Gail Vaz-Oxlade is the television host of “Till Debt Do Us Part” and “Princess”. The former show helps couples dealing with financial (and oftentimes, marital) difficulties, and the latter, a show that demands these princesses learn financial independence. She is also the author of countless books, including Never Too Late which offers to show you how to plan for your retirement, with as little as $1 dollar a day.
(BREAKING NEWS: Princess is coming back for 32(!!) more awesome 30-minute episodes.)
I had a chance to chat with Gail about frickin’ diets, shoes and…um…oh yeah, finances, of course! Through the course of our really awesome in-depth chat, I *may* have even proposed marriage, which is how enamored with Gail I was.
In case you’re wondering, she politely declined.
All eight times.
(This is the first of a two-part post. Gail was so gracious and generous with her time, I don’t want to leave anything out. Part two will be posted shortly).
Me: What are the best tools out there to help us better understand personal and investment finance?
Gail: Let’s pull investment out of there for a second. Why I say that is because investment has overshadowed personal finance for a very long time. That is putting the cart before the horse. You can’t be an investor until you know how to manage your money properly first. Because all those people out there who are contributing 5, 6, 7, 10, 12 thousand dollars to their RRSP (Registered Retirement Savings Plan) and are racking up lines of credit and credit card debt aren’t investors, they’re idiots! (insert my first proposal here)
You actually have to have money before you can be an investor. If you owe $5,000 and are putting $5000 in an RRSP you are fooling yourself.
Me: So wait, you don’t believe people should be investing their money while they still have consumer debts?
Gail: I do believe you have to do both, but you have to be addressing both at the same time. I also am not of the opinion that you have to pay off all your debts first and then start saving. Because we can always come up with a good reason not to save. You have to be aware. This is probably the single biggest gap in all of money: Unconsciousness. People are unaware of what they are doing right and what they are doing wrong – they’re just doing it. They don’t know why they’re doing it, they’re not sure if they’re doing the right thing, they are just doing it.
Me: OK, we need tools to help us, desperately in some cases…
Gail: Tool number one is the spending analysis. You have to do a spending analysis. If you do not do a spending analysis, nothing else that you do will work. Until you know what you’re doing now, you can’t possible hope to change so that everything will work out ok. (For tons of resources and tools. check out Gail’s website).
Me: Ok, let’s talk lingo for a minute…(this is where I admit to knowing basically nothing at all) I am not sure I clearly understand the difference between saving and investing?
Gail: Oh, that’s a very good question (me: phew!!) Here’s how the problem arose: We took a product and named it a savings account where you can put your money and earn interest on it. It’s actually an investment. Saving is the act of not spending money. To save, not only do you not spend $27 on that blouse that’s on sale but you take that $27 that you did not just spend and you put it somewhere where it will stay – that is savings. It’s just taking money out of your cash-flow and setting it aside for the future. What you then do with the money – regardless of what you do – that’s investing. So if you put it in a savings account to earn interest you’re investing. Or if you put it into a mutual fund, it’s investing. Or put it into the stock market, you are investing. Or if you buy bonds, you’re investing. Everything else is investing.
Me: I am amazed that we are not making diet & purse analogies to talk finances, as so many women-specific books and sites seem to do. Gail’s reply?
Gail: As far as relating diets to finance, I fricking hate it when people do that!! (insert proposal #2) How many diets do you know that are successful?. Compare finances to a diet and suddenly we are setting it up for failure. In people’s minds, dieting is about deprivation. I am trying to get people away from the idea that budgeting is about deprivation and to get people thinking about budgeting and about the fact that it’s your money – you decide how you are going to spend it, as opposed to letting it leap through your fingers and not knowing where it’s going…
Me: More than 85% of women are responsible for their household consumer purchases and yet the minute I mention retirement or investment, I hear crickets…these same women who manage the day to day budget do not seem to be responsible for their long term savings. What’s up with that?
Gail: One of the things that is very specific to woman and how woman think and the impact on how they manage their money: Women do not see money as the goal onto itself. Men accumulate money to watch the pile grow. Because they are winners, they are seeking to win – it’s a competition. Women see money in the context of the rest of their lives, as in
“Don’t tell me to pile money up in an RESP (Registered Education Savings Plan) tell me how I am going to save my children from a debt albatross when they’re going through school. Don’t tell me about saving for retirement -because remember now – I am trying to balance a crap-load of stuff all at the same time. Tell me that I have to take care of myself because my husband is going to die, divorce me or get sick. Ultimately I will be on my own”.
This is one of the things I have been trying to say to women for a very long time. I don’t want to be the downer, I’m not trying to say that your husband is a jerk and he’s going to leave you. I am saying that statistically, women end up on their own – whether through divorce or through widowhood - women end up on their own. And if we’re not in control of our own lives, our own money, things just get so much harder to deal with. So pick up the reins, while you’re in a good place and everything is humming along nicely, PICK up the reins and figure the crap out!
On that note, I excuse myself and rush out to purchase a copy of Gail’s latest book. I have not actually budgeted for this splurge, but justify it as a *wise investment*. I do not get a Starbucks, in order to off-set the cost of the book. I hope this is how it works.
The next post with Gail includes a discussion on the latest coupon craze, homes as investments and the bit where I make her *prove* she is just like the rest of us…..
GIVEAWAY: We have two copies of Gail’s latest book, Never Too Late to giveaway (Spoiler: we *may* be doing another book giveaway in the next post too…) To enter, simply leave a comment. For additional entries, click on the green Wall Street Survivor button (right-hand side) and enter your email to subscribe to our upcoming launch.