The Mother of All Days

If you’re able to read this, odds are that you are a human being and you have a mother. This may come as a surprise to some of you but, I too, have a mother. It’s true; I am a human being and not just some internet wunderkind blog-writing machine. The year was 1982 when I arrived in this world with a mission to become the incredible blogging wizard that I am today, little did I know that it would be due to the fact that I had managed to accumulate nearly $40,000 worth of debt at the tender age of 28. Did you know that my Mom is actually a writer as well? The big difference though is that she writes plays and novels and I write a sassy blog on the internets for nerds to read. Check out her first novel The Preacher. If you want a copy, let me know and I’ll hook you up!

My mom's first published book!

In case you forgot or haven’t got the hint from all the mom references, today is Mother’s Day (call your mom!), so what better day to talk about my Mom and how she has helped me over the past 28 ½ years! My Mom has always been a great teacher when it comes to money. I grew up in a small town with my Mom and Dad and 4 siblings. It was a busy house with lots of mouths to feed and a frenzy of activity happening all the time. To this day I don’t know how they managed to keep us all fed, pay the bills, and cover all of our school trips and other activities while on a single income. I had a great childhood, but I certainly remember the days when we really were scraping by and eating lots of macaroni and cheese (or sometimes macaroni and bread crumbs). What was most important is that we never went to bed hungry and we always had a roof over our heads. My parents also have a great sense of humour, which made life back home all the more fun for 5 children. Growing up with little really taught me a lot and I can go on for days with stories about how we scraped by, but the point is that you can still have a great life with little cash and a good budget.

I guess one of the most memorable ways that my mom helped save money was with our garden. Every year we would plant rows of delicious vegetables and the savings were incredible. Yes we all really hated weeding the garden. I think that of all the stupid chores that my mom would make us do weeding was one of the worst. The garden wasn’t always a source of frustration (because sometimes you just wanted to dump a gallon of herbicide on the thing and watch them all go!), my Mom would make things fun and loved to do silly things like plant a petunia in the onion patch just so that she could sing that stupid song that went along with it. The amazing thing about the garden was the amount of delicious vegetables that you could get from it and how inexpensive it is. There is nothing like grabbing a fresh carrot out of the ground and tasting how freaking yummy it is! We didn’t just benefit from our garden either, my mom voluntold us to go and pick apples at neighbor’s yards but the pay-off was totally worth it! At the end of the year Mom would make apple juice, pickles, and other preserves and have delicious food to eat for the entire winter. It was amazing. You don’t realize how much work goes into it and how awesome it was until you grow up and leave home! If you’re one of those lucky people who have a yard, you should consider starting a garden. It’s really easy and the rewards are fantastic!

My Mom is not like other Moms – she does not like shopping. I think my mom would rather weed the garden than have to spend more than 30 minutes in a mall. Yes, my mom is a country girl through and through. She liked to get into the store and get out of there as soon as possible. She and I were quite the team when we would go grocery shopping. The important lessons that she taught me were to read the flyers to see what the best deals were. She showed me how certain brands would go on sale and the sales would rotate every week. We almost never paid full price for anything. If the name brand stuff wasn’t on sale, we would buy the store brand. I learned quickly that when you’re cooking things from scratch anyway, it didn’t matter if you used name brand baking ingredients because the no-name stuff produced the same result anyway. We also never went shopping without a grocery list. When you’re trying to feed a family of seven, you always need to plan ahead for what you need and you have to assess what you already have so that you don’t run out of the staples like milk, eggs, flour, butter, and so on. I remember that we used to buy 5-6 4-litre jugs of milk every time that we went into the city for groceries. It was nuts!

Mom and Me!

I don’t remember my Mom ever talking about using her credit card, but I do remember that we had a line of credit. She taught me that the interest rates were much lower and when I needed to borrow money, Mom would use her line of credit and then outline the amount of money that I would have to give her in order to pay more than the minimum payment and get the debt paid off quickly. I was always the best with money in the family so I paid off a $3,000 loan with my mom in a matter of months. I think that actually boosted her credit rating thanks to me – you’re welcome Mom! Now my Mom is the co-signer for the Student-Line-of-Credit that I have, and I am definitely grateful for that since my interest rate on that is actually lower than the federal government’s student loan program. She’s saving me tons of money on interest!  

