I’m giving James coaching support to supplement his work on my It’s Your Money program. In exchange, he will guest post reflections on the modules as he works through them.

Here’s why he wants to take the program:

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Hi Nancy,

I guess part of the story of my life is delaying taking action in matters that are important to me, or that I have every indication that they will be important to me. And facing my “money issues” is one of those matters.

I have read or heard from different sources that how you deal with money is a reflection of how you deal with yourself, how much you love yourself. And all throughout my life, I have been dealing with low self esteem issues, with false beliefs about who I am, about others and about life in general. Even though I grew up in a middle to to high class environment, somehow I was always in a space of lack, I viewed life as this unfair structure that just “had it out” for some people, while favouring others. I felt I was one of those people life had it out for. It was this set of beliefs that drove many of my actions in life; the women and friends I chose to be with, career decisions and being clueless in matters of money.

The struggles I felt around my sense of self, others and life have led me to ask questions, that in due time have been answered. I have discovered that I am way more powerful than I originally thought. I have learned that by challenging false beliefs, finding my deeper truth (who I really am), setting clear intentions and acting in alignment with these intentions, I can basically have the life that I want and so much deserve, like everyone. I have also being introduced the concept of integrity, which basically is the way you measure how much in alignment with your intentions, and how to restore it when you all out of alignment or out of integrity. I have learned that shame, feeling bad, beating myself up about having falling out of integrity, is not going to get me back in integrity. I can admit to myself my mistakes while still loving myself, by viewing mistakes as part of being human and a vehicle that drives us to grow.

All these concepts have worked well for me in, slowly but surely, claiming back my life, my personal power. It feels as though waking up from a state of trance and looking around me and seeing the mess around me but instead of ignoring it, just slowly putting things in order. Well, the time has come for me to put my financials in order, to take steps to restore my financial integrity, so to speak. Part of the mess I have woken up to is finding myself in debt. Not too big but big enough to be noticeable and to send me warning flags that if I don’t do something soon, I may find myself in trouble. I see debt as the financial world’s way of measuring how much in integrity we are. If this is the case, I am out of integrity, and I want to restore it. Why did I take so long to take charge? Well, I felt ashamed, inadequate, a bad provider. But these feelings are no way to get to where I want to be, there is no power in feeling ashamed. So I have decided to face that shame and start taking my steps towards financial freedom.

I feel blessed that I have you as a source of guidance, and I can’t wait to get started in learning my way back to financial integrity. This is my intention for working with you Nancy, to learn how to clear all the false beliefs I have about money and my ability to be in a state of abundance. I look forward to this work with you.

To abundance,

James

Photo Credit: Blue Bubble

Here’s the situation. Based on a true story.

You run a well established bank – let’s say, a Canadian bank called CanadaBank.

You borrow $Millions from Canadians by issuing Citizens Savings Bonds and offer them decent interest.

You take that money you’ve raised and lend it out at higher rate to another country, ’cause that’s what bankers do, and you’re a banker.  Let’s call it the country of Perezo.

Perezo.  Oh, Perezo.  Perezo is run by a Military General (MG) who keeps law and order, true, but at dear cost to the citizens.

Western Democracy it’s not.

You hear rumours that MG, who promised he’d use the money to build infrastructure for water and transportation, instead siphons off most of it to his relatives and friends and also uses a lot of it to bribe judges. But it’s not really any of your business and  you are getting the loan payments back on time, with interest, which you then give back to your Cdn. citizen Bond holders, keeping the profit.

But then the citizens of Perezo revolt successfully.

Overnight, MG is gone. In his place is a revolutionary, beloved by the people, named Juan. He pledges to end corruption, fire the bribed judges, and free the people MG had imprisoned. He is also contemplating kicking out all foreign businesses.

Your phone rings.  It’s Juan. He wants a meeting with you.  In Perezo. You fly down to meet him, keenly aware that Juan could give a rats ass about you or your bank.

