A Money Coach in Canada

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depressed manJack is a widower living in Victoria. Jack has a daughter, early 20s still living with him while attending college, and a son, mid 20s, living away from home. Both kids require financial help from time to time. His daughter doesn’t pay rent.

He is a professional, taking home $3400 a month.

Here is his financial picture (see if it doesn’t sound like a lot of us canadians!):
Loans-
car loan,of $330.00/mth;
computer loan-65/mth
a consolidated debt loan of $458.00/mth;
mortgage of $754./mth and

condo fee of $290./mth.

Credit-
a Visa card maxed out at $6200.00 with a minimum of 268./mth;

Utilities are :
oil heat-$170./mth
power-60/mth
water-45/mth
phone/internet/cell-200/mth
water heater bill of 460., currently paying 24/mth on this.

My son’s cable bill ( in my name)- total bill 1000., I pay 100/mth on it.

Insurance-
life-30/mth
house-12/mth

Food / Gas-
I spend about 30 a week on groceries and often don’t have it.
Gas costs me roughly 20 a week.
Dog / cat food- 50/mth
My prescription costs-10/mth
Savings-
none

Ouch. If you do the math, there is barely a couple hundred left at the end of each month.

If this were a friend of yours, what might you suggest? It’s a touch situation, no doubt about it … and one I think a lot of canadians can relate to. I’ll give my money coach suggestions next week. (ps: this image isn’t him! he doesn’t smoke!)

Note:  as always, this case study is a real-life issue by one of our present or past  clients over at Your Money by Design.  Details of the person have been heavily altered to disguise the individuals but the issue remains the same.

About the Author


Imagine if Canadians were known for being all over their money. Engaged. Proactive. Getting out of debt. Savvy. Saving. Generous. Nancy wants to help. Nancy started her own journey with money over 15 years ago, and formed her company “Your Money by Design” in 2004 to help others along the same path. It’s not the usual financial advising/investment stuff. It’s about taking control of day-to-day finances –managing monthly cashflow effectively, spending appropriately, getting out of debt, saving. If you're ready to take control over your finances, pop by her business site, YourMoneybyDesign.com

2 Comments

  1. RG

    1. get out of debt by:
    a. stop paying son’s cable
    b. transfer credit card to o% interest for 18 months or so
    c. drop the phone/internet bills – I have a minimum pay on my land line for $15/month.
    d. Not sure if the consolidated debt can also be moved to 0% balance transfer. What is the full balance here?
    This should give him $850 a month before consolidated debt or $1300 including that montly payment. Then 1200 of that should go toward the debt.

    2. I think the life insurance is excessive. Since there is no issue of a surviving spouse and the children are old enough to pay their own living expenses (the daughter would qualify for college loans if something happened to the father), the only issue is funeral and other final expenses. $360/year is a hefty chunk of change to cover that given that the mortality of a 50-something is about .7%. If he’s 70 then I revoke my comment but would still encourage him to make other savings plans to cover funeral and final expenses and ditch the life insurance.

    3. I don’t live in Canada so I don’t have a strong opinion on the $300 utility bills for a condo. That would be reasonable for a single-family house in the US.

    4. This sounds cruel, but if he has a hard time finding money for groceries, then maybe the pets should go.

    5. I wouldn’t ask the daughter to pay rent, per se, but maybe she could pay for the internet/phone/utilities/computer. I’m assuming she pays for her own bills (clothes, food, gas) outside of rent since it wasn’t mentioned. $120/month for one or two people is great.

    6. In the US I would suggest looking at downsizing once the daughter leaves – he might be able to get equity out of the condo while keeping his monthly payment the same. If he could use that to pay down the consolidated debt, credit card debt, and compuer loan, keeping the car loan, he could build an emergency fund and start socking away for retirement more quickly.

    [Reply]

    Aug 05, 2007
  2. The issue is apparent. Start with a book called, “Boundaries: Where You End and I Begin”. This is a powerful hidden treasure; a series of chapters with questions/inquiries building awareness about how your life has been compromised and the legacy of compromises you’ll be passing onto your kids. Once you’re done with this book thoroughly (preferably with a partner), you’ll discover your money situation showing resolve as a side-effect.

    I am a financial planner, and the best of financial designs and strategies will not resolve your problem… even if you see changes occuring immediately and you can be excited about it – because of your own version of a Midas touch, your pattern of behaviour will re-create a different version of the same problem. Don’t examine your finances as the source, examine your self – and your finances will reflect your resolutions. When you start examining yourself first, then consider the strategies, such as redesigning your conventional mortgage, loan consolidations, etc. – make sure you’re coming from a place of strength, not weakness and helplessness.

    Consider for a moment that your life situation exists as something you created for you to evolve – and as long as you don’t evolve, you’ll have to re-create this situation even if someone else fixes it. Others fixing wastes your efforts. You need to face your deepest fears, others can’t face this for you even if they want to (if they do, they need help themselves).

    Have you known someone in an abusive relationship? If this someone ended up in a new relationship, what do you think are the odds that it would be an abusive one as well? What is in common? Is the partner the issue? Money is a relationship too; if you have the answer to the above questions, being broke with money is your relationship – and it’s not about money – it is only a reflection.

    Deal with the ‘real’ issues. You already have the answers. Getting used to the pretense that you don’t already know the answer will exhaust you while you keep running and hiding. See where your money goes, you’ll know where your priorities are. Take a closer look at how you compromise yourself – it’s everywhere; in your job, in your friendships, in your relationships, in your money, everywhere.

    Trust yourself first – use a coach – it may be the best money spent as medicine for the financially aching soul.

    Cheers,
    Kaaizer
    _____________
    money coach’s response –
    thanks, Kaaizer, you brought a unique angle to this. I thought I’d pass along the client’s response:
    “I actually know I have trouble with setting boundaies so I do want to read this book. I was a little concerned about the statement of falling back into the same financial trouble if I don’t sort out my relationship with money. This actually makes sense to me but scared me a little because I do not want to repeat my bad financial decisions! However I have learned a lot from your (ie. Your Money by Design’s) money missions and I am doing my best to stop my ostrich method of hiding from bills & money!”

    [Reply]

    Aug 07, 2007

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