Gails Blog

Here comes another beautiful summer weekend and you probably have a place or two to go. So pack up your car and have fun. Speaking of your car, in my experience, car-owners fall into one of two categories:

• there are the people who loooooovee their cars. They name them. They treat them like babies. They’re obsessed with polishing them and adding accessories, and
• there are the people who no nothing ’bout cars. I fall into this category. I think the dirt is fine since it’s probably holding my car together. I don’t sweat the dings and bumps. And the inside of my car always looks like I’ve just come back from a long car-trip with a band of wild children.

Sadly, both these groups of people may be wasting tons of money with their cars. Look through the following list and see if you’re doing anything wrong that you can cut out and save yourself some cash.

1. You pay to have someone wash your car. I can’t believe what a carwash costs. Every time I drive through the gas station that offers a car wash and see what they’re charging I shake my head. If you’ve got a bucket and some soap and water at home, why would you fork over $10 or more to have some machine wash your car. Why not turn it into a family affair, bathing suits and all, and have a car-washing-soap-and-water fight with the kids.

2. You never put air in your tires. Tires that need air use more gas and wear out more quickly. Don’t over-inflate though. That can be dangerous since not enough rubber hits the road to keep you safe.

3.  You buy premium gas.  Rumour has it if you use only the best gas your car will need fewer tune-ups and get better mileage. Yes, if you’re driving a high-performance vehicle, you need super-de-dooper gas. But most of us don’t, so don’t waste your money. According to them that know, the difference between 87 and 93 octane is so small that you won’t get better mileage or see lower maintenance bills.

4. You don’t bother to maintain your car or keep records. According to Natural Resources Canada Office of Energy Efficiency Auto$mart Thinking program, a well-tuned engine alone can improve fuel economy by up to 4% while a poorly maintained vehicle can increase fuel consumption by up to 50%. And if you aren’t keeping records, how will you know when someone’s trying to talk you into something you don’t need?

5. You haven’t raised your deductible on your car insurance. You wouldn’t make an insurance claim for less that $1,000 so why not raise your deductable that high and boost your emergency fund.  Make the call to your insurance company and see just how much you could save.

6. You’re a speed demon. Cars are most economical at about 100 kph. Driving faster uses up more gas.  According to one European study, rapid starts from traffic lights and hard braking consums 39% more fuel. And accelerating and braking is not only hard work on the car, it’s tougher on you as a driver. So relax, which brings me to…

7.  You’ve never turned on your cruise control. I love my cruise. It keeps my pace even, eliminates my sometimes leaden foot and makes my ride that much more comfortable. Just don’t turn it on when it’s pouring since there have been problems with cruise control causing hydroplaning.

8. You “warm up” your car. Really? You let your car sit there burning gas going nowhere. So you don’t think your mileage is crappy enough? According to Transport Canada, if every Canadian motorist reduced idling time by just five minutes a day, carbon dioxide emissions would be reduced by 1.6 million tonnes per year. Whew!

9. You never ask for directions. I know more than a few people who fall into this category. Okay, so if you get lost and end up driving around for an extra ten minutes, you don’t think that affects how much you’re spending on gas? Hmmm.

10.  You refuse to turn on your air conditioner because it wastes gas. Yah, A/C makes extra work for the engine, increasing the amount of gas you burn. But air conditioners are very efficient so around-town driving using the A/C will reduce fuel economy by about a mile a gallon. The highway is a different kettle of fish. Since driving at higher speeds with the windows down greatly increases drag, using your A/C is the more efficient choice.

11.   You don’t plan your trips. You need milk, you jump in the car. Your kid has hockey practice, band practice, skating practice, you jump in the car. You forgot to get the gezunta that goes with the whatchumacalit, you jump in the car. Since trips of less than five kilometres don’t usually allow the engine to reach its optimum operating temperature, particularly in the colder months, you burn more gas.

12. You drive around with your trunk full of crap. For every extra 45 kg (100 lbs) you carry in your vehicle, your fuel efficiency can drop by 1-2%. If you’re not using your roof rack, take it off. Not only is there a weight factor, it affects the aerodynamic efficiency of your vehicle reducing your fuel economy by as much as 5%.

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One of the biggest issues for people who are having financial difficulties is the fact that everything about their money is disorganized. They pay bills late, don’t pay them at all, or pay the same bill twice. Yup, I’ve seen it with m’own eyes, people. They transfer money back and forth between numerous accounts, often incurring overdraft fees because they miss by minutes. They take $100 out of the bank and 20 minutes later they’re back for another $20. Whazzup with that?

