Two weeks ago I asked, How Do YOU Manage Abundance? I suggested that we live in an abundant Universe and experience debt only after we’ve mismanaged abundance. Today I review “Debt-Free Forever” by Gail Vaz-Oxlade, a financial resource that continues to change my life!
Before we get into today’s book review, you might be wondering:
Why is having a healthy financial life important to healthy living?
First, messed up finances (either making too little or spending too much) equals stress! Anyone who’s ever lived pay cheque-to-pay cheque or experienced debt can relate to this fact. Second, healthy living is all about balancing a high quality of life now AND investing some it to ensure a high quality of life in the future.
“Debt-Free Forever” Review Summary
I inherited my mom’s financial philosophies such as, “You can’t take it with you!” “Money can’t buy happiness so why hang onto it?” and “Buy now, pay later allows me to play now, worry later.” It took a ton of debt, $14,000 in credit cards and $30,000 in student loans, by the time I was 25 to realize that, uh oh, I gots myself into trouble with these self-destructive beliefs!
Since then (it’s been 10 years now!), I’ve been learning about finances and applying what I’ve learned to my life slowly, surely and, seemingly, with one concept at a time. I’ve read The Wealthy Barber and The Law of Attraction: Making It Work for You!, attended both money-making and money management seminars (including a government-funded one) and listened to audio programs like Suze Orman’s The Laws of Money.
None of them, while all being very good resources, have had the same impact for me as Gail Vaz-Oxlade’s Debt-Free Forever. It has literally changed my life for the positive and continues to do so as I work hard to maintain the habits I’ve put into place based on her suggestions.
I started watching ‘Til Debt Do Us Part on Slice TV 3 years ago and loved it immediately. I learned a lot from the show, for instance, I realized I had a pathetically low income that needed changing. I did this eventually, but creating a budget and her whole money jar trick remained a mystery to me, no matter how many episodes I watched!
Then I received Gail’s book as a birthday gift last summer and gobbled it up almost right away. I was unable to do the exercises in the book at that time but vowed that once my life was somewhat stable again, I’d reread the book and do the exercises. I did so before the end of the year and what an eye-opener!
The one thing I DID do before I even finished reading the book through the first time, was to start saving 10% of my income. The Wealthy Barber suggested the same thing when I read that book 10 years ago but I was convinced as long as I had debt, that 10% was better spent on paying off debt. Gail managed to persuade me with logic and reason in starting the 10% savings habit and I’ve been doing it religiously for a year now. Yippee!
She walks you through very simple steps, including becoming crystal clear about where you currently stand financially; what is most important to you and what you want in your near future so you can stay motivated towards change; a spending analysis and spending journal to find out exactly how and what you spend your money on; how to make a plan; create and stick to a budget; and, of course, how to become and stay debt-free.
Gail’s also sprinkled tasty, healthy and practical tips throughout the book as sidebars to her main dish. And the best aspect of her book? It’s written as if she were speaking to you: in a down-to-earth, easy-to-understand, no-nonsense style that has the ability to really hit her lessons home. And hard.
Gail Vaz-Oxlade has written eleven books on personal finance, hundreds of articles for the financial media, published a financial magazine for women, hosted three prime-time television shows, including ‘Til Debt Do Us Part, and worked with Canada’s leading financial services companies to help educate employees and clients.
Excerpt from the book
Imagine waking up in the morning and knowing that no matter what happens today, you can cope. Imagine that you’ve got enough money to take care of the expenses that need to be paid regularly and to have some fun too. Imagine the sense of peace that comes from knowing you’re in control of your life.
If you’ve been frantically trying to cover your butt because there just never seems to be enough money, I can help you. If you’re up to your eyeballs in debt and can’t even imagine being debt-free, I can help you. If you’re at your wits’ end because you’ve made a huge mess and don’t have a clue how to fix it, I can help you.
How exactly has Debt-Free Forever impacted my life?
I’m so very excited to share this part of the review with you because most of the time authors or their PR reps send me books to review that they time along with a book launch. In these cases, I may have time to read and even do the exercises in the books but it’s not enough time to put their suggestions to practice and SEE the results.
In this case, a year has passed and I’ve done the work. And wow! What progress! Here’s the scoop:
- Started the habit of setting aside 10% of my income into a savings account.
- As of February 2012, I officially became consumer debt-free! (I still have my student loan but I ONLY have 2 payments left!) As a side note, I have been consumer debt-free once before within the last 10 years but then made a couple of financial blunders that got me into debt again – which I will not do again.
- I performed 2 6-month spending analyses, since the first one included a move and refurnishing my new pad which I knew would throw off the numbers, and became completely aware of what I spend my money on and how much I generally overspend on average per month.
- Because I understood the concepts she teaches in the book, I went above what Gail suggests and performed an income analysis since I receive income from 4 different sources, 2 of which are variable on any given month. This allowed me to come up with an average monthly income in order to create a budget.
- Created a budget, along with starting and maintaining a spending journal and Gail’s spending jars for weekly expenses in the 5 major variable life categories.
- Just started an RRSP (for retirement) and a tax-free savings account (for an emergency fund to start with and once I hit my goal, I’ll use the amount I’ve been squirreling away here towards a house fund). By the way, my regular savings account will be used for short-term savings, as in a vacation fund!
- Made 2 large purchases in the spring (a used car and dental work that I’ve been putting off for almost 4 years until I had the money). I paid for the car outright and for the dental work, well, because I failed to adequately plan for the expense I used credit (I know, Gail, I know!) to cover half of it.
- Since I had savings, I had money to give to the Tax Man when he came knocking (almost $2,000 the devil wanted!) and so my savings literally saved my butt from potentially owing the government and hurting my credit rating. Side note: my accountant did mention last year that this might happen and suggested I start saving for the eventuality… I chose to buy the car instead. Ooops, again! Though, I do not regret the decision in the least. I’m in the process of repaying myself and plan on having that money back in my savings by end of September, depending on my variable income sources.
As you can see from my progress list, I’m still working on prioritizing and discipline. For instance, in one week I may overspend in one jar (usually “entertainment”) and use the money from another jar (usually “clothes/gifts”) to compensate but I feel good that I’m sticking to the overall weekly budget!
By the way, I have not taken Gail’s suggestion to cut up all credit and debit cards, at which point I would be forced to rely solely on the cash in the jars. Instead, I may use my debit card while I’m out but upon returning home, I immediately track the expense in my journal and adjust the cash in the jars.
Using only the jars would probably speed up the necessary habit changes, however, I choose to make changes slowly and gain strength by working my discipline muscle. 🙂 Hey, I’ve come a long way in the last 10 years and it’s working, especially now that I’m using Gail’s other tips and tricks!
I highly recommend Debt-Free Forever for anyone who wants to clean up their finances and learn how to manage their money. It’ll help you become more self-aware, feel more in control, prepare for the future and unexpected expenses or life events, and create a balanced, healthy financial life. It will help teach even the most spiritual of folk out there that money has enlightened aspects, too!
Have you read this book? Did it help you?