Gails Blog

I’m not sure when renting got such a bad name, but if I were to hazard a guess I’d say when real estate started zooming through the stratosphere and a “home” became an “investment.” Then renting  became “throwing away your money.” Never mind the fact that you were putting a roof over your family’s head. Only slugs rented. Anyone who wanted to be wealthy knew enough to get into a home. As you can see for the sub-prime fiasco in the U.S., that attitude left a lot of people homeless when they found they couldn’t CARRY their homes AND EAT.

When I was in my 20s, I lived in a neighbourhood that was suited to a single girl hell bent on a good time. Back then, renting was the perfect solution: one of limited responsibilities and commitment. If a window broke, I called the landlord. If the fridge stopped working, I called the landlord. Renting is virtually a worry-free existence. (All this is assuming you have a decent landlord). 

Home ownership can be a pain in the rump. There’s always something that needs fixing. But home ownership also brings a ton of warm and fuzzy feelings. You have complete control of your environment so, yes, you can paint your living room red. And if you enjoy puttering about, you’ve just secured yourself years of weekend entertainment. Course, when it comes to the rent versus buy question, you can’t just focus on the feel-goods. You’ve also got to get in touch with at the financial facts of life. 

People often believe that a home is a good investment. And virtually every rent-versus-own question is a lead into why you HAVE TO buy your own home. It’s funny how none of those arguments present the positives of renting. Maybe it’s because they’re all in the business of financing home purchases.

First there’s the calculation that compares the cost of carrying your own home (your principal and interest payments and property taxes) with the cost of renting. Sometimes that comes out a wash, which immediately brings people to the conclusion that renting sucks. Hang on now, there are some other factors that weigh heavily in the decision making.

Renters aren’t responsible for maintenance. Home-owners are, and generally the older the home, the higher the maintenance. A good rule of thumb is to estimate home maintenance costs to be 3-5% of the home’s value per year.  So if you’re home is worth $300,000, you should have room in your budget for about $800 a month for maintenance. Sure, this won’t happen every month. Sometimes you’ll go a year or two with little to do. But eventually there will be windows to be replaced, driveways to be repaved, a roof to be reshingled, a furnace, a water heater, a fridge, a stove… I could go on FOR EVER!

Renters also don’t have to shell out the whack of cash homeowners must. There are  “closing costs”:  legal fees, land transfer tax, and other miscellaneous expenses that you don’t pay if you are renting. Assume another 5% of the purchase price on the home will go toward these additional costs.

And first-and-last-months’-rent is a lot smaller than the typical downpayment on a home. Of course, all that MONEY YOU’RE SAVING AS A RENTER has to be balanced off against the fact that no matter how small the principal portion of your mortgage is (and it’s miniscule in the early years), as long as the market is stable or rising, home owners are building equity and increasing their net worth with every mortgage payment.  And that money is earned tax-free. Thanks to the principal residence exemption, the capital gains on the sale of a home is zip, zero, zilch.   The way to offset this downside is to use the money you would have put into things like maintenance and downpayment to building an investment portfolio.

Do you suffer from wonderlust? Are you upwardly mobile and constantly on the move in your career? Stick with renting. People who relocate for work are often better off as renters because they don’t have to worry about the horrendous home acquisition and disposal costs (real estate sales commissions alone are between 4-6%). Unless you get lucky and the value of the home you purchased goes up by at least 10%, you’ll be losing money.  Keep in mind, too, that In the first five years of ownership, most of your mortgage payments are applied to interest, with minimal paid to the principal. So you won’t get this money back when you sell, and you’ll have all the hassles and costs of putting your house on the market.

Buying a home in a neighborhood you don’t know well is one of the top mistakes home-buyers make. If you’re new in town, you may be better off renting a house for six months or a year to get a feel for it. If you like living there and you like your neighbors, you’ll feel much more comfortable signing on the dotted line later on.

Your employment prospects should be pretty stable before you consider buying your own home. Home ownership requires a number of regular payments - the mortgage, property taxes, utilities, maintenance, and insurance. Missing any of these payments can trigger dire consequences. And unless you have a steady work history, lenders will be loath to ante up with a mortgage. 

It’s clear that while there are a number of financial factors that will weigh in when it comes to the rent versus buy question, the decision involves much more than just running the numbers. You’ve also got to look at the emotional rewards and challenges of each alternative.

As a good friend of mine put it, “You can either own capital or you can own property.” If you’re making regular investments and have a well-developed portfolio, you may be content to rent while you’re focused on you’re putting your money through its paces in the market. But if you’d rather put your money to work where you live, then home-ownership’s rewards go far beyond the bottom line.

I’ve been a renter and I’ve been an owner and overall I like home-ownership. Course, like the weather and my underwear, that could change. Who knows what the future holds. 