Most of us are disorganized in some way. I can never seem to find my keys. No matter how many “spots” I have in my purse, in my fanny pack, on the hook, I seem to spend more time than I should looking for my keys. Some people can’t keep their shelves organized. Other people have a junk drawer where they dump stuff until they “have the time” to get it put away. I’ve seen the Junk Drawer principal even applied to a whole room in a house. Sheesh!

Disorganization is one of life’s great stressors. Visual clutter makes us feel uncomfortable. Mental clutter keeps us awake at night. Taking the time to get your stuff organized, including your finances, will pay in time saved, reduced stress and a clearer path to being financially balanced.

People want to be organized and they’re constantly looking for an easy way to put things in order and keep them that way. When I did my speaking engagements last year, we gave away an Office in a Box at each session. People cried when they won the Office in a Box. It was relief, I think.

Build your own Office in a Box. You probably have lots of this stuff just sitting in a drawer somewhere. All you need are:

• Box of file folders (approx 30)
• Box of hanging folders + tabs (approx 25)
• Box to hang folders in
• Lables (1 box)
• Pens coloured (1 pack)
• Pencils plain (1 box)
• Eraser
• Small stapler
• Staple remover
• Scissors
• Scotch tape
• Paperclips
• IN box tray x 2
• Post-it notes
• Calculator
• Envelopes (letter sized)
• Stamps
• Accounting book — ruled

There’s no magic in getting organized. It takes time. It takes focus. And it requires that you have a process that you can follow. But it isn’t hard. Any dope can do it. 

When it comes to getting organized, everything needs a place. Gather all your paperwork and create a file folder for each of your accounts, forms of credit, home, insurance, estate, and taxes. You can use a filing cabinet or a box. The folders have to be able to stand up on their own, or you can use hanging folders to keep them straight.

Welcome to 21st Century banking.
 If you don’t already have it, set up telephone or internet banking. If you don’t have a “free” or almost free transaction account, you can reduce fees by setting up a buffer
 If you can afford it, transfer $1,000 float to your chequing account (pretend it isn’t there) and use that to minimize your banking costs. If you’re paying more than $20 a month (that’s high) for your banking, you’re a sucker!

Save automatically.
 Create an auto-debit from your chequing account to a savings account that will not be touched. Most people won’t put money into a savings account on a regular basis, opting to wait for a tax-refund or bonus before setting aside some money for the future. Establish an automatic savings deposit every month and your nestegg will accumulate faster than you think.

Create a Monthly Bill Summary. List your bills in the date order they need to be paid to prevent you from missing a bill. If you have bills that are paid automatically from your account, write an “A” beside these bills and remember to deduct them from your Spending Journal at bill payment time each month.

Set-up your in-baskets. 
Create an in-basket with two Unpaid Bills folders labeled “1-15″ and “16-31″ 
 Don’t let the mail pile up. As soon as you bring in the mail, look at the due date on the bill and put it in the appropriate folder. Recycle all the marketing crap in the envelope. 
Create a second in-basket with 3 folders labeled “bank statements”, “bills paid” and “tax receipts”.

Weekly


Make a date with your money. 
On the 12th and 28th of each month to pay bills, set aside the time in your schedule - you’ll need about 30 minutes, depending on your bills — to pay your bills.

Always pay your bills in one place that you’ve equipped with your bill paying system, spending journal, envelopes, stamps, pens, pencils, a calculator, tape, a stapler and return address labels and recycling bin for all that marketing stuff you’re going to dump.

When you pay a bill, write the cheque or transaction number, amount paid, and the date you paid it on the bill. Put the paid bill in your “bill’s paid” file. Deduct the amount you’ve spent from your Spending Journal. If a bill has not been paid in full (tax bills are paid over several months, for example) put it back in your Bills Folder so you don’t forget it.

Monthly

Reconcile you bank statements. When you bank statements come in, put them in your in-box folder. Make a date when all your statements are in (it’ll depend on when you receive them) to:

• review your statements to make sure there are no mistakes
• reconcile your Spending Register; clearly mark the cheques that have gone through your account and highlight the ones in your Spending Register that haven’t yet cleared the bank. A cheque that is taking a long time clearing the bank can lull you into thinking you have more money than you do. Go back at least a month to make sure all previous cheques have cleared.
• talk with your partner about anything unusual

Quarterly


File. 
Once a quarter, file all your paperwork to keep your system current.

Talk.
 Have a dinner with your partner and talk about the bumps, your goals and how you’re doing.

