It’s a dilemma for anyone with half a heart (if you simply don’t give a damn when the destitute on the street corners ask you for your change, you need to puzzle for a while then grow your heart two more sizes).

“They have soup kitchens and social assistance programs, and giving them change is just going to enable their dependency and probably will go straight to drugs”. That’s what I said to my softer-hearted cousin when she visited.

But over time I learned that it wasn’t that straightforward. Sometimes my change really did go to a slice of pizza that may have been the only protein or hot food they’d get that day. Sometimes the soup kitchens weren’t open (like Sunday mornings, because all the faith-based places weren’t open!). Sometimes the access to social assistance was so freaking complicated what little energy the individual could muster was sucked dry during the first (crappy pay phone) call to the 1-800#.

So then. I started giving out change if I had it, and dignify the exchange (somewhat) by leaving it entirely to the individual to use as they saw fit. Sorta like the rest of us do.

But I think I just heard a better answer.

What we can say with confidence is that we are to give something to everyone who asks – dignity, attention, time, a listening ear. Sometimes we may give money, sometimes not.

Sounds like a pretty Christ-massy sort of response to “can you spare some change” to me.

I’ll start, minimally, by not being pouty when some of Yellowknife’s folks (often inebriated to avoid hells I don’t know about) crowd in the local post office entrance or bank machine areas.

Anyway, when I was recently in Vancouver, I went to my radical and wonderful home parish in Vancouver’s Downtown Eastside and the priest on deck for the homily, Jessica (yes, a woman priest, YAY and because it’s a High Anglican church it’s “Mother” Jessica), gave the homily, and I have to say it challenged this money coach.

It challenged me to make tithing a central aspect of my finances rather than a one-more-aspect. By that, I mean I want it to become my new barometer of my financial health. This is part of my re-invigorated money-coach-heal-thyself programme to which I committed.

Previous barometers were:

• ability to meet my monthly obligations
• building up a nest egg
• buying a home
• able to live a more luxurious lifestyle
• having savings for nice things

But I want a new barometer.   I want my new barometer of financial success to be:  Am I managing my finances in such a way that I can give 10% of it away?  To organizations that feed the hungry?  To organizations that advocate for structural change, social justice, so that folks aren’t hungry in the first place?  To initiatives that will help the planet?  And of course, to my parish which has been such a rich blessing to me over the years?

I don’t do that right now.  I give a certain amount on a regular basis, and beyond that, on one-offs throughout the year.  But I can, and desire to, make it a central aspect of my money management to give 10% away on a regular basis.   If you want to listen to the homily – it’s about 6 minutes – it’s below.  If you want just the key points, here they are:

1. Tithing is in response to a great vision, not a commandment

2. Occam’s Razor – the simplest model is probably the best one  (10%)

3. Tithing can offer freedom from anxiety

4. It can invite God’s healing into our relationship with money

5. It’s a practice of gratitude

Mother Jessica’s Top 5 Reasons to Tithe from St. James' Anglican Church on Vimeo.

Photo Credit: More Good Foundation

This money coach loves these guys. And you will too. Not to mention you’ll love being a Saver.

And then there are my nearly-self-sufficient friends who live on a lake, grow their own vegetables and quinoa, compost their toilet (ewwww, but it works), chop down trees (don’t judge; it’s likely cleaner than your heat source) to heat their home (bear in mind our weather drops to -40C for days on end) and the latest? Bake their bread in this solar-energy contraption. The bread was fabulous, by the way.

I don’t really dare refer to myself as frugal in comparison.

THE SOLAR ENERGY OVEN

THE GREEN HOUSE (they also have an extensive outdoor garden)

WHAT SURELY MUST BE THE ONLY LOCALLY GROWN CANTALOUPE

HAND CUT AND CHOPPED. WHO NEEDS THE GYM?

EVERY CORNER OF THE HOUSE HAS A RAIN BARREL.

NOT SURE IF THIS IS USED. OBVIOUSLY NOT DURING MIDNIGHT SUN SEASON.

INDEED, IT IS!

This is my question to you. (And I ask this question after truly trying to change my thinking… imagining piles of $$$$$$ instead of clothes, etc., and making budget after budget, but to no avail. I still find myself enroute to yet one more store in my moments of boredom.) Question: Is it ever wise to actually cut up your credit cards? Do you ever give that advice to people? I truly do feel as though my spending and justifying it is out of control…however, if I was ever invited out to 30 great parties in a row, I would have some great dresses and shoes to wear to every single one of them! But, I did not make my RRSP contribution this year, and all those dresses won’t do me any good when I am 70!)

