February 2008 Questions & Answers


I'm so glad I found your website today. I had been banging my head on the wall trying to figure out how to do the things you suggest on the show. Then I went back to the show's site and found that someone had left your website address in a comment. HALLELUJAH!!

The reason I am writing though is that I'm wondering how to get back to swimming above water. My fiance has been working from a -$1000 overdraft for longer than I've known him. This has always been very troubling to me but since his regular pays don't even cover the deficit, we've had no choice but to continue living that way. My overdraft is only $300 and I always try as much as I can to not dip (too much) into it; but recently I've had to do it just about every month. How can we work on a debt repayment plan when we're never working from a positive bank account? I truly appreciate any insight you might have for me. Take care, and thank you so much for everything you do.

Name Withheld    

Okay, this is something a lot of people are dealing with, but the answer is pretty simple. Either you are spending too much money, or you don’t make enough. I don’t know which one it is. You have to figure that out for yourself. Use Gail’s Interactive Budget to figure out where your money has been going. That means gathering up all your bank and credit card statements for the past few months and working out what you’ve been spending.

If you’re spending too much, cut back. If you’re not making enough get another job: a second job, a third job and better job.
You can’t keep spending more money than you make.

You can’t keep living in overdraft. You have to do something about this. NOW!


Hi Gail, I watch your program whenever I can, and...even though I'll never have your challenges or resulting rewards, I've switched over to cash, a strict budget and the "jar" money system. I've gone from being 'in the red' to actually have a savings account. Now that I see that savings account grow, and I have no real debt to speak of, I need to know the next step! As the savings money piles up, I realize that I really enjoy the feeling of financial security, and I'd really like your continued direction on what to do with it!.

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Wow! You must be so proud of what you’ve accomplished. Good on ya girl. Now that you have all that money you were spending on debt repayment to play with, you have so many options open to you.

First, make sure you’re building your emergency fund to a place where it will be strong enough to take care of you should the worst happen – remember, plan like a pessimist so you can live like an optimist. That means having between 3 and 6 months’ worth of living expenses set aside. You can stick that in a savings account that’s earning a decent rate of interest. Don’t settle for what the dumb big banks are offering. Search my site for how to find a good account.

Put a little money back into your budget for play.

Ramp up your savings. Make sure you’re maximizing your retirement savings account. Start learning about investing so you can figure out what you’re comfortable with, and what will work for you.

Spread the word. Now that you know how good it feels to be debt free and addicted to financial security, tell two friends.


Hi Gail, I watch your show 'Til Debt Do Us Part EVERY DAY. My question is what is the best way to do the jars is and is it a good idea to get a loan to pay off several old bills? Also how to establish credit? (I own no credit cards, and have no credit ever established), with that last question do the secure cards such as the ones from Capital One, where they say give us $300 and we give you $300 credit actually help???  Thanks so much


Use Gail’s Interactive Budget for the jars.

Getting a loan to pay off your old bills will help you on your way to establishing a credit rating, though if you have old outstanding bills, that may negatively affect your credit history – and your ability to get the loan.

The secured credit card is a good idea. Make sure you stay current with your payments or it can end up doing more harm than good.


Hi Gail! After watching your show many, many times. I finally got my husband on board to doing the monthly budget. We've been doing it for 2 weeks now, and it's going pretty well. Not to say that it isn't hard, but it's the first time in almost a year that our bank account hasn't been in overdraft!!! We are putting a little more towards debt re-payment and living solely off of the cash in our jars, but we are still just making it every month. I was wondering if you had a time frame for when we actually start feeling like we're accomplishing something? I know everyone's circumstances are different so you can't give a definite answer, but does it start to come together after 1 month, 6 months, a year...? We have about 40K in debt and are living off of one income of about 56k a year, if that helps at all.

Name Withheld         

What a good question. And I bet it’s one lots of people have. But I don’t really have an answer for you since it depends on how fast you’re paying off the debt and when you can see the light at the end of the tunnel.

