A Money Coach in Canada

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Hi Nancy!
I love your words of wisdom and the fact that you too have been on the “consumption train” and so I know that somehow you were able to change your thinking. I am so on that train! I sometimes wish that online banking would allow you to organize your money into “files” so that you could actually realize that once it was all allotted, there truly is only so much left for spending on non-necessities.

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

I can’t believe I did this. But this redefines frugality. For £5 I got 5 minutes of a more … natural… pedicure. These fish are a particular breed of Carp and they gently nibble off people’s dead skin and don’t touch the new skin. It took all my nerve and I yanked my feet out at first, but eventually became OK with the sensation. Kinda. Sorta.

I can’t help but have my heart in my throat sometimes when I hear the statistics about people, especially in the States and Britain and especially Greece, who are facing structural financial difficulty. By that I mean: through no fault of their own, they are truly struggling to find work, or their currency has been devalued, or their net worth has plummeted because of the housing market or what have you.

It sounds horrible to say this, but while I’ve known for forever about these kinds of ongoing issues in other countries, like the former Eastern Bloc or Africa, it’s really sinking in at a visceral level now that it’s occurring right next door.

I’m a money coach. I help people manage the money they *do* have, not the money they *don’t* have. Nevertheless, I’d like to put together a series of blog posts for those who are facing particularly acute money struggles. I have some ideas – nothing mind-blowing, just a few topics I hope will prove gently encouraging – that I’d like to post about over the coming months.

Do you have ideas? If you are, or have been, or know someone who is facing serious financial struggle (either short term or long term) would you leave me a comment below? Feel free to use an alias and even a fake e-mail. I just want some REAL feedback.

Thanks,

Nancy

Photo Credit KuddlyTeddyBear

We all know how many messages – explicit and implicit – we receive urging us to Buy.Buy.Buy.

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?

For some time now I’ve been buying free range eggs.

But I’m ruined for that now. I’m currently in England and my hosts … well, I’ll let the photos below speak for themselves.

Dear Chickens Maisey and Mrs. Pepperpot, Thanks so very much for a delicious lunch!

As ridiculous as it may sound, I’m really chuffed to have the opportunity to closely connect my food with its source. And such clucky, feathery, cheery sources!

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