Ultimately you have to deal with the increases in costs by trimming some other part of your budget.

But what if your costs have gone up because you’re embracing things as needs that are really wants? How many people are walking around with smart phones and big fat data plans, which they are using strictly for pleasure? Hey, if you take your wants up by $120 a month for a phancy phone, what drops off your list so you can afford to pay for that phone?

On Princess, I use a pie chart that shows 10% savings, 15% debt repayment (you remember this from TDDUP), 50% needs and 25% wants (that’s the new part.) If you can trim your needs down, you get more wants. But if you only have 25% for wants, and your cell phone bill is taking a big bite out of that pool of cash, what else are you prepared to give up to keep the phone?

All too often we let our expenses go up without giving any thought to the fact that the amount of money we have to spend is limited. And because we haven’t thought it through, we end up carrying the balance on credit cards or sliding it on to our line of credit. Then we wonder why we’re in debt.

Each time you add a new expense to your life – or each time an expense increases – it’s a reason to revisit your budget and look at where you’re going to take the money from to cover the new cost.

Money is a finite resource. If we treat it like it’s unlimited – using credit to make up the difference – we end up paying hugely in terms of both interest and future options. If we’re constantly aware that a dollar spent today means one dollar less tomorrow, we’re much more likely to keep on the right side of the balance sheet.

Whether you’re adding daycare to your budget, working a new car payment into the plan, or adding hockey, soccer or swimming to your children’s activity lists, have you looked at your budget to see where you’re going to get the money to pay for it? And what are you prepared to give up to have the next fancy whatever that comes along and catches your eye?

Journalists are always asking me what I spend money on, I guess because I’m The Debtonator! (my sound-guy, John, came up with that one), and I’m constantly signing the “don’t spend money you don’t have” song. But there are things I love to do, so I budget for them. And I set some money aside each month for things I just feel like splurging on.

As long as you’re not going into debt, and you’ve got all your bases covered – including long-term savings, your emergency fund, your insurance needs – you can spend your money on anything you want. Want to travel? Go. Want to drink expensive coffee? Do it. Want to buy a new sumthin’or’nother? G’head. You work hard for your money and you should enjoy the pleasures it can bring you.

The only time spending becomes a problem is when you do it unconsciously and it interferes with your financial goals. You can’t eat out four nights a week if you want to save up a downpayment on a home. And you can’t buy everything your heart desires if you have no emergency fund. Take care of the details and then you can go shopping guilt-free.

What if you’re still experiencing pangs when you buy yourself the extras? It could be a couple of things:

Maybe you’ve been in austerity mode for so long you need to readjust to the idea that you can afford to splurge now, or

Maybe you shouldn’t be buying what you’re buying because there are other, more important things that should come first.

Keep in mind that for your pleasures to feel like pleasures, you can’t do them too often. If you love picking up a magazine at the checkout to enjoy with your Saturday morning tea, grab the mag. But if you aren’t reading those magazines, or just flipping through them quickly because you bought them – so there’s no really pleasure – stop buying. You need to go without for a while so you can reset your pleasure meter.

Being able to take pleasure from the things money can buy is part of having a balanced financial life. Don’t take the desire to enjoy too far and you can keep enjoying for a long time. And if you have to forgo a treat for a couple of weeks because things are a little tight, your pleasure will be all the sweeter the next time you indulge.

You’ve likely seen the yin yang. It’s the symbol that shows how opposing forces create a whole. It’s the balance between night and day, winter and summer, hot and cold, soft and hard. In is the interaction of yin and yang that maintains the harmony of the universe. Yin energy is calm, wet, cooling. Yang energy is hot, fast, dry. Yin is associated with water, earth, the moon and the female; Yang is all about fire, sky, the sun and the male.

Life is always about trying to return to balance. So on hot days we choose cool salads and crave ice cream. On cold days it’s the hot foods like soup, stew and chili that we seek as “comfort” foods.  After a hot day in the sun, we love the feeling of cool cream slathered on our pink skin. After a cold day of skiing or snowboarding, a long hot tub returns us to balance.

I want you to look at the yin yang symbol. Do you see how the white side has a black dot, and the black side has a white dot? Even as yin yang illustrates the whole is made up of disparate parts, there is a nugget of the opposite within each side. Since nothing in nature or in life is purely black or white, the symbol includes a small black spot in the white swirl, and a corresponding white spot in the black swirl. There’s a little Yang within the Yin, and vice versa.

That’s life folks: opposite forces working together, and even within those forces, other forces, all seeking to create balance. And the same is true for money.

You can’t do any one thing to the exclusion of all the other pieces. You must put things in balance for the whole to work. That means saving some money even as you are working your butt off to pay off your debt. It means looking for small ways to cut costs, even as you spend to keep a roof over your head and to enjoy your life. Doing anything to the exclusion of anything else leaves you vulnerable because your money isn’t in balance.

