While higher interest rates can be good news for traditional savers, they are more likely to bring even more bad news to those of us who deal with household debt. And, according to Global News, that level of consumer debt rose to an alarming $2.2 trillion as of the fourth quarter last year.  

With inflation hitting levels not seen since the 1990s, a trend that will almost certainly lead to higher costs for borrowing and using credit, Save with SPP decided to find out what the experts say about speedy ways to get debt under control.

Writing for MoneySense, noted financial author Gail Vaz-Oxlade says getting “a sense of control over your money and your life” is not easy, but is well worth the effort.  She recommends we all do “a spending analysis to see where your money is going, so you can put it where it does the most good.” Next, she writes, “create a debt repayment plan that gets you out of consumer debt in three years or less, even if you have to get a second job.”

The third step, she adds, is “creating a balanced budget,” so that you know exactly how much you can afford to spend on things before you actually start spending. “Make yourself accountable by telling friends and family ‘sorry, it’s not in my budget this month,’” she adds.

Following these steps, she advises, will lead you to a future where you have “no debt, a balanced budget, and a big fat emergency fund.”

The Zilchworks.com site outlines a number of different strategies for eliminating debt.

Under the “annual percentage rate” strategy, you target the debt source (credit card or line of credit) that charges you the highest rate of interest first. “Once you’ve crushed the worst offender, you move on to the creditor with the next highest rate,” the site advises.

Other strategies outlined on the site are similar – put extra on one, pay it off, and repeat. This can be done, the site explains, in a number of ways – lowest balance first, highest balance first, lowest payment first, etc. In all strategies, the concept is a sort of snowball/avalanche effect – as each debt falls, you are paying more per month on the next targeted debt, and so on.

At Credit.com, a few additional strategies are outlined. “The first and most important step in getting out of debt is to stop borrowing money. No more swiping credit cards, no more loans, and no more new debt,” we are advised. “Resolve to live on a cash basis while you make your changes.”

Other advice is to “always pay more than the minimum amount” on your debts. “Make this an iron-clad habit,” the site advises. Another nice bit of advice is not to slip back into old habits once you have paid off your debt – make sure your post-debt budget focuses on you staying out of debt.

Save with SPP and debt are old friends who only recently have parted ways. Here are a few other ideas we picked up along the way.

• The 95 per cent rule: If you don’t think you have an extra dollar to put on debt, this idea may help. Take five per cent of your take-home pay and put it immediately on debt. Then live on the balance. It is sort of like the Uncle Joe rule of saving 10 per cent of your income and living on 90 per cent, but tweaked so that it targets debt.
• Get your credit cards out of your wallet: If you are maxed out most of the time, you probably pay the minimum owing, then spend with your card some more, and are maxed out again, with a higher minimum next month. Give the card to a spouse, or a relative, or trusted friend, and tell them not to give it back unless you have a real emergency. By not using the card, your minimum payments will gradually go down.
• Stop making automatic payments for things on your credit card: If you are a super responsible person who pays off 100 per cent of your credit card each month, paying other bills, like utilities, or Internet, or streaming subscriptions via credit card is a good way to earn more cash back or points. But if you don’t pay off your balance each month, you are basically borrowing money to pay for living costs at maybe 25 per cent interest. It will catch up to you, and in the worst case scenario, you’ll bounce your bills due to having a maxed out card. Pay your bills a different way.
• Save up for trips: If you are going on a trip, save up for it and pay it in advance, rather than paying as you go with a credit card. That way, you don’t come home to a huge bill, and avoid feeling financially punished for taking a holiday.

When you are in debt, talk to friends and family about how they dealt with it. Everyone, it seems, has had a brush with problem debt and have learned valuable lessons on how to turn credit problems around.

And, once you have defeated debt, you’ll have more money to put away for the greatest vacation of all – life in a post-work reality. An excellent companion on this journey is the Saskatchewan Pension Plan. They’ll invest the money you contribute, at a low cost and with a stellar track record, and when it’s time to retire, will present you with your retirement income options. Check them out today!

Join the Wealthcare Revolution – follow SPP on Facebook!

It wasn’t all that long ago that cash was considered the smart way to go, in terms of saving and budgeting.

