Dear Caroline, I hate being asked for charitable donations. I receive so many requests from friends, colleagues and people I barely know — they all want me to sponsor their runs, walks, bikes, etc. If I gave to every one of them I would have no money to give to the charities I really care about. So I ignore them (especially when they come to me as a blast email!). Am I bad person?
A: Stop beating up on yourself. Yes, we all understand people work hard to support causes that are close to their hearts. But like you a lot of us are struggling with sponsorship request overload (and tight budgets) — it’s simply impossible to give to everyone and everything. And I do think the onus is on people who are asking friends and colleagues to support their efforts to understand this (especially people you don’t have a close connection to). You can feel free to ignore 90 percent of the requests you get, especially if it’s a blast email. For close friends and family, try finding a different way to be supportive. Stand at the finish line to watch them complete their run, for example, or hand them water along the way. Or just give them a hug and wish them good luck.
Dear Caroline, My husband and I racked up a lot of debt while I stayed home to take care for our daughter. We maxed out three credit cards and our payments eat up nearly half of our monthly income. Our daughter is now two and we want to get this debt off our shoulders but we can’t afford childcare to let me go back to work. We are tired of struggling and I don’t know what to do. How do we get ourselves out of this hole?
A: I think it’s great that you’re ready to fix your finances. And while you might feel like you’re in a big hole, it’s definitely not too big to climb out of. Step 1 should be to wipe out that credit card debt ASAP. Arrange a lower-interest line of credit through your bank and transfer your credit card balances to that. Credit cards charge notoriously steep interest — if you can halve the amount you’re paying to carry your debt, you’re ahead of the game and it should take at least some of the pressure off.
Next, you need to sit down and figure out how to tackle the debt you have. That starts by making a budget outlining what you spend on a monthly basis and finding cuts. Cutting cable and takeout are two areas you can find big savings right away. And remember: no cut is too small to make a difference — even toting your own coffee and lunch can save you hundreds of dollars over the course of a year.
Make a plan to divert all extra money towards your debt repayment — use an automatic payment system to get the money out of your bank account at the beginning of every month to make sure you do not spend it.
Finally, you need to figure out whether or not it makes sense for you to return to work full-time — will your after-tax earnings put you far enough ahead so that you can pay for more than just childcare? Don’t forget to factor in extra costs of going back to work like transportation and clothing. Or, could you work part-time in a way that allows you and your husband to share the childcare? You could work nights and weekends for example or take on freelance work in your home. This could allow you to earn the money you need to pay off your debt.
Dear Caroline, I want to save money but I don’t know how much of my weekly earnings I should be putting into savings. Can you help?
A: My answer: as much as you possibly can!! My personal philosophy is that saving money = choices and freedom. The more money you stash away, the more choices you will have down the road, whether it’s travelling, buying a home or starting your own business. If you can comfortably save half of what you earn or more, then do it. Create a monthly budget to see how much room you have to save and then use automatic withdrawals to get it out of your bank account every month and into a savings vehicle (a bank account, RRSP or TFSA to start). Even if you can only save a small amount, do it — every little bit helps!
Dear Caroline, My mother just turned 85. She recently told me that my brother has asked her to sell her house and to give the money to him to manage. He’ll then put all her stuff in storage and she will live with him in his apartment. She says she has agreed even though I have told her this is not a good idea because my brother has no experience with managing money (plus he has struggled with addiction in the past). What should I do?
A: This situation is setting off all kinds of alarm bells for me. I don’t know your family, but I do know that financial abuse of the elderly is pretty common in Canada. A study in British Columbia found that 80 percent of older adults have been financially abused, losing on average $20,000 each. Scary numbers!
Some questions for you — do you see your Mum regularly? Does she have a lot of friends or is she kind of isolated? As for your bro — I won’t knock a person for struggling with addiction, especially if they’re stable in recovery, but a decision like this should be discussed as a family. This sounds a bit secretive (not a good sign).
Your first step should be to talk to your Mum about what’s going on — why is she making this decision? Does she understand what it means? She might be tired of keeping up the house and could just want some help from her kids. Fair enough. But there are other choices, and maybe you can help her see what they are. You can also enlist her friends and family members to help you — keep lines of communication open and show her that you are all concerned about her well being and that this might not be the best decision.
There’s also the legal side — does she have a will and power of attorney? Is she legally protected? You might want to seek legal advice, especially if you think she’s at risk from another family member (not to mention moving in with him).
This is definitely a sticky situation — but you need to look out for your Mum’s best interests. Check out your local seniors’ centre too — they probably see a lot of this and might have some advice for you as well.
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