June 2013 Questions & Answers

 


C Wrote: I have my budget worked out and keep well within my limits. But when I watch your show, the budget you usually give people for groceries is $500 per month. We are a family of four (kids are preteens) and there is no way I can budget my grocery bill to be that low. We spend at least $800 on groceries every month.

I did read your tip on checking different grocery stores for prices, and I do that for the most part.

How can I get my grocery bill lowered, and still not go into the frozen TV dinner section. We try to eat healthy which means no frozen prepared foods. Blech!

Gail Says: If, as you say, you keep well within your limits, why are you trying to match the budgets of people I'm trying to help dig out of debt? They need to trim to the bone to have the money they need to get to debt-free. You don't. Why twist yourself into knots and feed your family less healthy/interesting food than you would like to simply to meet some standard I've set on TV. You've got to know what work for you and your family m'love.

 

M Wrote: My girlfriend is working on a debt repayment plan, and I'm wondering if you offer consulting services for that type of thing. If so, how can someone contact you to request pricing information?

Gail Says: Sweetie, I just don't have time, which is why I wrote Debt-Free Forever. It has all the instructions I would give her directly and it's the process (in much more detail) that I used with my Til Debt couples. Maybe you can work through the process with her. Best of luck.

 

B Wrote: I have a small business that I run in house. What spread sheet do you suggest I use to track Income and Expenses including HST?

Gail Says: All budgets are adaptable. HST would be a "liability" or a "debt" so just make one of your budget lines into an HST line and you're away to the races. I think it's one of the least understood ideas that a budget is a very personal thing and that you have to make the budget that works for YOU. I've tried to give some guidance with the interactive budget (free) and The Gail Way ($4.99) on my site.

 

D Wrote: My husband and I have been watching your show and realized that if we don't start budgeting now...we'll be calling on you for help! We've put together our statement of Revenues and Expenses. My question: Once our fixed variables are paid, what type of formula would you use in order to find the percentage for our new "jars"? Here's hoping I can send you a success story...lol

Gail Says: There's no formula for the jars, they are filled with whatever you allocate in your budget. If you look on my site you'll see two tools: the interactive budget (free) and The Gail Way ($4.99) both of which "pour the money into the jars" for you.

 

C Wrote: First of all I would like to thank you for all of your advice. You have helped me keep my finances in check while living in a very want (not need) oriented world. With the guidance of your blog I am 5 months away from being debt free! After graduation ($36 000 in debt) I accepted my first full time job then took a part time job to help put in place my "Pay off my student loans in 18 months Plan of attack"! Thanks for the push in the right and responsible direction. My question is regarding joining my finances with my fiancé once we are married.

My fiancé and I have discussed what we are going to do with our finances once we are married and have decided that we will join accounts and share everything. My only concern is that he will soon be taking over his father's business, and I would like to ensure that if by chance something were to happen to his business my finances will be secure. The business is great now, but just in case, is there anything I can do that will protect at least my portion of our income if his company were to go bankrupt? I work in a hospital and am not at all involved in the business. Am I better off keeping separate accounts to ensure we have something to fall back on? Would that even help?

Gail Says: It is always a good idea for both people to keep their own financial identities and build their own financial foundations. Why not go the His, Hers, Ours approach where you open up a joint account for all your shared expenses. You would each put your share in that account to cover your joint costs. Everything else -- credit, savings, personal spending -- you would do from your own accounts. Please do NOT sign anything for the business without seeking independent legal/financial advice. And do not let personal assets be used to secure financing for the business. That should keep you nice and safe.

 

A Wrote: First off, I would like to tell you how amazing I think you are. I have learned so much in the last year or so from your shows and from your books. I am very grateful to have a better understanding of my finances.

Lately, I have been wondering about RESP’s for a child who may not go to a traditional post secondary college or university. My 10 year old son has Aspergers Syndrome and I was recently looking through some of your Q & A's from a few years back and I read that you also have a son with Asperger's, so I feel you are absolutely the very person to ask about this.

My son's father and I are separated, but have a very cohesive parenting role for our son. We have been wondering if an RESP is the best place for us to be putting money away for his future? Currently there is about $13k in an RESP and I put $100 in every month. We are unsure at this early point in our son's life about what career path he will want or be able to take, but we want him to have money available to him for whatever schooling or training he wants to pursue. My son is in a regular classroom with EA support, and there is every indication that he will continue to stay in regular classes as he is a very bright kid. Should we continue with his RESP contributions or is there a better option for saving for his future?

Gail Says: The RESP is a very flexible tool these days, so I would continue to use it, grabbing all the grant money (past and present) that he's entitled to. For every dollar you put in, you'll get 20 cents in grant money, up to $500 in any year. But you can also claim for a year for which you received no grant money. So if there are years you didn't make a contribution, you can put in up to $5,000 and get up to $1,000 in grant money. Sweet! That's an immediate 20% return on your money.

 

C Wrote: To make a long story short...finally I found you!!! Like many others...I am a huge fan. My story is a little different however...I discovered you after my marriage ended largely due to financial catastrophe.