Annually


Re-vamp your budget. 
Review your budget using last years cc statements and bank statements to see what you actually spent. If you spent more on a particular category, make sure you know why, or look for ways to trim.

Clean up.
 Go through your files at the end of each year and throw out bills and receipts no longer needed for auditing/budgeting purposes.

• Tax Returns and Backup Documentation: Whether personal or business, the general rule is seven years.
• Insurance policies: Keep everything for as long as the policy is in effect. You can dump the old policy if you get a new one with your renewal each year. Don’t rely on the insurance company to provide copies of your records since any burden of proof will fall to you.
• Warranty Documents: Review your warranty file annually and get rid of documents for defunct appliances, telephones, or anything else that’s gone the way of the recycling bin. And, of course, when the warranty expires, you can chuck the paperwork.
• Home Repair Bills & Contracts: For as long as the warranty is in place, or longer if you want to prove upgrades for insurance or home resale purposes.
• Pay Stubs: Keep your last two year’s worth.
• Bank Statements: Keep a year’s worth in an accessible place so you can re-vamp your budget from accurate figures. File everything else for five years.
• Credit Card Statements: Keep the current year’s on hand for revamping your budget.
• ATM Receipts: Dump them once you’ve reconciled your bank statement at the end of the month.
• Investment Documents: If you have stocks, bonds, or mutual funds, you are buried in prospectuses, privacy notices, address confirmations, along with your regular statements. Keep the statements. Forever.
• Utility Bills: Writing off your utility bills for tax purposes? Keep them in your tax file. Otherwise, keep one year’s worth for comparative purposes. 
• Mortgage Documents: Until you die or the mortgage is paid off, whichever comes first.

BTW, people have been asking about The Budget Binder. There’s an example of how to make your own in the Your Questions section.

I recently worked with a new couple that made go, “hmmm”. She’s only 26 and already owes over $40,000 in consumer debt, even though she doesn’t pay a cent in rent and has virtually no real expenses. Sure she has a cell phone and a nice car, but they’re toys, not tools of her trade.

He went nuts with his credit cards when he first got them – yes, he join three separate gyms – and then froze his cards. He’s been working to pay them off ever since. He’s paying in the high teens and mid-twenties when it comes to interest, but has never considered negotiating his rate down.

So what happens to us to make us think that when we’re using our credit cards we aren’t really spending real money? How do we come to delude ourselves? What lets us rack up thousands of dollars in debt without batting an eye? And what lets us carry around balances on our credit cards, at huge interest rates, without losing our minds?

Hey, I know there are people out there who use their credit to make ends meet. Lose a job, have a child get sick, or watch your car die in the middle of a highway, and the idea of putting it on a card and carrying a balance becomes a secondary issue to taking care of the BIG problem.

I’m not really thinking of those people. I’m thinking of the people who bemoan their debt while booking their next cruise. I’m thinking of the people who can’t drive a regular car, they have to drive a car they really can’t afford. I’m thinking of the people who can’t seem to find the money to repay their old bad spending habits because they’re too busy traveling (on credit), eating out with friends (on credit) or shopping (on credit.) What makes those people immune to the gut-wrenching stress that other people feel when they owe money?

Is there such a thing as a debtor personality? Or is it simply a case of being clueless?

Psychologists have done some research on the issue of debt personality. Some believe that people who accumulate debt also:

• Lack the ability to plan
• Are not reflective in their thinking
• Have an urge to be active
• Are impulsive
• Can be anxious or apprehensive about making the wrong choices
• Need excitement and novelty
• Tend to disregard possible negative consequences.

When I ask my fams what they spent their money on when they were going into debt, they can’t tell me. When I look around their homes I may see some evidence of their debt, but very often they don’t have a lot to show for the amount of debt they’re carrying. And when I show them how much money they’re spending, they’re stunned. Some accuse me of making the numbers up. Ha! I don’t have to; they’re great all on their own.

So how do we get so far away from the idea that what we’re doing is SPENDING MONEY and that at some point in the future that money will HAVE TO BE REPAID?

Part of the problem stems from the “Minimum Payment” … the idea that you can have what you want now, for as little as $10 a month. Hey, but that’s $10 a month FOREVER. Do that a couple of dozen times and now you’re up to $240 a month. Do that four years and now you’re up to $960 a month… and you’re no closer to ever being paid off. Ouch!

It’s easy to use credit. It’s hard to pay it off. And if your circumstances change and you find yourself with less money in the family pot, you can really strap your ability to roll with the punches if you’re carrying around a bag of debt.

