This & That
Posted by John Draper | Filed under This & That
I’ve had quite a few comments recently about the fact that many of the fams I work with make tons of money and couldn’t I do a show with people who make less.
Pearl wrote:
re: the family whose income was $140,000.00 per year. It is a constant source of amazement that people with that kind of income are in debt!!! And don’t seem to know how to get out of it!!! Why don’t you give that $5,000.00 cheque to a more needy family that is in debt??? I would like to see a show where the family’s combined income is barely $55,000.00 per year, and then see how you can help that kind of a family!!!!
And SM wrote:
Why do you not do any individuals and/or couples that only gross 60k or less? It may be easier to help those with high income, however a good portion of Canadians make 60k or less per year.
I’m not sure why people are under the impression that we only work with richy-rich families on the show. If you haven’t caught these episodes, you should, because:
- Elizabeth & Wojceich only had an income of $3,400 month
- Corrina & Jay made less than $3,700 a month
- Kristy & Dean made about $4,300 a month
- Sharon & Dennis made just under $3,200 a month
- Natalie & Matt were earning almost $3,800 a month
- Jared & Christina were making just over $4,200 a month
- Tamara & Brandon made about $3,200 a month
- Andrea & Curtis made about $4,700 a month
- Evan & Jason made about $3,300 a month
- Dawn & David made $4,400 a month
Besides, it isn’t about how much you MAKE, it’s about how much you SPEND. And whether you make a little or a lot, you can’t spend more than you make and expect things to work out fine. Either you have to spend less or make more. Thems your options.
I’ve also received a few questions about life insurance recently. People are very nervous about life insurance, who to buy it from, how much to buy. The industry has a bad reputation and people are wary about being “taken.” It’s too bad because insurance is one of those things that rounds out a sound financial plan. But there’s so much misinformation people just don’t know what to do.
Chris wrote:
Several years ago, I had a “financial advisor” over to the apartment, believing that he would help us get on track to good financial health. We instead were convinced to purchase an expensive life insurance coverage, and he said he would support us with financial advice as a next step. I have all along felt good knowing my family is taken care of… but we are still financially sick- and have a huge debt from student loans etc. and have never seen this advisor again. I am NOW FINALLY getting on track with lots of support and information from this site. However this life insurance has always bothered me. Is $75/ month too much to pay for life insurance? It was explained at the time that i should purchase a lot of insurance now while i am young, and the premium would be lower when I am older, and in less financial need of the protection… ???? Have I been as dumb as I suspect?
Maybe not, Chris. Since I don’t know how much insurance you bought for your $75 bucks, I can’t tell you if it was a good deal. I can tell you, however, that you should have had at least a couple of quotes from different companies before you bought. And I can tell you that the amount of insurance you need depends on a variety of things, which I covered in a previous blog. Click on “Insurance” on the left to see. That being said, buying any insurance when you’re young and healthy makes good sense since you’ll pay through the nose if you wait too long. I’ll try to do some more insurance stuff if y’all want it.
Lynn wrote:
I know you advocate checking your credit score annually or twice per year. I would like to know your thoughts on credit monitoring services? Paying a monthly fee to to Equifax, Experian etc. to keep you up to date on your credit report and score. They run about $15/mo. Is this worthwhile or overkill?
Sorry, Lynn, but I’m unfamiliar with credit monitoring services. Whenever I’ve received this kind of info, I’m ignored it. I’ve taken steps to protect my credit ID, but this hasn’t been one of them. Anyone else have info on credit monitoring service, how they work and whether $15 a month is okay?
Faithful Viewer Gregg wrote:
I have slowly paid off all my credit cards I was wondering whether to cancel them or put them away because I heard that if you cancel credit cards it will affect your credit score. I would also like to see awesome follow up shows to see if the people that you help are still on track.
When you cancel your credit card, Gregg, you eliminate the history for the card, which is what affects your credit rating. I would put the cards away after I called and lowered the limits (high limits can also affect your ability to borrow in the future.) After a year or so, you can cancel the cards since the history would be old.
As for your second point. If y’all want to see follow-up shows, you have to write to SLICE or go on their website and comment about it. That’s beyond my production company’s control. And I, as a host, have NO say. Sorry.