Who can forget watching the great ‘Til Debt Do Us Part TV series, featuring Gail Vaz-Oxlade, where a key lesson to managing household budgeting was to save up change and bills in jars, one jar for food, one for fuel, one for entertainment, and so on. The jars of cash forced you to follow a budget, and credit cards and lines of credit weren’t allowed.

And what about the advice of American financier Mark Cuban about the dealmaking cash provides – he notes that “you’ll get better results if you negotiate with cash.” As an example, if you say “all I have is $40 cash,” maybe the vendor will settle for that instead of a higher amount. No such wiggle room exists with credit and debit cards.

But along came the pandemic to make the world tremble for cash users.

“More businesses are going cashless during the COVID-19 pandemic and are asking customers to use debit, credit or app payments as a precautionary measure,” notes the CBC. Some retailers are refusing to take cash altogether, others deal with it in a safer way, using tongs and little cash boxes.

The concern with cash is, of course, health-related; handing over bills and cash is a hand-to-hand action that does carry risk. Contactless payments are seen as safer.

In the U.K., contactless payment has risen by as much as 64 per cent of all transactions, reports MSN Money.

Major retailer Asda is now accepting payment from a wider range of mobile devices, and contactless payment limits – once quite small – have been ramped up, the article notes. The limit is now 45 pounds – about $78 Canadian.

Here at home, NFCW reports that Visa and MasterCard limits for contactless payments have jumped up to $250.

A final indicator of the cashless society is the use of automatic teller machines (ATMs). In the UK, reports PA Media via MSN. ATM use is down a whopping 60 per cent.

“When people do use a cash machine, they are typically withdrawing more money. The average cash machine withdrawal is now around £80, up from around £65 before the lockdown,” the article notes.

Seventy-five per cent of Brits surveyed say they are using less cash these days – and 14 per cent say they are keeping any cash they accumulate at home, perhaps in a piggy bank, for emergencies, the article concludes.

So King Cash has been dethroned, at least until the pandemic is over. No doubt the throne will be reoccupied one day when the pandemic is under control, and it’s safe to shop with a wallet filled with bills and coins.

Got some cash piling up? While saving it for an emergency is a great idea, so is saving it for your retirement. There aren’t as many people lining up at those green coin counting machines these days, so bring your piggy bank of coins there and convert it to bills. Those can then be tucked into your savings account via an ATM.

The Saskatchewan Pension Plan has a great “pay yourself first” feature worth knowing about. You can set up SPP as a bill in most online banking applications. Then you can pop those piggy bank dollars into your SPP as easily as you can pay the cable bill. Not a member of SPP? Check them out today – 2021 marks their 35th year of delivering retirement security.

Join the Wealthcare Revolution – follow SPP on Facebook!

Gail Vaz-Oxlade, the well-known author, blogger, and TV personality, provides just the medicine we need if we have stumbled into the horrible minefield of debt.

This book reminds one of going to your parents, cap in hand, hoping for help with the bills, and instead getting a lecture on how you need to fix your problems yourself. As the book says, there is no easy way out of the debt trap. Debt-Free Forever provides a detailed, step-by-step plan right your personal ship of state. So if you are sitting on a pile of debt that is starting to feel uncomfortable, your folks will be glad to hear you’ve picked up this book.

The great writing and the “we’ve all been through this and we can fix it” tone of this book is very encouraging and inspires you to help yourself out of your own mess. An example – “it’s a good idea to set a visual reminder of what you’re working toward. Cut out a picture of the home you hope to own and stick it on your fridge,” writes Vaz-Oxlade.

There is a lot of rich content here. The first four chapters talk about “figuring out where you stand” debt-wise, making a plan to get out of it, changing your habits (the hardest part), and planning for the future. While this sounds simple, it requires a lot of work, dedication and focus – but the book sets it all out for you to follow.

On the savings side, Vaz-Oxlade recommends the 10 per cent rule. “Take 10 per cent of your monthly net income… and put it in your long-term savings (like a retirement plan),” she writes. For those who say they can’t afford to save because they don’t make enough, have too much debt, or “want to live for today, man,” Vaz-Oxlade talks of the Law of Inertia.

“It is so much easier to maintain the status quo than to change. Fact is, you can’t save $10,000 until you save $1,000. You can’t save $1,000 until you save $100. You can’t save $100 until you save $10.”

Start small, she advises, make savings automatic, and gradually ramp savings up. This excellent book will help you turn things around in your financial life. It’s published by Collins.

