Friday, October 20th, 2017
The Master of Money: Gail Vaz-Oxlade
As I have mentioned many times in previous posts, my journey financially hasn’t always been a rosy one. You name it, I’ve done it. Lines of credit, maxed out credit cards, racked up overdraft, owing money to banks, owing money to family and even owing it to friends. I look back at those days and I see how stupid I really was. I was young, intelligent and hardworking and yet I didn’t know a damn thing. It was like I thought all these problems I created would just take care of themselves. Like there was some magic money fairy that if I was nice enough would just make my worries disappear. It took some very drastic issues for me to realize I was on my own. It was at that point, with no one to turn to and nothing going for me that I saw a person that showed me the way. It sounds stupid and made up, but TV saved my life, well my financial life anyway. My girlfriend at the time got me into watching this show, “Til’ debt do us part.” It was always fun for us to watch other couples who had it worse than us even though those ones were few and far between. We got to see other couples struggle with money like we did, and some found a way out. Others didn’t succeed but we saw that is was possible.
The reason the show was so meaningful to me was simple, Gail Vaz-Oxlade put me right in my place. She made it clear as day that getting out of the mess you put yourself in, would not be easy. There was no money fairy and there was no magic cure. There is one simple method to paying off debt: You need to make more money and you need to spend less money. Sounds simple right? Then why are so many people in debt? She made me realize that it was going to take some really shitty months and years to pull myself out of this mess. It was when I finally realized that fact then things began to change. Putting myself on a budget, a very tight one is what made the debt disappear. I used Gail’s methods which included divvying out the week’s money in jars for each category. Expenses like food, entertainment, transportation were all put on allowances. I negotiated lower rates for my debts, found leniencies where I could and said goodbye to my social life. Gail preached a straight up, no bullshit spending plan that didn’t include the luxuries in life. To be honest it was the luxuries that got me into that mess and I didn’t deserve them anymore. I needed that sort of wake up call.
Born: June 18, 1959, Jamaica
Occupations: Administrative Assistant, Freelance Writer, Television Host
Gail moved to Canada from Jamaica in 1977. She picked up a job as an administrative assistant and later, marketer, where she was asked by a client from the bank to write a manual on their RRSP program. Soon after she was writing manuals for all the bank’s technical materials and her freelance writing career began. She was soon contributing to over 20 columns a month. Soon after, she was asked by a production company to host a show called, “Til’ Debt do us part,” a show where newlywed couples get their money on track with Gail’s help. The show was a success and after 7 years she added another show, “Princess,” aimed at young women who need financial advice. She has since created the show “Money Moron,” and contributes regularly to shows and columns across Canada including Chatelaine, CTV, Moneysense, and CBC. Gail has written over 15 books on personal finance including:
Debt-Free Forever: Take Control of Your Money and Your Life
The Money Tree Myth: A Parent’s Guide to Helping Kids Unravel the Mysteries of Money
It’s Your Money: Becoming a Woman of Independent Means
Money Rules: Rule Your Money, Or Your Money Will Rule You
What I love
There is way too much I love about Gail to fit in one post, but I will try. Gail doesn’t beat around the bush when it comes to personal finance. When you mess up, she lets you know. Many, many times I have seen people break down and cry on her shows, finally opening up about the money mess they have gotten themselves in.
She hits hard but does have a soft side as well. Her aim is to make people see the mistakes they have made, admit what they are doing is hurting themselves financially and then move forward with the plan to get out of that mess. Some fight back and some don’t go with along with it, but most try their best to work through the debt. Her system was what I needed to get on track. So what is Gail’s system?
1) The Jars
Gail advocates extreme clarity when it comes to one’s expenses. If you are in debt she gets to the exact reason why. What this means is going over your purchases to the dollar. She breaks out the VISA and bank statements to see where every dollar is going. The reason why this is important is that you are going on an allowance. Yep, an allowance. To combat the debt, you must aggressively pay it down and that means taking the money you were spending on junk and putting it towards the debt. This is where the jars come in. You go back to cash living. If you want something, go to the jar for that specific category and grab the cash. Once that cash is gone, you’re done. I once saw an episode where Gail allotted one couple $7 per week for entertainment and gifts. Extreme times call for extreme measures!