Good day good folks. I have good news. This week Til Debt Do Us Part was nominated for a Gemini — our second nomination. We won the first time. This is Canada’s version of the Emmys. And while they are much maligned for various silly reasons, no one ever turns one down. It funny how at once we want to pretend it doesn’t matter much, but then we want to WIN! Even getting a nomination means you have one of the best shows going.

I browsed around the Gemini website after the nomination was announced to see who else had been nominated. One of the other shows nominated, At the End of my Leash, is produced by the cute chick who recruited me for Frantic (my producer) and then moved on. She’s a smart girl and deserves the recognition.

I call the show “Til Dogs Do Us Part” because the show so closely follows our format: something is wrong big-time (in their case, it’s the dogs; in our case, it’s the money), there are challenges, and there’s a resolution. There are several other shows that have picked up our format; some are better at it than others. As they say, “Imitation is the highest form of flattery.”

When we won a couple years ago, I had passed on the invitation to the party. I’m not a big party-girl. I would much rather sleep, which is what I was doing when the call came that we had won. My daughter answered the phone and said, “Sorry, we never wake a sleeping Mommy.” Ha! Ken told me at midnight when I got up to pee. I went back to sleep with a very big grin on my face.

I’ve been invited to go again this year. If I’m already in town shooting, then I’ll go. If not, I’ll wait to hear who won. It doesn’t really matter since it doesn’t much change anything for me. Here’s what does:

Yesterday when I got home from work there was a parcel on my desk. It came with a quote and a letter. The quote was from Maya Angelou, whom I admire greatly.

“People will forget what you said,
people will forget what you did,
but people will never forget
how you made them feel.”

The gift was a teapot shaped like a hippo. (No rush of hippos, please.) Alex, who sent the gift, really hit home with that because I’ve been collecting hippos for years, but this is the first one I’ve ever received this way.

The letter was my favorite part. I was very flattered by what Alex wrote, but I was most satisfied by her final line: “I have my peace of mind and life back. Thank you.” 

You’re very welcome Alex. I am so glad you have been able to put my tips to good use. But you are to be congratulated on doing so. It’s very easy to “say”; to “do” is the tough part. And YOU did. I am so proud of what you’ve accomplished, and to have been able to help.

I often hear from people why they CAN’T. They can’t make more money  because they already work so hard. They can’t pay off their credit cards because they don’t have the money. They can’t save… for a million reasons. 

Alex could. Like the little engine, she made it up the hill. So she, and all of the people who DO, should be very proud of themselves. (Take a Gail Hug here.) 

Attitude is half the battle. Knowing you can do it is a big part of success. The other half is plain old hard work. Some people just don’t have what it takes.

Whether we win a Gemini is of very little importance when put beside Alex — and all the Alexes — who have taken the work we have done and used it to make a positive difference in their lives. I am so proud of what we’ve accomplished on this show. And I’m so proud of all of you who have take the tools and made a change. Here’s to you!

I received an email the other day from a young woman named Annie who was inquiring about companies that say they’ll improve a consumer’s credit rating. Was it true? Was it worth the money?

Annie had been in to apply for a car loan at her bank and the lender had declined her loan. She was told only that she should check her credit bureau report. Something there was gumming up the works

If you don’t already know, when you sign a loan application form, you give your consent to the lender, be it a bank, credit card company and retail store, to access your credit bureau information to decide whether or not you’re a good credit risk.

Your credit file contains a listing of debit and credit payments and it includes public record information about how promptly you’ve paid bills, along with all the yucky stuff like collections, judgements and bankruptcies.

You don’t have to be a late payer to be declined. A lender may refuse a loan application simply because the credit bureau’s records indicate that you have other loans outstanding. Yes, everything you owe shows up — including all those credit cards you have even if there are no balances outstanding. When credit is refused, you’re usually advised to have a look at your credit bureau report to see what’s amiss.

In Annie’s case, someone else’s information was being recorded on her credit report. The other woman had a similar name, and it was an honest mistake. All Annie has to do provide the credit bureau with proof of the error and her credit report will be cleaned up.

So back to Annie’s original questions: Can a credit-repair company clean up a mess and is it worth the money? When a company offers to fix your sloppy credit history, it’s often just a ploy to get your money. And wouldn’t you rather spend that fee — anywhere from $250, to $1,000 — paying down your debt, especially when it’s virtually impossible to cover up your past mistakes. While ads for credit repair companies may seem like the cure for a credit life lived less than perfectly, in reality, no credit repairer has the power to change or erase accurate information in a consumer’s file.

If the reason you’re in trouble with a potential lender is because of wrong information on your credit file, you could pay someone to take care of the problem for you, but it’s often just as easy to take care of that problem yourself.

If you’ve damaged your credit rating by missing payments, carrying high balances or over extending yourself financially, you can improve your credit rating. Start by locking away your credit cards. Don’t cancel them because if your credit rating is low, you could have trouble getting new ones. But don’t use them until you are debt free. You must pay at least the MINIMUM to stay on the positive side with your credit history. But paying the MINIMUM isn’t going to get you out of debt. So figure out what it’ll take to get out of debt and then DO IT!

