14 Feb 2013 15 Comments

Money Rules

I have always been a huge fan of Gail Vaz-Oxlade, and enjoy her no-nonsense approach to money management on her show, Till Debt Do Us Part. Her latest book, Money Rules, just came out (yeah, a book review that is not over a year old!) and she is currently on her book tour.

The book is essentially comprised of 261 her Money Rules. All the basics are covered, like budgeting, investing, and real estate, with other topics thrown in, such as credit, insurance and taxes. There’s tons of information to go through, but it is still an easy read as the rules are broken up into chunks. With 261 rules, I’m sure everyone can learn a little something from this book!

I’m going to go through and list my 10 favourite rules that I found in the book. They’re not necessarily the best 10 rules of the book, just the 10 rules that resonated the most with me. It was SO HARD to narrow it down to just 10 though; if you were to read it, I think you’ll find 10 of your own favourite rules. At least 10! :)

1. Renting is NOT a waste of money.

I loved this rule. Probably why I continued reading the book! j/k. :) It is such the societal norm to pressure people into buying a property, even when you don’t have a clue of their financial situation. Without this information, it would be impossible to determine whether or not it makes financial sense for them to own. But who cares whether or not the numbers make sense, right? As renters in Calgary, we get a lot of crap from people about throwing money away on rent, but no one will sit down and go through the numbers with me. It is much better to be renting right now; I have ran the numbers to prove it to myself. :)

2. Don’t Marry a Money Moron

Pretty self explanatory.

3. Don’t tithe if you owe money.

This reminded me of some clients I worked with. It was always a sore point during the process as I didn’t believe that they should be doing it if they owe money. Technically, it is not THEIR money they are giving away because, if they’re living on credit, they don’t have the money in the first place! Seemed hypocritical to me, but, of course, we didn’t see eye to eye on this issue.

4. More won’t make you happier.

You will eventually hit a point in your life when another car, another house, or another new toy just won’t make you happy anymore. I think our society, in general, with the mass amount of toys and gadgets we own compared to previous generations, will eventually realize that all this stuff isn’t making us any happier.

5. Never travel without private medical insurance.

This is always a debate with myself whenever I travel. When I leave Canada I usually have some insurance, but the ones where I go back and forward on weekend trips to other provinces? Friends tease me about being paranoid.  It’s only a couple days, and I am hardly an adrenaline junkie, so I should be fine, right? :) At the end of the day, the money is worth the piece of mind for me. I think I take healthcare for granted living in Canada. Fortunately, I have never had to make a claim on any of my insurance policies either. Now, whether or not to get trip cancellation insurance… :)

6. Your situation is unique.

Everyone is unique. Everyone has their own financial difficulties and struggles they have to deal with. But “no situation is special enough to justify ignoring the rules of sound money management.” I don’t care if you suffered a financial setback in the past, you are still responsible for how you spend your money now! Stop using something that happened 20 years ago as an excuse for your bad habits now!

7. Lose your bad habits.

This one hit close to home. I usually think I am pretty good with my money, and I don’t have any bad habits, right? I don’t smoke. I seldom drink. But eating out, ah, that one hit close to home. I ate out 12 times in January, and it is a pretty big expenditure for us. Definitely something we have to work on this year; always something new to learn or work on!

8. Stuff accumulates. Use it up!

Chapsticks. I had tons of them. They’re only a couple bucks and I always liked the fruit-smelling ones. And the cute-shaped ones. And I NEED the ones with SPF in it, right? So I promised myself last year that I WILL NOT buy another one until I use all the other ones up. I STILL haven’t finished all of them yet. Its a slow and painful process, but the money I am saving on it adds up. It could be something different for you. Jackets? Socks? Shoes? Lotions?

9. Watch your food costs.

This is something we have been consciously working on for the past 6 months. It is definitely eye opening once you track everything you buy, as it is easier to determine whether or not your diet is going to help or hinder your waistline. :) We’re at about $200 for the month which we’re pretty happy with, but I know some can spend over $400 a month for 2 people. Do what works for you, but just make sure you know where your money is going!

10. Buy the Index.

What? Me plug ETFs? Never! :P

There are lots of investment choices out there, and it can get overwhelming! So keep it simple by buying the index through ETFs (Exchange Traded Funds). Not many fund managers out there can consistently beat the market year over year, so just buy the index and you’ll do better than 75% of the mutual funds out there. I find that the % varies from resource to resource, but the fundamental idea doesn’t change.

Like I said, it was HARD to narrow it down to just 10. There are tons of topics I haven’t even touched, like RESPs, leveraging, and company pension plans. Great resource book for those who are looking for someone to explain concepts to them.

As always, check out Money Rules by Gail Vaz-Oxlade from your local library or purchase it here… well, I used to have an Amazon link but it is crapping out on me at the moment and I haven’t been able to figure it out yet. :P

Thanks for reading!

 

by Vicky in Favourite products, Personal Finance, Recommended Readings