2) Aggressive Debt Repayment
There is no way to get out of debt in a timely fashion unless you get aggressive. Gail understands this fully which is why debt-ridden couples are put on the allowance. The majority of their variable spending will go to the debt payments sometimes leaving them with no money for fun. This was exactly what I needed. This is what everyone needs because if you only pay the monthly minimums, you won’t get anywhere. They are designed to keep you in debt for a long time. Don’t believe me? Check out the box in the corner of your bill. Why on earth would it take 87 years to pay off $3000? That’s because the minimum payment is designed to keep you in debt and even promote racking up more debt.
3) Hatred of the Banks
Gail has a special disdain for the banks. She says the wolves don’t come dressed in suits with slicked-back hair, they look like you and I and work at the bank. I am with her on this one. It is not because they are evil people; it is because they work for evil people. This whole system is designed to keep you in debt and take a fraction of your pay every month to service that debt. Buy the house you can’t afford, sure! Get the insurance that may not cover you, sure! Get the items you don’t really need, sure! Finance the car you can’t afford, sure! Payback the student loan into your 30’s, sure! When you add up the interest on all the things in your life that you did not buy outright, it is a staggering number. You could have somewhere between 10-20% of you pay every month going towards interest on your home, car, credit card, loans and lines of credit. Bleed you dry a little at a time. For Gail it is not their fault however, it is the rest of ours. We don’t teach financial literacy in school. We don’t teach our children about the perils of debt. We don’t ask enough questions when it comes to our money. That was her goal, to get us asking “why,” instead of saying “why not.”
4) The Budget
Gail is a strong proponent of the budget as a means to financial freedom, as am I. Everyone needs a budget, even the wealthy. Especially the wealthy. The only difference between the wealthy and the lower class when it comes to debt is the number of zeros at the end of the number. The more you make, the bigger the trouble you can find yourself in. Gail and I believe it is the budget that allows you to spend money where it is needed instead of wanted and even more important, track the spending. It is this analysis of spending that will force you to correct your mistakes on a monthly basis. For me, this is extremely necessary. For instance, I had a lot of unexpected expenses early in 2017. What did that mean for me? The summer of 2017 was a boring one. I saw that a lot of money was spent several months in a row and corrected the behavior by chilling out for a few months. That is why I have the budget. I see where I am going wrong and I correct it. It is the unknown spending that will hurt you in the long run. The number of times I hear people say, “I don’t know where all my money goes,” is scary. That is a habit I picked up from Gail.
When you think of defining moments in your life, most people think of things like a wedding, childbirth, or a loved one passing on. For me, finally realizing that handling my money correctly was important, changed everything completely. The moment where debt scared the crap out of me was a definite turning point. Before that, it was just a number on a piece of paper or an angry phone call to be avoided. After working through it I finally knew the implications of what debt actually meant. I knew I had to make more money, and spend less. Gail slammed that in my face and it was well needed. There was no more time to BS or stall, drastic measures had to be taken. It was the methods Gail taught me that helped me through and of course a lot of willpower. That journey provided me with the dream and ambition to help others through their money problems like Gail helped me. For my 200th post, I give thanks to her, for making me no longer a Money Moron!
Gail Vaz-Oxlade Quotes:
“You can have everything you want. All you need is a plan. And how do we spell plan? B-U-D-G-E-T!”
“A goal without a deadline is just a dream.”
“Change brings challenges, learning, and a sense of New. Change is full of promise.”
“Happy people don’t worry about what other people think about them.”
“We feel good when our homes are bright and shiny, put a little elbow grease into your money and it’ll glisten too.”
Gail Vaz-Oxlade at Ted Talk: