This & That: The Truth is Hard to Hear Edition
Posted by Gail | Filed under This & That
K Wrote: I am a single mother who has gotten into debt through not receiving my support, lending money to my children, and having expenses for my current vehicle in the thousands in less than 2 years I have owned it. On top of that I have had braces, Driver’s Ed, all of which their father doesn’t help with what so ever. Are there any suggestions you can provide to me? I claimed bankruptcy and will be discharged in November and feel like I am going to end up right back where I started. I am open to any suggestions, I am just sick of wanting to sleep through my weekends because I am too broke to do or go anywhere.
Gail Says: You’re a single mother who has gotten into debt by spending money you don’t have. I know your babies’ father should step up and do the right thing, but he hasn’t and you have to get over it. In the mean time, you’ve got a job to do: raise your kids and have a life. I’m not sure why you’re holding on to “what could be” when it clearly isn’t working for you. The child support isn’t coming, get over it and get on with doing what you have to do. If you’ve been discharged and are now debt free you get to start with a clean slate. This time, know that the only person you can bank on is YOU. As for sleeping through the weekends because you’re too broke to do anything or go anywhere, quit feeling sorry for yourself. Pour that energy into finding fun things to do that don’t cost money. At the very least, use your time to advantage. Perhaps if you volunteer your time somewhere you’re needed and can actually do good, you’ll start seeing the point and you’ll be able to count your blessings. Quit staring at your navel, girl, and take control of your life.
P Wrote: I am not proud of this. I let friends use my name for their utilities and such and now I hold the bills that I cannot pay. I live on an income of under $900 dollars per month. This is what I pay each month; $60 for gas in my car, $120 for insurance, $400 for rent, after I pay this I end up with about $130 left for the rest of the month. I am on a disability and am under a doctor’s care. Can you give me any advice as to how to budget? What I do have, by the way, is my son who is an auto tech so all I do pay for parts and he keeps my car going. My car gets me to all my outings, entertainment, and allows me time with my grandkids. Could you please email me any suggestions that I could use to get ahead in this situation?
Gail Says: I would argue that your use of the word “friends” is incorrect if you now hold bills they were suppose to pay that they did not. Why did you think it was a good idea to put yourself at risk for “friends”? That being said, you’re now stuck with those bills. On an income of $900 with fixed expenses eating up so much, my only recommendation would be to get rid of the car if you can do without it at all.
S Wrote: Do I give if I am over my head in debt?
Gail Says: Does God expect you to give money when you’re not giving YOUR money? If you owe, then you must pay. Then you can give. In the meantime, find a way to share of yourself by volunteering or sharing in some non-monetary way.
S Wrote: I watch your show faithfully. I love the tips. We used the jars and in 3 months had saved over three thousand dollars. But our debt is still climbing. I don’t know what to do. My husband blames me completely. We have over $46 000 in consumer debt and I don’t seem to be able to get us out. We both make good money. I am a registered nurse, he is a paramedic.
I really need help. How much should I be paying towards debt repayment? Is there anything else we can do to help our situation?
Gail Says: How can you say, on the one hand, that you’ve saved over $3K and in the next breath, “but our debt is growing?” Which is it? If you use the jars and save $200 in a week, but put an extra $200 on credit, you haven’t saved squat. And if you’re using the jars without a budget, without tracking your spending in a spending journal, or without a plan of any kind, then you’re just giving a nod to money management, you’re not doing it seriously.
If you want to be debt-free, it’s not going to happen without a plan. Get your hands on a copy of Debt-Free Forever and follow the steps I’ve laid out exactly as I’ve laid them out. You’ll end up with a debt-repayment plan, a balanced budget, and a system for keeping yourself on track.
S Wrote: We are trying to balance our budget based on the Excel spreadsheet we downloaded that was designed by Gail. The problem we are having is that our life is 43% of our budget instead of the 25% allotted. Our daycare costs for three children are 27% of our monthly income. How do we balance this? Should we be getting second jobs to pay for childcare?
Gail Says: Money is a finite resource. You can only spend as much as you make or you dig yourself a huge hole. The percentages I’ve given are guidelines. If you have no consumer debt then you have another 15% to roll wherever you want. If you have debt, you’re not getting an extra job to pay for childcare, you’re getting an extra job to pay for the stuff you bought with money you’re now going to have to go out and earn. If you have no debt and you’re still having trouble making the budget work remember that you can reduce your income taxes at work based on your child-care costs, (using form T1213) so you have more cash flow monthly. You won’t get a refund for all that childcare you paid, but you will have use of your money in the meantime.
K Wrote: I need your advice about an uncommon (and not at all bad) situation. My boyfriend and I share a house and a mortgage, but otherwise don’t co-mingle our finances in any way. We split all the household expenses 50/50 in the spirit of equality.
However, I make more money than he does, and have a very healthy savings account. When I’d like to take on household projects on my own (say, replacing old floors or upgrading windows), he balks and doesn’t want me to do so because he reasons that “it benefits both of us, so I should pay half, but I don’t have the money.” I can tell him until I’m blue in the face that it’s MY desire and therefore MY responsibility, that he can do something else in the future to contribute, etc., but he continues to feel that he would somehow be “in debt” to me if he doesn’t pay his half.
I love him and the fact that he’s so responsible and egalitarian, but it’s driving me NUTS. How can I convince him that I not going to call in his “debt” one day??
