December 2007 Questions & Answers



Love your show & love your no-nonsense attitude towards money. I am 38 yrs old, & am pretty good with money. My only debts:
$27,000 (5.2 % interest rate) on my mortgage, which will be paid in about 2.5 yrs; $20,000 on a RAP. I have about $132,000 is RRSP & Pension plan combined. I have no unused contribution in my RRSP. I currently contribute 7% of my salary to my pension plan with my employer contributing another 5%. I also have my yearly bonus going directly into my RRSP (about $2000). After I pay my mortgage, I so plant to going back to making the maximum contribution (13%) to my pension plan. In the meantime, when I have extra money, do you recommend putting it towards retirement or mortgage?

Name withheld

You sound like you're doing great. Congrats on having achieved so much at your tender age. When it comes to maxing your retirement savings versus paying down your mortgage, my usual answer is to do both: make your maximum RRSP contribution and use your tax refund for a principal prepayment on your mortgage. If you're already maxing out your RRSP, then I'd suggest you focus on paying down the mortgage. That being said, you also have the opportunity to build a non-registered investment portfolio to supplement your retirement savings, or to achieve other goals you may have such as traveling, starting a business, or fulfilling some other dream. You are a smart chick. You're already doing very well. Make sure you're having some fun, that you have your other financial bases covered (disability insurance, your estate plan, etc.) and keep on truckin'.


Do you offer the same support and strategies as on the show [without rewards] on a consulting basis? We are very interested.

Name withheld

Sorry, I don’t. I am already going at 200 miles an hour doing what I do, and I am determined not to spend more time away from my kids than absolutely necessary.

My best advice if you need help is to build a relationship with a community-based financial services company – a small-named trust company, a credit union – and let them help you figure out where to go next. While I’d love to be able to refer you to some bodies, I don’t know of anyone (yet) who does what I do with the same integrity and common sense.


I have extended health through my benefits at work. I am deducted 29.10 biweekly. I thought this was a good deal and then I figured out the yearly amount is over $700. Is it worth it to sock that away for emergency rather than pay it? Last year we only used the equivalent of $400 for dental and that is all.

Name withheld

Congratulations on your good health. This year, I've already spent close to $2,500 on dental and eyes for my fam. And I don't have the benefit of insurance, so I'm out of pocket that total, though I can claim it on my taxes.

When you buy insurance, you are buying piece of mind and the protection of your cash flow. While it may be tempting to pull the money away from the insurance for other purposes, the question you have to ask yourself is this: If the ca-ca really hit the fan and you were faced with a whopper of a bill, would you be able to manage it easily?

According to Statistics Canada, the average Canadian family spent $1190 on health care in 1998, $1260 in 1999, and $1360 in 2000. Haven't seen the most recent numbers, but the trend is definitely up and you're definitely on the low end of average.


Hi Gail: First of all, congratulations on your TV show. My husband and I are big fans of yours. We are both 30, are doing really good financially, no debts, a mortgage to be paid off in 2011, RRSP accounts, some savings. My husband is currently on a contract, which is ending in March (no benefits, no vacation and makes about 45 K annually). I was doing good as a full-time translator for an accounting firm but they closed down my department and I decided to make the move into self-employment this fall. I used to make 56K annually and because my own business is still pretty new, I am making very little money right now. I am worried that this was a bad financial decision as we now just make enough to pay the bills but not to save or enjoy life. Also, we would like to have a baby soon but being self-employed I am not entitled to a maternity leave. Should I go back to work full-time and have this baby or give my new self-employment gig a chance?

Name withheld

Wow! Big question!
Isn't it amazing how things change in life. One day everything is going along, hunky-dory, and the next you're wondering what happened!

Whenever you make the leap to self-employment, you're taking a chance and you have to learn new coping skills. One month you'll make tons of money, and the next nothing, zip, zilch! I've been self-employed since I was 25 and know about feast or famine. I also had both my babies while self-employed and was not entitled to mat leave benefits. So I had to set aside enough money to see my budget through my non-working months. And I had a shortened mat leave.

You have some choices to make here:
Do you really want to be self-employed? The pros: you are the primary determiner of your own success; you're in charge of your time; you can work as little or as much as you want to. The Cons: You get really tired. I used to get up to write at 4:00 a.m., wake the kids for breakfast and school at 7:00, walk them to school, work from 9:30ish until 1, have some lunch and a 20 minute kip, work some more, pick them up from school, make dinner and crash!