The meeting goes worse than you anticipated. Juan notes how your bank’s money had enabled MG to purchase the guns that had mowed down citizens in the streets. How it paid off judges who imprisoned some of the country’s best thinkers who had dared speak out against MG and his henchmen. And he shrugs off your rebuttals that you had lent it to be used to build infrastructure, asking you, “where is it? Do you see water towers? Do you see good streets?”.

You develop a cold sweat because you realize you may well not see a penny of that money back. And your bank owes it to the people of Canada.

Readers – over to you. Dig deep into that inner armchair economist in you. What would you say to Juan to convince him to honour MG’s commitment to repay the loan?

ps – This is a real situation faced by a top banker. I have a book he recently wrote about his banking adventures, called “Banker to the World“. Chapter One describes how he handled it.  You get the book (maybe) if you take a shot at responding in the comments!  (one book to give away.  if more than one brave soul answers, it will be by random draw)

Photo Credit: UberZombie

What were you taught about money?

How to bust a poverty mindset

Quick chat with John Chow on culturally-shaped attitudes towards money

Cover it Live twitter chat w/ Krystal on how she got out of student debt so fast, and Marcy on common money messes she sees.

Get New Parents (if yours didn’t give you a healthy approach to money)

Saving. Should you save if you’re in debt? and other such questions.

Debt Elimination: Part 1 Part 2

Disappointment Recovery Plan

And of course all the goodness that was my Online Launch Party!

Rack debt up again – frack!
Whittle debt back down.
Slowly rack debt up again.
Hack furiously at debt.
Outta debt!!! < happy dance >
OOOOOPS – forgot about the car repair payment due but no money ’cause it paid off the debt.
Back in debt.
Discouraged. Pissed off. Get outta town for the weekend on the credit card since it’s racked up anyways.
In more debt than ever.
HACK FURIOUSLY AT DEBT.
Forgetaboutit. Just forgetaboutit.

You cannot get permanent results with temporary changes. (Liz said this first)

If pulling out your credit card because you don’t have the money for your purchase is a lifestyle, your lifestyle is out of whack with your income. It’s time to make some permanent adjustments. Will it be painful? Possibly, but not as painful as living with screwed up finances for the rest of your life. And probably not nearly as painful as you might think.

1. Start by getting a real handle on what you’re doing with your money.

2. Have a sober look at your lifestyle. I don’t mean the lattes.
I mean medium/big ticket things like:

• your choice of transport
• your choice of home
• the extent to which you socialize and how you socialize
• your choice of job (not enough income/location)
• your bright-shiny-objects (lookin’ at you, fellow geeks).

Are there systemic aspects of your lifestyle that are slowly taking you under? Wednesday’s post asked you to identify some small changes you could make to your lifestyle. Today I ask you to think carefully about the bigger picture. Are there some fundamental changes you need to make, permanently? This is not a quick-fix thing; this is a long, hard look thing that will require serious discussion with other people in your life, identifying multiple options for yourself, selecting the one that is most workable, and the resolve to make a permanent shift.

Wbat’s peace of mind worth to you?  What’s that inner assurance that you are getting ahead worth to you?  The lifestyle changes above are the pricetag.   Over to you.

3. Find ways to increase your income. This is a whole topic in itself. It doesn’t have to mean a second job (but it could). You could start a small home-based business. You could ask for a raise. You could see if your investments could do better. You could actively seek higher-paying work. You could get your teen-age+ kids to contribute a bit to the family coffers.

update: for a recap of all Sept Money 101 posts, click here

Photo credit: Bill Luken

So many clients have a quiet hopelessness about their debt. They’ve been nearly submerged in it for so long they cannot conceive of it ever going away. Or perhaps they roll it into their mortgage only to wrack up the credit cards again.

In my experience, here is the underpinning reason folks don’t get out of debt once and for all: They focus solely on their debt – it becomes the central drama of their financial lives – instead of looking at their overall financial picture and seeing how debt-reduction can realistically fit in.

Here’s a practical example. Say Joe and Sue (fictional!) have a credit card of $7K plus a LOC of $11K. Then one day they bump up their LOC by $3K AND THEY PANIC.

Determined to GET RID OF THEIR DEBT they vow to cut back on eating out. To stop going to live theatre. Maybe even to sell the car and use public transit (but they don’t).

