Gails Blog

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.  

I was shopping with my daughter in Payless when a woman heading towards me pointed at me and said, “I watched you on TV last night, which is why I’m shopping here instead of there,” she laughed as she pointed to the more expensive shoe store across the mall. Her husband who was toting a tot on his shoulders laughed too and said they were living on the jars.

Everyone wants to use the “magic” jars. No matter where I go, people tell me they’re living on the jars and lovin’ it. Wow! Something so simple, eh?

Since I put up the website a week ago, the most questions I’ve had have been about the jars: how much to put in them, how often to refill them, and lots more.

There’s no formula for how much goes in each jar. It really does depend on each individual budget. But you can figure this out for yourself by going to Gail’s Guide to Building a Budget and following the instructions, and the link to Gail’s Interactive Budget Worksheet. This worksheet will show you what should go into the jars. It’s a bit of trial-and-error to find the right mix, but keep at the budget until you balance and you’ll have a really good road map to move forward.

The jars aren’t actually the “magic” in making money work; the budget is. The real magic is the fact that people seem to want to use the jars - people hate to budget - and I think it’s because it’s so tangible. You decide how much to put in the jars, you put the money in, you live on it, you can see when the dough’s running out so you have to stop spending, and you get a real kick out of having money left in the jars.

That’s the part that really blows my mind. I cut the budgets of people I work with by 50%, 70% as much as 90% — what, you didn’t see that show?  – and they still manage to have money left at the end of the month. Whazzup with that?

I’m just working with a couple who had to figure out how much went into the jars as their first challenge. They loved it. Not at first, though.

When I gave them the challenge, they were really disappointed. They had hoped I would balance the budget for them, which is what I usually do. But when I check-up with them this week on how the jars were going, they were very happy - and they had money left!

When I asked why things were going so well, she said she felt empowered being able to figure out the budget and adjust it as their circumstances change. You got it babe!

That’s the beauty - often overlooked - of a budget… it’s your road map so you get to say how much you’re spending in each category. If driving a new car isn’t important to you, you can cut back on your transportation costs and beef up your grocery bill, entertainment, debt repayment or savings. The important thing is that the bottom line balance… YOU CAN’T SPEND MORE MONEY THAT YOU MAKE. If you can’t balance, then maybe you have to find a way to make more money.

As for how often you put money into the jars, again that’s a personal choice. When I worked with my first couple, we put it in monthly. Tasia says she’s still using the jars, but they switched to putting the money in weekly. People find it easier to work with the shorter time frames.

Managing your money isn’t rocket science. And it isn’t magic. It’s discipline. You have to be determined to live on what you make, passionate about getting your consumer debt (credit cards, lines of credit) paid off in three years or less, and convince that it is important to have some money set aside for the future.

If you’ve never had a budget that worked before, try it. You may like it. And it may be the first step to eliminating that sinking feeling in your stomach every time you think about your bank account.

It’s Saturday morning. The snow is crunchy underfoot and it is COLD. When I left the city this morning at 4:00 a.m., it was -2. When I got home about an hour and a half later, it was MINUS 16 in my driveway. Considering it’s the middle of November, I’m of two minds: first, I hate to have to drive hither and yon in unpredictable weather; second, maybe we’ll have a white Christmas… hurrah!

I usually shoot the show on Thursdays and Fridays all over southern Ontario… from Niagara Falls in the west to Bowmanville in the east. Since I live up in the Northumberland Hills, just north of Cobourg, driving to Guelph, Hamilton or St. Catherines is quite the trek, especially if I’m driving in the snow.

I don’t like to be away from my kids more than the two days a week that I shoot, so I typically leave home at the crack of dawn on Thursday, and drive back at the crack of dawn on Saturday. This week my producer Jennifer – I call her PJ, or Peej – called to say that there was a snow storm rolling in and I might want to head into the city Wednesday night, which I did. Good call. The highways were a nightmare on Thursday.

The week’s shooting went without significant incident, though I’m always sad when a family doesn’t get the full $5,000.

Anyhoo, when I landed home and went through my email I came upon a question from the website from a woman who needs some help with some tough decisions. Widowed with a young child – her husband died unexpectedly in his prime – she now has some pretty big decisions to make.

I’m going to help her. But her situation made me think of all those times I say to couples on my show, “He could die, and then where would you be.” Nobody ever believes me. They think I’m being overly dramatic.

