A Money Coach in Canada

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Forewarning: I’m in rather a mood. This is going to be a rock-n-roll post re: economics and faith, so faint of heart or sensitive ears go back to watching Rush Limbaugh.

I’m a christian. A practicing high anglican. This post isn’t to explain this choice (short story: it was an aesthetic choice – with a dose of Pascal’s wager, and frankly, the likes of atheists like Jan, Rob, David and Derek provide compelling and thoughtful challenges to me, yet, I remain deeply christian).

As a christian, I am utterly flummoxed by the “christian right,” and I’m talking here primarily about the economic side of it. Seriously. It strikes me as so very, very counter to Jesus’ in-your-face teachings, that I am astounded by some of what I hear from my fellow christians. I just.don’t. get it.

So here’s post number one with my point of view on how faith and economics intersect.

It appears to me that Jesus doesn’t give a rats ass about how much taxes his followers pay, or how secure their wealth is. He gave a damn about how much we share with the poor. Full stop. Without qualification.

Proof texts.

1. Proof Text: Matthew 22: 15-22
When some wheedling religious rulers, called pharisees, asked Jesus, “Is it right to pay taxes to Caesar” Jesus was openly disgusted. He asked them for a coin, held it up to them (in itself an in-your-face act) and asked them whose image was on it and whose inscription. When they responded “Caesar” (d’uh) , I imagine he flicked the coin in contempt back at them as he said, “if it says Caesar on it, then pay Caesar”. He followed that up with a stinging correction: “and give to God what is God’s” The obvious question these so-called religious leaders should have been asking, “what do we owe to God”?
In other words, “You SO DON’T GET IT. Your question was a waste of my time, and yours for that matter. Come back to me when you’re ready for a serious conversation about things that matter”. (actually, the bible itself is more severe, saying that Jesus considered them to have had “evil intent” by even daring to ask the question).

Our takeaway: We’re in whatever taxation system we’re in. Don’t waste time freaking or resentful about how much taxes we pay. We’ll never win that one in any case. It’s absolutely not Jesus’ priority for us. Our priority should be entirely about what we owe God. Ask that question and ask it and ask it and keep asking it.

2. Proof Text: Luke 18: 18-23

A young rich guy, some kind of ruler, came to Jesus asking what he had to do to ensure he had eternal life. Jesus had an immediate response: You know the commands! Don’t murder, don’t steal, don’t commit adultery …
And the rich guy, truthfully or not, said he’d kept all these commandments his whole life. I imagine he was getting his hopes up at this point, and for all we know, Jesus was too. In any case, Jesus respected him by taking the conversation to the next level, and giving a very personal invitation: Give up everything you have to the poor, and you’ll have treasure in heaven. Then come, follow me.

That, my friends, was the make-or-break moment, the true test of whether the young man was serious, or bullshitting both himself and Jesus. He bailed on the project, preferring to keep his possessions, and walked away all bummed out. FAIL.

Jesus was disappointed too – I suppose it would be like being married to someone who remembered your birthday, evenly shared the housework, was a great dad to your kids, but was actually in love with another woman.

Our takeaway: Unless we’d be willing, genuinely willing, to redistribute our wealth, all of it, we miss out on entering the kingdom of God. (one of my favourite quotes is an inner city NYC preacher who said, “we don’t get to heaven without letters of reference from the poor). So if we have issues with redistribution of wealth, we have issues with Jesus.

3. Proof Text: Luke 10: 25 – 37

Almost everyone knows the term “Good Samaritan” but we may not realize what a smackdown story it was. The Samaritans were despised by the religious folks. Much like liberals are despised by the Christian right. Jesus was in your face in this story. Here it is:
A guy was mugged and dying on the side of the road.
A holy priest sees him, and walks by.
A Levite (a special kind of Jew) sees him and walks by.
The Samaritan, (the liberal?) doesn’t stop to ask questions. He goes over to the dying guy and frackin’ helps already. He probably frantically bound up the wounds, kept telling the dying guy to hang on, and got him to the nearest place of healing and on top of all that, paid the bill. Ssly.

Guess who was the hero in Jesus’ story? Guess who is fulfilling the law of God?

Notice, there’s no mention of deserving poor. No qualifications. No resentment because the guy was on welfare and this was his umpteenth handout. No moralism that he was probably selling drugs and was a victim of gang rivalry. No commentary on why the guy had contributed to his own dying state. He was in trouble, he was bloodied, he was dying and the Samaritan just helped.

Our takeaway: We can set ourselves up as judge over who deserves our tax dollars and who doesn’t, and come off like the hypocrites in the story. Or we can drop all moralism, and respond to a need, and be heroes in Jesus’ eyes.

