Gails Blog

For years people who studied behavioural psychology believed that most of the decisions we make are rational ones. It came as a big shock when they discovered that investors aren’t rational. Yup, we can be pretty stupid sometimes.

Then they discovered that irrational behaviour also applies to our shopping. Really? What a surprise!

In a study conducted at Stanford University, and reported in Neuron journal, people’s brains were scanned as they looked at desirable goods and their prices, and the most active brain areas were recorded. The result: while distinct parts of the brain anticipate having the item, others register the impact of having to part with money.

It seems our nucleus accumbens, which is full of dopamine receptors and so is a pleasure centre, lights up when we want something. So the nucleus accumbens lights the fire of want. Our insula (associated with pain) is activated by prices that seem too high. So it’s like the sprinkler system putting out the fire. Yes, there is an actual physicality to the trade-off between really wanting something, and having to pay for it.

Here’s the thing: If you have an overactive nucleus accumbens or a lazy insula that could be the reason why you’re a chronic shopper. Or it could simply be that your brain is being tricked into acting in a foolhardy way.

Let’s take the credit card as an example. If you don’t feel the pain of actually having to part with cash, or do without something else, because you can just charge it, then your insula won’t douse the great feeling you get from your nucleus accumbens when you think about acquiring that new dress or those new tools. And if the retailer or salesperson can convince you you’re getting a deal, your insula won’t rain on your parade and stop you from spending.

Now, if they could come up with a credit card that reminded you of your outstanding balance every time you pulled it out of your wallet, that’d be the ticket. Think anybody’s working on that sucker?

There’s been a lot of traffic on the Have Your Say section of the website. Some of you have left questions for me (use the Your Question section so they will come directly to me.) And I’ve had feedback from people all over the world who are watching the show, including some old participants who are still on the path.

For all the people who want to see a show about people who are doing it right, you’ll have to wait until season five to see a little of that… not a whole show, but a small segment (I don’t know how small yet, since the show is in edit and what we shoot is often much more than what you see.) But we did use people who knew how to live within their means to guide a couple who did not.

Some people are asking for advisor recommendations. I don’t do this for three reasons: first, I don’t know your circumstances well enough to send you to the right person; second, I want you to take responsibility for your money, including finding your own advisor - one that suits you to a T; third, if I send you to someone and it doesn’t work out, it becomes my fault… I should have known better. Sorry. No can do. Ditto investment information. Too much goes into making an investment recommendation and you need to find someone that can do a detailed needs analysis for  you. I will, over time, add more to the site on investing, but it will take time.

If you’re looking for an advisor, go read Choosing a Financial Guide. 

For Christine who “wants to open some kind of bank account for my children …for gifts of $ they receive from family.  What type of account do you recommend? An ” In Trust Account” is what exactly?” I’ll write you an article over the next couple of weeks. Stay tuned.

For Grace who wonders if I have developed (published) a “budget binder” for people to buy and use as they do on your show, the answer is no. But you can do your own. Go and read The Budget Binder in the Your Questions section. There are lots of great answers in this section and if you’re looking for something specific you can now search the site and the Your Questions section. Look for the little magnifying glass up in the top right hand corner beside the little house, which takes you back to the home page.

People like Mike are always asking about how I come up with what goes into the budget and the percentages I use for the show. Go and read Gail’s Guide to Building a Budget (which is under blogroll on my blog)

For J. Lavigne and Tiff and all the other people who want to see follow-up shows, you’ll have to email Slice about that. As for how many of the couples actually stick to what I show them, the answer is all the smart ones. Some of them like Bev, Elizabeth, Richard and Cat visit this site, others visit the Til Debt Do Us Part Facebook page. Most stick with the plans, adapting them as their lives change. Some never get it. You can usually guess who those are.

Jane, and a few others, has indicated a desire to do what I do for a living. I wish you a great deal of luck and suggest that you find yourself a financial institution that has a real, honest interest in helping people. I’d check out your local credit union or other smaller, community-based financial institution for an opportunity to work with people and provide the kind of advice I do.

Kathy wanted to know where my accent is from. Girl, mi come from backayad! If yu no know whe dat is, den yu need to hask aroun’.

Terra wanted to know if I would do a show outside of Toronto. Since I visit each family four times in a month, I am hard-pressed to move too far a-field and still have a home life. That’s why we stick to the GTA, although we’ve gone as far as Niagara Falls and Brantford in the West, and are looking for a couple more families in the Barrie area to round out some applications we may be pursuing for season six. So if you know anyone in Barrie who needs help, tell them to apply.

