November 2008 Questions & Answers


I have a credit card with a 6.9 interest rate, fixed. I receive a 1% cashback for every dollar I spend. I pay it online weekly to avoid letting it get out of hand, but use it for everything I can. Is there any danger in this as long as I track it and make sure I have the cash to pay it at the end of the week/month?

Name Withheld       

As long as you keep that sucker paid off in full every month, you’re doing fine.


Hi Gail! I love watching your show! I've just created a budget and I now feel that I'll be able to buy a house and still be able to comfortably retire! :)

I've been reading over your budget organization tips, and I just have a quick question about all of the organization of bills and such. I have set up paperless billing on all of my accounts, since I feel bad about wasting all of that paper for the bills and envelopes when I can just view an electronic copy of my bill for free online. But in your steps and tips you recommend setting up different trays for all of the bills so they can be organized by dates due and paid and such. Is it bad that I'm not organizing my bills this way because I don't get paper copies? Or should I be printing them off and organizing them this way?

Thanks!! :) Terri        

Terri, if the system you have is working for you, there’s no need to print copies and put them in files. I assume you have some way of tracking your bills to make sure if there’s a debate over whether or not you paid, you have proof of payment, and that’s good enough.


In the budget worksheets you developed.  There is a spot for long term savings.  When I enter in an amount here it is deducted from my net pay.  At my place of employment we have a pension plan (6.5% employee contribute + 6.5% company matched).  So my net pay is after my long term savings.  How do I account for this in the budget worksheets?  

Name withheld       

You can add the amount deducted at work back into your income and then deduct in the savings column and it’ll come out even and make your percentages balance properly.


Hello Gail,  It’s me again I am very sorry to keep bothering you but I am asking for help in a big way. I keep living on our overdraft, so that does not leave much money on the paycheck when it comes in ,I am getting very scared as to what might happen and do not want another bankruptcy, we already had two 20 years ago and I DEFINITELY DO NOT WANT ANOTHER. My husband is not aware of how this is going as long as he gets his allowance, what he calls it and the bills are paid he is happy. Yes we do have some money but then it’s also always goes onto the overdraft. PLEASE Gail , PLEASE HELP me to end a stop to this. PLEASE. I am honestly CRYING for HELP. Your help would be of so much help. Thank you


If you’re in overdraft and can’t get out, then you have to find a way to make more money so you can get the overdraft paid off. It’s that simple. It doesn’t take a miracle, just some hard work. I don’t care how many hours you have to work, get enough money together to pay off the overdraft. Do you have something you can sell? A skill you can use to create a home business? Do WHATEVER it takes.


Hello Gail, I would like some advice about investing/managing $50,000 severance pay (approx before taxes) that I will receive in about 8 weeks. My department will close, and I was employed for nine years. My only debts are a recent vehicle purchase - balance is $28,000 at 5.75% (I plan to pay half of that with the severance pay); and a $140,000 mortgage that I pay bi-weekly accelerated. I am 35 years old, and do not have children. My main concern is being taxed on this lump sum. What tax shelters do I have? What is the maximum amount of severance allowance I can save tax free? Gail, how should I proportion this money?

Thank you in advance,      

Wendy, if you live in Canada, there may be a tax free rollover of severance to an RSP that would allow you to mitigate your taxes. The amount eligible for rollover depends upon how long you worked for your employer. For service after 1995, none of the severance can be rolled over to an RRSP and therefore the full amount is taxed. For service after 1988 and before 1996, a single limit of $2,000 per year of service can be rolled over. For service before 1989, you can roll over $2,000 for each year of service plus $1,500 for each year in which none of the employer's contributions to a company pension plan vested in the employee.

If you have unused RRSP contribution room, you could use the severance to make a contribution and then use the deduction to reduce the taxes on your severance. Later, if you need the money, you can make taxable withdrawals from the RRSP.


Thank you for answering our questions. Question: Do I continue to put my life on hold while my fiance pays off his debt?

I found out two years ago that my fiancé was in major debt due to not filing/paying taxes (he was running his own business) and some small credit card debt. He is now in debt approx. $65,000. He has filed his tax return and his parents bailed him out and paid for him, but he still owes his parents that money.

I don't feel comfortable getting married while he owes all of this money. I was actually getting over this feeling recently because I decided that I could pay for the actual wedding. Now, I have been thinking about having kids and I know he can't afford to have kids in this state.

I have been completely supportive in the last two years and as soon as I found out about the debt I helped him make a plan of what to do first (talk with his parents, meet with an accountant etc.).

It has now been two years and I am getting tired of waiting. How long do I need to put my life on hold? Am I being selfish?
I love him and want to be with him forever, I don't want to be with his debt forever. Thank you for your time.

Name withheld

You are not being selfish, you are being sensible. While you love this man, he has to love you back enough to NOT put you at risk. And how could you ever consider having children and becoming dependant at a time when you and your honey are so deeply in debt? As for what you should do, hey girl, that's your decision. What are your expectations? What do you want? What do you NEED? It's fine that his parents bailed him out but do you want to take on their BABY? And if you do, are you ready to clam up when the caca hits the fan. You can already see the issues, now you just have to be brave enough to deal with them.

Gail my husband and myself went through a hard time when we where first married. His hours got cut right before I had our first daughter and after living on credit for almost 6 months he had to claim bankruptcy (06). Since then we have been sticking to a budget. My husband has not been making enough for us to save or have any rrsp's. My second daughter just finished breastfeeding so I decided it was best to go back to work. I found a way to work from home and avoid childcare cost and I now make the same amount as my husband working almost half the time. ( doubled our income to 4400 take home a month) We have had resp's for our daughters since they were born and our mortgage is on accelerated bi weekly. My question is what is the best thing to do with the surplus of money we have at the end of each month if we are already saving for rrsp's and general savings? We want to be able to access the money once we have saved enough for our dreams (holidays and trips) but we also want to make the most we can on the money.

Name withheld        

First congrats on seeing the problem and solving it. Good for you. I send you a big Gail Squeeze. You don't indicate if you have any debt. That would be the place to put the extra money until you are debt free (not including your mortgage). Next, you don't say if you have an emergency fund. Remember when your hubby was laid off and you had to use credit. If you'd had an emergency fund, that wouldn't have been so hard. If you don't have one now, build one. Search my site for "emergency fund" for ideas. If all of that is covered, then it's time to a) start planning for things you want to do, and b) have some fun.

I have been single 10 years, have met a great man who has had 2 financially disastrous relationships (marriage/commonlaw ) is self employed for many years .. is without any knowledge of bookkeeping etc etc .... owes a lot personal and gov't earns great money but without direction ... I on the other hand frugle and good earnings .. I would like to plan a future with this man, but need his finances organized before I can commit .. he is more than willing to re-structure and learn. I understand you only serve the Toronto area and we are in Calgary ... we really need your help .. first man I have dated in 10 years and treats myself and family great. Really big heart just some really bad luck and no planning.

With distance the issue, can we come visit you or give us a kick start online. Thank you

Name withheld

Lots of people do this for themselves using the tools on my website. The place to start is with my budget worksheet to make a family budget. Your partner can use the same idea in building a business budget. Unfortunately, I can’t come to you. But I’m sure there is someone in Calgary who you can work with. Try your local credit union first, since in my experience they’re willing to spend the time.