I’ve long extolled how important it is to take care of your money as a whole. We have to look at both sides of the balance sheet to make sure we’re moving along to where we want to be next. It doesn’t matter where you are right now, if you want to be somewhere else – in a better place – you need to look at the whole and create some balance. So if you’ve been shopping up a storm, racking up debt, and having nothing saved for the future, you’re yin yang is out-of-whack and you’ll be miserable. You might not be miserable now as you relish the hot of acquisition and pleasure, but it’s only a matter of time before you feel the cold of bill collectors and not being able to keep a roof over your head.

I try to live my life in balance. It doesn’t always come easy, contrary to what some people think. It actually takes work. Balancing career with family means saying no to some opportunities to make money so that I have the time with my children I need to have to be a good mother and teacher.  Flying hither and yon (which I despise) to make a buck means being able to take the children on that trip that will open up their world and expand their horizons. I’m always balancing what I’ll do for money with what I want to accomplish elsewhere in my life. And I weigh carefully what I have against what I need and what I want so that I don’t end up unbalancing my life in a way that’ll takes heaps of energy to correct.

One of the mantras I use with the children is this: Where we are today is not where we’ll be tomorrow.

If life is good, say thank you and hang on; bumps ahead. If life sucks, know that it’s all about to change; just hang on.

The same is true with your money. There will be times when you run short, have to scrounge to come up with rent, or must work three jobs because the caca has hit the fan. And there will be times when you feel like you’re rolling in clover. If you remember that the point is to find balance, you’ll be able to adjust and do what you must to keep things flowing as smoothly as possible.

Can you see how important an emergency fund is to the whole idea of balance? How about setting aside a little sumthin’ sumthin’ now for the future when you’re not working? How about getting to DFF?

How close are you to balanced? What’s thrown your yin yang out of balance and how have you dealt with it?

I consider myself to be rich. I’ve got a happy home life, two kids I’d die for, work that I love to do (even at 4:00 a.m. in the morning, which is when I often write) and I’m financially free. You can be too. All it takes is a commitment to doing the detail and a sense of balance.

If you define financial freedom as freedom from stress, then the road to freedom must be paved with more than good intentions. It requires action: small steps that lead to a big sense of well-being. And that’s where doing the detail comes in. Being free means not having to worry. To not worry, you’ve got to take care of all the what-if’s.

You must save.  If you want to have money set aside for the future — tomorrow, next week, the year 2020, you have to NOT spend it today. You must manage your cash flow if you want to keep yourself in the black, minimize your credit costs, and eliminate the midnight spectre of bogeyman reminding you that you’ve bounced yet one more cheque. And if you want to protect yourself and your family, at least financially, from life tragedies — death and disability — you need insurance.

None of this is, in itself, difficult.

To save you take $5, $10, $25 a week or month from your cash flow and put it somewhere that you can’t spend it.

To invest, you choose a financial vehicle you understand that meets your needs in terms of time and risk/reward, and use it to put your money to work for you. You start simple and as you learn more you become more adventurous.

To gain control of the monster credit, you throw the cards behind the freezer so you can’t use them for a while, transfer your balance to a cheaper form of credit so you’ll pay less in interest, and squirrel away as much as you can to pay off that debt so you can live debt free.

For those who see these small steps as overwhelming — you want to run and hide from past sins and a future that seems less than rosy — stop measuring yourself by external standards. Anyone can be smart about money. It doesn’t take a special brain. It doesn’t require a degree of any kind. And being smart about money — once you’ve committed to doing the detail — is more about having a sense of balance than anything else.

Balance, of course, is the ability to deal with a variety of things at once, giving each just as much attention as it deserves. Don’t be influenced by someone else’s — anyone else’s — standards. Doing nothing because you can’t meet some standard arbitrarily set by a Spurt is dumb. How much is enough? Only you can decide.

When you do set goals for yourself, make them realistic so you don’t end up berating yourself for missing the mark. Work steadily toward achieving your goals. And remember that as long as you’re moving towards your target, you’ll be on the right road. But they’ve got to be your goals, not the goals of others around you whom you may think know better.

Today, if you haven’t begun an emergency fund, decide you’re going to save … (how much will that be?) a week. And if you don’t have a will, decide that by the end of the month you will. And if you haven’t yet established a debt repayment plan, decide how much you can afford to repay, and calculate your debt-free forever date.

Also decide that you’re not going to feel bad, overwhelmed, stupid, stressed, or anything else negative about your money anymore. Instead, you’re going to do something about it — no matter how small those steps — so you can achieve your own sense of financial peace.

We have made some progress. Shows like Til Debt have opened people up to talking more about their money.  And the dire state of the economy over the past several months have people commiserating on their shared misery.

But what if you’re doing fine? What if you’ve got your house in order and are doing well? Would you downplay your success or your sense of safety because you are reluctant to share how well you’re doing in light of all the financial tragedies out there?

I got a letter the other day from a woman who says she’s ashamed to admit she’s doing well when she has friends and family who are struggling. “I just can’t tell them I’m planning my dream vacation. It’s sad, really. I wish I had someone to share news of my good fortune. But I feel I’ve got to play this down or not talk about it at all.”

And P wrote to say: “So is everyone doing badly right now? I know some people take comfort in the fact that everyone is – as you would say Gail – in deep doo doo. But I can’t believe no one is any better off. Or is it that everyone is okay with admitting they’re in trouble so now it’s out of fashion to say you’re doing okay. The other day I caught myself telling my sister-in-law I couldn’t afford something instead of just saying, “I don’t want to spend my money on that.”

Perhaps the reason some people are reluctant to share their good fortune with their friends is that they’re afraid they’ll be accused of  lording it over others. Y’know, the “na, na, na, na, na, na, I’m doing better than you” song. Or they’re worried that people will take their sharing as “bragging”.  Can’t you just hear your mother saying, “Honey, it’s not polite to talk about the big honking raise you got when your brother hasn’t been able to find a job in eight months.”

Sharing our weaknesses – I’m in debt, I’m a financial mess, I don’t have a pot to pee in – may be hard for some people. But it doesn’t seem to be as difficult as, “I’m getting a bonus and the hubster and I are planning our dream vacation.” After all, if you’re broke, no one expects much of you, do they? And they also don’t have to worry about measuring themselves against your success and coming up short.

If you’re doing well, you should NOT be ashamed of it. You’ve worked hard. You’ve overcome your own obstacles. And if you caught some updrafts along the way – you were wise enough to take advantage of opportunities that presented themselves – more power to you. Your true friends and family will be happy for you. They’ll revel in your success. And they won’t hit you up for money because you’re in a better place. Any body who detracts from what you’ve accomplished is a body to be tossed!

Don’t worry about what other people think. You know you’re doing well, and you should be able to talk about your successes openly and honestly. It’s not, “Look how fabulous I am.” It’s “I really buttoned down and did the work I had to do so I could be in the great place I am now.”

If you plan to stand firmly on your own feet, build a foundation that’s as solid as a rock, and have some fun too, it’s only a matter of time before you have to deal with people’s perception of you and your money on a whole different plane. There will be times when, sure, you can afford to do something, but you’ll choose not to because you simply don’t see it as a priority. You can’t thoil it and you shouldn’t have to worry about being seen as cheap or stingy because you choose not to participate in a spending spree.

Whether you choose not to spend because you’re working towards a savings goal, or you’re stashing away money for a snappy new car, new outfit, or new golf clubs, since it’s you’re money you get to say where it goes.

You can use your money to make your life better without feeling like you have to hide it. So, P, don’t hide behind “I can’t afford it again.” Say instead, “Sure I could buy that, but I have some other stuff that’s more important right now, so I’m going to say no to that.”

What do you think? Is it easier to say, “I can’t afford it,” than “nope, not spending my money on that?” Have you found yourself hiding your financial success from family and friends? Have you been on the receiving end of an envious eye?

There is, after all, a natural rhythm to our emotions – peaks and valleys. When we start something new, there’s the rush of mental and physical activity. We make the plans, draw up the debt repayment plan, create a chart to show how we’re doing. By week 16, we’re pretty sick of not having any money to buy coffee, packing our lunch for work, and having to tell our partner, our children, our friends, that we’re broke and can’t spend any money.

While the initial burst of energy is what we need to get us going, the inevitable slump that follows can be enough to stop us in our tracks, if we let it. But if you know it’s going to come, and you develop a strategy for dealing with it, you’re much more likely to wade through and get back on track with your big goal.

Being prepared for the let-down is key. Instead of giving into the negativity, step back and take a good look at why you’re feeling frustrated, angry or depressed. Are you disappointed by your results? Are your feelings even justified? Or are they simply part of the natural emotional rhythm?

When you did your debt repayment plan, you decided how long it was going to take to get out of the hole. If you went with the full 36 months, you have to be prepared for several slumps along the way. If you aren’t prepared, your emotions may drive you to go out and spend money on credit that will only worsen your situation. But knowing that a slump is going to come means you can be ready with a tactic for dealing with that slump.

Friends and family, a mate, your kids can all help with this. So can your dog, cat or bird. Talk to them. Tell them how you’re feeling. Describe your frustration, your anger, your sense of helplessness. Get it out of your head. Then ask them what they think. But don’t let them answer. (You’ll have to warn the ones who can speak to keep quiet here.) No. You must find the words that you need to hear to put yourself back and track and say them out loud so your brain can hear them. (Leaving it up to someone else to motivate you won’t work. You need to re-motivate yourself.)

Haul yourself out of the emotional dumper and turn those negative thoughts to something useful: positive ones. Remind yourself that this is a realistic path you’re on, and it will take time. Count your successes – no matter how small – thus far, and give yourself a hug. Remind yourself what you’re trying to accomplish and what your life will be like when you reach your goal.