Creditors like to see a solid credit payment history. If you have a credit card, use it every month. Make small purchases and pay them off IN FULL. If you can’t get a credit card — maybe you’ve just come through a bankruptcy —  use a secured card. You deposit money with the lender and they give you a credit card with a limit of between 50% and 100% of the amount you deposited.

Can’t cope with all the bills you’ve got? You have two choices. Declare bankruptcy or find a way to put more money toward you bills: cut expenses or make more money.

You should check your credit files at least once a year to ensure the information is correct. Send a written request to one of the two major credit bureaus in Canada: Equifax Canada Inc. or Trans Union of Canada Inc. More information can be found online at www.equifax.ca and www.tuc.ca. There is no charge for this service. If you’re into instant gratification, you’ll have to pay a fee.

If you question an item on the file, the credit bureau will investigate on your behalf to verify the status of the entry. If an error is found, the credit bureau will fix it and send copies of the updated file to credit grantors upon request.

The longer you exhibit good credit behavior by paying your bills on time and managing your credit wisely, the more your credit rating will improve, until you once again achieve a favorable credit rating. And if you’ve got a good rating that’s been marred by inaccurate reporting, it’s your job to fix it. It’s your credit, after all.

Despite the way I dress on TV, I’m not a clothes horse, and some people’s obsession with handbags, shoes, shirts, skirts, blouses, jackets, watches… well, I could go on forever…  seems weird to me. I’ve been in homes where there are hundreds of pairs of shoes, dozens and dozens of pairs of jeans, and cupboards and drawers full of clothes, along with loads of debt. I scratch my head. What drives us to collect all this STUFF when a) we’re in debt and b) we just can’t afford it?

According to the Stats Man, in 2002 Canadians spent $21.5 billion dollars on clothing and accessories. Women’s clothing made up about half of that spending, men’s made up about 29% and the rest was on kids’ clothing.

So, just how many pairs of shoes can we wear? Do you really need 40 T-shirts? And how can a handbag priced at $600 ever be a good idea, particularly if you’ve got ANY debt?

Clothing, it seems, has a lot to do with how we see ourselves and others. Many people use clothing as an opportunity to express themselves, and just as many use it as a means of judging others. If you’ve caught yourself looking at some fatty walking along in a too-tight t-shirt and cringing, or wondering why that woman would pair that lovely plaid skirt with that horrible polka-dotted ruffled blouse, you’re guilty.

Men and women are so weird about their clothing obsessions that they actually lie to each other about what they’ve paid. Sometimes they lie UP to impress. Sometimes they lie DOWN to appease. But the very fact that you feel you have to lie about what you spent on an item should indicate how twisted this all is.

I’ve listened and watched people almost get into battles over the question of whether to by cheap-and-often or quality-that-lasts. People get all uppity about their brands. And there are dopes who believe that dropping $400 on a pair of shoes, handbag, new jacket, is something they HAVE to do. There are people who’ve told me they HAD to buy it because they were “saving so much.” And there are people who, despite having several versions of an item already, have to acquire the next one anyway.

Now that the prices of food and gas are going through the stratosphere, it’ll be interesting to see if people are willing to cut back on their STUFF so they can keep eating. I’m not willing to take a bet on it since this aberrant shopping behaviour is totally unpredictable.

If you find that you’re guilty of having too much stuff, but you just don’t know where to start, it may be time to take inventory and make some choices. After all, you can’t possibly wear it all, and there is such a thing as “too much of a good thing.”

Empty your drawers, putting everything on your bed in a pile. If you have seasonal clothes, separate the seasons, and put the clothes you’re not wearing this season aside.

Of this season’s clothes, choose those you really love and actually wear on a regular basis.

If you have special occasion clothes, pick out the ones that are your favs.

Put the clothes you love back in your drawers leaving space around the clothes so you can get them out easily. If you’re stuffing your drawers, you still have too much stuff.

Now, do the same thing with your off-season clothes, putting the ones you’re planning to keep in a bin for the swap-over, and setting aside the stuff that’s just accumulated that you NEVER wear.

Ditto handbags, shoes, jewelry, hats, scarves, undies, PJs, and whatever else you’re hoarding. And, of course, there are all the clothes hanging in your closet. Yup. Them too.

You can do this exercise for your linen closet, your towels, your dishes, glasses, cups and mugs, DVDs, CDs, books.

Now, make yourself a promise that you’ll never impulse buy anything again. If there’s something you need, you’ll put it on a list. You’ll price it out, and write a target price beside it. Then you’ll buy it when you have the money to pay for it, and it has hit your target price. If you want to keep simplicity front and centre, add that you’ll get rid of something you no longer use every time your bring something new into your space.

