There’s been a lot of yadda yadda yadda about financial literacy, but it’s not what most people think it is. It doesn’t matter how much you know, if you aren’t using what you know, you aren’t financially literate. Some of it’s not particularly exciting. And some of it is a royal pain in the arse. But if you don’t do the detail, you can’t whine when you feel like you’re standing on shifting sand.
At any point the ground beneath your feet can begin to shake. Lose some hours at work, shake. Lose your job, major shake. Get sick for a week, a month, a year, shake, Shake, SHAKE!
If you don’t have a plan that includes money set aside for the future, how do you deal with the crap that life throws at you?
No budget means you have no idea where to trim back. No emergency fund means you have no options. No retirement plan means that not only are you going to be old, you’re also going to be poor. I don’t know what would suck more than that.
But Gail, you say, I just can’t seem to save a cent?
Sound familiar? Well take a look at yourself in a fresh light. If you can’t save because you’re living on a very low income, you’re right, you don’t have any money to save. You’re going to have to develop some strategies to cope with not having money to spare. And you’ll be counting on CPP and OAS to see you through retirement.
But if the reality is that you’re making excuses — if you drink coffee in the morning, buy cigarettes, or have cable — you’re choosing not to save. It’s not a lack of money. There are about 7,496 ways you can spend money rather than saving. All the financial knowledge in the world isn’t going to change your behaviour unless you stop making excuses.
My Money, My Choices is about doing. I believe 85% of what it takes to build a strong financial foundation is already in your head. You already know you shouldn’t spend more money than you make. You already know that if you’ve got debt you have to get it paid off. And you already know you should save something for the future.
The other 15% IS more complicated. Investing, insurance and estate planning are specialized areas, but the good news is that there are experts who can help. You just have to know how to find the right one.
Time to Take Control of Your Money
So here’s what the program looks like:
My Money, My Choices is a community-based program, so those participating in the program will help family, friends, and coworkers get smarter about money. Participation is absolutely free and your information is YOUR information. All you have to do is find like-minded people AND have the gumption to finally take control of your money and your life.
Here’s how each My Money, My Choices community will be set up.
- First, you must pull together a Tribe. A Tribe is a group of interested participants from your community. You can define your community however you like but I define a community as any group with similar interests. It could be your religious community. It could be at your school or workplace. It could be your book club, knitting club or hockey team.
- Each community will include at least one Watcher. What’s a Watcher? The Watcher is someone who is already financially literate (according to The Book of Gail), organized and has the time to shepherd the members of the Tribe through the program, tracking progress and acknowledging successful completion of each level.
- Once you’ve gathered your community together, have each person enrol at mymoneymychoices.com. It is your starting point for all the tools you’ll need to take this journey together.
- The Watcher guides the first 2, 3 or 4 members of your Tribe through Level One. Once those first members have completed Level One, they will move on to Level Two. They will also each be responsible for guiding up to 4 new Tribe members through Level One. So, as each Tribe member completes a level, they will help someone else through the level they’ve just completed. That’s the “learn one, teach one” system.
- When you’re guiding someone else through a level, you’ll be helping them to understand what they need to do, encouraging them as they complete each activity and signing off on their completions. You’ll be reinforcing your own learning. And you’ll be sticking with the program because others will be counting on you. And that’s how you’ll stay on track: you’ll be NEEDED and COUNTED ON. You can’t afford to screw up. You’re an integral part of the success of the program in your community.
- There are 23 levels in the program. You must complete a level before you move on to the next level, and the first level is the hardest. By hard I don’t mean difficult. By hard I mean a crap-load of work. If you don’t have the gumption to do the Level One activities, leave now. You need a backbone and a sense of determination to do the tough stuff so you can get to the good stuff. Big change takes work and commitment and can mean big results.
- Within each of the 23 levels there are a series of activities. When you do the activities you get points. The points are how YOU measure YOUR progress.
- At each level My Money, My Choices will offer a link or reference to a resource to help you work through the activities. There’s no need to reinvent the wheel; there’s material already available for you to use. Over time I’m going to build more resources and put them on youtube. If you know of a terrific resource that other people can use, send it to firstname.lastname@example.org with “resource” in the subject line and we’ll check it out.
- There is no race to the finish in this program. The point is always to be making progress. The other point is to always know the next thing you need to do to solidify your foundation.
Take Control, One Step at a Time
Here are the questions I hear most often from people: “What do I do? Where do I start? What happens next?”
My Money, My Choices provides a schema, a framework, a place to begin. And, having begun, the program will guide you through the next step, and the next, and the next.
So why is Level One so tough? Because you’ve got some serious work to do. That’s where you have to create a spending analysis, a debt repayment plan, a balanced budget and a net worth statement. Level One is the work you must do to lay the foundation for everything else you will achieve.
When you finish Level One, you’ll earn your first badge. Then it’s time to pay it forward. You’re going to introduce someone else to My Money, My Choices and guide them through Level One, even as you move through Level Two.
At Level Two you’ll align your cash flow with your bills. You’ll begin using a spending journal and will earn points for every week you do so consistently. You’ll also enter the information you gathered in your spending journal into your cash flow budget.
At Level Three you’ll calculate your savings rate, set up and automate your emergency fund, enroll in your company pension plan if you have one, and if you don’t you’ll set up and automate your own retirement savings. You’ll also open a curveball account, a TFSA and if you have kids you’ll set up an RESP.
Your emergency fund covers job loss, sickness and death. For the little things like a dress to wear to your best friend’s wedding or a new hockey stick to replace the one your son broke in his last game, you might need a little extra cash. Your Curveball Account is money you can pull on without upsetting your entire budget. I recommend $500-$1,000 in a high interest savings account. And whenever you use your curveball account, you MUST replenish it before you buy so much as a cup of coffee.
As you progress through My Money, My Choices, you’ll learn to establish and use credit to your advantage so that you’re making good decisions, and you’re not at the whim of someone with an agenda that doesn’t serve your needs. You’ll make a will because you’re gonna die! You’ll buy enough and the right kind of insurance to make sure your family is well protected. You’ll learn to set goals. And you’ll learn about investing. By the time you complete Level 9 you will have created a solid plan. From there to level 22, you’re implementing the plan and growing financially stronger every year. At level 23 you are rockin’ the world.
I Could Do This On My Own
Yes you can. I’m not the only one with the info. You can go anywhere you want to go if they’ll help you become financially literate. You just have to be sure that they are there to serve your needs, not their own agenda.
Will My Money, My Choices Make Me Rich?
Let’s talk about how you get rich because that seems to be something everybody’s obsessed with. In my world, rich is not how much money you have. Rich is how well prepared you are when life throws crap at you, how satisfied you are with your progress towards your goals, and how happy you are with what your money is doing for you. Money is only a tool. Money gets you the things you need and some of the things you want. But more money does not make people happier beyond meeting their basic needs. And if to make more money you sacrifice important things like friendship, family and fun, you’ll be wealthy and sad. You won’t be rich.
My Money, My Choices is about having perspective, setting priorities and making choices that take you closer to achieving what you want in your life. A person who is driving a late model foreign car, living in a big house with marble floors and granite counters and travelling three times a year does not have a better life than someone who is working with an autistic child in a classroom, making little or no money, but contributing in ways that change the world. Having enough money so that you can be independent is important, but only you can decide how much is enough. Let anyone else make that decision for you, and you won’t be happy. So go ahead and make your life rich, but don’t bank on money to accomplish it.