It’s time to become a little more reflective in your thinking. It’s time to learn to plan. And it’s time to stop disregarding the possible negative consequences of your rampant spending.

Want some real excitement? Try living on half your income so you can put the rest to debt repayment. Have the urge to be active? Get another job and use all the income to pay off your debt. Impulsive? Eliminate the temptation: don’t carry your cards and stay out of the malls.

There’s always a solution. If you really want one. So, do you?

It’s amazing the many ways in which we’re willing to delude ourselves so that we don’t have to face our realities. People are soooo willing to grab hold of a Maybe or a What If or a Perhaps, all so they don’t have to deal with their own crap. If you’re thinking that any of the following are in your future, you need to give your head a shake.

Prince Charming is Going to Save Me. Really? Prince Charming? Didn’t you see Shrek? He’s a Momma’s Boy who is so obsessed with his own future that you’ll only know he’s been there by the wreck he’s left behind: YOU! Despite all the stuff that’s been written about the Prince Charming Myth, there are still people out there – boys and girls alike — who believe that someone is going to come riding to their rescue with pots of money to bale them out. If he’s stupid enough to try and bail you out of the mess you made of your own life, why would you want him? Let’s face it, in today’s very complex world, one person with the “solutions to all your problems” is likely to come with a whole lot of baggage of his own.

My Parents are Going to Leave Me a Million. Let’s say they do. What makes you think you’re going to have any better luck managing an inheritance than you do managing the money you actually have to work hard for? But what makes you think they’re even going to have a million to leave you? After all, with rising health care costs and greater longevity, your parents could live to be ninety. And many of those years will be very expensive as they take medicine, hire caregivers and generally do whatever they can to extend their lives for as long as possible. Assuming you’re 25 years younger than your youngest parent, you’d could be 65 or 70 by the time both your parents kicked the bucket. That’s a hell of a long time to put your life on hold. And then, of course, if you have a sibling or three, you’re going to have to split what’s left once dear old mom and dad shuffle off this mortal coil.

I’ll Win the Lottery. Ha! This is one of my favorites. Do you know that you’re more likely to be struck by lightening TWICE than win the lottery? How about this one: you’re more likely to die in a car accident going to the store to buy a lottery ticket than win the lottery. I know someone has to win. I know it could be you. But do YOU know that it very likely won’t be. Besides, 1/3 of lottery winners end up bankrupt within five years of cashing in their lottery tickets. Why? Simple. We don’t value what we don’t have to work hard to earn

Oprah’s Going to Discover Me. Yeah. I’m waiting for her to call me too.

I’ll Get Rich Playing the Stock Market. “Playing” is the operative word here. If you’re “playing” then you’re not serious about investing. If you’re serious about investing, you’re using a buy-and-hold strategy, and you have an advisor who knows what she’s doing.

I’m Just Waiting to Land the Big Job. Which job is that? The one where they pay you oodles of money to do what they could pay someone else half as much to do? Hmmm.

Things Will Work Out. How’s that working for you so far?

Financial success is based on performing the essentials of good money management. You have to have a plan. You have to be organized. You have to have a goal and be committed to achieving that goal. And you have to work smart. 

Harbouring financial fantasies are detrimental to success because they encourage you to put the power outside yourself: you’ll be rescued, you’ll be left a ton of cash, you’ll be discovered. If you want to be successful, you have to take back the power and know that the best way to make it happen is to do it for yourself.

The old saying, “It took 10 years to become an overnight success” is true because success means learning from your mistakes, becoming knowledgeable about money and how it works, and knowing our own strengths and weaknesses.

So PJ and I were walking past a shop window on the way to a shoot the other day when we looked in at the washers and driers. PJ has just bought a new house, which came with a washer and dryer she doesn’t particularly like. She was looking at an energy efficient front loader with a little lust. The set was on sale; a good price we thought. Especially when we turned around and compared it to the Big Name set that was priced higher.

Funny that. It seems it’s in our natures to assume that because it has a higher price, it’s a better product.

To prove the point, researchers from CalTech and Stanford told their guinea-pigs that they were drinking five different wines at five different prices. You know what? Those tricky psychologist lied; there were only three types of wine because two wines were offered twice: a $5 wine was described as costing $5 and $45, and a $90 bottle was described as costing $90 and $10. (There was also a $35 wine with the accurate price given.)

The guinea-pigs not only rated a wine as tasting better when they were told it was pricier, but their brain scans showed greater activity in their pleasure zones. OMG! Just being told the wine was more expensive gave the drinker greater pleasure. How awful is that?

