A Money Coach in Canada

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I have a counterpart in the States, currently residing in the UK. (actually, I’m flattering myself by referring to him as a counterpart. He’s years further into this privileged business of helping people take charge of their money than I am.) Steve Rhode recently posted a thoughtful blog post. He asks the question: are you functionally poor, even though you have plenty of money? Are you debting yourself out of the life you could have, if you paid more attention to your money?

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debtsucksshirt.jpgHave you ever noticed that society seems to define people with money troubles as only those that can’t make the monthly payment? What about the functionally poor. Those people that make enough money to pay their bills but pay so little attention to their spending or finances that they are never late, but never ahead either.

A person can be a debtor without making friends with the collection people. It is possible to do so horribly with your finances that you rob yourself of life opportunities and fun and after all isn’t that the major consequence of debt, lost opportunity?

It is interesting that people see no problem with hiring live-in caregivers to raise their children, personal chefs to cook meals, gardeners to manicure the lawn and housekeepers to help keep things tidy. But when it comes to our finances; who keeps those neat and clean for us?

People of wealth have financial professionals that watch over the books for them and keep things headed in the right direction but people in the rest of society feel that professional money management is unnecessary and an expense not worth paying for. I wonder if that belief is why they can’t make their money go further and have to work harder for it?

In the past, the daily money management in the U.S. or the AllPaid approach in the U.K. has worked best for busy professionals and attorneys, doctors and police officers. The lawyers and medical doctors often worked long hours and just wanted their finances managed well. They also understand the value of a professional service. Police officers on the other hand, I guess it is just a stress elimination thing for them. Coming home after a hard shift dealing with bad people, who wants to deal with the bills after that?

So what shall we call this concept of debting without poverty? Anyone got a good name for it? I’m open to suggestions.

The major problem with debt is not that you get collection calls and a bad credit report. Nope, the big problem is that debt robs you of life. When you go into debt or spend recklessly, you have to earn more and all you are doing is sacrificing future labor to make up for your financial management inefficiencies. At the end of the day all that is lost is the opportunities and possibilities that you would have had if you kept a grip on money that need not have been spent.

Now I’m not talking about labeling expenses like cut flowers as a ridiculous expense, in fact, quite the contrary. If you can use money to bring joy into your life then that’s a great use of money. But in my belief, unconscious and self-medicated shopping does not fall into the same category.

When we overspend in an effort to hide or medicate ourselves from the underlying issues, that just becomes like yet another bottle to crawl in to. It’s an escape and a numbing agent and not a bringer of joy and happiness. As one client told me once, “Shopping is my heroin and the credit card is the needle.” Oh so true.

Another example of this concept of debting without poverty is the therapist that was so busy with her practice that when I examined her bills in detail I found out that she was paying double for a home alarm service, paying for satellite television she was not receiving, was on a high rate long distance plan and was spending way too much for her mobile phone because she was using additional minutes.

When I pointed out all of this to her she kept saying that she had not paid attention to these issues or even looked at her bills because she was so busy earning money to make ends meet. The amount of money she wasted was huge, but she was not delinquent on her bills.

So let’s stop thinking about debt as delinquency and instead focus on debt as a sacrifice of future life energy. If you could, wouldn’t you rather work less so you can take longer vacations or have more time to do the things you want? I would.

You can be a debtor without poverty. Are you?

Money coaches in business for themselves are no more immune than the rest of the population to moments of anxiety about money! And today, for the first time in months, I had waves of anxiety. (and having worked with high-income earners as well as middle-income canadians, I just bet that the likes of oprah et alia aren’t exempt either!). I’ve learned some good strategies to handle my anxiety and offer them to you.

