Money, money, money

I probably think about money a lot more than I should. Have you heard the phrase, “Money makes the world go ‘round?” I have, and as much as I hate to admit it, I think it’s true.

For the past few years, my husband and I have been working hard to improve our financial situation. Almost seven years ago, we took a bit of a financial hit when we had our first baby and I decided not to go back to my full-time job. While I was fortunate to be able to make some money as a freelance writer, it wasn’t close to a full-time salary – and in a few years, we found ourselves in debt.

We’re certainly not alone. The statistics are horrifying. Apparently, almost 90 per cent of Canadians have more debt now than they did five years ago. That’s a staggeringly awful statistic that shows just how bad many of us are with our money.

I was lucky to have the opportunity to speak to financial expert Gail Vaz-Oxlade on the subject of debt recently. Gail, a well-known author and host of ‘Til Debt Do Us Part on Slice network, has some pretty strong opinions on what we’re doing wrong in terms of money and debt – and she isn’t afraid to speak her mind. She’s adamant: If you can’t afford to pay cash, don’t buy it!

I found her frankness refreshing, particularly since I must receive at least three or four different credit card offers a week. I mean, honestly, how many credit cards does one person need? Am I going to keep on buying things that I can’t pay for? Then spend the rest of my life working to pay it back?

Last fall, my husband and I decided to get smart about our money once and for all. (We’d been watching Gail’s show!) We’d had a budget in place for years, but couldn’t figure out how we were consistently overspending. By keeping track of our expenses for a few months, we realized the problem wasn’t our fixed costs – it was all those “one time” expenses (birthday presents, extra-curricular activities, car repairs, etc.) that were crippling us. We’d use credit to pay those one-time expenses, and soon, we just didn’t have any money to pay the credit cards off.

We set up a very solid financial plan, which took into account those “one time” expenses. We kept track of everything we were spending (and still do), and if we can’t afford to buy something, we don’t. Simple as that.

In just a few months, the changes were astounding. Not only were we able to pay off our line of credit debt, we upped our RRSP and RESP contributions, increased our life insurance and started a high-interest savings account. We’re not perfect by any means, but things sure are looking a lot rosier.

It was only by looking at our finances realistically, and making debt repayment and money saving our top priority, that we were able to turn our financial outlook around. If you’re one of the millions of Canadians in debt, I urge you to do the same thing. You won’t believe the feeling of freedom that comes from having your finances under control.

Gail would be proud.