As for what to do with the stuff you’re divesting: charities abound. If you have women’s and children’s clothes, consider your friends and family, then a women’s shelter. If it has value, sell it on Craig’s List. Put whatever you earn toward your debt. If you don’t have any – YEAH! – put it towards your next experiences.

It’s experiences that make us happy, not STUFF. Commit to having a great experience with a friend, your partner, your kids, and then give yourself something to look forward to that you can use to battle off the STUFF MONSTER the next time it rears its ugly mugg.

People are always asking me about what they should be spending in various areas of their budget. I don’t like giving specific answers because there are so many variables: where you live, your priorities, your income.

Speaking of which, I know I’ve said this before but I’m going to shout it this time: YOUR GROSS INCOME IS NOT YOUR IINCOME. Your gross income is yours and the government’s income. If you want a budget that works, you have to work with your NET income.

If you gross $60,000 a year – the average Canadian FAMILY earned just over $66,000 in 2007 — you don’t have $5,000 a month to spend because:

• If you live in B.C. you have to give $12,455 to the government
• If you live in Alberta you have to give $13,491 to the government
• If you live in Saskatchewan you have to give $15,141 to the government
• If you live in Manitoba you have to give $15,317 to the government
• If you live in Ontario you have to give $12,957 to the government
• If you live in Quebec you have to give $16,518 to the government
• If you live in New Brunswick you have to give $15,679 to the government
• If you live in Nova Scotia you have to give $15,590 to the government
• If you live in P.E.I. you have to give $15,353 to the government
• If you live in Newfoundland you have to give $15,189 to the government
• If you live in N.W.T. you have to give $12,568 to the government
• If you live in the Yukon you have to give $13,240 to the government
• If you live in Nunavut you have to give $11,717 to the government.

(BTW: According to the book Tax Facts 15, income taxes account for only 34.7% of the taxes the average Canadian family paid in 2007. Ouch!

Okay, let’s take Manitoba as our example. Instead of $5,000 a month, AFTER TAXES your NET income – would be $3,723.58.  Hey, wait a minute. That’s not your TAKE HOME PAY. If you have deductions your TAKE HOME PAY WOULD BE LESS. You might have to pay employment insurance, CPP/QPP, or other deductions. And if you get company benefits – health benefits, for example – that are taxable, they’re going to take even more tax off your cheque.

Let’s face it, if you earn $60,000, you can’t just divide by 12 and think that’s your income. And if you’re basing your budget – and more importantly, your thinking – on your GROSS income, it’s no wonder you’re going deeper and deeper into debt each year.

So, if you make $60,000 a year and bring home $3,600 a month after deductions, how much should you spend on housing. According to the Gail Pie – and this is only a guide, people, it’s not written in stone – you should spend no more than 35% of your income on rent/mortgage payments, taxes/condo fees, heat, electricity and maintenance. That tops you out at about $1,260 a month.

Does $1,260 seem like a lot or a little to you? With rents and house prices eating a larger and larger portion of our income, we’re becoming numb to the impact on our ability to spend, which ultimately pushes us to use our credit.

According to the Canadian Real Estate Association, the average house price in June this year in Canada was $341,100.

Assuming you put down just 5% as a down payment and amortized for 25 years at 5.5% your monthly mortgage payment would be $1977.94. So you couldn’t afford the average house. Let’s say you got into the market a while ago, and had a $200,000 mortgage, your monthly payment would be $1220.78, which would leave a whopping $40 to cover your taxes, heat, electricity and maintenance. Hmmmm.

But wait, Gail, you said that the percentage wasn’t written in stone.

It’s not. If you can find a way to get to work without spending 15% of your budget on transportation – which would be $540 a month – you could lump the rest into your housing budget. Or if you had no debt, you could lump that 15% into your housing budget, or your transportation budget, or your LIFE budget.

Most of us aren’t don’t or can’t hoof it to work every day, so we have a car and with it a car payment, insurance, maintenance and fuel costs. According to the Stats Man, the average Canadian household spent $9240 a year – or $770 a month – on transportation. But this was back in 2006 (the last year for which he has numbers) before gas was over a buck a litre, so we’re spending a tad more now, me’thinks.

It’s getting harder and harder to make ends meet, while having at least some of the things we WANT.  There’s a better TV, a better cell phone, a better digital camera. How about a holiday down south, or a trip to Europe, or a boondoggle to Vegas? And since the styles of clothes, shoes, handbags keep changing, we have to buy at least a couple of new things each season just to stay current, especially if we have a visible job. And those darned kids just keep growing! Never mind what we have to put out for skating lessons, piano lessons, hockey equipment… the list is endless.

Retailers know how to help us part with our money. But they’re always looking for new ways. According to a Cornell University team, if restaurants use a numerical price format without the accompanying “$” symbol, diners spend more on a meal. I guess without the dollar sign there as a reminder that we’re spending MONEY, we forget. Really?