My best friend, Cookie, died of a brain tumor at 43. Marilyn died at 45. Teddy’s daddy died at 41. Victoria’s husband died of cancer in his late 40’s. Benita’s husband died in a motorcycle accident when she was in her thirties, with three young kids, and one on the way she didn’t even know about.

Crap happens all the time and we’re faced with stuff we never thought we would have to deal with: death, divorce, disease, disability, devastation. We cope. Most of us do. But it’s a whole lot easier if you have some money in the bank and some idea of what you can do to make it to tomorrow.

On any given day, in any given town, someone is dealing with something hard. The idea that this can’t happen to me is ludicrous. If you think it couldn’t ever happen to you, you’re delusional.

I love my life. Even the driving. I leave early, give myself plenty of time to get where I’m going, and listen to a good book on my ipod to keep me alert and my brain engaged over hundreds of miles of tarmac. And I tend not to worry about a lot of stuff. I definitely don’t worry about money.

I have some savings. I have some insurance. I pay my credit card off in full every month. I have taken care of all the details so I don’t have to waste my energy trying to figure out how to cover my butt.

The families I work with who get it (yes, there are some who don’t), all get taller as I work with them. You can see it on TV. As the burden of not knowing how to get out of the hole is lifted, their spines straighten, they chins go up and their eyes sparkle.

That’s the best part of my job: watching people come into the light.

There’s snow on the ground today. Christmas is around the corner. Promise yourself that you won’t put more money on your credit card than you can afford to pay off. Stay on budget. Have a great life. I did it. You can do it.

One thing that has always driven me crazy is the number of mixed messages the financial world sends out. On the one hand you have companies fighting to give you credit, and on the other you have experts telling you how bad it is.

Then there are the messages about saving for retirement: “Make the maximum contribution every year or you’ll have to eat cat food” versus “You shouldn’t even put money in a retirement plan because the government will give you all you need.” Really?

The insurance world screams: “Term insurance is the best.” “Permanent insurance is the best.” So which is it?

Is it any wonder that the people I meet are confused?

So I’m wondering the wonderful web when I come upon the Canadian Banker’s Association’s quiz, “How financially fit are you?” You answer all the questions and they give you a score.

The problem is all the questions in the CBA’s financial fitness test relate to debt management, which is only a small part of being financially fit.

Hey, I’m the Debtinator, right, so it’s not like I don’t think having too much debt is a bad thing. What I’m objecting to is the fact that the very people who should know how important all the other components of a sound financial map are, are leading the public to believe that it’s all about debt.

It’s not all about debt. Credit isn’t the monster. Ignorance is.

Let’s say you have no debt and answer all the questions on the CBA’s Financial Fitness Test in the negative. Your score is fantastic. In fact, according to them, “You’re the picture of financial health.” Good for you.

So when your roof starts to leak on Tuesday, you’ll be fine because you have set aside money for home maintenance and you’re prepared, right? No. You mean you don’t have a home maintenance account?

How about an emergency fund? Nope?

Or disability insurance? Not that either, eh?

Well, I guess you’re not the picture of financial health.

You see, being out of debt does not mean you’re financially healthy. Having all your financial bases covered does. And you’d think the smart people at the CBA would know that, wouldn’t you? After all, if you don’t have a home maintenance account, if you don’t have an emergency fund, if you don’t have disability insurance, then it is only a matter of time until something you haven’t planned for pops up and pushes you to use your credit.

Over and over I’ve worked with families who had no financial road map and ended up lost. And it’s no wonder, since the people they are counting on for good advice are just as vacant as they are. Too bad. I guess counting on the pillars of our financial community to get it right is expecting too much.

Hi y’all and welcome to my blog. I’m going to use this as an opportunity to tell you what I’m thinking about money, life, TV, the world, parenting, and whatever else pops into my mind. Yup, I’m just gonna blather on. You can let me know what you think, or not, depending on your pleasure.

When I decided to do this, I wondered at first if I’d have enough to say. I mean, it’s one thing to throw caca at the wall, but I didn’t know if I could sustain a blog that would be interesting. The idea of being BORING is anathema to me. Then I got to thinking about how opinionated I am and just how much crap there is out there, and I figured there was little chance I’d run out of things to talk about.

So, here we go.