A last, personal word. Bono, when talking about his own faith, infamously reasserted his right to be an asshole. I don’t claim such a right for myself, but the blunt question to me is the extent to which I live out these teachings. Ugly fact is, I Don’t.

If Jesus really asked me to give up all my possessions, I don’t know if I would. I do think I’m pretty damn grateful for all I have, rather than going around all upset about the taxes I pay, and I do think I’m making progress on losing judgmentalism (but only making progress).

It’s not OK that I don’t live this out entirely and it falls completely short of what I believe Jesus wants of his followers. All I can say is, I hope as the years go by, I get better. That would be grace to me. And I hope at least a couple of people who are “poor” by our standards will write me letters of reference.

In the meantime, I want to be on record as a christian who believes christian right is a contradiction in terms.

On Day 4 (Thursday) as Dee’s crash-course money coach, we start to move into decision-making.

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First, high-virtual-five on all the work you’ve done to date.
By now you will have a clearer picture of exactly where you stand.
As you continue completing your spreadsheets, you will discover more important data as well – the fine tuning.

Today, we move into a different mode:  some decision making!

Part of the reason we can feel anxious and perhaps even out-of-control about our money in general, and debt in specific,  is that we haven’t fully put ourselves into the drivers seat.

You actually do have control over the debt.   The first step is to create parameters for the debt as it fits into your overall goals.

So, I’d like you and Chris to have a discussion and sift through the following:

1.  What amount of debt are you willing to live with, simply paying the minimum balances, while you get yourselves fully up-and-running with your respective new ventures (ie., your business and Chris’s new career?)
Are you willing to go further into debt, if need be, to fund your business and get Chris established?  Why or why not?

2.  Does your debt bother you enough that you would consider withdrawing from your investment portfolio to pay it off?  Why or why not?

3.  If you receive unexpected money this year (and we usually do, in some amount or other) – let’s say, $1000 – would you rather put it against your debt, or use it for something else like a getaway, or something for your home?

Tomorrow, we’ll drill down further into this by taking a first stab at creating strategies to reduce the debt, IF that’s what you are ready to do.
Note:  as a business owner, it’s perfectly respectable to hold off on debt reduction!  Businesses very, very often survive on credit for the first few years of operations.

UPDATE:  Dee’s Response

I am extremely motivated to transform my financial situation, but my brain hurts.   My assignment for today was to make some decisions regarding the amount of debt I am willing to live with (continuing to just pay off minimum balances or sacrificing some creature comforts in order to make larger payments) and figure out what I’d be willing to do in order to bring that debt down (withdrawing from investments, using money we were gifted with, etc.)  Transferring credit card balances to other credit cards with lower interest rates, rolling our line of credit into our mortgage, etc.,etc.  Oh, and can’t forget to pay myself first.  What to do?  What to do?  The great thing about this assignment was becoming aware of my choices.  All of a sudden I didn’t feel quite so helpless.

I’ve come to the hard realization that the bank is not my friend.  I am not “richer than I think”.  The bank is there to make money…from me.   Doing this assignment taught me that it’s up to me to decide how much.

Will we have to stop having fun if we want to get out of debt?  No.  We’ll just have to be innovative and creative in the ways we have fun.   We’re certainly not the only ones in our circle of friends who carry debt and are living beyond our means.  I hope we can come together and support one another on our journey towards financial freedom.  Board game night, anyone?

It’s the 3rd day of Dee’s crash course in getting out of debt, and today, she get’s a hardcore assignment.   I gave her a spreadsheet with some debt calculators in it – if you’d like one, e-mail me at nancy at your money by design dot com.

Here is the assignment:
Today, your assignment is to really get a handle on your debt.  This has two components:

1.  Read the fine print, learn the specifics of each credit instrument you employ, and you’ll be in a stronger position to make informed decisions.

2.  Give yourself clear data on your specific debt amounts  – how much you owe, by when, to whom, the respective interest rates, and how long it will take to pay off.
Here is a spreadsheet with debt calculators.
a.  Complete the “consumer debt manager” for a bird’s eye view
note: enter the data in the B and D columns; the rest should self complete.   Ignore the “safe amount” cels at the bottom of the box.  Do enter your monthly income at the bottom to find out what percentage of your income is going to service your debt.
b.  Complete the sheets for your individual debts.   Play around a little – what happens if you increase a payment by 10%?   What would happen if you put a lump sum down on a particular month?  Etc.
note:  enter the interest rate (cel c-10 in each sheet), the beginning balance (cel D14) and your monthly payments (cel E14)

Congrats!  This is a significant step forward in tackling your debt.  It may cause some discomfort.  That’s often part of the process.  The other side of the coin is, you are putting yourself in control.   Tomorrow’s exercise will move forward from “data gathering” to “moving forward”.