See what’s happening? They are not factoring in things like — some nights they work til 8pm and making themselves a meal is just.not.gonna.happen at that point. things like — going out for lattes is a stress-break, a vital little perk in the day, without which they feel pretty despondent (can’t even afford a freakin’ latte??). things like — next month is their anniversary and they are going to want to celebrate it.

When clients work with my program, they develop a holistic plan. One that accounts for their lifestyle and their idiosyncrasies that have unique money components. Only by grounding itself in LIFE AS IT REALLY IS, can any eliminate-debt plan hope to succeed.

There are the Krystal’s of the world, for sure, who are able to make it a priority and have it over and done with in a year. But for the majority of folks, a measured, one step after another approach is what works in the long haul.

Here’s one of the emails I received:

Credit cards and debt collection – is there a law stating how many times they can call you in a day? [credit card collections] has been calling me 4-8 times a day for 2 weeks starting at 7:30am! Last week I wasn’t able to answer my phone (mechanical failiure) but this week I can and I just asked to speak to a supervisor, who was of course out of his office.
Any suggestions? I’ve complained to them about this before.

I recognize that I am in arrears with my account, but does that give them the right to basically harass me? Any links / tips would be helpful. thx.

The answer is “NO!  Creditors cannot hound you like that”.  Most Canadian jurisdictions have laws regarding how creditors must operate.

Before proceeding with the resources below, it must be said:   If you are in a situation financially where creditors are hounding you, you need the help of my business.  Listen to this (my story) and take it from there.

In 2003, the Ministers Responsible for Consumer Affairs all across Canada agreed together to work towards legislating limitations on Collection Agencies in their respective jurisdictions.

BC.  According to the Canadian Bar Association of BC creditors can only attempt to call your employer to verify your employment.  They can call you at work once, only if they cannot reach you at home.  In addition, if you request in writing that they contact you only in writing, they must do so.

Alberta:  This legislation (scroll down on the page) applies to collections agencies (as opposed to businesses collecting money you owe)

Saskatchewan:  Collections agencies cannot call you earlier than 8am, after 6pm, or on Sundays or holidays.  There is further protection from harassment

Manitoba: Scroll down to Section 98 for the limits on collections calls.

Ontario:  They can only contact you three times (including leaving voicemail) within a seven day period.  Further information is here.

Quebec:  The legislation isn’t as specific but it provides some parameters

Newfoundland/Labrador:  Scroll down to Section 12

PEI: doesn’t allow them to contact your place of employment at all (see Section 5)

New Brunswick:  has robust regulations.  Scroll down to Section 14.

Nova Scotia:  see Section 20

Territories – sorry – it wasn’t easy to find legislation!  Worst case scenario, contact your MLA.

Your spending, your debt, your saving?

My on-line money coaching is in beta for four more days and while it is, it’s free in exchange for feedback.

So if you’re uber-frugal, pop by now to sign up!

BUT the soft-launch pricing (effective June 15th)  remains frugalicious – only $25!

In September of 2009, I stood up in front of my friends and family and promised to take another person “for better or for worse”. He took me too, but as it turns out, where he wanted to take me was to the cleaners.

My husband, let’s just call him JerkFace (JF for short), and I met in February of 2003. We started dating in April of the same year, moved in together pretty quickly after that and then went through all the motions you’d expect: We went from renting to owning an apartment, we got a dog, we got engaged and then we got married. We shared everything. We were the lucky ones, I thought, we can easily share everything and it’s not an issue. We never haggle over who pays for what, we don’t fight over who spends more, and we shared everything. We put all our money together, we paid our bills together, and we shared everything. It was to the point where we had to be very sneaky about getting each other gifts because we didn’t have our own accounts, our own cards… who needs it when we have each other?! We shared everything, remember?