Dealing with the emotional lows is part of the process when you’re trying to achieve something big. While we like to give into our emotions, imbuing them with more power than they rightly should have, if you do, you’ll kick yourself later.  Emotions are thoughts. Thoughts are in your mind. Your mind is yours to control. Change your thoughts and you’ll change your emotions.

Don’t be surprised with negative emotions pop up and threaten your momentum. That’s the way the mind works. But you’re bigger than any barrier your mind can create for you. And you know you’re on the right path. Focus on what you’ve accomplished, on what you will accomplish, and take another step forward. Momentum will turn back in your favour. At least for a while. Then you can rebuild your emotional strength to deal with the next emotional hurdle. It’ll come. But you can get over it. Yes you can.

If you have a closet full of stuff you don’t wear it may be that you’re buying too much or the wrong stuff. After all, that gorgeous dress may have made you look like a million bucks, but if you’ve only worn it twice it may not have been the best idea.

Consider using the 70/30 rule when it comes to having a wardrobe that will work: 70% of your clothes should be your main course clothing, leaving the other 30% for dessert.  Lots of people have the proportions backwards and end up always complaining, “I don’t have a thing to wear!”

Your first step will be to inventory what you have. Make four piles:

• stuff you’re going to throw out
• stuff in good enough shape to give away
• stuff you love that needs to be fixed
• stuff you’re going to keep.

Of the stuff you’re going to keep, make sure the 70/30 rule applies. If you have way more fluff than solid pieces you’ll wear regularly, you’ll have to rebalance your wardrobe. Start by writing a list of all the pieces you have that still work. On a separate page, make a list of the pieces you may need to acquire to really make your new, streamlined wardrobe sing.

Since your lifestyle dictates your clothing needs, don’t fall into the trap of buying lots of pieces that you wish you could wear. I’ve worked with more than a few people who have loads of evening attire and a handful of work clothes. As you shop ask yourself, “Would I wear this today?” and “What do I have in my closet that will work with this?”

If the outfit, shoe or accessory you’re salivating over will only work on specific occasions, reconsider. You’re way better off with pieces you can dress up or down because those pieces will get far more wear and you’ll get your money’s worth.

Stick with pieces that reflect your personal style. If you like soft and flowing fabrics and cuts, don’t get suckered into a boxy suit just because “it’s a good staple.” When I was out shopping for yoga pants (because I love how they fit and they can be worn just about anywhere), I came face to face with a lot of materials and cuts that didn’t suit my style. I’m a cotton girl, and I love a loose cut. So I kept looking until I found exactly what I wanted.

Speaking of fit and fabric, if you find you have a lot something, but wear only a few of them – so you have a dozen pairs of jeans but live you’re your favorite two pairs – take a hint. While you might have been attracted to a different cut if you ended up not wearing it because it was uncomfortable or “just not your style” learn your lesson. It’s better to have two or three pieces you can live in than dozens of things that just hang in the closet or live in the drawer.

Speaking of living in a drawer, when I find I put something on that no longer makes me feel good, I stick it in a drawer (or a pile on a shelf) and wait to see if I ever go back to it. If I don’t, then it’s gone. How long do I wait? Usually about six months to a year depending on how seasonal it is.

The perfect pants don’t have to have a designer label to be fashionable. In fact, the less money you have, the stronger your sense of style must be because you have to develop the knack of making things work together.  And for heaven’s sake, if you buy something and then decide it really isn’t you, don’t hang it in your closet; take it back right away!

You should be working to fill your closet with stuff you look and feel great in – stuff you get lots of wear from — than to own a ton of so-so clothes that you only sort of like.

So, do you have clothes you never wear? What tips do you have for streamlining your closet? What’s your favorite staple? Accessory?

I bet you thought this was going to be one of those economics 101 blogs about inflation and it’s impact on your money. Fooled ya. The type of inflation I’m taling about today is Lifestyle Inflation.

Back when my parents were paying their bills, they had to cover:

• a mortgage
• home insurance
• car payment
• car insurance
• utilities
• our home phone
• my ballet lessons

I have to pay all those bills and a few more that hadn’t been invented yet:

• cable television
• internet service
• cell phones

I don’t have a TiVo (nobody can understand that!) or a NetFlix membership, a satellite radio, a gym membership or an Onstar account, none of which existed when my parents were raising us.

Now people buy bottled water (my parents turned on a tap), and daily coffee (my parents made this at home), and have answering machines or voice mail (my parents’ phone just rang and rang and rang.) Nobody they knew would spend the equivalent of $200 on a pair of running shoes or jeans. And when my mom threw a birthday party for me, only a couple of friends but a lot of family showed up to my house (no party-room), and my mom did all the cooking (no ordering a pizza) and baking (or professionally made cake).  Dogs didn’t get to wear clothes, cats ate scraps of the family’s table, and travel was something you did only very rarely.

