As young children we learn to avoid, it is human nature. My two daughters try every day it seems to avoid certain chores, or tasks. Take homework for example: children need to learn how to use a day planner and how to break down the large assignments into small achievable daily tasks. Avoiding the project or task until the final hours before it is due, increases stress levels and the final copy is of poor quality. Yes we all know this FACT by the time we are adults!
However, avoidance is the first behaviour that I focus on when dealing with families and their budgets. The first question I will ask is where is your mail? You would be amazed at the “unique” filling systems or lack of that I have seen! There are some people who bring down boxes (covered in dust), or some cute small file organizers, but most cannot bring me their mail or bills. Why, because the mail is filed throughout the house. One of my customers used behind there fridge as a filing system. Talk about avoidance. Once the mail has been tracked down it is very easy to see who has the mastered the skill of Avoidance. I have seen over an entire year’s worth of mail in one box and not one single envelope had been opened. Yes there was mail from the “tax man” and all the regular monthly bills X twelve. What if there was a winning lotto tickets in there?
Now going beyond opening your mail, my second question is, “How many bank accounts to you have?” For my customers who are reading this, I know you are smirking. This is my favorite question. Some people have one or two accounts, but many however have five, six, or more. Some people opt in favour of having bank accounts with overdraft protection attached with limits of up to $5000. In addition there are Line of Credits accounts, Savings and Chequings. Now the game of avoidance in this example is how to avoid knowing what living within your means is. This is accomplished by making your financial life so complicated transferring money from one overdraft account into the line of credit then back into the main account in a never ending cycle. This is what I refer to as pretend money! You have worked hard all week, and it is finally payday! Your cheque is automatically deposited into your account. But wait your balance is still in the negative. Hmmm, to avoid costly overdraft fees you transfer money from your line of credit because this payment is only 3% of the entire balance, and then your proceed to live off the credit card for all your daily expenses because there is a delay of two to four weeks depending on when your due dates are. Now times this behaviour by two, as both the husband and wife are transferring money from account to account and now you are immersed in a cycle of debt.
- If this is you, please stop the avoidance it is time to simplify!
- Stop the Overdraft protection or at least limit the amount to $500.
- Have one main account and one or two Savings accounts no more.
- Do NOT use your Credit Card or Line of Credit unless you have already earned the money you are charging to it.
- Do not count on a paycheque that has yet to be earned.
- Please open your mail!
Take ownership of your finances and your life.