From 2005-2008, I worked for a credit union and learned an incredible amount of money and financing and also what sort of trouble those things can get you into. I froze accounts for separating couples, tried to console weeping spouses whose husbands or wives had emptied out the account on their way home to ask for a divorce. I went to a presentation about women and money and the presenter gave a piece of advice that I kick myself now for not listening to: “A woman,” she said, “should always have the means to leave if she has to.” She stressed how important it is to have some money that is just yours, tucked away in a savings account or accessible investment for the rainiest of days. I took this advice and I passed it along, talking to women in bad situations and encouraging them to make sure they had the funds to be able to stand on their own two feet if they had to. The poor women who weren’t at all like me, who weren’t one of the lucky ones like I was, the ones who had relationships that they needed protection from or a backup plan from.

Not me, though. I continued to put every last penny into a joint account and emptied out both my RRSPs and my savings for the down payment on our condo and for our wedding. Even as he advanced at his career and we put him through school when only one of us could afford to go, I didn’t bat an eyelash at pouring my hard-earned money into the life we shared. Now he earned two and a half times what I did, so it was worth it, right? “We” had more money coming in. I didn’t mind that he didn’t have any savings to put towards the wedding, he got paid more so put more towards our bills, right? And once he’s gotten ahead, I’ll go back to school and we’ll pay for me to go. We shared everything, so what was there to worry about?

On October 22nd, 2010 (my 28th birthday), I found text messages in JF’s phone with plans that he was moving out. I was the last to know, he was trying to be considerate by not doing it before my birthday (he’s all heart). So just over a year after we said our “I Dos”, he said, “I Don’t Anymore” and the next morning he left.

He then did things that I never thought he would do, he spent all the money in our account on going out and partying, he refused to speak to me or see me and tried to fully extricate himself from my life. Once all the confusion and the upset began to fade a little bit, I could hear the presenter’s words in my mind as I realized that I didn’t have enough money to stand on my own two feet. If we weren’t sharing everything anymore, what did that mean for me?

In JF’s eyes, it meant I had my salary and he had his and we’d sign a few sheets of paper and that would be it. He figured he’d have to give me some cash to buy me out of the condo (which he was planning on keeping and kicking me out of) but had no intention of paying me any sort of support or paying me back for all the money I had so willingly dumped into our relationship. Alimony? Doesn’t exist, he decided. That was only for if you had kids and the very mention of it was taken by him as a threat and further deteriorated the bits of communication we did have.

So, I found myself staring at a spreadsheet I’d done up at 3 o’clock in the morning, the red digits of my negative expendable income glaring on the screen. Forget being a homeowner anymore, I didn’t know how I’d afford to pay rent. We had so much debt between us that he wanted to split 50/50, all my income would be going towards debt repayment. Forget going to school, I’d have to get a second job just to handle my living expenses. My car, which I’d been thinking of trading in to get a newer car since it was getting old and less reliable, was suddenly an expense that I didn’t even know if I could keep. To say I was overwhelmed would be a massive understatement.