And once you get on track, the Saskatchewan Pension Plan is a great place to set up regular, automatic contributions to your long-term retirement savings. Check out SPP today at www.saskpension.com.

Written by Martin Biefer

Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. After a 35-year career as a reporter, editor and pension communicator, Martin is enjoying life as a freelance writer. He’s a mediocre golfer, hopeful darts player and beginner line dancer who enjoys classic rock and sports, especially football. He and his wife Laura live with their Sheltie, Duncan, and their cat, Toobins. You can follow him on Twitter – his handle is @AveryKerr22

By Sheryl Smolkin

We’re back and there is more than ever to share with you! We took a two-month break, but our favourite bloggers were still hard at work. So we have lots of great stories to tell you about in the weeks to come.

The Liberal government’s first Federal Budget was tabled last month. It eliminated some measures enacted by the Conservatives and others will be phased out over time. On the Financial Independence Hub, Paul Phillips from Financial Wealth Builders gives a financial planner’s perspective on Budget 2016. One surprise he notes is the elimination of the tax deferral on fund switches within a mutual fund corporation.

The significance of not having a great credit rating may not hit until you apply for a credit card or mortgage and are either turned down or not approved for the amount you need. Blogging on Money after Graduation, Bridget Eastgaard discusses five easy steps to build good credit. Because 18% of credit reports contain errors, she regularly checks her credit report to ensure her student loan payments have been properly recorded, no credit cards were opened under her name through identity theft, and that companies have complied with her requests to close credit accounts.

Robb Engen is a well know blogger at Boomer & Echo and over the years he has shared lots of ideas about how to more effectively earn and save money. While he does not encourage calls from his office on evenings and weekends, he says it is a fair trade off because his employer covers his cell phone bill. In fact, he estimates that he has saved more than $9,500 over the last 12 years (144 months x $66 per month) because in a series of jobs over that period he has never spent a dime out of his own pocket on a cell phone plan.

As the balance in your RRSP grows over time, it can be hard to resist the temptation to tap into your nest egg in an emergency or just because you “need” something that is above and beyond your current budget. Retire Happy’s Sarah Milton gives three good reasons why withdrawing money from your RRSP before retirement is not a great idea.

And finally, personal finance maven Gail Vaz-Oxlade recently announced she has written her last blog. While we know from personal experience that blogging week in and week out can be challenging, her fans (myself included) will miss her consistently great advice. Fortunately, most of the archived blogs are timeless.

So for those of you who are considering buying a home this spring, we are linking to one of her better articles. She makes a great argument for spending a little time saving for a down payment rather than locking yourself into a mortgage payment that strangles your cash flow while you pay exorbitant amounts in interest and insurance premiums.

*****

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

In this space we typically provide links to interesting work by our favourite personal finance writers about topics ranging from money-saving tips to retirement savings to retirement lifestyle. But many of these prolific bloggers have also posted great videos on YouTube with helpful tips and tricks for people looking for ways to better manage their money.

So keeping in mind the old adage that “a picture can be worth a thousand words,” this week we identify a series of videos featuring pundits you already know well. While some of these videos are not new, they have stood the test of time.

Take a minute to watch at least a few of them, and let us know whether you would like to see more video content on savewithspp.com.

Sean Cooper is a pension administrator by day and a hard-working personal finance writer by night. Watch him burn the mortgage he paid off in 3 years and reveal his super saver secrets.

One of a kind blogs like How to get married for $239 by Kerry K. Taylor, aka Squawkfox have have been read by thousands of eager fans. In this video she discusses with the Globe and Mail’s Rob Carrick, How to stop wasting money.

In Life After Financial Independence as part of his Tea At Taxevity series, actuary Promod Sharma interviews author and former MoneySense editor Jonathan Chevreau about his post-retirement projects, including the Financial Independence Hub.

TV personality and personal finance guru Gail Vaz-Oxlade is interviewed on Toronto Speaks: Personal Finance about spending beyond your budget.

Studies suggest that 6 out of 10 Canadians do not have a retirement plan. Why is that number so high? Retire Happy’s Jim Yih shares a couple of theories about why it’s hard to plan for retirement.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

As I write this, perhaps the most newsworthy item of the last week has been the election of the new Liberal Prime Minister Justin Trudeau. But it will be weeks and months before we know what impact the change in government will actually have on our day to day lives and the Canadian economy.