Okay, so you’re not as rich as you think. Your housing costs are eating a bigger part of your budget. Transportation costs are soaring. Demands on our pockets keep growing and retailers are coming up with new and improved ways of parting us from our hard earned moolah. What’s a person to do

Back to basics boys and girls:

Make a budget. You’ve got to WRITE IT DOWN. And I don’t mean in a notebook, or on a post-it note. I mean on a BUDGET WORKSHEET.  Start by looking at your June bank statement and using only the income you put in the bank. Never mind that some months you earn commission, or your partner does an extra job and brings home a little more, or your deductions fall because you’re close to the end of the year and you’re all paid up. If you have a fluctuating income, then you’ll have to build a two-tiered budget: one for the basics when the well is dry, and one for the extras when the money is flowing.

Get rid of your debt. If you have no debt, you have more money to do the things you want to with your family. If you have debt, get it paid off. It doesn’t matter what you have to give up or how much harder you have to work, GET OUT OF DEBT.  Once you’ve figured out your budget, if the amount allocated to debt repayment means it’ll take more than three years to be debt free, you MUST find a way to increase your debt repayment amounts.

Dump the expenses that you think you HAVE to have, but aren’t related to keeping body and soul together. Once upon a time there were no cell phones and we didn’t die. Once upon a time there was no cable and we didn’t die. Prepared meals didn’t exist.  Coffee was something we brewed at home. Eating out was for special occasions. Nails were something we grew and food never had the word “junk” in front of it.

Now we spend money on energy drinks, buy sixty-two versions of cleaning products (whatever happened to a mop and bucket?) and wouldn’t dream of NOT buying our lottery tickets because if our numbers came up we’d be mad as heck! We throw huge weddings, going thousands into debt for ONE NIGHT of fun and frolic. We throw ridiculous birthday parties for our kids, inviting whole classes so no one will be offended. We spend buckets of money to try and not look old, lose weight, be healthy. (It’s not fooling anyone but you. Sorry.) And we believe that if the deal is good enough, it justifies spending money we haven’t yet earned.

If you want a life that’s not riddled with stress, you’ve got to know where you’re going and how you’re going to get there. It doesn’t mean throwing wads at the wall and hoping something sticks. If you don’t have a written budget that you’re following like the gospel, then you’re a Wad Thrower and you’re doomed. ‘Course you won’t have to wait to die to go to hell; you’re there now!

I was browsing around the web the other day when I came upon an article that talked about an economic phenomenon called the “lipstick indicator.” I was intrigued.

According to Investopedia’s dictionary, it’s a term coined by Leonard Lauder, the chairman of Estee Lauder, the cosmetics company. Lauder noticed that when the economy got tough, lipstick sales would go up. Why? Well, it seems that we turn away from big spending to small indulgences; lipstick fit this bill. In fact, in the months following the September 11 terrorist attacks, lipstick sales doubled.

Three sorts of products sell well during tough times: there are your small indulgences, then there are your morale boosters – to make you forget that your investments are down 20% or that you can no longer afford that nifty $400 cell phone. And then there are your inferior goods – the crap people buy so they can keep shopping even though they can’t afford value anymore.

It seems that not shopping would be just too depressing.

Even the Richy Riches are beginning to feel the pinch, it seems. According to a poll by a U.S. marketing company whose clients include retailers in the luxury goods market, there’s been a 20% decline in spending on luxury goods in the second quarter of 2008, and the lowest luxury consumer confidence level in the about five years.

If you’re south of the border and received a piece of the $50 billion stimulus from Mr. Bush, no doubt you’re still spending. Scott Hoyt, senior director of consumer economics at Moody’s Economy.com says that those cheques could spur spending until September, falsely buoying the economy since consumer spending accounts for about 70% of the U.S. economy. In Canada, no one is throwing money at us in an attempt to keep us spending (though $50 BILLION would go a long way to paying down some debt, wouldn’t it?)

If you accept the idea that small indulgences are one way to offset the yuck of a nasty economy, then the next question is what are you going to indulge in, and how often? I’m not a lipstick girl. Couldn’t care less about make-up. Natasha, who does my makeup for the show, has to practically fight me to do my touch-ups.  For me, it’s not coffee either, since I don’t drink the stuff. But lots of other people do. And while it may have been a small indulgence in the past, Richard Bach ruined it for a lot of people.

Ever since Bach equated lattes with waste, the idea of small indulgences has taken on a different meaning. A small latte at $3.74 a pop works out to about $1,000, which is not a SMALL anything. So there are lots of people who won’t do that anymore.

Of course, if coffee doesn’t work we can always turn to football and the Super Bowl effect. Basically, it goes like this: If a team from the AFC wins the Super Bowl, the national economy will do badly. If a team from the NFC wins the Super Bowl, the national economy will do well. There doesn’t seem to be much proof either way, but in many of the years of the Super Bowl being played, it was more or less true.