My Top 5 Methods of Handling Financial Anxiety

  1. Distinguish between cash flow issues, and overall net worth. Cash flow can be navigated, including choppy waters. Net worth is the grounding point. (and if any readers are panicking because they don’t have much net worth either — this is just one in five! Read point #5 – it will help!)
  2. Clearly differentiate between self-worth and finances. Fortunes come and fortunes go. So do the tighten-the-belt times. We are not our finances! We are, in Lynn Twist’s words, fully sufficient as human beings irrespective of our bank accounts. So let’s not overencumber ourselves by adding our very sense of Self into the mix!
  3. Remind ourselves of the numerous times we have handled tough moments. Life simply isn’t easy – not for Britney Spears, not for Owen Wilson, not for anyone. The real test, in Kipling’s words, is: “If you can meet with triumph and disaster And treat those two imposters just the same.”
  4. Do some deep breathing exercises. Take deep breaths in … and let go of the past. The past is in no way a determinant of our future. Take deep breaths in … let go of the future. It hasn’t yet arrived. We do no know what it holds, in any direction. Anxiety about the future is based on nothing real. Take deep breaths in … and enter the flow state of Now. In that calmed state, approach your current circumstances and … #5….
  5. Turn the anxiety into productive action. In the calmed state, review the situation, and make plans. They don’t have to be perfect plans. They can be adjusted. They don’t have to be Ultimate plans. They just need to give some methods of navigating through the current financial circumstances. Lay out the facts. Give yourself breathing space to come up with ideas. It may come down to ‘which is least unpleasant’, but more than likely, it will come to something that is manageable.

Do you have strategies of managing your anxiety? What are they?

I’m here at the Entrepreneur’s Business Growth Group, and the guest speaker is from SPUD SPUD– small potatoes urban delivery. I use them — one of the things I spend extra money on (ie organic, lots of local ) instead of the usual grocery stores. Over the year, I’m sure it costs a chunk more (retraction! see notes below), but I want my dollars to go towards: food that is less gm, more local and better for this body of mine.

This isn’t quite ‘live blogging’ as I’d hoped (taking a lesson from Miss 604), but I am typing this on location, and as I hear it and will upload when I get to some wifi!

Speaker:

Darren Stot (with a tantalizing table piece – massive bowl of gorgeous fruit. hmmm…. for decor only? – Later — nope, we got to sample!)Cezanne Fruit

Darren’s been with SPUD for 4 years; SPUD is 9 years, founded by David.

Cool factoids:
SPUD started with: 5 customers, 1 farmer, 2 staff.
Now: 100 staff, 10million rev/year, over 100 farmers, over 5000 customers in vancouver, 7000 across 4 locations. Vancouver, Calgary, Victoria, Seattle. Plan to be in 20 cities over next 10 years. Some have challenged them, “big is bad!” to which they reply: The more that buy from SPUD, the greater impact on environment.

Triple Bottom Line: People.Profit.Planet

Primarily, it’s a Grocery delivery business.
yes, they have a List of Banned Ingredients. eg. nitrates (huh? I’m clueless- don’t know what they are or why they Ought To Be Banned)

potatoes AND
household cleaners
local bakeries, pizzas
ethical bean coffee (some questions are dumb. I asked one. I asked why we buy coffee grown on saltspring at the expense of our neighbours in the south. he explained the beans aren’t grown on saltspring; the beans are processed there. and if you want to go hardcore ethics, choose Cafe Etico = non profit, direct relationship with farmers)

Meat products = humanely reared, organic note: free range can have antibiotics. They sell only organic.

Produce = certified organic
Everything = local (processed here)

speaking of ‘local’, referenced BALLE. Business Alliance for Local, Living Economies.
org that connects local businesses – who then support each other.

Because they sell groceries, but are not safeway/iga, by definition they are a Challenger Brand which requires different marketing, eg. trucks are purple. They do inhouse pr, including guerilla stunts – got a coffin, put a shopping cart in it, had a ceremony on VAG = press

They were first grocery delivery company to turn a profit in north american.

Why? because delivering a unique product, ie, straight from the farm. Kept it small.
Customer loyalty: because sustainable, recycle, etc., customers love them, and stick with you.

The Lovemarks Effect: Winning In The Consumer Revolution

is a book describing how some businesses cause their clients to fall in love with them – cbc, vancity VanCity

(ahem. Apple)- people just love these companies because of what they do. because they invest in the community. 60% of new customers came from present customers. fanbase.

It’s the same price as purchasing organic food from a store.

Question: does organic food go bad quicker?
Answer: yes. so buy it every week and make sure you eat it all!
on the other hand, you get it more fresh, since it’s local.

Q: what are those ‘green bags’ that keep things fresher, longer.
A: don’t know they name, but they work. As fruit goes off, they release ethene gas which makes fruit go bad. Don’t keep bananas or apples anywhere near other fruit.

side tip: Don’t put tomatoes in fridge.