So today, we go back to basics and draw on the writings of many of our favourite personal finance bloggers and mainstream media pundits who day in and day out, produce articles that help us better manage our money.

The thought of being unemployed is terrifying, but the odds are it will happen to you or a close family member at least once in your lifetime. On Money We Have, Barry Choi writes about How to Prepare for Unemployment. He suggests that you have an emergency fund; a side hustle and that you improve your skills.

Gail Vaz-Oxlade tackles Parenting on a Budget. She says the trick to not letting kids’ expenses get way out of hand is to allocate a specific amount to each child’s activities and needs, and stick with the plan. Start by listing all the things your children do for which you must lay out some of your hard-earned bucks.

Krystal Yee has been vegetarian for almost two years now. She shares on Give me back my five bucks her one month experiment moving from vegetarian to vegan. She anticipates higher than normal grocery bills and that it will be tough to change her habits, but she is hoping that one month will turn to two months and the result will be a new lifestyle.

If you wonder where your money goes, you’ll enjoy The crunch years: Where the money goes by Matt McCleern on MoneySense. McCleern tracked every cent he spent digitally, over the last 12 years. He says transportation and daycare were real budget busters, but the best financial decision he ever made was to aggressively pay down his mortgage.

And in the Huffington Post, Pramod Udiaver discusses five major trends that will affect how you retire. They are increasing longevity; the lower return environment; fewer defined benefit pension plans; and growing health care costs.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

I don’t often review personal finance books because it seems to take an inordinate amount of time to wade through yet another statement of the obvious just to glean enough cogent information to give readers a taste of what the book is all about.

But when I read accolades from the likes of Gail Vaz-Oxlade, Preet Bannerjee, Roma Luciw, Dan Bortolotti plus a whole bunch of my other favourite personal finance bloggers in the introductory pages of the book, I thought I’d better keep on going to find out what all of the fuss is about.

Author Robert R. Brown says Wealthing Like Rabbits is written to be a fun and unique introduction to personal finance and suggests that any book that includes sex, zombies and a reference to Captain Picard is “an absolute must read,” regardless of genre.

Brown starts out by asking how many rabbits there would be after 60 years if 24 rabbits were released on a farm on a great big island. Before providing an answer to this question, he introduces the need to save for retirement, although he doesn’t begin to predict how much you or I will need. His only conclusion is that “more is better” because it is better to be 65 years old with $750,000 saved than 65 years old with $75,000 saved.

Then he reveals that there would be 10 billion rabbits after 60 years and launches into a discussion of the history and key features of registered retirement savings plans (RRSPs) and tax-free savings accounts (TFSAs). Subsequently he riffs about how many zombies there would be in England if France sent 100/week for 40 years.

If you are still with me, you may wonder — what is the point of all this?

Not surprisingly of course, it’s to illustrate the power of compounding, whether in relation to rabbits, or money or zombies. We learn that just $100/wk deposited in an RRSP earning 6% for 40 years will add up to a nest egg of $624,627.

But the positive and the negative impact of compounding interest are also very cleverly brought home in later chapters. I particularly liked the comparison of brothers Mario and Luigi who both had similar incomes and $100,000 for a down payment on a house. They went to the bank to find how big a mortgage they were eligible for.

Mario’s banker told him “he could afford” to buy a house for $525,000. Luigi told the mortgage specialist he needed $10,000 for closing costs and the $90,000 balance had to cover at least 20% of the purchase price of the house so the most he would be willing to spend is $450,000.

The story continues with Mario buying a 3,000 square foot home for $525,000. Luigi sticks to his budget and buys a 1,600 square home nearby for $350,000. Over 20 years, compound interest on the mortgage means that Mario ends up paying $807,538 for his house while Luigi only has to fork out $538,359.

Similarly, when it comes to debt, Brown illustrates that high interest credit card debt can quickly escalate if balances are not paid off every month. Even I did not realize until recently that if you miss your payment due date by even as little as one day, the interest-free grace period completely disappears. In fact you have to pay interest on the amount of each transaction from the date each and every purchase was made.

Brown also reviews the characteristics of a line of credit; a home owner’s line of credit; bank loans and consolidation loans. While generally he believes all of these can cause severe damage to your financial health, he recognizes that when handled properly, they each have their place.