Are you willing to give up the full mat leave in order to have the flexibility of being self-employed, which comes in very useful if the kids get sick, there's a school field trip, or you just want to go to the beach?
Will your husband get a good job to replace the one that's up so you aren't pushed to using credit to fill the gap?
Could you work part-time corporately while you build your own business?
How long are you prepared to put off having children?

I think if you answer these questions honestly, you'll have your BIG answer.


Hi, we have recently sat down with a rep from Primerica. They want to help us get "out of debt" quicker by going with them for mortgage, RRSP's insurance. I was wondering if you have heard of them before and what your thoughts are on the company. Right now they are telling us that even though they have a higher interest rate on mortgages that our house would still be paid off sooner than the banks. They say they are trying to teach people how to have their money work for them. There is just so many companies out there telling you could do way better dealing with us than the bank and so on that I don’t know who to believe or what to do.

Name withheld

Here’s the thing about trust: it’s earned. The most optimistic of us keep and open mind and give the other person the benefit of the doubt. The most pessimistic of us say, “Prove it.” You sound like a bit of a pessimist and so my advice would be to tell your financial adviser you want the recommendation and the outcomes in writing, you want to see proof, before you proceed. If (s)he isn’t willing to pony up with the proof, you’ve got your answer.

As reading what you’re given, it should be in English (as opposed to financeeze) and you should do some of your own verification. So, for example, if your advisor does a mortgage rate comparison and says (s)he will charge you 6% compared to the bank’s 7.5%, you want to get on the web or telephone and check out whether the banks are offering a rate comparable to the one your advisor is offering.

Your job is to be vigilant about checking the facts as they are presented to you. If you still don’t trust your advisor, don’t do it. What’s the point in having a relationship with someone you don’t trust?


I have been working on our budget for some time now and have a question. How do you figure the amount the family needs or should be spending on the daily needs such as food, gas, entertainment etc.? I hope this question isn't to wide range but it is difficult to make a budget for daily needs once all the bills are paid. Thank you very much. I love the show and have used some and they have worked and some that have not but keep trying.


Go read Gail’s Guide to Building a Budget. If you still have questions, write again.

I run a new business, it’s about 3 years old, and my wife is also self-employed. She, unlike me makes money. My business is not making it so far. Do you have any business budgets?

Scott Stevenson

You may need more help than simply creating a budget. There are often small business seminars that you can attend, and I’d strongly recommend one if you feel your skills aren’t up to scratch.

I’m not sure if what you need is a business plan or an operating budget so I’m giving you some links you can use to, hopefully, find what you’re looking for. Good luck!

Business Guide to Government Programs - Steps To Starting A Small Business
Ontario Government Guide to Small Business
Business Tools and Resources - Industry Canada
Service Ontario - Gateway for Business
Small Business BC - Starting Small Business Guide
Alberta First - Starting a Small Business

Hi Gail & Team! I am currently using your excellent system to manage my income successfully & I would like to try to live on cash. I would be ever so grateful if you could please give some tips & examples of the notebook system. You recommend it in "Til debt do us part" to keep track of what is being spent. Please show an example, explain in some more detail or recommend a site if possible. I would like to thank you for all your help. May you & your families be blessed with happiness, health & wealth.  Thanx.

Donna (UK)         

On the show we use a small three ring binder with loose pages. The first page has the budget amount that goes in each of the jars. Each of the subsequent pages is labeled for one of the jars. So there’s a page for Food, Transportation, Clothing & Gifts, Entertainment and Other, which includes stuff like pets, medical costs, bank fees, etc. (See Gail’s Guide to Building a Budget and Gail’s Interactive Budget to see what goes into the jars.)

Now that you’ve labeled each page in your binder (or notebook), you write in the first week’s amount. So, let’s say you have $100 a week for food, $120 a week for transportation, $20 for clothing & gifts, $40 for entertainment and $40 for other. Here’s what your food page might look like at the end of the week.


Weekly budget: $100

Beginning of the week




















New week



As you can see, each time you spend money, you deduct it from what you had before and carry down the new balance. So when you spent $45, you deducted it from $100, which left you with $55. That way you always know exactly how much you have to spend. No guessing. Dating it lets you see your spending patterns (are you going to the store too often?), and itemizing what you’re spending on (groceries, coffee, vegies,) let’s you see exactly where your money is going.