Back in 2009 after fessing up to my husband that we had over $50,000 in credit card debt, I asked him for a separation. He started taping your shows on the pvr/tv in our bedroom. Of course I ignored them! It was Till Debt Due Us Part....and at that point I was too angry with him (for other contributing factors of our breakup....as well as his anger/frustration due to money stress) to watch the shows. When I was first on my own I would watch a little bit of your shows....then when it hit to close to home....I would turn the channel. It wasn't until we sold our home and I was renting my own place that I really started to admit to myself that I needed help with a budget...so at this point I began taping your shows and actually watching them....and for the first time began to understand and learn how to budget money. My parents would always say...save save save...but I really didn't know how to.

So I did a budget based on your theories...but went to the bank once a month...sorted all my cash for expenses in a vinyl coupon wallet...and together with my son we knew what we could spend and where for the month, broken down into each week. Whatever was left over would be put away to buy something special that we wanted to save for. I also took this as an opportunity to teach my son how to save by giving him an allowance and a budget for himself. Well...I am happy to say...that I learned so much...even to the point where my husband and I were able to go for counseling and work things out between us! Now he refers to me as the Budget Queen (although secretly I know he would prefer me to be a Sex Goddess LOL!).

But I have learned so much from you...and I continue to learn (for example as I was looking at your website last week I learned to now take my husbands lowest monthly income...use that as our budget and any money over that amount goes into our reno/vacation fund)...and I so badly wanted to thank you for your help!!!! I know your focus is on couples whom are about to break up...and I've been there...done that.....but it is NEVER too late to learn....and I oh so love "Princess" because I too was a Shop-A-Holic! As I went through my process of being separated and back together with my husband...whom I truly loved...but life just got to be too much for us...I'd wonder how many other couples could work things out if given the opportunity to learn what we have learned from you!!!

And I do have one question I hope you don't mind answering as I can't seem to find an answer for this. I am self-employed and I do not know what my earnings will be so I do not include them in our monthly budget as my husband's can cover all our expenses. I'd say the least amount that I earn is $15,000 net per year...to hopefully $25,000 and up as my business grows (I do kitchen design, sales and installation www.thekitchenplanners.ca) which I take out in lump sums every 3 months after a job has been completed and HST has been paid. In my own budget I have accounted for my husband's salary to pay all our bills. We are not contributing to an RSP...just and RESP for my son. My husband has a good pension plan as he is a teacher, and I have none...but he would like to retire early. I am putting all my earnings away in a separate account to pay the mortgage off as early as possible and for savings for us and as well for a new vehicle down the road.

Any advice you can give would be most helpful!!! Honestly!!!

And as for my son...you have also helped him as we have watched your show many times together! I opened up a bank account with him last Jan 16th with $500 and have continued to give him $10 per week allowance (he is almost 14 so we have decided to take your advice...and because he has done so well saving...increase that amount to $15 per week. To date he has $780 in his account...has paid for all his social activities and even bought himself a $350 longboard he saved for...I am so very proud of him!!! I am trying to teach him to save a little, spend a little, and give a little!!! I would love to see a show for teenagers...as they truly do have the most indispensable amount of cash with no expenses. My son wants to learn to buy and manage properties...and I am hoping to continue learning so I can help him learn how to be successful at this!!!

Once again Gail....I can't thank you enough for your help! You really do reach out to people...and you really do make a difference!!!!

Gail Says: Thanks for your letter. The only think I'd suggest you do differently is make sure you're also accumulating some retirement savings of your own. You should, at the very least, be maximizing the Tax Free Savings Account contribution every year ($5,000) and if your husband also uses his that would be up to $10K a year accumulating for down the road. It sounds like you're doing a great job with your son. And it sounds like you're managing your business/personal income well.

I'm glad you were able to take what I've offered and use it to your advantage. Lots of people have told me they had trouble watching the show because it hit too close to home initially, but over time they've learned important lessons. It does my heart good to hear your story. Best of luck moving forward.

 

C Wrote: I watched you on The Lang & O'Leary Exchange the other night when you cautioned persons against using "Credit Counselors". I agree with the predatory nature of Commercial credit counselors but have you ever investigated the work of Family Service Ontario agencies that provide genuine service to financially compromised individuals and families?
These counselors are dedicated social workers that work within the Family Services network to provide genuine assistance at a minimal cost to the client. They very often pick up the pieces from victims of the For Profit Counselors after the individual has expended several thousand dollars to these companies with that at best simply point them in the direction of the creditors.
I am a former director of the Family Services Huron Perth Agency located in Stratford, Ontario and would encourage you to find out more about the many satisfied clients that they have assisted in getting out of debt.
Please refer to Ontario Association of Credit Counseling Services of Ontario
http://www.oaccs.com/agencies.html
These Service Agencies are funded by The Ontario Government, United Way, etc
If you have not investigated this resource in the past for your clients, I suggest you would be doing them a great service by recommending the many agencies referred to in the above link.

Gail Says: When Credit Canada, which I believe belongs to your organization, allowed Money Mart to be a corporate sponsor of credit education week they lost my vote completely. "Not for profit" does not immediately signify "in consumer's best interest" and until credit counsellors stop accepting "white wash money" I can't in good conscious recommend them to anyone.