Thanks!
Cathy from Ontario
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Thanks for your question, Cathy-from-Ontario! It’s a good question and you’re in good company. In fact, according to a recent report by TransUnion, the average Canadian owes $25,597 in addition to their mortgage, of which $3,539 is credit card debt.

Here’s what I recommend:

1. Assume you will never win the fight against short-term satisfaction versus long-term anything . It’s well-established that we humans are hard-wired to choose the lesser-but-immediate gain (hot dress) over the greater-down-the-road gain (healthy RRSPs when you’re old or simply a healthy savings account). Don’t beat yourself up over this – I don’t beat myself up – but acknowledge it’s a component of your humanity that needs to be factored in. But it doesn’t end there…

2. You can set up the game to increase the odds that your rational side – the part of you that does want to opt out of the consumption train in favour of thoughtful budgets and your old age – has a fighting chance to win over your emotional and energizing side – the part of you that “connects” quickly to spending. Here are three ways that work for me:

a. Set up savings accounts precisely how you mentioned, ie., for specific items. Mine include “holidays,” “dog emergencies,” “slush fund”. Each of these have a gut-level attraction to me, so I have an emotional commitment to them. Find the items that resonate for you — a gift for your child? a great outfit for an upcoming event? Then set up saving accounts AND set up regular contributions (even $25/paycheque) into them. (By the way, I use ING – super fun for multiple savings accounts – and if you sign up with them, quote my “orange key” as 14641937S1 and we’ll each get $25 or something like that.) Will this create your retirement plan? No, but it will easily and quickly shift your self-perception into being a Saver and trust me, that will start to play out for you over time. Plus, you’ll have money ready for stuff you value.

b. Give yourself full permission to shop when you are bored With This Caveat: you can only buy the item(s) you find the next day. If you still really want it the next day, go for it. Truly. This little trick is the.single.most.effective habit that turned me around. I can honestly say I basically never impulse buy any more!

c. Create a new pathway. Right now, it sounds like you are in a rut: I’m bored -> I shop -> I buy. Think this through right now: next time you are a little bit bored, what is an alternative action you could take? It’s important to identify just one action. Then, try it out. Next time you are a little bit bored take that action and see how it works. It will take a bit of “muscle” to develop the new pathway, so it’s important to start with the little bit bored times. With repeated practice, a new pathway will be created.

3. And the credit cards? Don’t cut them up. But do lower their limit. I have a $1000 limit on mine. A low limit helps us think of them in a healthy perspective – there when we need them, but not for all our wants and dreams.

Hope that helps Cathy!

And, of course, check out my $25 online program which will help on exactly these sorts of issues!

READERS: If you have a question about your finance (not investment or tax stuff, but day-to-day issues) by all means e-mail me: moneycoachcanada at gmail d0t com.

Photo Credit: consumerist

Only active questioning and resistance can prevent us from being mindlessly sucked in.

Here are 3 vital questions worth asking before buying.

1. Am I buying this because I think it will improve my life?

If yes, unpack this belief at least briefly, before walking up to the till.

• How will it improve my life?
• How much will it improve my life – enough to justify the cost?
• How long will it improve my life?

2. Am I buying this because I think I may need it “someday”?

In this instance, it might be worth a quick review:  Do I often buy things thinking I may need it?  If so, have most of those purchases indeed proven to be useful, or are they collecting dust?  When do I think that “someday” will occur, and until then, will I feel good about this purchase?  In light of your answer (either way), do you still wish to make this purchase?

3. Am I buying this primarily because it’s on sale?

If yes, think of at least 5 other uses for that same amount of money.   Now, would you still prefer to make the purchase (in which case, go for it), or would you prefer to use the funds for other things?

I think there are actually two steps prior to writing anything.

The first, in polite Steven Covey terms, is to begin with the end in mind.

In other words: Consider Your Death. You are going to die. Obviously so am I.

Forgive me for being so blunt in April of all times; death has been on my mind. A man of great influence on me personally died last week. I listened to this interview of Nuala O’faolain, a famous Irish author in which she talks frankly and weepingly of her impending death. And most directly relevant, I watched “Really achieving your childhood dreams” a video by a Carnegie Mellon professor who knew this would be his last ever lecture.

