We had a chance recently to meet Gail Vaz-Oxlade (host of the TV shows Til Debt Do Us Part and Princess), and she dished out advice on how to manage your money well — from how to share expenses with your partner to living within your budget.
If you’ve ever watched Til Debt Do Us Part, you’re probably a fan of the sensible and practical advice host Gail Vaz-Oxlade imparts to the debt-ridden people featured on her show. We jumped at the chance to talk with her about personal finances, budgets and saving money at a recent event in Toronto. Here’s what we learned.
A shopping list is essential
When you go to the grocery store, if you peruse the aisles and just buy whatever catches your fancy, this could mean overspending on things you don’t need. Making a shopping list will help keep you on track so you can avoid the impulse purchases.
While we don’t rack up the same type of savings here in Canada when we use coupons, Vaz-Oxlade doesn’t understand why more people don’t use them. It can save you 50 cents, for example, she says, and if you saw 50 cents on the ground, you’d pick it up, wouldn’t you?
Think of your income in net dollars
“People tend to think of their gross income, but of their expenses in net dollars,” she says, and this results in a 25 to 30 per cent gap, because they’re not accounting for the taxes paid. Take the time to look at how much money you actually put into the bank so you have a clear understanding of your cash flow.
Your personality type plays a role in how you manage your money
“There’s a personality type that very much lives for today,” she says. “They think of right now, live for the moment.” Also, people have been raised to think money matters should be secret and that one needs to have a degree of some kind to talk about money, she says, noting money lingo such as M.E.R. (management expense ratio) with regards to mutual funds as an example. “What that is, is a fee. Why we call a fee an M.E.R. is to keep you stupid so you don’t ask too many questions.”
Overdraft protection is not your money to spend
“There are people now who live in overdraft until each paycheque,” she says. “The paycheque goes in, they go out of overdraft for 12 seconds and then they go right back into overdraft until the next paycheque.”
If you’re getting married, maintain your own financial identity
“You each have to have your own chequing accounts, your own savings accounts. If you have any credit, you have your own credit,” she says. Never co-sign on credit except for a mortgage. “If you have to co-sign on a line of credit if you decide to renovate the house, it takes both your signatures to access the line, so [neither] of you can put the other into debt,” says Vaz-Oxlade. “It’s so important that you have your own identity financially, then you sit down and work out a budget together that works for both of you, and you decide the common expenses together,” she says. And for those common expenses, open up a bank account, and deposit money in proportion to your income to share those expenses.