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UPDATE

Dee’s response:

My assignment today was to get to know my creditors intimately. I needed to find out who I owe, how much I owe and when I owe it. I also needed to look at interest rates, terms and penalties. I should probably have known all of
this off the top of my head, but I didn’t. I was disheartened to discover the minimum payment we have been faithfully making each month on our line of credit (debt consolidation) is only a few dollars more than the interest that is charged on it every month. At this rate, it seems like we’ll never get it down.

Despite this realization, I remain optimistic. I understand this information gathering is all part of the process.

This afternoon I found it helpful to reflect on the abundance I have in my life. Come on Law of Attraction! When I look at my life from a place of abundance…my family, my friends, my health…I am truly rich. 🙂

2981173354_5c6d11f357_m.jpgOne of the key assignments in my work as a money coach is for clients to track their spending.

Here’s a question for you:

What percentage of your money could you account for, if asked, off the top of your head?

Most of us think we have a fairly solid sense of our spending.

When clients actually go through the exercise of *tracking* their spending, though, they inevitably get a surprise or two.

Common underestimates include:

  • groceries
  • weekend getaways (average estimate: $200 or so.   average actual: $400 or so)
  • kids’ birthday parties

So, today I’ll be asking Dee and Chris to track their spending for a month.  It should take no more than 5 minutes a day, and pays off big time.  For one thing, it eliminates that uncomfortable question “where did my money go?”.   More importantly, it gives valuable data that can be used for decision making down the road.

In Dee and Chris’s case, this will enable them to discover what income they realistically need to support their lifestyle.  It will also enable them to discover if their is some spending that could be minimized so the money can reduce their debt instead. They seem to be fairly careful shoppers, so possibly the info about income needed will be more important.

I’ll be sending them a simple excel spreadsheet template that I use personally (if you’d like a copy, e-mail me at Nancy at your money by design dot com).  Another fantastic option is pennyminder – free online software that accomplishes the same thing (Canada’s answer to Mint).

You can follow Dee’s progress this week on cbc’s website.

Readers: do you or have you ever tracked your spending?  How did it help you?

Photo Credit: Life in LDN

Happy New Year!

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Photo Credit: GarrettC (who is himself out of debt. kudos!)

I thought I’d kick things off in 2009 with a day-by-day case study.   Dee and her husband Chris were selected by CBC Radio 1 to work with me this week – some of you may have heard the initial interview on the Early Edition this morning.

This week, Dee and Chris get an intensive money workout!

They own their own home, have investment portfolios … and $60K of debt.  The debt came about in the past couple years, due mostly to  a series of life circumstances: Chris returned to school and is now starting a new career, Dee got laid off and started her own business and on top of that, they received a $12K levy on their home.

Each day this week, I will be giving Dee and Chris an assignment.  They will then blog their responses on the cbc website, so follow along there!

Dee and Chris, like many of my clients, are uncomfortable about their debt but somewhat unclear about the details of their financial life.  This lack of clarity can exacerbate feeling disempowered and anxious.  Of course, we make more effective, grounded decisions as we increase our sense of control, and as we have confidence The first three assignments are going to focus on obtaining data.  Knowledge is power!

Here is assignment #1:

Ground yourselves in your net worth.

To find out your net worth, simply

1.  Add your respective investment portfolios’ values

2. Add the value of your home  (you may wish to review MLS for comparable home prices, or simply use last year’s property tax assessment value).

then

3. Subtract from the above your outstanding mortgage

4. Subtract your debt.

Note: in your assets, you may also include items of solid value other than your home and investments.  For example, in my own assets I include my Heintzman Piano.

It’s important that your decisions about your debt are not driven by panic!  Instead, it should be dealt with in light of your overall financial picture.  Knowing your net worth is the starting point.

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UPDATE:  Dee’s Response:
You know what they say…admitting you have a problem is the first step to recovery.  Hi, my name is Dee and I have debt.

My first assignment from money coach Nancy Zimmerman was to calculate my net worth.

Knowledge IS power, so it only makes sense to take a good hard look at what money we’ve got and where it’s been going, right?  Why then, did I feel a combination of anxiety, nausea and excitement when faced with this assignment?  The anticipation of being confronted with the truth was terrifying.  I guess I expected things were going to be bleak.  Turns out, we’re in better shape than I thought.   PHEW!
I found this exercise enlightening as now we have a better idea of what exactly we’re dealing with.

I have to admit, it is also of little consolation knowing I am like thousands of other Canadians carrying a heavy debt load.  It has only been in the last two years that our family circumstances (school, childcare, career changes, special assessment,etc.) caused us to go into debt.  It has been stressful and uncomfortable ever since.

As I journey down the road of debt recovery to financial freedom I am looking forward to seeing what my money coach has in store for us next.

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