And, finally, KM wrote:
Your show is my daily inspiration to live completely debt free, sooner than most of my (lawyer) friends. I am 37, earning $72000 per year. I owe $6000 on my line of credit (used to finance a moderate used car), and $163 000 on my mortgage (my house is probably worth $220K). I am being highly aggressive in my debt repayment strategies: $1400 per month on mtg (PIT) and $1265 monthly on my line of credit. I have no other debt. I want the line of credit balance gone in 6 months, and plan to route the majority of the payment amounts between savings and extra principal payments once it is at a zero balance. I feel conflicted. Should I extend the payments on my PLC to one year in order to lighten up, or is it better to just stay on an extreme budgeted course and get the debt over with? I have some home reno dreams, and vacation dreams and am not sure where these should fit? I am conflicted between rewarding myself in the present or being completely debt-free and “rich” later. Thanks – your show and your website are invaluable.
KM, I hear the conflict in your letter and want to say, “Breath, girl.” You are being too aggressive on your debt repayment since your $72K in income translates into about $55K net, or just under $4600 a month. So you’re trying to spend over 27% of your income on debt repayment. While I often make my fams jack up their debt repayment to get debt free before they suffer from Debt Exhaustion, I think you should take a little more time. Get the line paid off in 1 year, loosen up your budget a little and start setting aside some more for your Planned Spending: your vacation and your renos, so you don’t end up putting that stuff on your LOC later. How does that sound?
July 19, 2008 at 2:43 pm
I have wondered how the Equifax thing works too…. shouldn’t my credit score be available to me for free? After all it is my information that is incidentally avalable to anyone else that wants to lend me money.
July 19, 2008 at 3:31 pm
Hi Tracy,
TransUnion is free if you send their form though the mail. It takes longer but is totally free. They have an option to do it on the website which is fee-based. It is the same as Equifax. Here is their website.
http://www.transunion.ca/ca/personal/creditreport/consumerdisclosure/mail_en.page
Andrea
July 19, 2008 at 4:05 pm
Tracy, you can get it free by requesting it in writing and having it mailed out to you.
I struggle sometimes as well with determining if I should allow myself a vacation fund when I have this LOC debt that I am putting $1200/month toward. I do feel that without sacrificing too much else, I can make the $1200/month debt payment and still save for a vacation.
Gail, you are so refreshing and I look forward to starting each day reading you blog. Thank you.
July 19, 2008 at 5:40 pm
Tammy’s exactly right – you can order your credit report by mail for free from either Equifax or Transunion. Paying $15/month to have your account monitored is a complete waste of money in my view. If you take little steps to reduce the chance of identity theft — e.g. shred documents, take care with your PINs/passwords, monitor your bank account and credit card statements, and order your free credit report once a year you are being duly diligent I’d say..
July 19, 2008 at 9:26 pm
i have a cibc visa. i don’t pay for additional services but what’s included is an alert to your online banking account whenever there is a change or an inquiry to your credit score. when we renewed our mortgage, it was almost silly, we received an alert from the broker, an alert from the bank,, each for my husband and my self since we co share the card.
food for thought, not a bad idea in my mind but i wouldn’t pay extra for it (mind you we pay for the card, but it pays dividends so it pays for itself).
July 20, 2008 at 8:08 am
When it comes to protecting your identity, I don’t think we need to pay to have the monitored either. If you pay attention to your credit card statements and get annual copies of your credit reports you should be fine.
I’d like to recommend that you only carry the identification that you NEED like your drivers license. When I worked in bank customer service, it was sad to see how many people lose thier wallets or they are stolen from them with ALL of their ID in the wallets. It really made it very difficult for them to obtain new copies. It’s especially important if you are relocating to a new province where no one know you. Imagine losting all of your ID and no one knows who you are to help you get new ID.
We likely don’t need things like our birth certificates, SIN cards, passports etc. Please take a minute and go through your wallet. Put those pieces of ID in a safe place like a fire-proof box or a safety deposit box.
July 20, 2008 at 10:24 am
Hi Gail,
Just had to say thanks for your blog. THANK YOU THANK YOU THANK YOU.
That’s all!
Krista
July 20, 2008 at 11:01 pm
Are there times when the only thing you can recommend is bankruptcy? Particularly after divorce?
My husband and I watch your show often and one of the comments he makes is that he can’t understand how, after five years, anyone can be half a million in the hole. My understanding is that the number is meant to shock people so that they understand the ramifications of what they’re doing – I’m sure that long before that they’ll be forced to declare bankruptcy.
I guess I’ve met a few too many people who have declared bankruptcy and don’t think much about it.
Thanks for the show – it’s been an eye-opener.
Karen
July 22, 2008 at 9:04 am
personally I love the shows with the high income earners. I guess because I am in that category. Seriously, though, it doesn’t matter what you make, it’s what you keep!
My favourite is the family doctor who was spending $12K more a MONTH than he made. It’s season one, which isn’t online.