Creativity is a wonderful weapon when it comes to enjoying your life and living on the cheap. There is nothing that my Mom couldn’t think up that wouldn’t entertain the heck out of us! My mom used to make play-dough out of flour, salt, and water with a few pinches of food colouring – fun for hours! We even had oomalik which was just corn starch and water. If you haven’t tried this yet, you really should – it’s tons of fun! She sacrificed having her own fancy yard and instead filled half of our backyard with sand so that we could dig it up and make dinosaur trails or build sandcastles with the neighbourhood kids. Our yard quickly became the best place for kids to come play and have a blast because my Mom would rather us have a fun place to play rather than a pristine lawn. My Mom did all sorts of creative cost-saving things like sew our Halloween costumes. I remember one year a friend of mine didn’t have a costume so she literally took a couple garbage bags and shredded them up to make him into the “swamp thing.” It really is amazing all the great things she would do with her creative mind to save money.

Mom - just hanging out in the clouds! 

So my message to you all is this, instead of looking to your Mom (or Dad) to pay for things for you, look for advice from you Mother. Usually the women of the house are the ones balancing the books at the end of the month, so when you talk to your mom, see if she has some ideas to help support your journey to financial freedom without it being monetary. Thank you Mom for all the love and support over the years and for reminding me that a creative mind can achieve anything – as long as you’re a little patient along the way!

Happy Mother’s Day!

Love,

John

Bills Bills Bills

Gail - Frustrated with a touch of Awesome

As Destiny’s Child used to say; “Can you pay my bills? Can you pay my telephone bill? Can you pay my automo-bill?” They bring up a great point – can you pay your bills? I read a disturbing article on CBC news about how debt for Canadians has reached an all-time high of 150%! This means that for every $1,000 that you make, you owe $1,500! Isn’t that ridiculous? And this is just the average! That means that there tons of people out there who are terrible with their money. Admittedly I was happy to hear that I am on the lower end of this average (and quickly becoming well below average – whoo!) but I finally got the same feeling that I’m sure Gail feels everyday of her life – frustrated (with a touch of awesome). There are so many people who need a lot of help getting their debt together. The CBC article was followed by another story about how credit card debt is actually on the decline! Wow, are people are finally using their brains and stopping all the overuse of their plastic? You want to believe that this is happening for a good reason, but the real reason is actually incredibly stupid.  The article described how credit card is on the decline due to the rise of lines of credit which are being used to pay off the credit card companies. Isn’t that the dumbest thing ever? Using credit to pay off credit? I think that people get really confused and forget that their line of credit is not actually their money!

I’ve brought up parts of what I’m going to tell you in this blog entry in past issues (yeah, yeah, I’m being repetitive - it’s been a slow week), but sometimes we need a bit of a refresher about why it is so ridiculous to use credit to pay credit. Rule number one that I was always told by Gail is that if you can’t afford something, you shouldn’t use someone else’s money (i.e. the bank) to pay for it.  The other important point from Gail is that a line of credit should never be used as your emergency fund – it’s a scam. Banks have gotten wise to consumer hatred for high interest credit cards, so now they are offering (so-called) low-interest lines of credit, which unlike credit cards, don’t offer you any reward programs. Banks act like a line of credit is a great safety net that will help bail you out of the debt toilet. Here’s the thing, if you just started your own emergency fund or even just sat down and did a proper budget, you wouldn’t need to rely on the line of credit at all. The first thing I plan to do when I have my lines of credit paid off is to get rid of them entirely! I suggest that you start saving up the equivalent of the line of credit in savings to make a real safety net, and then ditch the line of credit altogether.  We rely so much on a line of credit, but what reward does it give us other than another interest payment to make?

Let’s do some recapping, I have two lines of credit: my regular line of credit with a 10.25% interest rate and is sitting at about $4,500 (you think that’s not much, but it’s almost maxed out). Using the magic compound interest calculator, if I only pay this off in 5 years, I will have paid a whopping $2,830.03 in interest! In 10 years, the interest skyrockets to $7,439.84! This is why it is so important that you avoid taking on more credit than you need. When you get to the point in your life that you are looking to get more credit so that you can pay your bills, that’s when you sit down and make a budget.  Now, there are ways to avoid getting to the point where you are have to use credit to pay for credit, and that’s why I’m here to help. Let me tell you how to pay your bills.

Get yourself a sexy calendar?!