So, at the end of the first week, you have $2.25 left over. You can add it to your next week’s $100 (as I did here), or you can move all the extra you have at the end of the week into it’s own jar and use it for extras.

Careful though. Some of the jars are meant to accumulate money. For example, in the transportation jar, there’s money for both gas and car repairs. If you spend all the transportation money on gas, or move the money at the end of the month, you won’t have anything set aside when it comes time for an oil change.

Got it?

Hi Gail! Just wanted to say I'm a big fan of your show. The question I hope to have answered from you is: As a full time first year university student, I'm finding saving money very difficult. Currently, I am not working and living off of my family's handouts. I would like to stop this cycle and get a job of my own shortly. However, until that time I want to know if you have any tips on how to start saving for my future. With no student loans as of yet I would like to keep it that way - I definitely don't want to be paying off student loans until I'm 50! How much should I be setting aside anyway? Thanks for your time and once again congratulations on your show! I absolutely love it!

Name withheld

This one’s short and sweet: while I admire your initiative in terms of looking to the future, right now your number one goal should be to get out of the present without any debt – which you seem to be doing. Keep up the good work. As for savings, you should have an emergency fund (set aside $25 a week), but leave the rest until you’re out of school.

My husband and I have about $6000 in debt, plus about $30,000 in student loans. We have 2 small children, a toddler and an infant. I am on Parental Leave and my husband makes $23,000 a year, bringing home about $1400 a month, and my EI is $802 a month. I will not be returning to work on the end of my parental leave as daycare will cost upwards of $1000 a month, and I have secured a part time position that has flexible hours (many working from home) so I will be able to work around my husband's schedule while making up the balance of the budget. We ran into a rough patch last year, which got us into this situation, I had to leave my job for medical reasons 74 hours short for employment insurance - I had NO income whatsoever for 6 months. After I had the baby, I was able to secure a position to get those hours, but now I don't have a traditional job to go back to.

We had started a consumer proposal, however the person who was handling it got fired in the middle of the proposal, in addition made an error and had our credit card accounts closed, even though they were paid off and up to date. Almost all creditors had voted no and our file had been shuffled between several hands and not one person there knew what was going on so we decided to pull from the proposal and made a plan, using the jar system and other tips from your show.

We have taken a 2nd job (in my husband's name which we can do as a family), which starts in 2 weeks and will be able to pay off the $6000 by November 2009 and Student Loan by December 2011.

The creditors will be receiving notice that the Consumer Proposal has been withdrawn this week. I imagine by Wednesday, I will begin receiving phone calls again (which is why we started the consumer proposal to stop the calls as they were impacting my health). We are receiving about 9 or 10 calls a day (they are all relatively small debts). Because I am home with the children, I have to answer the calls. If I let them go to the machine, they fill it up with their long-winded messages, or if I answer, I have to be verbally assaulted with "there must be SOMEONE you can borrow the money from" and start listing various relations or they start with the deadbeat path. We already received one call on Friday, and we notified her to watch the mail for correspondence, and she replied she will be sending out a worksheet that we need to fill out and send back.

We are just polishing off a letter to all creditors outlining our repayment abilities and will be mailing out their copies tomorrow along with a cheque for their 1st payment.

That all being said, my questions are:
Do I have to talk to them? Or can I request that correspondence be in writing (I'll accept e-mails). I'm to the point I'm scared to answer the phone. I can't take care of my children and give them the attention they deserve while trying to deal with the creditors at the same time. I used to have a very high stress job, which I left because after 5 years it became too much, even though it was good money, my health is worth way more than that. I have been stress free for almost 2 years, but when the creditors begin to call the chest pains come back after a few weeks of non-stop phone rings (sometimes people, some times automated machines) and I have to go to the hospital for treatment. The phone calls have stopped because of the consumer proposal, and my chest pains have gone, but I'm afraid once the calls start again, they will come back and I will need treatment again.
Can they refuse our payments? We had one tell us pre-consumer proposal that what we offered was unacceptable and she wasn't going to cash our cheques, she wanted higher monthly payments.

Some general guidance on how to handle the collections people would be appreciated. I was enjoying my relatively stress free life, then we had our blip and are getting back on track and I'm starting to enjoy life again. Now that we have a plan, I'm not worried anymore and a huge weight is lifted off my shoulders. The only concern I have now are these phone calls (and what my 3 year old is going to jump off next!)

Thanks so much! I love the show and watch it whenever I get the chance.