Perfume is another good example of a product whose quality is often measured by its price. You can buy a six-ounce bottle of a lovely perfume at the drugstore for $30.00. If you want Chanel No. 5, one ounce will cost you $250.

A friend of mine told me a story that made me split with laughter. It seems her cousin was in the drugstore where he saw an expensive brand of cologne on special, two-for-one. So he bought them. He didn’t need them, but the idea that he was getting something expensive for FREE made him bite. His perception wasn’t that the colognes were half the price they had been before. No. He kept the original price as his benchmark, and registered the other bottle as FREE to justify dropping a lot of money he could ill afford to spend.

Hey, nobody likes a BOGO sale more than moi. I’m talking averaging down two pairs of shoes to $20 each here, not popping for a $300 handbag so I can get the other one for $150. I guess, it’s all a matter of perspective.

While it is sometimes true that “you get what you pay for”, if you decide to pay two or three times the price for a particular product, does that mean you expect it to be twice or three times as good? Think about it. Is that Super-de-dooper Latte really three times better than the coffee you could pick up at Timmy’s?

This is where we get into the whole idea of “value.” Dollar for dollar if the more expensive item isn’t proportionally better than the cheaper one, should you spend the extra money? Would the lower priced item suit your needs just fine?

So how’s a body supposed to counteract the More-expensive-is-better syndrome? You could do some blind testing of our own. If there are products you pay extra for because you think their higher quality makes it worthwhile, maybe it’s time to check your assumption.

You could also be better informed by reading consumer reports available in magazines or online. You could ask for friends’ opinions on the performance of less expensive alternatives they may be using.

Okay, it’s your turn: Have you ever bought a premium anything only to be disappointed? Do you have substitutes that you routinely choose over more expensive items because they are just as good? 

I’ve had quite a few comments recently about the fact that many of the fams I work with make tons of money and couldn’t I do a show with people who make less. 

Pearl wrote:

re: the family whose income was $140,000.00 per year. It is a constant source of amazement that people with that kind of income are in debt!!! And don’t seem to know how to get out of it!!! Why don’t you give that $5,000.00 cheque to a more needy family that is in debt??? I would like to see a show where the family’s combined income is barely $55,000.00 per year, and then see how you can help that kind of a family!!!!

And SM wrote:

Why do you not do any individuals and/or couples that only gross 60k or less? It may be easier to help those with high income, however a good portion of Canadians make 60k or less per year.

I’m not sure why people are under the impression that we only work with richy-rich families on the show. If you haven’t caught these episodes, you should, because:

• Elizabeth & Wojceich only had an income of $3,400 month
• Corrina & Jay made less than $3,700 a month
• Kristy & Dean made about $4,300 a month
• Sharon & Dennis made just under $3,200 a month
• Natalie & Matt were earning almost $3,800 a month
• Jared & Christina were making just over $4,200 a month
• Tamara & Brandon made about $3,200 a month
• Andrea & Curtis made about $4,700 a month
• Evan & Jason made about $3,300 a month
• Dawn & David made $4,400 a month  

Several years ago, I had a “financial advisor” over to the apartment, believing that he would help us get on track to good financial health. We instead were convinced to purchase an expensive life insurance coverage, and he said he would support us with financial advice as a next step. I have all along felt good knowing my family is taken care of… but we are still financially sick- and have a huge debt from student loans etc. and have never seen this advisor again. I am NOW FINALLY getting on track with lots of support and information from this site. However this life insurance has always bothered me. Is $75/ month too much to pay for life insurance? It was explained at the time that i should purchase a lot of insurance now while i am young, and the premium would be lower when I am older, and in less financial need of the protection… ???? Have I been as dumb as I suspect?
 

I know you advocate checking your credit score annually or twice per year. I would like to know your thoughts on credit monitoring services? Paying a monthly fee to to Equifax, Experian etc. to keep you up to date on your credit report and score. They run about $15/mo. Is this worthwhile or overkill?
 

I have slowly paid off all my credit cards I was wondering whether to cancel them or put them away because I heard that if you cancel credit cards it will affect your credit score. I would also like to see awesome follow up shows to see if the people that you help are still on track. 
 