Gail Says: I’m going to take you one step back: 50/50 may be “equal” but it isn’t necessarily “fair.” I believe that fair is to split costs proportionate to income. Add your incomes together. Now divide your income by the total and multiply by 100. That’s the percentage of joint expenses you should be paying to be “fair.” As for how to convince him to let you do more, sweetie, it sounds like his Johnson is getting in the way. Manly man that he is, it may bruise his ego not to be the main breadwinner. I suggest you find ways to let him know that the money is the last thing that counts (as long as he’s being responsible). Once you’re splitting everything proportionate to income, he may have more he can contribute to those projects. Even if that’s not the case, just point out the other things he does that you value.
J Wrote: I went on your website which is very informative. Unfortunately, I am financially inept. I work lots of hours and most banks are not open when I am off work (after 7pm through the week and Sundays). I really don’t know how to plan for my retirement or know if what I am doing is right. Help me please. Here’s some basic info:
- I turn 45 the end of January 2013 and single with no children and I have no siblings
- I have been working since I was 12 years old (I have my grade 13 from ECVI in Oshawa, ON)
- I live in Pangman, Saskatchewan as of November 2010 (moved out of Ontario April 2008)
- Presently, I make $104,155.00 gross a year with a company I started with November 2011 (was making $75,000.00 up to August 2012) working in the oil patch
- Paid bi-weekly salary with overtime eligible (40 hours a week Regular time and 10 hours Overtime guaranteed for 49 weeks a year and 40 hours regular time for 3 weeks a year (vacation))
- I travel and to and from work which takes approximately 1 hour each way and then have minimum of 10 hour work days Monday through Friday – 8 regular hours and 2 overtime hours per day and usually on call on Saturdays which is considered the overtime eligible if called in for emergency – paid for 10 hour days Monday through Friday (I do not get paid for travel)
- I have 5% company (DC-RPP) pension plan that is on top of my gross pay that started January 2012 (based on $76,960.00 for pension now and was based on $75,000.00 up to August 2012)
- I contribute 2.5% to a TFSA as of January 2012 I think conservative
- I contribute 2.5% to a Group RRSP as of January 2012 I think conservative
- I purchased common stock options at 5% of my pay (not sure is base salary or gross salary or net pay of either, that starts on October 5, 2012 (URS Flint))
- I also work relief for the local provincial ambulance service – usually once every three months I am on call at a rate of $4.93 an hour on call for 12-24 hours then if called out I would get paid $20.35 for each hour on the call)
- I share deeded ownership in the house my father and I own in Strathroy, ON (value of approximately $200,000.00) (no mortgage, paid in full and my name was put on the deed January 2000 a year before my mother passed away)), dad lives in it presently, he is 85 years old as of the end of August
- I have no savings and no other investments.
- My ex has left me with approximately $35,000.00 in debt (he claimed bankruptcy and my name was on some of his company legal things)
- I owe my father $3,600.00 from August 2011 before I landed this job I have now
- I owe to creditors I think around $20,000.00 (I really don’t know, cause I don’t answer phone with numbers I don’t know or unknown numbers and no, I haven’t paid anything to any of them for I don’t know how long)
- My credit is s**t.
- I just bought my first car in over 4 1/2 years (I pay $289.00 bi weekly based on a 5 year term that was started the end of May 2012)(which is up to date and one late payment on the first payment cause I screwed up on the payment date, which I rectified within 5 days)
- I currently rent a place for $400.00 plus utilities, which are all up to date
- I have no life insurance.
- I have a work truck and fuel card for this work truck so I only use my car on weekends occasionally
- I am a smoker approximately 3/4 pack a day (I buy two cartons on paydays)
I am terrified of my financials and where they are at!!! I am scared s***less of not having enough money for retirement. I hate having a debt but more scared to face it! I really hate living pay cheque to pay cheque and want the cycle to stop!!! And I don’t know what to do!!! PLEASE tell me what I need to do!!! Do I need to save more or not? Am I at least doing some things right with the TFSA and the Group RRSP? Who am I to talk too? Who can I trust with my financials, I really don’t know!!! PLEASE, PLEASE, PLEASE help me!!! I really don’t know who to talk to or what to do!!!!
I know I am an idiot with all the screw ups I have had with my financials over the years and I REALLY want to be financially “okay”, but I don’t know how to do it or where to start! And I don’t know who to trust. I want to start 2013 on the right foot, but I don’t know how to do that. PLEASE Gail, tell me what to do, or who to talk to, ANYTHING! I just want to do what’s right!!!
Gail Says: Your money is your responsibility. You can’t claim you’re inept. It doesn’t wash with me because this is far too important to throw up your hands. If you want to be in charge of your money you will:
1. Do a spending analysis to see where your money has been going (get your hands on a copy of Debt-Free Forever)
2. Make a budget based on that spending analysis… and make it balance
3. Track your spending — every penny — in a spending journal, and use that info to…
4. Keep track monthly against your budget. (you can buy a copy of The Gail Way from my website and it’ll explain all)
5. Figure out what you really, really want so you’re not wasting your money on less important things
6. Start learning about the various investment options available and what suits you
7. Know your PSR… personal savings rate…and whether it will be enough (get your hands on a copy of Never Too Late)
8. Make a plan to get your debt paid off… 3 years max for consumer debt (DFF can help with this too)
9. Stop saying you’re an idiot and become Money Smart.
Only you can do this. If you’re looking for someone to help because you feel you need guidance, find someone in your friend-group, your family, your community. Do not assume that because someone works for a bank they a) know what they’re talking about and b) have your best interests at heart.
You are completely capable of doing this. The only thing that remains to be seen is if you have the gumption.