What are some of the other signals people use? Umemployment, certainly. Inflation? Yup. Gross domestic product as well. How about rubber bands?

What?

The Rubber Band Indicator is this: when the economy is bad, the rubber bands around broccoli bunches at the grocery store are thinner. Hmmm.

How about an increase in the number of laundry lines as people attempt to cut back on their power usage? Or the percentage of gardens given over to growing FOOD instead of flowers? Or the number of people who are cutting back on cable?

So what are your signals that the economy is in the toilet? What changes have you made to the way you’re managing your money? What are your small indulgences? And what will it take for you to believe that the economy has made the turn and is on the mend?

There’s nothing like a great back-to-school sale to get a person’s juices flowing. Shopaholic or not, the new school season brings out the crazed consumer in most. Clearly there are smart and not-so-smart ways to arm our kids with all the stuff they’ll need to face a new school term, but the distinction is not always clear. So here are some guidelines:

DO shop the sales. You can make your dollar go a lot further by gathering up the flyers and doing a little prep work. I buy my kids’ next season’s clothes at the end of the current season, usually at fifty to seventy percent off. Add up the cost of a snowsuit, boots, and the next-size school wardrobe and the savings are huge.

DON’T buy things you don’t really need no matter what a great price they’re going for. Going out of business sales and retail closures can tempt even the savviest shopper. Make a list before you go and stick to it. 

DO involve your kids in the experience. Giving them a budget to work with for school supplies or at least part of their clothing purchases will initiate them in the budgeting process. Help them to set priorities and to determine quality.

DON’T be unilateral, as in “You can’t buy that. It’s stupid.” Once you give your child the money you also have to ante up the responsibility or she won’t learn a thing. If she’s determined to make a bad purchase (in your opinion), let her. The consequences will teach the lesson. Just don’t stick your hand back in your wallet to rectify the situation when she sees the error of her ways. With responsibility should come accountability. Let her earn the money to rectify her problem.

DO hold off on shopping until you’ve done a complete inventory of what your child has and what he needs. If last year’s jacket still fits, that’s one less expense. And if you wait until he’s back in school to do the school-supplies run, you’ll end up getting what he needs, not what he thinks he needs.

DON’T forget about extra-curricular expenses such as sports equipment, music books, uniforms and the like. You’ll likely have to come up with extra money during those first few weeks of school to cover all sorts of activities, so hold some back when you’re off shopping.

DO stick to your guns about what you can afford to spend on your child’s clothes. Even if she has to have that jacket, you can say “No.” She won’t break. You could, of course, allow her to upgrade using her own money to make up the difference between what you’re prepared to spend and the brand she absolutely has to have

DON’T miss the opportunity to guide your kids. This is your job. Remember to keep talking about the cost in terms of what else that money could buy, as in “Sam, I know you really want those jeans, but you also wanted to save for your ski lessons. Which one’s more important to you in the long run?”

DO show your children your budget so they have realistic expectations. Many parents hate to talk about money with their kids. And they’re dead set against disclosing the realities of their financial circumstances. Then they get ticked when their children don’t show sufficient appreciation for how hard they have had to work to provide those no-name jeans. Well, if you don’t tell ‘em, how are they supposed to know? Being smart about money isn’t intuitive. It’s learned. And you are your children’s most influential teachers… of both good habits and bad.

DON’T burden your kids with the horrors of your financial mistakes. If this seems to be a contradiction of what I just said, it’s because there’s a fine line between being up-front and truthful with children, and burying them in reality. Kids deserve to feel safe. Telling them you haven’t got the money to buy groceries doesn’t add to their sense of security. What you want is to create a sense of reality for your children, not to worry them to death.

Very often people are seen in a particular light: I’m a mother to my children, their friends, and their friends’ parents. To some I’m a nut. To the farmers around whom I live, I’m a city-girl. To those people who interact with me at school, I’m a parent or a busy-body or a Crazy Woman. You’ve seen my eyes pop out of my head on TV. Imagine what it’s like when people are messin’ with my children!

My children helped to define who I am. Before my daughter, Alex, came along, I was this sex-pot, career-focused over-achiever who thought the world revolved around me. The whole world. (Hey, don’t laugh about the sex-pot thing… you should have seen me in a bikini before babies!) After I had my children I became a much nicer person simply because I realized that I was so much more. I love motherhood. And I’m damn good at it.

One of the things that helped me be such a good mother was the realization that I couldn’t control everything. When my son was about four I found out that he has Asperger’s Syndrome - a classification of autism. Along with it came a significant language disability. And along with that information came the idea that having a child who had some challenges meant I was not in control - in fact, had never been in control — of all that goes on around me.

I have subsequently shared my story about Malcolm in many places, including a story that still lives somewhere on the internet. I received a note recently from a woman who had read my story and taken strength from something we share.

J wrote:

I love Til Debt Do Us Part and have probably watched every episode, but my question is in fact a comment that is not about personal finances (although my husband could learn a thing or two from you!).