Q: are your dairy products organic?

A. 80% yes; 20% no. and yes, Soya, unsweetened. Yes, rice milk.

REGARDING STAFF
attracts certain people. 8 managers. each one could double money elsewhere, but committed to what SPUD is about. Grocery business = slim margins.
brainstorming. involved in decisions. give ideas on csr. Victoria warehouse: took it on themselves to have ZERO waste. Every single thing is recycled or composted. No waste, at all, leaves the warehouse.

Social purchasing portal = group of businesses that, for example, will employ from downtown eastside. If you do that, other businesses will use you as a business.
For example, VanCity buys from SPUD explicitly because they have hired people from downtown east side.

Students/Interns want to research projects. Advice on how to be more efficient by engineering student; marketing student gave marketing ideas; business students from BCIT gave ideas on retaining customer loyalty.

Biofuels: can come from recycling waste or from cornfields in brazil. Trouble with latter is cornfields get grown for fuel, not food. Chop down rain forests. and you’re still burning carbons. so not always wonderful.

Stat: delivery companies use 95% less energy than a grocery store, they are that more efficient.

1 truck drives efficiently to 100 homes, instead of 100 people driving to grocery store.

also, takes 8 minutes to shop online instead of 1 hr to go to store and back.

…and that was that! informative, and I discovered, frankly, how little I know about the world of organic food, ethics and the food industry etc. Perhaps I’ve been letting myself off easy, hoping SPUD will do the thinking for me.

Also in the group were

Blaise MacClayne, and Teya France (founder of EBBG) who do phone marketing B-2-B

Chris Sturgess, Freedom 55

Diane DeVie, bookkeeper

Kassandra Harfield iris imaging/metabolic typing

Katrina Smith of Thrive Chiropractic Wellness Centre

Robert Wood, lifecoach.

It’s a hard thing, being ‘content’ in this culture of ours.

FurnitureToday I leafed through Martha Stewart Living magazine and saw image after image representing the life I wish I had.
Beautifully outfitted women.

Spacious character homes perfectly appointed.

500-thread-count egyptian sheets.

Sigh.

I live in Vancouver. I have a small (but full of character) condo in the gritty neighbourhood of gastown. I saw those images, and longed for
that idealized lifestyle. “Why”, I wondered, “don’t I have a wardrobe full of perfect clothes?” “Will I ever,” I wondered, “be able to purchase a
large character home in Vancouver, given the market?” and “When will I too be taking semi-annual trips to Europe? Or I’d settle even for annual ones!” Frustration, resentment and discouragement set in.

Two hours later, I was overlooking the ocean and the northshore wooded mountains, in the Barnett Marine Park – a best kept Vancouver secret.
With me were my 2 daschunds, and my closest male friend, an intelligent, loyal, extremely interesting friend who loves me through thick and thin.
A seal caught a fish right in front of us and feasted in full view.
We ourselves ate prosciutto, spicy olives and ferrero rocher chocolates.
It was 90 minutes of heaven on earth.

Love. Pets. Clean (reasonably) air. A place that is ‘home’ regardless of the size.

These things are priceless.

This fall, my renewed praxis is to begin each and every day with a moment of reflection of all that is good, meaningful and satisfying in my life, right now, exactly as it is. It’s not easy to reorient myself towards what is priceless (how crazy, that that should be hard!), but I commit to centering myself in all that is priceless in my life. (and if anyone wishes to send me a Talbot’s gift card, I’ll happily accept that too.)

Question: What is priceless in your life?

Our guest post today is from Pierre, who states, “Keeping up with Jones’ is for suckers!) Pierre and I work (me, part-time) at Canada’s best-kept-banking-secret, a virtual bank called http://www.citizensbank.ca, that puts ethics on the table, right on par with profits. Its parent company is Vancity Credit Union. Pierre is the bank’s IT guru.

First of all I’d like to thank Nancy for her warm invitation to post on her blog.

Nancy and I work and the same great company and I have come to really appreciate and relate to Nancy’s love of technology (I’m a techie myself!) but also for the important work she is doing with her website and blog educating people about the basics of money management.