But he draws a line in the sand when it comes to payday loans. Never, ever get a payday loan, Brown says.

He gives the example of Buddy who borrows $400 from a payday loan place because his furnace broke down. He is charged $21 for every $100 he borrows for just two weeks. Two weeks later he pays the payday lender $484. That’s 21% for only 14 days, which works out to 546% annually. And that’s only the beginning.

If Buddy can’t pay in two weeks the payday loan company will charge him an NSF penalty and continue to accumulate stratospheric interest rates on the whole amount. Further defaults mean he will likely be hounded both by telephone at home and at work day and night. The file may be handed over to an even more aggressive collection agency.

In the second last chapter, Brown offers a brain dump of financial tips (which he doesn’t call “Fifty Shades of Brown”):

• Spousal RRSPs are cool.
• MoneySense magazine is a great source of personal finance information.
• Eat dinner at home. Then go out for a fancy coffee and desert to Starbucks.
• Buy life insurance, not mortgage insurance from your bank.
• Read Preet Banerjee’s book Stop Overthinking Your Money for the skinny on life insurance.
• Use the noun“wealth” as a verb. So instead of saving $150/week in your RRSP you will be wealthing your money.

And finally, Brown’s parting words at the end of the book are “you’ve got to show up.” Put some money away for your future. Live in a house that makes sense. Be smart about how you spend your money. Spend less than you earn. Be comfortable living within your means. He says it really is that simple.

Wealthing Like Rabbits is funny and engaging and it hits all the personal finance bases. Regardless of whether you are a Millennial, a Gen Xer or a Boomer, you will find lots of tips on how to save more, spend less and still have a lot of fun along the way. 

The book can be purchased in hardcover for $16.95 and the epub and kindle versions are available for $7.99.

By Sheryl Smolkin

Over the last few weeks, the Globe & Mail has featured an interesting series on debt, and how it is affecting both individuals and the economy. If you haven’t been following it, take a look at some of the stories below:

A taste for risk: Looking into Canada’s household debt

In deep: The high risks of Canada’s growing addiction to debt

Are you drowning in debt? See how you compare to other Canadians

Laurie Campbell: Credit Canada CEO shatters debt myths

I particularly like Rob Carrick’s article There’s no such thing as good debt. Mortgages, investment loans and student loans have traditionally been characterized as “good” debt. Carrick agrees borrowing for each of these purposes can be a rational thing to do and you may end up wealthier as a result. But he concludes there are too many pitfalls today for any one of them to qualify as a no-brainer financial decision.

Big Cajun Man (Alan Whitton) on the Canadian Personal Finance lists several articles about the evils of debt among his personal favourites. In 2008, he wrote Debt is like Fat. He says that just like his weight gain occurred a little at a time over 14 years, if you are not careful, debt build up can occur slowly without your noticing it.

If you are facing a mountain of debt and don’t know where to start, take a look at How I Paid Off $30,000 of Debt in Two Years, The Blog Post I’ve Been Waiting to Write  and What a Year of Being Debt-Free Has Taught Me  by Cait Flanders, who blogs at Blonde on a Budget.

In 2013, Krystal Yee at Give me back my five bucks wrote  How do you fight debt fatigue?. Debt fatigue is a mental state that can happen when you’ve been in debt for so long that you think you’ll never dig yourself out of the hole you’ve created for yourself. She quotes financial expert Gail Vaz-Oxlade who often tells people on her television shows to try and make a plan to get out of debt in 36 months or less – because anything more than three years, and you’ll likely suffer from some form of debt fatigue.

And finally, in a guest post on the Canadian Finance blog, Jim Yih from Retire Happy wrote that Debt Can Be A Problem For The Baby Boomers’ Retirement Plans. He says baby boomers who are getting ready for retirement need to get serious about planning for the best years of their lives.  Part of getting serious is addressing debt head on and taking the necessary steps to develop good habits around debt. His five tips on how boomers can deal with the debt epidemic are: stop overspending; increase your income; get support; focus on you before your kids; and, take one step at a time.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

If you max out your SPP contributions each year, you know your money is invested in an easy to understand balanced fund. However, when you top up your savings with contributions to either workplace retirement savings plans or your personal RRSP, it is often challenging to figure out how to invest your money.