Lots of our modern “necessities” add value to our lives, but they come with costs. Some people work really hard to make sure they can afford these new “needs.” Some just put it all on credit and hope for the best. All that “more work” means more expenses: an extra car, more professional clothes, childcare expenses, higher commuting costs.

Yup, lifestyle inflation is not only expensive, it’s complicated.

So how do we decide what’s a new “need” and what’s a “want” dressing up like a need? When you watch those Onstar commercials about the car crash, does it make it feel like that service is a safety issue and, therefore, a need. Ditto the movement to organic food. Or the decision to buy a van over a smart car.  Are we so spoiled by the things we now take for granted that moving back to a simpler, less expensive and less complicated lifestyle would feel like deprivation?

How big does you home really have to be to be good enough? According to the National Association of Home Builders, our homes grew from just over 1400 sq. ft. in the 70’s to over 2,330 sq. ft. in 2004.

How new does your car have to be? And how many pairs of jeans does your son or daughter need? How many TVs, DVDs, or roomsful of furniture are enough?

Now that we know we should be saving more, and we’re a little worried about inflation (the economic kind), is it time to look at the impact lifestyle inflation has had on how we’re spending our money to decide what’s really important?

I have some nice things and I’m very happy with what I’ve got. I don’t have a driving desire to improve my lot by buying more stuff or the latest new toy. (I don’t have a Blue-ray machine and I’m not even thinking about a 3D TV).  I’m happy to drive my current vehicle until it croaks, and my expenses are pretty much under control. There have been times in my life when I’ve spent a lot of money on stuff but not so much now.

So, how has lifestyle inflation eaten into your budget and what are you doing to combat it? What “need” do you have that never even existed when you were growing up? And what do you think you’ve had to give up to have the stuff that’s become so important to so many people?

For my last birthday, I bought myself Wii Fit. The two things I love most about this game are the yoga and the balance games. One morning as I stood on the board, slowly rocking my body to and fro to get those little marbles into the holes, I thought about how like investing this is.

If you move too dramatically in one direction the marbles skitter off the board. If you move too slowly, you lose time. To make the most points you have to balance what you’re trying to achieve against the trepidation of making a mistake and watching your marbles plummet into nothingness.

Investing is a little like that. You’re goal is to balance the return you are trying to achieve against your fear of loss. If you come up with the right balance, you’ll have a portfolio that let’s you sleep at night while you earn a return you can live with.

Speaking of a decent return, this means different things to different people. I get a lot — and I mean a LOT — of letters from people asking for something safe with a “decent” return. Hey, what do YOU mean my “decent?” While the very aggressive, growth-oriented investor won’t settle for less than the highest the markets can offer, conservative investors are more concerned with maintaining the safety of the principal; return comes second. Knowing who you are as an investor is key to creating a investment portfolio that works for you. Being swayed by the latest news or jumping on the get-rich-quick party train with all your friends is a sure way to end up watching your marbles disappear down the hole.

Many of the letters I get ask me how to invest so to make lots of money fast. I never answer these questions. Most of these people haven’t got a clue about investing, but their greed has them moving dramatically in one direction and then the next, depending on whose advice they’re seeking. With little thought to their overall needs, their investment time horizon, or their investment risk tolerance, they’re willing to throw their money at the wall and hope that something sticks.

It seldom does! Ouch! And so you end up with people whining about how badly “the markets” have treated them. You can’t blame the markets when a body jumps into the fray eyes closed holding its breath. If you want to be an investor, if you want to make your money work really hard for you, you’re going to have to put a considerable amount of time into getting educated and staying informed.  Or you can hire a body that knows what it’s doing to manage your investing for you. This doesn’t remove the need to know what’s going on, it just takes off the day-to-day pressure.

Standing on my Wii board and watching those balls move this way and that, I eventually get the knack of how to balance earning lots of points (my greed) against the potential of losing a ball over the edge (my fear). Learning to invest takes time too. Moving too quickly is a bad idea unless you’re prepared to watch your money evaporate. But not moving at all – giving into the fear – means you never score any points.

There are times when Fear has a strong foothold in our psyche. At the beginning of 2009, the markets were behaving so badly that people considered putting money into the markets as throwing it away. The folks who still saw the benefit went in anyway and reaped their rewards. With markets on a steady upward trend, Fear gives way to Greed, and everything begins to look like a sure bet.  Just remember that today’s sure bets can quickly become tomorrow’s hangovers re-teaching the lesson that nothing in life or investing is certain.

You don’t ever get somethin’ for nothin’. A strong, well-performing investment portfolio doesn’t just happen, it takes work. It takes research, education and commitment. There’s no magic. And there’s no sure thing.  The guys who make it look easy are busting their butts to know everything that’s going on so they can make informed decisions about what to do with their money. They’re working 70-, 80- or 90-hour weeks reading research, visiting companies, meeting with the leaders of the companies in which they are investing. They’re looking for small — very small – signals of what will come next so they can take advantage of those opportunities. So it isn’t easy. It just looks easy from where we sit.

Speaking of making it look easy, when I give families those big numbers on the growth of their savings, using anywhere from 5% to 7% as my return factor (depending on the year in which the show was taped), that’s not based on a “savings” account. It’s based on a moderately invested portfolio. The great returns comes from the loads of time some of these couples have. Hey, 30, 35 or 40 years goes a long way to making your portfolio really sing. My numbers also assume they are reinvesting any tax benefit they derive from their retirement savings plans. So if you want to put the “easy” factor to work for you, start early, be consistent and keep learning. As you achieve a new level, you’ll have to acquire new skills to keep those balls moving the way you want them to. But that’s part of the fun, right?

Working with Princesses has really brought home just how much people buy into the “image” message. I’ve met chicks with thousands of dollars worth of designer shoes and not a penny in emergency or long-term savings. Looking good seems to have replaced common sense. Oy!

Once upon a time when you saw a doll in a snappy Diane Von F. dress sporting a pair of designer heels, you could assume she was making (or married to) some pretty big bucks. And if himself sped by in a BMW, you knew he made enough to be able to afford the mortgage-high lease rate. Not any more. Now Poor Joes and Shopgirl Susies are sporting the most expensive toys. And they’re doing it on credit. So not only do they have nothing saved, they’re actually mortgaging their futures to maintain the images they so wish they could actually afford.

The biggest stumbling block to becoming wealthy is pretending you are. The cost of keeping up the image of success – the cool digs, the snappy clothes, the fancy dining – erodes the saving you have to do to put a positive spin on your balance sheet.

Wealth doesn’t just happen. It takes conscious effort. The truth is that while most people say they want to be wealthy — or even debt-free —  they really just want other people to think they are. And so we have a culture of designer wear being sported be a crop of Wannabes.

People are always saying one thing and doing another with their money. Whenever I write about how important it is to save up a 20% downpayment for a home, it’s often followed by a barrage of email from people who say they’ll never be able to buy a home because they can’t afford that high a downpayment. Yet if you look at what they’re spending their money on, the reason they can’t save becomes pretty clear: they’re so busy shopping they have nothing left to save. If they cut back on their spending, and set a reasonable expectation for their first home, they could own their first home in about five years.

Now comes pressure from the Big Five Banks for the government to change legislation to make minimum downpayments higher and maximum amortizations lower. Hmmm. Seems we don’t have the good sense God gave a goose and we need new legislation to protect us from ourselves. Ouch!

Books have been written about the Invisible Rich: the people who live simply but have a bucketful of money stashed away. These people do not feel the need to define themselves by an expensive car, shoes that cost the equivalent of a mortgage payment or table-service at the snazziest club in town. They know that the only way to build wealth is to live well below their means. They put their financial independence well ahead of creating the right social image. And they work hard.

Frugality isn’t a dirty word among people who desire to be wealthy. They would rather live within their means and save a substantial portion of their income than bathe in the covetous attention of their friends and family.

Hey, if you’re happy spending every red cent you make, then you should do what makes you happy. But you can’t then whine about it when crap hits the fan and you have no cushion, no options. And if you’re determined that this is the year you finally take control of your money and your future, then it’s time to walk the walk instead of just talking the talk.

We all have the option of taking immediate gratification over the long term security that setting aside money brings. And yes, a shiny new car is a lovely thing. But it doesn’t beat having a big, fat F-U account. Like the ad says, “Sleeping well at night: Priceless.”

Gail, what the dickens are you going on about?

Lots of people who are trying to get out of debt want it gone NOW. But it took a while to dig the hole and it’s going to take a while to get out of the whole. I do recommend strongly that if you’re carrying consumer debt that you focus on getting that consumer debt paid off in under three years so you don’t end up with debt fatigue. But there are lots of other kids of debt: mortgages, car loans, and student loans just to name a few.  And sometimes, if the debt is significant, it may take a little longer to get to the end.

This is where tortoising comes in. As Confucius said:

“It does not matter how slowly you go so long as you do not stop.”

While jumping on the fast track to debt-free forever may feel exhilarating as you start out, it will take persistence and tenacity to get to where you want to be. If you don’t have the courage or the backbone to do the hard stuff, if you don’t have the stay-with-it-ness to stick with the program, you’ll be back in debt in no time flat.

There will be times when you get into very tight spots. It will seem as if everything is conspiring against your plan to become debt-free forever. But you must stick with it. Yes, you may have to adjust your plan to accommodate whatever boulder has appeared in your way, but if you keep moving like the determined tortoise you are,  you’ll eventually get around the boulder and back on track.