Get yourself a calendar. I don’t give a $hit if it’s an old school paper calendar, firefighters calender, playboy calendar, a whiteboard, or even a fancy schmancy electronic calendar. Just get any kind that will grab your attention and keep you on track. The next thing you’re going to have to do is open your bills as soon as you get them – I know that this can be difficult and the risk of paper cuts is high, but believe me I have been there and I’ve survived. Most bills all come around the same time of the month so if you’re missing one, call the bill collector (yes, most will still charge you interest whether you get your bill or not). Or alternatively, get the applications for your bills on your smartphone! Yes, they have those! On each bill, look at what the expected payment is and make note of it. Next, look at the part of the bill that says when the payment is due. With your calendar handy, write down the payment amount 3 days before the bill is due on your calendar. That’s when you need to make sure the bill is paid because it allows time for processing, saves you from paying late fees, and it will make your credit rating shine! If you notice that all your bills are due in the same week and you don’t trust yourself to keep all your money until the week that they are due, pay off what you can as soon as possible. I am definitely the kind of person who likes to use the internet to pay my bills because it’s so full of instant gratification and I highly recommend you do the same. When you make an online payment, the money is auto-magic-ally taken out of your account and it prevents you from running out of cash at the end of the month to pay your bills. The other positive to this is that it keeps your bank balance in the back of your mind so that you always know how much expendable cash is leftover for the month.

Another great tip I can give you about paying bills is to set up automatic payments with your bank. Some bill collectors will give you the option to have all your bills get charged to your credit card – which is fine as long as you are paying off the full balance every month. However, I’m guessing that if you’re reading my blog, you need to learn not to use the credit card. Did you know that you can change the times that bills are due as well? This is an awesomely smart thing to do if you are paid monthly. It can save you from having all the bills needing to be paid at the same time or make sure that you have money in your account which in turn will prevent you from wanting to dip your fingers in the line of credit honey pot. I’ve set it up with my bank so that all my line of credit payments come out on the 1^st of the month because I find that day easy to remember, and all my other bills such as my cell phone, hydro, and internet are paid as soon as I get them.

It’s super important to follow up and make sure that your payments are being received as well. All those ba$tard bill collectors that I have encountered have online sites where you can check to see how much you owe, when the payment is due, and when they’ve received your payment. We’ve all heard of someone getting someone else’s money deposited into their account or the bill collectors have received payments from someone else by mistake, so be thorough and check if the bill was paid – if your bill was paid by someone else – cha-ching!! I remember I had a friend who once had $50,000 accidentally deposited into his bank account - I think I would $hit my diaper if that happened to me! They eventually corrected the mistake and took the money back – fyi.

Now, about those credit cards; are you paying off your creditors and noticing that you never seem to be getting ahead? That’s because you’re not paying enough Ms. Stinkypants. The Financial Consumer Agency of Canada (FCAC is the acronym and it sounds like eff-co¢k in my mind teehee) has a sweet-a$$ tool that helps you figure out how to get your bills paid off in a smart way, and shows you how much money you will save, and how long it will take you to pay it off at your current rates. Credit card bills are special kinds of evil (I have my credit card listed as “the Devil” in my online banking) so don't sit around picking your bum and waiting for that glorious day that your credit card bill arrives. Make payments early in the month and as often as possible to reduce your interest charges. This information is all broken down further on the FCAC website so check out their tool and actually use it! Remember, you can always call your credit card company and talk to them about lowering your interest rate. If they won’t, shop around for another company and do a balance transfer to a lower rate – yes this is possible.

Do you have a phone, cell phone, internet, and cable bills that you’re paying off every month? Were you aware that if you have the same service provider for all these services that you can bundle that $hit? What the bundle are you talking about you ask? Bundling is something that saves you muchos deniro. I have my internet and cell phone bundled now which saves me 5% off each bill every month. The savings are significant and they get even greater when you have more services combined. Look into the different ways that you can save with your bills. Some of them will even offer you credits on your bill for switching to a paperless invoice – good for you AND the environment. 

So now you’ve got a routine down, your bills are getting paid off, and you’re not paying for unnecessary charges; this is a good time to take a moment to really review all the services that you are paying for. Do you really need to have a $90 cell phone bill every month? Is that $70 ‘porn plus’ cable package really needed? Are you always overusing your internet downloading porn every month and paying extra charges? Make the adjustments to your plans to match your lifestyle. Like any kind of shopping, make sure that you pay for something that is valuable to you and don’t let the monthly bills get on your nerves, make you depressed and want to lie in the tub getting all pruney with depressing albums playing on repeat.  Keep it up and your bills will disappear from your mind like a fart in a tornado.