On Tangerine Bank’s blog Forward Thinking, Preet Bannerjee suggests Parking your RRSP contributions to beat the deadline. The money just sits there, “parked” inside an RRSP as a low-risk investment until you’re ready to figure it out. Some people may not realize that investments inside an RRSP can be changed later.

In My 2014 (and final) Portfolio Rate of Return Boomer & Echo’s Robb Engen admits his dividend stocks did not match average market returns last year so he finally bit the bullet and sold “his babies,” replacing them with an easy two-fund solution.

With another take on passive investing, Holy Potato released his “Canonical Portfolio,” a simple recipe of four funds or ETFs for your portfolio. He presents a portfolio of four funds (bonds plus three equity classes) with a simple rule-of-thumb to determine the main split.

Sarah Milton specifically addresses the investment dilemma facing people saving in group retirement plans on Retire Happy. She presents 3 Investment options for passive group investors including guaranteed investments, asset allocation funds and target date funds.

And finally, Gail Vaz-Oxlade’s post How Do You Stack Up? refers readers to a tool on the Royal Bank website that measures how you stack up against your region and Canada in general when it comes to your income and net worth. Although it’s nice to get a benchmark of how you’re doing, she says that comparing your results to someone else’s means nothing if you aren’t dealing with similar circumstances.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere?” Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

 

Hi, today I’m kicking off the 2015 SavewithSPP.com expert podcast interview series. I’m delighted that Gail Vaz-Oxlade has made time in her busy schedule to talk us.

Gayle is truly Canada’s money maven. She has worked in the financial services arena for 25 years as a writer, reality-television host, public speaker and corporate spokesperson. Over the last several decades she has published 15 personal finance books, four of which were on the best-seller list at the same time in January 2012.

She has also filmed almost 200 episodes of her television programs, Til Debt Do Us Part, Princess and Money Moron. In addition, she regularly blogs and answers questions from readers on gailvazoxlade.com.

But, what I’d like to talk to her about today is mymoneymychoices.com, an online financial literacy program she founded just over a year ago.

Welcome Gayle.

Hi, thanks for having me.

Q: So Gayle, how do you define financial literacy? How big an issue is lack of financial literacy in this country? 
A: The issue itself is huge because most people already know most of what they need to know but aren’t doing it.

Q: You describe mymoneymychoices.com as Canada’s first comprehensive financial literacy program designed to raise the money IQ of Canadians by drawing on community support, a solid financial roadmap and gamification for reinforcement. How did you come up with the concept?
A: I was actually between television shows. I had a big whack of time off and I read about an organization in the U.S. that that used positive peer pressure in order to change behavior. So I laid out this roadmap of everything you need to do in the order I think you need to do it in, to build a rock solid financial foundation.

Q: What are your goals for the program?
A: Really what I want people to do is stop saying “I don’t know where to start.” If you go to mymoneymychoices.com and register – it’s absolutely free – and you just take the steps as they are given to you in the program, then you will work your way to being financially healthy. I want people to come together in communities and support each other, teach each other and work together in order to increase their community’s financial literacy. 

Q: You say the first level is the hardest. Why?
A: In the first level, which I say has all the heavy lifting; you have to do your six-month spending analysis. You also create a debt repayment plan to get your consumer debt paid off in 3 years or less. You have to build a budget and you do your first net worth statement.  And very often I find that people don’t understand why the pieces are necessary. I say to people all the time, if you do the net worth statement today and it looks really bleak, it’s irrelevant, because it’s not where you are today. It’s how different it will be when you do it in six months for the second time.

Q: Do you have any sponsors or partners? Or, are you solely responsible for the development and maintenance costs of the site?
A: I would love sponsors to support us, but the thing is that, whenever you affiliate with anyone, typically what happens is they then have some say in what you do. And so I bore the costs of the development of the site myself and I set up the My Money My Choices Foundation, where I’m taking donations. In late 2014 I ran an Indiegogo campaign and raised $3,785.

Q: Is My Money My Choices, aimed at any particular age or demographic?
A: No it’s not. The reality is it doesn’t matter if you are 23 or 43. If you’re not aware of where your money is going then that’s the first place you have to start. If you’ve done all those things already you can just pick through those on the program until you get to the level where you are implementing something new for yourself. For example, it might be the level in which you investigate disability insurance and life insurance

Q: Give me briefly how the program works. I see there is a leader board and different prizes and levels.
A: The prizes are really icons. They are what you can use to show the world where you are and how you are progressing through the steps.