If you have $40K in debt and you want to have it paid off in three years or less, then you’d have to make monthly payments toward your debt of about $1200 a month. Based on your current income, I bet you’re no where close, which is why you may not feel like you’re making progress.

You may have to cut back a little more, or find a way to earn some extra money to ratchet up that debt repayment so you don’t feel like it’s a never-ending journey.


Gail, I recently went to a credit person to discuss credit proposal, in an effort to prevent bankruptcy. But, since I have been following your plan of getting debts paid within 3 years I believe I can pay all my debts except my student loans, which will be 10 years old in Jun 2008. Should I still consider the proposal to add the student loans? Or is there another suggestion.

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I'm not a huge fan of the credit proposal route since you end up with as crappy a credit history as if you'd gone bankrupt.

If you can pay these debts off in three years on your own, that's the route I'd recommend. I'd also recommend that you call and negotiate with your creditors to knock as much of the interest off as you can. You might even be able to settle some for a portion of the principal if you negotiate really hard and tell them you're considering bankruptcy.

As for the student loans, there are a number of alternatives for debt relief. You should investigate and take advantage of those before going the credit proposal route.


Hi, thank you for your good advice. I have been married for 5 years and we always keep our bank accounts separate with separate budget: I pay the mortgage, he pays the cars. At this point, with 2 young kids, we would like to know if it would be a better move to have only one bank account with one budget or it will not make a big difference?

Name Withheld         

This is a very personal choice and I'm a big believer in, "If it isn't broken, don't fix it," so if this is working for you, why change now.

I often recommend that couples integrate their budgets and accounts to create a united financial plan that works to meet the family's needs. And I believe that people who keep separate accounts and divvy up the bills tend to communicate less about their money.

I am curious as to how you do your financial planning: issues like retirement planning, who saves for the kids' future educations, how you handled maternity leave, and anything else that had an impact on you jointly.

Again, like everything else in financial planning, each unique experience requires a unique solution. If what you have works for you, keep it. If it's not working as well as it was, change it.

Is it possible to be over-budgeted? I love a budget - my husband and family tease me about my budgeted ways. Anyway, the reason I ask is that my husband and I would like to start a family but we've put it off for a year or so to save enough in the baby fund to cover baby needs and our expenses for when I go on mat leave. The reason we decided to do this is because my husband started a new business a little over a year ago and although he makes a profit, our combined income is about $25,000 less than what he made working for a company. (We currently make about $70,000, have no debt other than mortgage but struggle to put money into long term savings every month). I wanted to make sure we had enough to cover expenses in the event he has a lean patch while I'm on mat leave. I don't think I'd be concerned about over-budgeting except I'm moving into my late 30's now and the clock is seriously ticking in my ears these days. I'm just concerned that I may miss my chance for a baby making sure that all my financial ducks are perfectly in a row. What do you think?

Name Withheld

I think that if you want to find a way to work a baby into your life, then putting the baby in your budget makes good sense. If you’re planning on taking the full year (or even six months) for mat leave, you should do two things right now:

a) find out what your mat leave income will be, and
b) start living on that budget right now, which will mean trimming expenses.

The money you save can go toward building up your emergency fund, buying the stuff you’ll need when baby gets here, or just putting some room into your budget later on.

Once you go back to work full time, you’ll be used to living on less, so finding the money for longer-term savings should be a breeze.

In an episode of Til Debt Do Us Part - you sent a couple off to a "Supper Club" to assemble prepared dinners - this seems like a great idea because in our household we spend lots in groceries and often without good planning there is too much waste. Do you have a link or contact information for the place - I have googled and have basically come up empty handed - I live in Toronto with my husband and would love to be able to participate in this type of club. Also, I have to say I really enjoyed your presentation at the Fairmont. I love the positive energy you are creating in people by sharing your wisdom


The one we used on the show was called Supperworks, Mike. But there are several others including Sensational Suppers, Suppertime, Dinners Ready! and Dinnerworks.

If you want to find the names of more providers, google "meal assembly" or "component cooking" to see what turns up.