I have just read an article you wrote about your son Malcolm and your family’s experience with his hyperlexia. I cannot thank you enough for this article. My son Stephan is 5 and seems to fit all the criteria for hyperlexia, although we are still waiting for his developmental assessment (he has finally been seen by an SLP and is slated for some therapy this summer).

Thank you for sharing your fears, frustrations, and above all your son’s success. I can relate to almost every word and it brings genuine hope to me and my family - instead of constant fear and worry about my little guy’s future.

J’s note got me thinking. Y’all know me as The Money Girl with a pretty good idea of how to put food together. But I’m also the mother of a child with Asperger’s Syndrome. And I’m the mother of a child who is Gifted. I’ve been married three times and in my first Wifely Role was abused, so I continue to work to try to get the message out that abuse is not the fault of the abused. I’m the daughter of an alcoholic, which makes me the cheapest date in town since I’ve made the conscious decision not to drink. I’m a step-mother, a grandmother, and a friend - although I’ve been left on the earth by some people whom I loved dearly and miss like mad. Sometimes I feel lonely. Most times I feel blessed. I work hard to be happy. And I work hard to make as many other people happy as I can, not doing what they want, but being there for a hug or a kiss or an ear.

We are all many people. We’re smart about some things and not-so-smart about some others. We can help people who need what we know, and learn from people who know what we need. But we have to find each other.

It’s funny the different ways the world has of putting people together. I recently watched an inspiring video called The Last Lecture by Randy Pausch, a professor at Carnegie Mellon University. Professor Pausch died of complications from pancreatic cancer this summer at the ripe young age of 47. The gist of his lecture focuses on how he achieved his childhood dreams.

This got me thinking about what my life is like relative to what I thought it would be like, and how I’ve achieved my dreams. I’m not done thinking. It’s a big question.

Too often we get caught up in what is missing from our lives, and forget to look at what we have achieved, the riches with which we are surrounded, and the beauty of every moment. Not to get too sappy, but when was the last time you thought about how WONDERFUL your life is?

Never mind that you are lonely. I’ve been lonely. You change lonely by going out and touching someone. Thanks Brownie.

Never mind that you are sad. I’ve been sad. You change sad by thinking of what you have that you can be grateful for. My beautiful children are always the first things that come to mind.

Never mind that you wish your life were different. I’ve wished my life were different, and then I’ve made it so. Not overnight. No. Big changes take both commitment and TIME. But my life has changed in remarkable ways over my 49 years, often following paths I could never have predicted.

The key, I think, is our willingness to play the hand we are dealt, but play to WIN. Randy Pausch talks about this in his lecture. It’s our willingness to look at the donut, not at the hole in the donut. And it’s in HUGE ways supported by the people with whom we choose to surround ourselves.

If you’re an alcoholic, it would be stupid to hang out with friends who always wanted to go drink their faces off. If you’re a shop-a-holic, it’s stupid to hang out with people who define themselves by their stuff. If you’re predisposed to sadness, its stupid to feed that sadness with ANYTHING – books, music, movies, people – who create sadness for you.

Randy Pausch’s lecture reminded me that I am the author of my fate, that I am responsible for making my own dreams come true, and that it’s all about attitude.

People overcome horrendous obstacles all the time. They are remarkable people. The thing is, I believe WE ARE ALL REMARKABLE PEOPLE, some of us just don’t realize it.

Today, tell someone you love just how remarkable they are. Do this every month. Find someone who is remarkable – you are surrounded by them – and TELL THEM. Find someone you can help and HELP them. Find someone who can help you and ACCEPT their help. We are nothing if we are not connected. We carry within us the spirit and experiences that would allow us to give so much to others. But like your Momma said, you have to learn to share.

What do you have to share? And who are you going to share with TODAY?

No topic has as much confusion attached to it than the issue of going to, and paying for, post-secondary education. I scratch my head because it seems like such a straightforward thing. You want to go to college or university, you save the money, pay your way and go. Failing that, you get a job and pay as you go. Failing that, you get scholarships. Failing that you get student loans.

What I see happening as young adults head off to the halls of higher learning is a default to the “student loan” option right off the bat. Student loans, it seems, are the only way to get through school. You can live on them. You can drink beer on them. You can parTAY on them. And it doesn’t matter how much you borrow, because you’re getting an education and that’s all that matters.

So how come I see so many people with an “education” and the debt to go with it earning $10 an hour in call centres, retail stores, and wherever else these educated debtors end up. And how could you ever imagine that if you have $20k, $30k or $40k in debt, that you’ll ever get out of the hole earning $10 an hour?

Ya know what? This is, once again, a case of NO PLANNING. We’ve come to believe higher education is our right, and we can have it, damn the cost. We don’t even have to know what we want to be when we grow up. We can just graduate from high school and then head off to get an undergrad degree. We’ll figure it out as we go. The degree is the thing. That’ll mean a good paying job, and we’ll pay off the loan then. Maybe.