Here is what I did:
• I went to talk to a lawyer. My husband acted as if my seeking out legal advice was an aggressive and unnecessarily hostile move, but it wasn’t. Seeing a lawyer and finding out what I was actually entitled to, regardless of what my JerkFace of a husband thought, was the first step towards me feeling like I had some control over a seemingly impossible situation.
• Did some research and got out my calculator. I crunched a lot of numbers and worked out that JF and I would be sharing the debt 2/3 to him and only 1/3 to me, based on our incomes. I found some tools online to help me calculate how much I would be legally entitled to ask for in spousal support (based on our income differential, the number of years we had lived together as spouses and my age). I printed out bank statements, college transcripts and HomeBuyer’s Plan receipts. I also found instructions on how to put together your own Separation Agreement to take to a lawyer so you don’t have to have them draw everything up (and charge you for it).
• Wrote everything down. And I mean EVERYTHING. Every penny I put on our down payment, every monthly expense we had as a couple, every debt, every asset… I even listed out all our shared property down to tea towels and DVDs.
• Used everything I found to draft up an Agreement and gave it to JerkFace. Was he mad? Yeah, he was really mad. And it was a really hard thing to do. I had to get over this stigma in my mind of a woman “going after” her ex-husband for everything he’s worth as some sort of revenge and realize that I am entitled to be able to go on living my life, even if my marriage is over. He accused me of trying to “financially cripple” him, even though it was right there on paper that even with paying me support and fairly dividing our debt, his expendable income was more than three times what mine would be. I realized that to him, “fair” would be him getting everything and being able to walk away without losing anything or even inconveniencing himself.
• Fought the urge to just give in and give up. Breaking up is exhausting and emotionally draining. At the end of a day where you are working hard just to feel like a normal person in public, the last thing you want to do is fight over money and furniture. There were times when I wanted to say, “Fine, just take whatever you want and get out of my life.” Because it was too much to take on. I had to just keep remembering how mad I would be at myself three months from now, when I have no furniture or can’t pay my bills on time. Just keep pushing through it, and it will be worth it in the long run.
• Leaned on my support system. Taking on a battle that you know could end up in court or worse and go on for years is a really scary thing. I don’t think I have ever been through something that so clearly showed me who my real support system is. The people that sat up with me until the early hours of the morning or let me sleep on their couch when being alone was too hard or brought me care packages wouldn’t let me just lie down and die, even when that’s all I wanted to do. They also wouldn’t let me end up homeless or bankrupt or all the other “worse case scenarios” that were running through my mind. I was lucky enough to have an aunt who offered to help with me legal fees, if it came to that, and friends and a sister who would have let me live with them indefinitely if I needed a place to stay.
• Tried to look at it like it was business and not personal. Stepping back from the hurt and rollercoaster of emotions I was going through and just looking at the numbers, the facts and the figures really helped me feel like I could get through it. The laws are there to protect our rights, even when we feel like we can’t protect ourselves.
Going through this Separation has by far been the most difficult thing I have ever faced. Aside from the emotional beating you take, fear of an unknown future and figuring out how to make it on your own seem unconquerable.

But if I could give advice to anyone out there in a similar situation: Stand up for yourself, even when it’s the hardest thing to do. Don’t let someone else control your future because they think you won’t fight for what’s yours. Get support, get advice and make yourself an expert in all things divorce. This is the first step you are taking in a new life, make it a stride forward towards being a confident and “no nonsense” woman.

I hate to be the type of person who looks back on things with regret, so I try be forgiving with myself about the choices I made through my relationship. I made them with the best of intentions and because I really loved and trusted someone and those are all good things. So, if I could go back and do it over again differently, would I? No. Will I ever make those same mistakes again? Absolutely not.

Truth be told I feel pretty self-conscious every time my personal story of my 20-something misadventures with money get splashed in mainstream media, like it did today in the Toronto Star. The reason I drop my guard is simply this: If I could turn things around, anyone can, and that’s a message I believe a lot of Canadians need to hear. There is hope. And if you are in a bit of a money muddle – or in financial hell – you are not alone.

We live in such a pressured culture, don’t we. I think I’ve generally hit my stride in terms of being unapologetic for myself – my values, my beliefs, and my finances – but I sure know what it is to have felt I had to present a particular image, or spend what I didn’t have in order to fit in, or (and this is kinda sweet) to help someone else out ’cause I cared yet didn’t want to admit to them or myself that I, too, was in a bad way.

So yes, I’ve known the acute discomfort of more than one “pay up” phone call (and will *never* give American Express any business again! #wayunnecessarilyrude) and sleepless nights wondering how I’d manage the coming month. And yes, the worst ever was having my credit card cut up by some high-school kid behind the till of the Shopper’s Drugmart on Broadway Ave in Vancouver.

But I’ve also known the quiet inner confidence of choosing to take charge of the mess. Of putting one step in front of the other, and after withstanding setbacks, discovering I really did “arrive” at a much better place.

If you are in need of a safe place to take a look at your own finances, and if you would like to put some building blocks in place to help you move forward, I can help — but not quite yet! I’m on a sabbatical from money coaching until January 2011. At that point, my business Your Money by Design will be live and kicking again, and ready to help (at entirely affordable pricing). If you would like to be on the wait list, feel free to e-mail me personally at money coach canada (all one word) at gmail dot com. Helping folks who are going through what I went through is one of my greatest joys. And I promise you, with time and a bit of effort, you can have your own turnaround story.

With care and high hopes for us all,

Nancy

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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?