognizes an employment candidate unless they have some kind of designation (remember I am a child of the 80’s only the “privileged few could afford degrees). I struggled to find a position any position that would keep the roof over our heads. I have found a position, making considerably less then before and at a job I hate. But that is life and as it settles into a normal pace, my recent experience has become the catalyst that now makes me wonder what the &%&% am I going to do when I get old? We (yes we) have no RRSP’s (I don’t even know what a TFSA is. I am only now starting an RESP for the kids. I grew up in a household that as a new family to Canada in the 1970’s, life was a financial struggle, never having much but never going without the necessities. There was never talk about retirement or saving for old age. I am starting from scratch and paying the price of “oh I don’t need an RRSP I have a home” or “I don’t have the $ to put towards and RRSP right now”. Maybe when I retire I can survive on eating those words.

I am diligently working threw Gail’s spreadsheets and crunching the numbers and quickly realizing the consequences of financial Inaction. I enjoy working with numbers and kick myself for all those wasted years….. I am determined to teach my children all that I am learning. Thank you Gail for being the financial little voice inside my head waking me up from my financial slumber…… I look forward to viewing your new show.

By: rmck

rmck — Tue, 02 Mar 2010 15:44:18 +0000

That’s where I’m from so I know…”That comment obviously doesn’t apply in all housing markets.”

By: Geoff

Geoff — Tue, 02 Mar 2010 14:01:57 +0000

@ rmck – one thing that has driven prices up is low mortgage rates. In the 80s, a mortgage of 18% wasn’t unheard of. As for your argument that houses are bigger now, in the cities where they exceed average income the most (Vancouver, 9x, Toronto, 5x) trust me, as someone who lives in a 1300 sq. ft home and paid 4x as much as my sister’s much larger house in Stouffville, bigger costs does NOT equal bigger house.

By: rmck

rmck — Tue, 02 Mar 2010 06:03:40 +0000

Deanna:

That comment obviously doesn’t apply to all housing markets. It should be rather undeniable, though, that houses are being built bigger than they used to be and this should be taken into account when comparing average housing costs now to then.

By: Geoff

Geoff — Tue, 02 Mar 2010 00:46:58 +0000

I agree — and it goes all ways —- usually there’s someone out there screaming that house prices are going to drop 40% tommorow, and someone else out there screaming that house prices are going to go up 10% so buy now. Follow the money and see how they get paid. Ten bucks says the first guy is selling a book telling you how to avoid this apocalypse, and the second person is looking to sell you a house

Make your own decisions, live comfortably, have a reserve fund, do the best you can.

Personally, for those of us with kids and a mortgage and in our 30s, my personal goal is to escape into my late 40s / early 50s with my job and no consumer debt. Anything else (ANYTHING) else is a bonus.

By: inge

inge — Tue, 02 Mar 2010 00:01:49 +0000

My grandparents have lived through two wars, about three changes of governmental system, one hyperinflation, and two changes of currency, and have done quite well by not putting all of their eggs in one basket. They lost all they had put in government bonds and had the family business reduced to rubble, but they made enough on land for 30 years of retirement, got a modest but stable profit out of industrial stocks, and left the emergency gold to their children. My grandmother’s advice: 1. Diversify; 2. Keep your cool; 3. Invest, don’t speculate.

So, even if you go through “your retirement savings are going to be the least of your problems” phases of history, it doesn’t mean you cannot win.

By: prettyinpink

prettyinpink — Mon, 01 Mar 2010 23:50:01 +0000

Thanks Kelly for writing in. I am in the same boat but single and 38 years old. It is easy to focus on the threat of hyper-inflation and forget about the benefit of a fully indexed defined benefit pension plan. The financial industry is set up to freak us out. My new wealth advisor gave the same advice as Gail, TFSA first then RRSP and reminded me to live in the now. It is comforting to know that he is on the same page as Gail.

By: Mrs. T

Mrs. T — Mon, 01 Mar 2010 22:38:05 +0000

My parents purchased a 4 bedroom 2 bath 1 yr old home in 1978 for $63,000. My parents had a combined income of approx $40,000 at the time… which means their home cost 1.6 times their annual income.
27 years later, in 2005, my hubby and I purchased a 1 yr old 4 bedroom 3 bath home for 3.4 times what that same annual income would be today, so I agree with Deanna… price of housing has gone up significantly, relative to how much wages have gone up!