You must also have faith in yourself. When the tortoise went up against the hare, he didn’t start the race saying to himself, “This is ridiculous. I can’t possibly hope to beat this hare. I’m wasting my time.” Nope. He just got on the road and started plodding to the end. And if you want to be debt free, you’ve got to get on the road too.

If you make mistakes along the way, don’t fret. There’s always tomorrow. You’ll get a chance to figure out what you did wrong and make it right. Everyone makes mistakes. Everyone. Stop beating yourself up over these mistakes. Learn and keep moving.

I often talk about the need to have “gumption” when you’re facing a hard task. While others around you throw up their arms in despair or frustration, you and your gumption keep on truckin’. You know you will be debt free. You can smell it. And you’re not going to stop until you get there.

Inspirational quotes on persistence abound. From Dale Carnegies “Most of the important things in the world have been accomplished by people who have kept on trying when there seemed to be no hope at all” to Franklin D. Roosevelt’s “When you come to the end of your rope, tie a knot and hang on.” You can find something that will speak to you and help keep you focused. Get on the internet and search for “persistence” and “quotes”. You’ll be astounded at what pops up.

I’ll leave you with one more that I love.  This one is from Marian Wright Edelman, the first African American admitted to the bar and an activist for children’s rights. She founded the Children’s Defense Fund in 1973. She says:

“You’re not obligated to win. You’re obligated to keep trying to do the best you can every day.”

Go. Do your best!

You’ve just gone over your budget and realized you have a bit of cash left every month and you’re trying to decide what to do with it. Sure, you could boost your savings even further, but you’re thinking maybe there are better things you could do with that money.

Like buy a big screen TV. Or a new car. Or a whole bunch of new clothes.

Now hang on a sec, before you go acquiring (which is fine if that’s what you really want to do), think for a minute. Are there some things you could DO with that money that would increase your happiness factor?

Like what?

Well, like having some fun. If you’ve been single-minded about balancing your budget and creating a sound financial foundation, you may have forgotten just how much fun FUN is. What do you love to do? Maybe you miss hunting through flea markets with your best friend, sipping coffee with your sister or experimenting in the kitchen (my funnest thing). Haven’t been skiing in dogs’ years? Want to make that new quilt you’ve been talking about but reluctant to shell out money to start? Hey, this may be the perfect time to do those things that bring you joy, teach you something new, or let you share with someone you love.

Using your money to strengthen bonds with family and friends is a great way to increase your happiness quotient. Studies have shown that close relationships have a lot to do with how happy we feel. So maybe it’s time to spring for a trip to see your old high-school chums or university roommate. Or you could offer to bring your sister and her family to your place for visit. I find saying, “My treat” let’s people who are themselves financially strapped consider doing things that they’d love but simply couldn’t afford.

Using your money to reduce your stress is also a good “investment.” If you and your partner are working hard, busy with the kids, and can’t find time to do the vacuuming, maybe spending a little of that extra money to come home to a clean house will be worth it to you. And if you’re tired of yelling at your mate to get the garage, the basement, the shed cleaned up, hiring someone to do the dirty would eliminate the need to nag.

You could also take some of that money and spend it on someone else. Making other people happy has this fabulous rebound effect. If you could help ease someone else’s burden, or just bring a little unexpected joy to another’s very difficult life, the gift you give will be returned to you in spades. Would you child’s teacher appreciate a gift of some new books? Would the elderly in the local home appreciate a bunch of new movies to wile away their countless hours? How about building a treat basket for less well-advantaged neighbours and leaving it on the doorstep with a note that says, “I’m having a great day, hope you have one too!”

Whatever you decide to do with your money, it should be something that will truly make YOU happy. Never mind what turns anyone else’s crank, this is about using your money to fill your life with joy.  Figure out what makes you happy, and then use your money to fill your life full.

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?

While it’s simpler to think in black and white than the cope with all the versions of gray that exist in a life, learning to see the subtleties brings a great sense of calm. In the absoluteness of youth it’s easy to think that there are right and wrong answers and that everything must fall into one of those camps. But as we grow older we learn that the world, and our own lives, simply don’t work that way.

It is when we start to find the grays that we realize that aiming for perfection is a fool’s game. If you always aim for “all” or “nothing”, you end up with “nothing” a lot. Far better to be willing to accept what is than try and make the world conform to your ideas of what it should be.

I’ve long said that I don’t really care what people spend their money on as long as it’s their money they are spending. But I listen carefully to what some people consider a “waste” and what others consider a “need” and I recognize that there’s a lot of all or nothing at work. Judging others isn’t the secret to happiness. Judging others is the route we take when:

a) We are unsure of our own path and need to make ourselves feel “more right”, or

b) We are still so young that we don’t yet realize we are all right AND wrong.

There’s a difference between having healthy standards and setting arbitrary rules by which we judge ourselves and others. Learning to see the gray, accepting that each of us must walk our own path and learn our own lessons, means we can accept the flaws in others and in ourselves. It is no longer about being perfect; it’s about being the best we can be.