Your show is my daily inspiration to live completely debt free, sooner than most of my (lawyer) friends. I am 37, earning $72000 per year. I owe $6000 on my line of credit (used to finance a moderate used car), and $163 000 on my mortgage (my house is probably worth $220K). I am being highly aggressive in my debt repayment strategies: $1400 per month on mtg (PIT) and $1265 monthly on my line of credit. I have no other debt. I want the line of credit balance gone in 6 months, and plan to route the majority of the payment amounts between savings and extra principal payments once it is at a zero balance. I feel conflicted. Should I extend the payments on my PLC to one year in order to lighten up, or is it better to just stay on an extreme budgeted course and get the debt over with? I have some home reno dreams, and vacation dreams and am not sure where these should fit? I am conflicted between rewarding myself in the present or being completely debt-free and “rich” later. Thanks - your show and your website are invaluable.
 

Early to bed and early to rise, makes a man healthy, wealthy and wise.

Ever heard that old saying?

I’ve worked with more than 75 couples on the show so far, and I’m amazed at the number of people who want to sleep in. These aren’t teenagers whose brains just aren’t tuned to the morning. We’re talking adults. People who have jobs (or should). People who have children. People who can’t find the time to manage their money properly. Whazzup with that?

I love getting up early. I get so much more done. This morning I made a mess of potatoes in my crock pot – mixed with garlic, onions, oregano, the zest and juice of a lemon and a little paprika – while I sipped my tea. Later I’ll throw some of the chicken I marinated on the grill. Hey, 7 a.m. and dinner’s ready!

Most days I’m awake by 4 a.m. Yeah, I’m nuts, but it’s a hold-over from when the kids were really little and I was up early to write. And it comes in handy when I have to drive three hours for an 8:00 a.m. shoot. I hate, hate, hate traffic and I’ll leave early from home to avoid it, picking up a newspaper and a cup of tea or doing some web stuff at the other end with my extra time.

When I don’t have to be anywhere, I read. It’s my time. I get to bed nice and early, so I’m not an insomniac. Just an early riser. I’m usually up by 5, either doing stuff around the house, processing a family’s finances or writing.  No yelling kids. No phones ringing. No one breathing down my neck. By 6 I’m in the kitchen getting the kids’ stuff ready for school.

The Dalai Lama is a get-things-done kinda guy. I bet he gets up early. He says, ”Everyday, think as you wake up, ‘today I am fortunate to have woken up, I am alive, I have a precious human life, I am not going to waste it. I am going to use all my energies to develop myself, to expand my heart out to others, to achieve enlightenment for the benefit of all beings, I am going to have kind thoughts towards others, I am not going to get angry or think badly about others, I am going to benefit others as much as I can.’ “

I’m willing to bet there isn’t a single really successful person out there who sleeps past 7 a.m. (If you’re a shift-worker, don’t write me back.) And they don’t start by jumping out of bed, late as usual because they hit the snooze button.  They don’t rush out of the house and arrive at work all rumpled and foggy. No, they probably have a ritual that lets them set the tone for their day, and it probably starts the night before when they look over the next day to see what’s what. They’ve set their goals, and they know just what it’ll take to get through the next day successfully.

If you want to get up earlier, like everything else, it takes a plan. Start slowly. Wake up just 15-30 minutes earlier than usual for a few days. Then wake up 15 minutes earlier than that until you hit your goal time.

Getting up earlier means you may have to get to sleep earlier. If you stay up till one in the morning watching TV, playing video games or surfing the net, you’re going to have to cut back to get to bed at a decent hour. Don’t just climb into bed and lie there struggling to get to sleep. Read. Listen to a story on tape. Meditate. In no time at all, you’ll be fast asleep.

Move your alarm clock away from your bed so you have to get up to turn it off. I never hear my alarm clock because I’m always awake before it goes off. I learned this when I was quite young; if I tell myself what time I want to wake up before I go to sleep, my body just does the right thing. No jolt. No panic.

Since you’re out of bed to turn off your alarm anyway, might as well head to the shower. If you get back into that bed – particularly when it’s cold outside – you’re sunk.

Make sure you set yourself a task to do first thing so that you aren’t getting up and then wondering around what to do until your brain kicks into gear. Life is so busy, you won’t have any trouble finding something. Just make a mental note of the first thing you have to do after you’ve cleaned yourself up.

I often find myself driving east, heading home, when the sun is rising, and I find it exhilarating watching the sky change colour. It’s a gift. And one we often take for granted. Make a date with me to get up tomorrow morning and watch the sun come up.

As I was checking into my hotel last night I was greeted by a lovely young man who expressed some frustration at not being able to beat down his debt. With about $12,000 in debt, some at the highest interest rates going, he was frustrated. He’d tried to get a consolidation loan but had been turned down because the bank said he was already overextended. (We’re going to see more and more of this as credit gets tighter.) He was wining the battle, but said, “It’s hard staying motivated.”

