In some ways Gail Vaz-Oxlade reminds me of a sports coach who empathizes with players’ feelings one minute and calls them pathetic weaklings the next. Her book Debt-Free Forever delivers tough-love messages, hope, and wake-up calls for the debt-ridden.
Most financial books are aimed at helping those who are well-off optimize their finances and investments to make even more money. This book is aimed at the other end of the spectrum where people have multiple maxed out credit cards but still can’t resist the latest iThing or pair of boots. If you’re ready, Vaz-Oxlade has practical steps to right your financial ship. “If you’re still waffling, put away this book and go buy something else you don’t need.”
Vaz-Oxlade delivers practical advice for spendthrifts in a blunt but engaging style. Most people who overspend know they need to spend less and just telling them to spend less is unlikely to help. This book lays out practical steps for people to change their habits.
If you have some reason why you can’t start improving your financial life right now, the author invites you to “insert your pathetic excuse here”. The decision to take out a pay-advance loan is “dumber than a sack of hammers”. If writing down your spending “sounds like too much work, you’re a dope.” Those unwilling to work hard when they need more income are “lazy doofuses”. These parts of the book amuse me the most.
“The rule of thumb is that you should be budgeting between 3% and 5% of the value of a home for annual maintenance.” In 2010 I replaced my roof and I still didn’t get to a total of 3% for maintenance for the year. This rule of thumb seems off to me unless the author and I have very different ideas of what counts as maintenance. But it certainly is true that new homeowners need to expect maintenance costs.
Stopping Pre-Authorized Charges to a Credit Card
If you can’t get some merchant to stop charging you each month, you might try cancelling your credit card. However, this won’t always work. Vaz-Oxlade says “If you want your account to actually be cancelled, you must report that card lost.” Clever idea.
Finding a Better Job
“Don’t quit your job before you get another one.” It’s amazing how many people can’t follow this simple advice. The best time to look for a job is while you have a job. You seem more valuable to employers and you’re in a better bargaining position. If you’re already making $20/hour, it’s easy to ask for $25/hour from a new employer. If they say no, it’s no big deal. But if you have no job, you might just have to accept an offer of $15/hour.
The author stresses finding some way to create a visual reminder of your goals that you see every day including some sort of checklist where you can check off the steps along the way. I can see the importance of this. Deciding to spend less isn’t a one-time decision. It involves many choices day after day. Having a visual reminder can make it easier to do the right thing at times of weakness.
The Point of Thrift
“The point isn’t to eliminate every small pleasure from your life. The point is to choose those pleasures consciously”.
“You want to blow $50,000 on a wedding? Then have $50,000 in the bank. It’s that simple. But to go into debt for a wedding is just about the stupidest thing I can think of.”
This section was quite muddled. The book suggests that the reader write down 5 names, put them in a hat, and draw one. It then asserts that there is a 92% to 98% chance of that person becoming disabled (presumably at any point in his or her working life). I’m not sure what the hat had to do with anything unless the author really intended to quote the probability that at least one of these 5 people would become disabled. In any case, this just sounds like scare-mongering. Disability insurance makes sense at a reasonable price and doesn’t make sense otherwise.
Suppose that Grandma opens an RESP for her grandchild. Grandma is called the subscriber. If she hasn’t named a “contingent subscriber,” when Grandma dies the RESP money will likely go to her estate with government grant money lost and taxes to pay.
Losing Your Job
I’ve had friends lose their jobs and I never really know what to say to help other than to help them find new jobs. This book has several pages covering emotional and practical aspects of job loss that I think could be helpful for many people.
This book is aimed at those who handle their finances poorly. This is definitely not me. However, I was pleased to get some insight into the way that spendthrifts think and how to help them if they want help. For that reason this book could be of interest to those who wouldn’t benefit directly.