It’s worth taking time to think about it, at least a little, before landing on and pursuing our hopes and dreams: When we are on our death-beds, will they seem trivial, or worth the days we had? Will they be lasting and of some kind of substance, or the equivalent of soap bubbles?

Before we put a money towards our dreams, it’s worth being convinced of their death-bed value.

Last weekend was all about identifying your unique strengths.
You now have a composite that should inspire and encourage you.

Now it’s time to apply those strengths to managing your money effectively. So grab a pen and paper (or open your macbook, or whatever) and have at ‘er. Think of at least three strengths and brainstorm new ways you can bring them to bear on your money.

To get your thoughts going:

• Are you a good team player?  Why not consider buddying up with others who also want to become expert money managers and pull together as a team? Smart Cookies did it!  So could you!
• Are you good at engineering or systems?  What would happen if you spent some time developing an elegant, systematic approach to your money?
• Are you a big thinker?  Give yourself permission to think big about your money.   What do you want it to do for you?  For the world?  Then start taking steps (more later on that topic) to realize it?
• Are you good at conversation?  Do people feel at ease with you?  Try talking to people about their best strategies for handling money, and let it inspire you and give you ideas.
• Are you good at Excel?  Create a whiz-bang spreadsheet for yourself
• Are you skilled creating graphics?  Make yourself some charts about your debt, your savings, your net worth and update them regularly.

The list is endless.  The point is, capitalize on your strengths.  Be creative.  Let yourself grow and develop further muscle as you apply your strengths in new ways.

Readers – I’m super-interested if you care to share:  what is one of your strengths that you already use effectively in managing your money?

Monday posts will be a personal praxis of contentment.
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Don’t you love the feeling of sleeping in a cool room with just the right weight and warmth of a quality blanket? Yellowknife of all places is good-blanket worthy! This pure wool blanket was made in Canada by the MacAusland Woollen Mills in PEI. This family-owned business has been making blankets since 1932! Thanks to The Old Faithful Shop for introducing me. And as you can see by the last photo, a little friend also fully appreciates it too (and I indulge him).

Does this story sound familiar?

Amanda was determined to spend more responsibly, and especially to stop using her credit card so much. Time and again, she set a firm plan, and over the coming weeks, sometimes even managing for months, she would seriously curb her spending. But inevitably, one day she would succumb to an irresistible temptation and feel like she had ended up right back where she started. Most often things went something like this: Amanda would turn down invitations out for lunch, she would walk on past John Fleuvog’s on Queen Street, and she would content herself with dvd’s at home (after all, hadn’t she bought the Blu-Ray in order to do precisely that?). Then one day when she was perhaps a little tired, or maybe lonely, she would finally say Yes, and out would come the credit card. And having finally broken the strict regimen, she would then go the distance – go out for lunch with friends, then pop into the nearby shop and top it off with late afternoon drinks. $300 gone.

There was always an immediate rush of gratification, but pretty quickly discouragement would set in.
“I’m in debt. Again”. And then she would blame herself. “I have no self-discipline!”.

Chip and Dan Heath, in their latest book “Switch: How to change things when change is hard” have a useful lens through which to understand what just happened.

We are not a sane species! In fact, we are downright schizophrenic. Our minds have two systems at work at the same time, all the time.
One part of our brain is rational. This is the part of us capable of long-term planning, analysis and delayed gratification for the greater good.
The other part of our brain is instinctive. It is, every moment, acutely aware of whether we are experiencing pain or pleasure.
Our rational side provides us with direction. Our instinctive side provides us the energy to get things done. When these two parts of our brain work together, change happens. But when our rational mind is at odds with our instinctive mind, the rational mind will lose. Every time.

When Amanda was faced with a strong enough temptation that put her instinctive, short-term mind into conflict with her rational mind she pulled out her credit card.

This does not mean she is un-self-disciplined.
It does not mean she has an unconscious desire to sabotage herself.
It does not mean she is lousy with money.

She simply found herself in a situation that put her two systems in conflict.

This is the first thing you need to know about changing your money habits. Long-term success requires an awareness of these two parts of your brain, and finding ways to work with both the rational and the instinctive parts. Over the coming mid-week and weekends, I’ll be posting on how to do precisely this.