Yup, when it feels like you’re progressing in teeny tiny steps, it can be hard to stay motivated. Just the thought of tackling a mountain of debt can stop the less brave from even beginning. It can seem like a massive undertaking to jump-start yourself into action. It can seem even more daunting to maintain your focus when your progress, although steady, seems really slllooooooow.

So what can you do to help you stay motivated? Try some of these ideas and see what works for you.

Make a List. Write down your financial goals in small increments.
So if you want to pay off a $3,000 balance on a store card you might write:

Transfer balance to a lower-cost card
Earn an extra $200 a month
Trim $100 from my budget
Pay $300 a month toward card in August
Pay $300 a month toward card in September
Pay $300 a month toward card in October

And so on…

As you achieve each of your individual steps on your list, you can stroke them off. Man, what a feeling as you watch your page fill up with stroked-out achievements! And if you start doubting your progress, if you start feeling demotivated, you can look back at the success you’re having and kick yourself in the pants.

Tell Everybody What You’re Trying to Do. One of the biggest problems we have is the fact that money is still a BIG SECRET. Whazzup with that? I mean, if we’re prepared to talk about our most private matters, why the big secret when it comes to money? Because we judge others using money as a benchmark. And we’re afraid they’re going to judge us. STUPID. Let’s face it, we’re all making mistakes and if we don’t share our mistakes it means we have to make them all over and over, never learning from our friends or family. And keeping secrets means we can’t count on our friends or family to pull us back from the edge when we come close to falling. But if we tell people we made a mistake, if we ask them to help us stay on the straight and narrow, then when we become tempted we can use our Safety Network to pull us back, to help us stay motivated.

Keep a Journal. Don’t moan. I know not everybody likes doing this, but it works. Write down what you’re doing, what’s working, what’s not, and what you’re going to change, and you’ll find yourself closer and closer to your goals.

Eat the Frog! If you have things you need to do that you find easy to procrastinate, then do them first! It’s called “eating the frog.” It’s a quote from Mark Twain who said if the first thing you do in the morning is eat a frog, nothing else will seem as hard for the rest of the day. So, Eat the Frog!

Keep Your Goals Visible. Post them on your fridge, on the bathroom mirror, on the wall right behind your computer. Put them where you see them ALL THE TIME so you can stay on track.

Measure Your Progress. This works for kids. And it works for grown-ups too. Draw yourself a thermometer graphic to show how much debt you have to pay off. As you pay it off, colour your way up the thermometer. There. You have a visual record of your progress to keep you motivated.

One of the most important lessons you will learn is that no matter how well you prepare and how many precautions you take, there will be times when you’re thrown off track by an unexpected setback. That’s life. Having friends to urge you on, going over what you’ve achieved on your List, taking pride in your progress chart are all ways to get yourself re-motivated to get back on track. And you can use my blog to share your frustration and accept encouragement. Whatever you’re facing, it can be a temporary setback or you can let it permanently derail you. It’s up to you.

Most of the families I work with have a problem with impulse spending. Putting them on the Magic Jars and giving them the budget binder to write down everything they spend goes a long way to making people change their spending patterns.  If you think you might be an impulse shopper, the first step to controlling it is monitoring your urges. It’ll only take a couple of weeks of thoughtful note-taking to give you a good insight on how and why you shop.

Get yourself a small notebook, keep it handy, and every time you get an urge to shop, practical or not, write it down. Note where you were, what you wanted to buy or did buy, and how you felt. Note every time the Impulse Monkey squawks at a prize, whether it grabs you online, at a store, or when you’re flipping through a flyer. No matter how often that Impulse Monkey chatters in your ear, make a note of it.

Whether you buy the item or not, keep track of the Monkey. Many times our urges are subconscious and we can’t control our spending if we aren’t aware of it.

Once you’ve determined that you have a problem, you’ll have to take some drastic steps to get the Impulse Monkey off your back.

Avoid the mall, the discount department store, the dollar store – anywhere you can spend money. I’ve actually just started working with one fam where the Lady of the House was dropping over $150 a month in a dollar store. OMG! Just going into a store practically guarantees you’ll buy something on impulse. Find something else to do to replace your shopping habit.

When you do go shopping, go with a list. In the grocery store, use a list. In the home-decorating store, use a list. In the mall, use a list. You’re not allowed to buy anything that isn’t on the list. No matter how good the deal is. NOTHING.  

