90 Days to Financial Stability

Do you remember when you got your first credit card? The excitement you felt? The urge to go out and buy something on it right away? Did you take your friends or family out for dinner to celebrate or was your first card a store card, like mine was. When you got your first statement in, did you casually look over the amount owing and just fixate on the minimum payment required? Hey that isn’t too bad, is it? I can afford that! So did you do like I did and keep spending? Then one day you realized that casually looking at the amount owing wasn’t going to work anymore – you can’t ignore it any longer. But what happened? You have been making the minimum payments, haven’t missed one, and you aren’t using the card that much so why doesn’t the amount owing get smaller? That’s an easy question to answer. Very little of the minimum payment goes towards the principal debt; it is eaten up by interest. Interest is how the lending institutions make money and they are going to make sur

Interest rates go up and down, depending on what is happening in the economy.   When times are tough, interest rates go down to entice people who are apprehensive about borrowing money to get in debt. When times are good, the rates go up since people are more open to taking on additional liabilities to get the things they want. Rising interest rates can be good and bad. Especially if you have consumer debt. Credit cards take a beating – or a I should, you, the credit card holder – takes a beating. A card with a $10,000.00 balance and an interest rate of 16.83% could see an increase of $25 a month just on a quarter-point rise in interest rates. That’s $300 in a year all thanks to interest. Auto and student loans and mortgages on a fixed rate will not have a noticeable increase. Or at least they shouldn’t.   When the loans were taken out,   the rate of interest was fixed at that time. However, if you take out a loan when the interest rates are high, you are locked in to

I know I have written on budgets before but because it is such an important topic, here are some more tips. When creating a budget, there are a few rules you may want to use. One of them is the 50/30/20 format. The theory behind the 50/30/20 is that 50% of your income is applied to housing and bills. 30% is allocated for wants and entertainment and 20% goes to savings, investments and paying off debt. There is also the 80-20 rule: 20% for financial goals as in savings etc. and 80% for everything else. That is the ideal. Sadly, many of us can’t adhere to those rules. I live in Vancouver, BC, which is a very expensive city to live in. Property is expensive and so are rents.   50% of income going to pay rent or a mortgage is not unheard of. Too often, people don’t have the funds to be able to put away 20% of income. So what do we do? The best we can. Personally, I would feel hopeless whenever I read some of these budgeting rules. I would feel desperate – with my

Why do I, and other debt coaches like me, advise you to keep a spending journal? What is the benefit of that? It isn’t only for you to see where your money is going but also so you will start to think before you spend. If you know that there is a record of every cent you spend, somewhere it is going to be listed that you spent money you didn’t have on something foolish, you may stop yourself. Even if you are the only one who sees it, you may stop. Or course, you   could just not record it but that would be lying and you don’t want to lie to yourself. Another advantage of keeping a spending journal is when you also record how you are feeling when you want to spend money (or do) you may be able to find your triggers. Did you just get into a fight with your significant other and now want to go out and spend a lot of money? If you have sat down and wrote in your spending journal about this experience – the fight, the feelings it brought up and the desire to buy som

Have you ever said to yourself, ‘I will start the new diet... tomorrow’; ‘I will start my exercise routine ... tomorrow’; ‘I will look for a better job...   tomorrow’; ‘I will take action on paying off my debt... tomorrow’. And guess what? Tomorrow never comes! The consequence of this is that we get fatter, less fit, more miserable at our jobs and deeper in debt. I know how this works, I have been there and done it. Until you decide that the pain of staying where you are in life is greater than the pain of making changes, your tomorrow will never come. I have talked before about taking action and deciding to do something is taking action. You could say that making the decision to do something is the first step. The next one is to create a plan, set a definite date to start and stick with it! Don’t get to your start date and push it until later. Start on your start date and even when the road to your goal gets difficult, stay with it. Humans are great procrastinators a

I posed the question in my Facebook group, Reduce Debt, Revive Dreams, of whether you should pay your debt off first or save money. Most of the people who responded were in favour of paying the debt off first. And that is a good strategy. After all, with debt you are paying interest, you are paying more money so paying the debt off faster makes sense. Right? Yes and no. Paying your debt off faster will save you money in interest payments. But what happens if you have an unexpected expense and don’t have funds available to pay for that expense? Whatever are you going to do? Delay paying for the expense until you save the money? Alternatively, put the expense on a credit card? Probably the latter, right?   Now if you had savings, you would be able to take some of that money to pay for the unexpected expense. Then you would just have to work to replace the money taken from savings. In fact, Dave Ramsey advises you have a savings of $1,000.00 before taking drasti

There are many ways to get out of debt and I will be discussing those in later posts but today I want to talk to you about perhaps the most important factor for getting out of debt. Taking responsibility for your actions. By taking responsibility, I don’t mean that you have to blame yourself. There is no blame here.   What I mean is that you acknowledge the fact that you were the one that got yourself into debt or allowed someone else to. Here’s what I mean.   In 1999, I went from earning minimum wage as a part time sales clerk to making $20,000 a year when the federal government hired me. Six months later, I more than doubled that income when I transferred to another position.    Just before my one-year anniversary, I woke up partially paralyzed on one side of my body. The doctors diagnosed me with multiple sclerosis and within three months, I went on disability and took a 30% cut in pay. The problem was that for that year I spent money as if it was water. A n

I had this blog entry all written on Friday. I thought I had my ‘why’ all figured out. You know, why I do what I do. Then I attended a workshop led by Georgee Low and discovered what I thought I knew was only a wee bit of my why. For the last few months, I have thought that I helped people with their debt because I don’t like to see anyone being left out and being in d ebt leaves a person out of so much. However, as I discovered, my why is more than that. My why in life is to inspire others so that they can feel recognized and powerful.   I do this by living right, honouring and helping with a sense of belonging while making great memories. I guide people through a 5-step process I used to save myself over $400,000.00 in future credit card interest charges so they can pay their debt off faster and regain the power debt took from them. Wow! That is so much more than just helping people not feel left out of life. Wouldn’t you agree? And by living in accordance wi

Did you know that at one time, companies could change the title of a job so they could pay a woman less than a man? A court case in 1970, Schultz vs Wheaton Glass, changed all that.                        In 1972, Katharine Graham became the first female CEO of a fortune 500 company. 1974 saw the passing of the Equal Credit Opportunity Act. Until this time, banks required a woman to bring a man with her to co-sign any credit application. It didn’t matter what her income was and a bank could disregard some of it. Sometimes up to 50% of her income! A year later, the first woman-owned commercial bank opens in New York City – appropriately named the First Woman’s Bank. In Ireland in 1976, women were finally able to own their own homes outright. The Pregnancy Discrimination Act passed in the US in 1978. Now an employer couldn’t fire a woman just because she became pregnant. The Equal Employment Opportunity Commission defines sexual harassment in 1980 e

In 1922, the UK allows equal inheritance. In the US, Rebecca Felton of Georgia, became the first female Senator. She was 87-years-old, a suffragette and activist. Felton only served one day and in that day she called out southern men for an excess of chivalry but a lack of respect for women’s rights. She wrote, “honeyed phrases are pleasant to listen to, but the sensible women of our country would prefer more substantial gifts.” Two years later, Wyoming’s Nellie Tayloe Ross became the US’s first female governor. In 1938, also in the US, the Fair Labor Standards Act wiped out the wage disparity between men and women’s hourly wages with the federal minimum wage. In the UK in 1956, civil service reform gives government workers – both men and women – the right to equal pay. In India in 1961, there was a law passed that banned dowries for women before marriage and allows women to sue if her husband’s family harasses her for money. Sadly, the anti-dowry law goes wide

The UK passed the Married Woman’s Property Act and two years later, in Illinois, the freedom of occupational choice was granted to both men and women. Yet, when Myra Colby Bradwell – who studied as her husband’s law apprentice – tried to pass the Illinois bar to practice as a lawyer, the US Supreme Court ruled in 1873 that the Illinois bar didn’t have to grant a license to a married woman. Mary Gage opened a stock exchange for women who wanted to use their own money to speculate on railway stocks. Meanwhile, the Witch of Wall Street – Hetty Green – was consolidating her own fortune. (In a later entry I want to write about Ms. Green) If you were looking at France in 1881, you would see that women are the right to own bank accounts, married women received this right five years later. The US didn’t grant the same rights until the 1960s and the UK, not until 1975. In 1908, Oregon restricted workday hours for females to ten hours – because of course, women were too fragil

We are continuing our look at women and money over the centuries. Last week, we ended with the 1100s in England. Today, we go across the water to the Americas in 1718. In Pennsylvania, women could own and manage property. But only if their husbands were unable to do so. In 1753, in Russia, there was something called ‘separate economy’. This meant that Russian women could earn their own income and keep it for themselves. The husbands couldn’t demand their wives hand over the money. Just over a decade later, Catherine the Great founded the first state-financed learning institution for women called the Smolny Institute in St. Petersburg. We return to the States in 1771. New York established that husbands needed their wives’ consent if he tried to sell property she had brought into the marriage. A judge would meet privately with the wife to ensure she wasn’t coerced and the signature in question was hers. France in 1791. Revolutionary France gives women equal inhe