Name withheld

I’m sorry you’re having a tough time of it. But I have some questions for you, and they aren’t going to be easy. Brace yourself.
What made you think you should go ahead and have two babies when you barely make enough to keep body and soul together?
Why would you settle for an income of $23,000 a year when you have a family to take care of? If you have to work two jobs, three jobs, whatever it takes, you have to come up with more money. And if you have to work the shift after your husband gets home to look after the kids, hey, you made this bed. Part-time just won’t cut it kiddo.

What the hell where those student loans for? It’s all well and good to say you’re all stressed out, but when the credit was extended to you, you chose to use it. When did you think you were going to pay it back?

I don’t mean to rag on you… well, actually I do… since it appears that you’re moseying through life a little divorced from reality. Heads up, girl. You’ve got two children to think about and la, la, la-ing along isn’t going to cut it. Love is great, but it doesn’t fill an empty belly.

You and your husband need to wake up to your responsibilities.

Okay, that being said, the rules for how to deal with collections calls differ slightly from one part of the country to another. Since I don’t know where you’re located, here’s a partial list of the rules for Ontario.

CAs may not harass you or your family, including repeated calls to you while you're at work. Feeling overwhelmed? Keep a record of the time, date and frequency of the calls just in case you decide to make a formal complaint against the collection agency.
CAs may not call you on a statutory holiday, on a Sunday before 1 pm or after 5 pm, or on any day before 7 am or after 9 p.m.
CAs may not call you, leave you a voicemail or email you more than three times in any seven-day period on behalf of the same creditor.

And they can’t contact friends, relatives, neighbors or employers for information other than your address or telephone number, with limited exceptions.

Be straight up with the person on the phone. Yes, you have to take their calls. Don't let them to bully you into making commitments you can’t keep. So if you can repay $20 a week and no more, that’s all you commit to. If you make a commitment, keep it or be prepared to explain why you couldn't.

Want more detailed information about collection agencies in Ontario? Read the Ministry of Consumer and Corporate Relations' free brochure A Consumers Guide to Collection Agencies

My husband and I watch Til Debt Do Us Part religiously and I have a question I never see answered. We are very well off for our age but we have separate bank accounts. My question for you is, can this work when our incomes are so different? And if we have children?

My husband inherited our apartment and we owe nothing on the mortgage. He makes 52000$ a year and I make about 35000 but I also receive about 10000$ from family dividends each year.

Our work ethics are also very different and I find we fight a lot about that. I believe good things come to those who work hard and he's all about relaxing and punching out right on time. I make quite a bit less than him and work 3 times harder. It's very frustrating. We split everything in half bill-wise and I have learnt from my mum that we are equals and that I believe is fair. My husband was an only child and doesn't understand sharing. Do you think we can survive this rift with separate bank accounts, and living this way?

I have no debt, maybe under 1000$ and He has about 10000$. we are both shopaholics except I buy clothes and he buys vehicles or really big ticket items. He says he likes living in debt. All I want to do is save. Every year we go to Mexico on our line of credits and then I get money from my dividends and it gets paid off. I would like to save that money... Please help me! What do you think?
Thank you!

Name withheld

I think you two need to sit down and have a serious conversation about your life’s goals, your approaches to money and how you’re going to get through the rest of your lives together. Here’s what else I think:

If he’s pulling his weight financially, why does it bug you that he doesn’t work as hard as you do? That’s your problem, not his. If he wasn’t pulling his weight, that’d be a different story.

Splitting the bills 50/50 works well for some couples. And since he’s taken care of the housing issue for you, (I’m assuming you have no mortgage from what you said) then your arrangement seems fair.

You have far less debt than he does and he needs to figure out why he’s going into debt. If, as you say, you feel you are well off, why are either of you spending more money than you make? Just greedy?

If you pay for the vacation from your dividends, does that mean you’re footing the whole bill? How come? With a lower salary, you should be splitting this bill (at the very least) too. And what’s with putting it on your line of credit and paying it back. Skip a year of holidays, save up the money and pay for it in cash next year so you don’t have any interest costs.

How do you plan on handling the whole “when we have kids” issue? Who will stay home? Who will assume the financial burden for the family? How will you divvy up home responsibilities?

And how well insured are you? If one or the other were to get sick, could you live on the other person’s income? If not, you need some insurance.

That should give you enough to think about for now. Write again, if you need more thought provoking questions.