Maybe not.

If you want to be one of the dopes who graduates from university or college with a heap of debt and no clear direction, hey, who am I to try and stop you. It’s your right to be as big a dope as you want.

If you’ve decided that option sucks and you’re committed to doing it differently, then I have a series of articles for you to read.

So You Want to Go to College/University is first up, followed by How Much Debt CAN You Afford? Let’s face it. For some degrees - anything with the title Dr. in it, for example — you will graduate from school with the equivalent of a mortgage in student loan debt. That’s the reality. But there are plenty of people taking on more student loan debt than they will ever be able to afford to repay because they think it’s okay. Well, it’s not. The debt you leave school with affects your ability to have a life. 

What’s the alternative to debt? comes next. Yes, there are options. There are people who graduate from school without a ton of debt by working part time (hey, let’s hear from some of you guys), taking a year off to work, or living like the poor students they are while at school and until their debt has been repaid.

Managing Your Money for School includes two downloadable worksheets that you’ll find useful for dealing with your lump-sum money (loans, scholarships, savings from summer work) and expenses, as well as dealing with your monthly living expenses and how to keep them within reason. Download the suckers and USE THEM! If it looks like too much work, you’re probably wasting your money going to university or college since my dumb worksheets aren’t a patch on what some professors and teachers are going to ask you to do. 

But I’m in Debt. What now? offers suggestions for what to do if you’ve graduated from school with debt. 

I found an excellent article, Freshmen Survival Advice for Life that EVERY STUDENT going off to college or university should read. I could not have said it any better than Ruth Ann Raycroft, so take her advice.

TO MY AVID FANS: I want to get this out to as many people as I can. Send an email to all your friends and family who have kids in university or heading off within the next year, so they have some tools available. I was originally going to only do a blog and link to useful material… but it was sadly lacking. Hmmm. So now HERE are tools and information and we just have to tell two people, who will tell two people, and so on and so on and so on. Ready… set… GO!

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A lot of the people who watch my show are not in debt. They watch because they find the stories so compelling. But over and over I’m asked, “How can people get themselves into such a mess?” I’m less aghast. I know falling into the debt hole isn’t as hard as it looks.

First there are the people who’ve had a significant change in their life, but haven’t come to terms with the financial implications. Whether it’s through divorce, the loss of a job, sickness or death, changes in our lives don’t necessarily translate into changes in how we manage our money. So later, when we suddenly realize what we’re doing isn’t working, we’re stunned at the mess we’ve made and at a total loss as to what to do about it.

There are also some psychological factors that play into our Dance with Debt. At a website called The Frontal Cortex there’s an interesting article on how the subprime crisis happened. It boils down to the fact that we’re wired to be more responsive to short-term gains than long-term risks. It’s the old, “bird in the hand” principal. Johan Lehrer says, “Our feelings are thrilled by the prospect of a new home, but can’t really grapple with the long-term fiscal consequences of the decision. Our impulsivity encounters little resistance, and so we sign on the bottom line. We want the house. We’ll figure out how to pay for it later.” Whether we’re talking about subprime mortgage or zero-down home-ownership or whipping out our credit cards so we can go on holiday, the same principals apply. The reward now is more powerful than the potential cost in the future.

There are also a fair number of people who feel entitled. “I work hard, I deserve a vacation.” If I had a dollar for every time someone has said this to me, I could cruise around the world…twice. People believe that just because they want something they have a right to it, regardless of whether they can afford it. That’s how Buy Now Pay Later became such a hit. “I want it. I have to have it. If I can’t pay for it, I’ll just find a way to get it without paying for it.” Then when the bill comes due at a whopping thirty-something percent, people whine about how rapacious the rates are.

And then there are the people who are Delusionally Wealthy. They have a big screen TV, a late model car, computers, the latest cell phone (which, like dopes, they lined up for when they could have been working)… the list goes on. Instead of measuring ourselves by the amount of money we have accumulated (which is what wealth is), we use stuff, things, crap to create the delusion of wealth.

The brother-in-law to Delusionally Wealthy is Capriciously Credit-worthy. These are the people who measure their success in life by how much credit they’ve been granted. I’ve met people who brag about how much borrowing power they have. I remember when we used to braq about how much we had saved. Not anymore. Now it’s all about how deep in the hole we can go. Wow!

And then there’s Hubris, or the belief that god-like we will always be able to magically escape whatever mess we’ve made. There’s nothing magic about money or economics or the process of debt repayment. The belief that we’ll never have to pay the piper, that we’re above the rules, is what gets us into a mess and then keeps us there.

Sadly, even in today’s very difficult economic times (will it get worse?), there are people who cannot smell the coffee burning. For them, and those who love them, the caca is still to hit the fan, and there will be hell to pay and pay and pay.