Leave your credit cards at home and only shop with cash. If you don’t have the means to overspend, it’s amazing how much self-control you can show. If online shopping is a problem, you may have to throw your credit cards behind the fridge as an additional deterrent.

Do what my friend Natasha does and keep a long-term list too.  If you have an urge to buy something, first you have to put it on your Thirty-day List. You can buy it (if you have the money) after 30 days, assuming you still want it and something else hasn’t jumped up and captured your Impulse Monkey’s attention.

Finally, use the Grocery List technique for all your “needs.” You make a grocery list to stop you from buying everything the Impulse Money squeals at, right? Well, make a Clothing List, a Home Décor List, a Kids’ Toys List… you get my drift.

Let’s look at the clothing list in more detail to see how this would work. First, you list what you must have in your wardrobe: number of shoes, shirts, suits, jeans, jackets, scarves, belts, purses, coats. Then go through your wardrobe and take inventory of what you already have, marking it off your master Clothing List. What’s left is what you need to complete your wardrobe. That’s your Clothing List and you can’t buy anything that isn’t on that list.

Another keen trick is to make a deal with yourself that every time you buy something, you must get rid of something. This avoids falling into the trap of simplifying and then going shopping to replace everything you miss. It also makes you prioritize. If you must have that new doodad, what are you prepared to give up?

Buh-bye Impulse Monkey. Buh-bye.

Peer pressure is something we associate with teenagers and their ability to distinguish between a sensible course of action and a dumb one. We know peer pressure leads to bad decisions and good, and that we want our kids to be able to think for themselves. But have you given any thought to how you may be affected by the peer pressure from your friends, particularly when you decide to change how you’re managing your money?

One of the hardest things to deal with once you decide to live on a budget, change how you’re using your money, and modify your life, is telling your friends. Some of them won’t mind a bit. Some will congratulate you. And some will think you’re nuts.

I run into this all the time when I’m working with my fams. They have friends who like to go out to restaurants. They have friends who want to explore all the amusement park rides in the summer. They have friends who think a budget is what losers do.

You may have to rethink who you’re hanging with.

If you’re hanging with people who are in your new head-space – folks who budget, watch their money, and are getting and staying out of debt – you’ll find it easier to stick to your plan. These Frugal Friends will know that you’re working hard to make changes and they’ll support you.

Don’t equate frugality with meanness or tightwads. Being frugal is being committed to staying on a budget and living a simpler life.

Your Careless Chums won’t consider for a minute how their own spending patterns may be difficult for you to deal with. They’ll say, “Com’on, we haven’t been out for dinner in weeks” or “We’ll just go for a couple of drinks” or “You need to spoil yourself once in a while.”

Frugal Friends are also into the sharing thang. If you have a chain saw and they have a lawnmower, they’re quite willing to share their tools with you, as long as you reciprocate from time to time. Imagine a network of Sharing Friends! I mean, how often do you use your crock-pot or your stepladder or your powerwasher? I once had sharing friends who let me use their swimming pool, which I kept clean in exchange. There’s $10,000 I didn’t have to spend! (They’ve subsequently turned their pool into a beach,  which I’m still happy to share.)

Splitting the bill evenly is not always the way to split it fairly. Frugal Friends always go with the “fair” not the “even.” If money is no object, or if y’all ate the same thing, hey, splitting equally is fine. But if you eat a $15 meal, why should you have to ante up $30 to split the bill equally? As the girl who never drinks, my share of the bill is always less than the others’ who have put away a couple of bottles of wine with dinner. My options: pony up and shut up; eat the most expensive thing on the menu; have dessert.

Having a fun night out doesn’t have to cost a fortune. Your Careless Chums may want to blow $100 on baseball tickets, but your Frugal Friends will be quite happy with a night of scrabble and a pot luck dinner. Yes, you’d have a great time at the baseball game. And your Careless Chums may even offer to spring for your ticket ‘cos they love you.  Then you feel you have to go, spending gobs for parking, food at the stadium, treating them to drinks after as a ‘thank you’ and paying a babysitter

Frugal Friends will be willing to point you in the direction of the best deal, ways to cut costs, and having fun for free. While Careless Chums will brag about their latest acquisitions, leaving you feeling pooooor, your Frugal Friends will demonstrate just how rich a life can be without constant consumption.

I’m not suggesting that you tell all your Careless Chums to go to hell and go get yourself a whole new set of friends, I’m just trying to point out how peer pressure can mess up even the best laid plans. If you’re committed to changing how you deal with your money, you’re gonna have some ‘splaining to do if you want those Careless Chums to understand your new headspace.