Some of the case studies I’ve read on Nancy’s blog sound like typical stories, everyday folks trying to get by as best they can but needing a little help to get out and over the trap of living paycheck to paycheck.

Unless you are lucky enough to have learned certain fundamentals from your parents or a course in school (I didn’t have one when I was growing up however did you?) basic money management is still a mystery to most.

With the cost of housing here in Vancouver nearly doubling in the span of 5 short years and the average downtown condo going for 300K+ I can imagine that this can be incredibly daunting to most new young people graduating from college with school debt hanging over them.

I am by no means an expert but for what its worth here are some of my thoughts on the subject:

1. Keeping up with the Jones’ is for suckers. The people who have accumulated the most wealth didn’t do so by being extravagant and showy. Many ‘rich’ people I know drive 10 year old cars and live in very nicely decorated but simple homes (not mansions) even though they can probably ‘afford’ much more. This takes a bit of a heart to heart with yourself: What is the most important thing to you and how do you intend to achieve it?

Many people think that more money, bigger houses, fancier cars is the way but more often than not it leads them down a path which feels more like a trap as they find themselves slaves to the monthly payments, a job they hate and often not having time to enjoy these things they’ve been working so hard for in the end. A lot of people would say more freedom and choice is a good thing to have but most won’t see this until they retire given the current path they are on and then maybe only if they are lucky.

Everyone I’m sure would agree that there are enough things to cause yourself stress so why add money to the equation? Instead of spending time worrying about money all the time why not free yourself up to allow for more time with your family, creative pursuits or (you fill in the blank). I can’t reiterate how important this one is but also the most difficult.

Many people get caught in the rat race trap thinking they have to ‘be’ in a certain place at a certain age taking on huge mortgages and debt and living in absolute terror of how they will manage should their situation change? What if they lost their job, what if the interest rate changes? What if?! If you do your best to lower your monthly obligations to a low as possible you will start to feel that freedom.

2. So how do you start to lower your monthly obligations? I don’t even know where all the money goes each month you say! Simple. To start, do up a monthly cash flow budget! [editor’s note: if you’d like a free, easy-to-use cash flow spreadsheet, contact me, nancy, via my business website – link is just below – and I’m happy to e-mail it to you]. Most of the people I talk to that are stressed out about money have no idea where it all goes every month. You need to get a handle on your month cash flow to understand your spending habits. There are some simple techniques (Nancy has suggested some great ones at www.yourmoneybyyourdesign.com).

One of the simplest and most brilliant ideas was one I read about on Nancy’s blog here, was the separate sub-account. Once you’ve calculated your personal budget at every paycheck transfer your ‘spending money’ – in my case this is money for groceries, gas and entertainment – to a sub account and only spend money on those things from there. It will help you stick to your budget and help to prevent dipping into your savings by having two separate accounts. Certain costs are fixed and others are luxuries which add up quickly (Starbucks, eating out etc…). Once you see where the money is going you can allocate self imposed limits.

3. The harder part is trying to reduce some of your fixed costs like the mortgage. Ok, so I’ve got a hold of my monthly spending. Now what? How do I lower my monthly living costs? Stay or move, settle or co-mingle? Considering the cost of housing in Vancouver has doubled in the past 5 years (although salaries haven’t!) I think many people have thought of alternatives. I believe people will be making some tough choices.

More and more people will either resign to raising a family in a condo or you will see a more occurrences of multigenerational living arrangements where parents and children live together, the parents perhaps passing the family home to their children and the the children looking after their parents in their old age. It is also a real help to growing families who now have some help around the house and certainly makes it easier for the any young family considering children if the parents are there and willing to help with babysitting etc.

The latter is not as typical in our culture so my money is on the first scenario, but we’ll see! If neither of these choices sits well with you and you absolutely want the white picket fence dream then moving to a less expensive city or suburb should be a consideration. Locating by public transit can also reduce the need for a vehicle (this is more realistic for single people or couples living downtown who don’t have kids who need to go to piano, hockey ballet etc!!) but can also help couples potentially reduce the need for a second vehicle if communing by transit during the week in as option.
I would love to hear your comments and I also would be curious to hear what you think a bank could do (say in an online capacity) to provide basic helpful advice to help people reach their financial goals.

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