Some people choose to deny themselves all pleasure for fear that they will succumb to the evil of pleasure altogether. “I can’t buy myself anything nice because if I even go into a store I’ll completely lose control.” No you won’t. You can have a little glass of wine, a piece of chocolate, a cookie, a slice of cake. You can buy yourself the things that will bring you joy without slipping into total hedonism. You don’t have to go to the extreme of having it ALL or having NOTHING at all (genuine addictions excluded.)

There are times in everyone’s life when we must put immediate pleasure on hold because other priorities – real needs – take precedence. And a wise person knows when to rein it in so you can keep your bases covered. But putting off pleasure forever only feeds the desire and creates the likelihood that you’ll go overboard when you do decide to bust free and par-tay.

That’s one of the reasons why I strongly suggest every budget include some small pleasures that you can enjoy even as you bust your butt to get your debt paid off, build your emergency fund or establish a healthy retirement savings plan.

Balance, as opposed to all or nothing, is the key to creating a life that’s worth living now.  And being able to see the full array of gray, from ash to heather, from oyster to silver, from pearl to stone, lets us enjoy all the parts of our lives because we realize that there is so much between All and Nothing.

“So, how’s it going?”

“Pretty good.”

“Whatcha been up to?”

“Y’know, work, life, kids?”

“Anything interesting goin’ on?”

“Gee, lemme think… hmm. I’ve been busy, but I’ll be damn if I can remember with what.”

It is so easy to let life just happen to us. Sunday rolls around and we wonder where the week went. September rolls around and we wish we’d taken more advantage of the summer. What did we do with all our time? We look up and it’s time to hang the lights and buy a tree. And then it’s a new year. (The only thing that seems to take forever is February!)

Most of the things we do with our life aren’t memorable. I have had moments when I was so happy I would pinch myself hard and say to myself, “Remember this!” My happy memories do not come from doing exciting things, though exciting is easier to recall. Some of my happiest memories are of cloud watching, laying in the grass and listening to the crickets, feeling my horses nuzzle me, and soaking up the sun on a beach listening to the water laps the shore.

Imagine if you could orchestrate each day to hold a memory. Rumour has it if you can do one thing that scares your pants off  you won’t forget. I don’t think when the experts talk about creating excitement that talking about riding a roller-coaster. I think it’s more a case of facing the fears that may be holding us back from trying new things.  Painfully shy? Talk to that pretty boy on the bus. Have a good idea? Take a shot presenting it at work. Put yourself on the line. Feel the rush. It can be anything you think you can’t do: from sewing yourself a dress to concocting a ridiculously complex dessert, if you freak yourself out you’ll stretch and grow, creating a bigger life.

One of the things I have learned to do to make the most of my life is take care of myself. I have routines now that soothe me: from a really good cup of tea while I watch the birds devour my offerings, to sitting on a beach and breathing in the fresh air, to climbing into bed at night (my favorite time of day!) after a very full day. I just love the feeling of being absorbed by my bed, I sigh with joy, enjoy the feeling of peace.  I take the time to notice how comforted I am.

‘Course, it isn’t always sweetness and light. Sometimes I’m really ticked and have to find a way to soothe myself.  Or I’m frustrated, and have to do something nice for myself to feel better. Sometimes I’m just tired and choose to rest, rather than driving myself on to more frustration and anger because I won’t cut myself any slack. I’ve learned if I take time each day to make sure I feel good, it helps me to remember that I’m the author of my own happiness and it makes each day that much more memorable.

One of the biggest things I’ve learned over my life is that if I focus on someone other than myself, I am happier. Being selfless feels good. Studies abound on how giving to others (sharing time, money or whatever else we have) is repaid in spades with good feelings. Taking the time to do something nice for another person helps us to be thankful for our own bounty. And anything we do to strengthen our relationships with others brings more happiness. I don’t think I’ve ever regretting giving when I truly expect nothing back.

My brain also needs some attention for me to feel I’m having a worthwhile life. Whether it’s through reading, study, or experience, if I learn something new, I’m more likely to feel full. And I don’t even have to remember what I learned (sounds odd, I know). Just the act of learning something new is enough to give me a happy buzz. I’ve recently taken up knitting. It’s something I’ve always wanted to do. I’m on Dish Cloth #2 and I find that it’s not only great in the “learning” department, it’s also great in the “soothing” department since I have to spend a lot of time on set just waiting until The Boys have set up the next set of lights.

Tonight I’m cooking Turkey Dinner for Alex and her friends, and I’ll be comforted by the laughter and joy all those teenagers will bring into my home. There will be a lot of chucking and jiving, some pinching, some biting, lotsnlotsa hugging and a ton of laughter. Just anticipating it feels great. Snap: another terrific memory; another day well spent.

So what do you do to make your life feel worthwhile? How do you pack something special into your days so you can remember what you’ve been doing?