Q: What is the community element? From what I read on the website, you can’t do this on your own. You’ve got to be part of a tribe or a team.
A: You can do it on your own because anyone can use the roadmap. However if you are working within a tribe then what happens is you benefit from the support that comes along with that. When you have a whole community cheering you on, or kicking your butt depending on what you need that day, you’re much more likely to get back on the horse if you get bucked off.  That’s part of the purpose of the community.

The other part is that some people within a community are very good at some things and other people are very good at something else. And, when you bring it all together you create cohesion, together with process, together with management skills. When you bring all those things together you make it much stronger than each individual trying to do all the pieces alone.

Q: What role does the watcher play?
A: The watcher is the first guy to do the teaching. Typically the watcher is someone who has some money expertise whether it is official or not. And that person’s job is to help the first few people go through level one, and then guide those same people through the various other levels and encourage them to bring more people into the tribe so that they can become teachers and mentors to their own protégés. Ultimately, the watcher will manage the whole process and say “okay, this is how we’re doing as a community.”

Q: If a group of people want to get together and participate in your game on your website, do they have to have a watcher or does someone become a watcher because they are the first one who gets through the levels?
A: I’ll give you an example. I was invited to speak to a church community in Thornhill a few weeks ago, and I agreed as long as they set up a My Money My Choices tribe as part of the process. A gentleman named Emilio who is well along the way because he’s been following me for years became the watcher for that church community. He set up a Facebook page so people could communicate with each other. He made sure that there were books in the library so that the resources were available if people needed help making a budget or doing a spending analysis. He did all the administrative and support stuff to make sure that as people started coming into the program they didn’t get sidelined by small issues.

Q: That’s really cool. So it’s 23 levels. Can you give me some examples of what participants learn as they progress through the various levels?
A: Sure. The very first level, as I said is the hard one because what’s it’s laying the ground work for everything else. Once you’ve done level one you move on up to the point where you are putting process in place. You’re using a spending journal. You’re posting to your budget every single month. You know where your money is going. As you move up you also start allocating money to savings. You get your debt paid off. Ultimately, the reason there are 23 steps is because I don’t expect people to go from 0 to 100 in 12.2 seconds. It takes time.

Q: So you say you’ve had 8,000 people register on the website. How many of them have progressed through all the levels?
A: Nobody yet.  Because at the last level you are maximizing your RRSP, you have paid off your mortgage, you are maximizing your tax-free savings account, and you’ve got all your consumer debt paid off. This is a process. You are incrementally improving your financial position all the way along in very, very small steps.

Q: There are ways to earn extra points. What do you do with those points? What do they do for you? 
A: This is a very interesting phenomenon. One of the pieces of research shows that the points in and of themselves are what people want. They don’t care what the points translate into. It’s human nature. We like to gather things. We like to accumulate things. We measure our success in points. We like the point system.

Q: What kinds of things do people do to earn extra points?
A: It’s the idea that every time you post to your spending journal or push your spending journal to your cash flow budget you acquire more points. The reward system is based on action. If you are actively participating, you keep accruing points.

Q: Do you have any plans to changing or enhancing the program,?
A: I’m not going to touch the My Money My Choices program as it currently exists. I worked on it for about two years before I actually put it up. I think it covers all the bases. If people send me good resources to supplement it, I will add those resources over time once I have vetted them. But really, I don’t have to reinvent stuff if it’s okay and it’s working. What I want to do is use some of the Indiegogo money to create more of a presence on the internet that helps people find the program.

Q: You always seem to have dozens of projects on the go. Is there anything new and exciting still in the developmental stage you can tell us about?
A: I have a new book coming out in January 2016 called “Money Talks, When to Say Yes and How to Say No.” And that will deal with all the relationship side of money. How do you have those really difficult conversations that people just seem to be avoiding? Whether it is the conversation you have before you get married or the conversation you have with your parents because they keep hitting you up for money and you are dead sure they don’t have a retirement plan. So it’s all about having these difficult conversations and how best to position them.

Q: Thank you so much for taking the time to talk with me today Gayle.
A: Oh, my pleasure.

—

 

 

 

 

 

 

You can find out more about mymoneymychoices.com and how to play the game here. All of Gayle’s books are listed here and can be ordered from Indigo or Amazon.