I am totally blown away by all the people all over the world that write to me on the site. Malaysia. Australia. Wow! I know the show airs in Britain too, but haven’t heard from anyone there yet. So if you’re a Brit, identify yourself!

I asked y’all to vote on which book you’d like me to republish first. A Woman of Independent Means won the vote and I’m about half-way through the edit. Look for more on this in April.

Finally, I will be speaking in Nanaimo, Saskatoon, Winnipeg and Toronto in January and February. If you want to come out and see me, go to the Credential website to register. Look for my face and click there. The evening is free but you have to register and space is going fast! See you there. 

If y’all want to meet my crew, now you can. These are the guys who have made the show what it is (except for the directors and editors who play a huge roll but aren’t  here. I’ll add stuff about directors and editors another time.) These guys work together like a finely oiled machine AND they make me laugh a lot. I love to laugh, and they are great at keeping the energy high on set. If anybody tries to steal them from me, you’ll know the Wrath of Gail! The other thing I’m working on for the site is a piece for people planning to marry. This came out of a question I received from a mom who wanted to buy a consultation with her soon-to-be-married daughter. Sorry, I can’t swing that, but I hope what I’m creating really helps. Would y’all like me to include a piece on budgeting for the wedding itself? 

There sure are a lot of questions coming into the website. I had intended to answer one a week, and maybe when it slows down a bit I can get down to that. For now, the questions are coming fast and furiously and I’m running hard to keep up. I’m sorry I can’t answer them all, but there just aren’t enough hours in the day, people.

Some of the questions are on a theme: Lots of people want to know what goes into the jars or how to budget. That’s why I created the interactive budget (look to the right under Blogroll and you’ll see all this worksheet and guide to using it). I’ve also added the worksheet for figuring out how to get out of debt, along with the holiday shopping worksheet to the Blogroll, along with their instructions. There. Now they are easy to find.  Another frequent question: Do I take private clients? Are you kidding me? Like my days aren’t long enough? And by the way, since y’all are so deeply in debt, how could you afford to pay me? I’ve given some guidance on where to seek answers or you can ask questions and work it out using the website tools as a guide.  People often ask when I’m coming to their part of the world. Hmmm. Since I visit each family four times over a month, shooting outside of Ontario would be a traveling nightmare, even assuming I’d be willing to leave my kids (which I am not.) So all you people all over the country, don’t be holdin’ your breath. I don’t want you turning blue on my behalf.  I can tell you that I intend to add more and more to this site because I can’t get to all of you privately or on the show. Since I can’t possibly visit all the people who need help, I want y’all to treat this website as a virtual me. Each question you ask helps others, and every tool I put up can be used by everyone who needs that help. If there are specific things about money you find challenging, let me know and I’ll see what I can do to help.  The site is getting some good traffic, but the more people who see it and share their ideas (that’s what the Have Your Say is supposed to be about) the better the site will get. If Have Your Say gets busy enough, I may replace it with a discussion board. The problem I have with that right now is that I can’t possibly monitor it myself (time) and I don’t believe I can leave it unmonitored (too many potential yucky things said). So I’m waiting to see how much real demand there is for a discussion board before leaping in.   I want to thank y’all for the great response and for the love. It’s great hearing how well y’all are doing, watching the show, applying the things you see. And I want to be able to help as many of you as I can. Be patient, tell me what you need (be persistent), and pass on what you’re learning to other toadies.   Keep the faith, take small steps, move towards your goals. And tell me what you want need. You’re the ones driving this bus. Where are we going next?       

New content went up today. Lots of people want to know if it’s better to buy or rent, so there’s Renting versus Owning. People also seem very interested in the Office in a Box. While I can’t deliver one to you online, I can give you Gail’s 12 Steps to Getting Financially Organized. There are lots of new questions and answers under Your Questions, so check ‘em out.   I’m also taking a small poll. One of the things I have yet to do is make my books available through my website. Years ago my publisher went bankrupt and I was left with a few good books and no way to put them on shelves. Since people have been asking, I’m planning to put a couple of books up for sale. So, the question is this: Which one do you want first. I’ll publish by demand. Your choices are:

• A Woman of Independent Means
• The Money Tree Myth: A parent’s guide to helping kids unravel the mysteries of money
• The Retirement Answer Book
• Shopping for Money

To vote, go to Have Your Say and tell me what you want. I’ll be collecting responses until January and will have the first book ready shortly.