Indigenous Woman, Hear Me Roar!

Hi Scott,

I am a young professional Aboriginal woman from Cape York. In the past I made some foolish investments, but a few years ago I picked up your book. I loved it, though I struggled to get my hubby to read it. So I played him your audio-book in the car. He was so excited, given how easy it is to follow. 

Long story short — we are now on our way to financial freedom! We no longer have credit cards or a car loan, we have refinanced our mortgage, and our renters are paying our mortgage off for us. We also have a joint account and have started our little guy on the jam jars. I would love you to do a ‘Barefoot Walkabout Tour’ once COVID is out of the way. 

Tania

Hi Tania,

This makes me so happy. Well done!

We have a shameful history of finance companies ripping off Indigenous communities (especially when it comes to funeral insurance). One not-for-profit group that is making a huge difference in this area is MoneyMob Talkabout, who employ Aboriginal elders to teach financial education in remote communities. Check them out at moneymob.org.au.

NAB CEO says ‘get out now’

“Get out now.”

That’s the advice the CEO of NAB has given to homeowners who are struggling to make their repayments.

Yes, in his quarterly trading update last week, NAB’s new-ish chief, Ross McEwan, warned:

“There will be some circumstances where people are better off selling out early and taking some equity out of their homes, or keeping some equity, before it disappears.”

While most of the media didn’t give his words much attention, there are two good reasons that you and I should:

First, because in all the years I’ve been doing this column I’ve never heard a bank boss speak so candidly. 

Bank bosses are basically politicians: they get parachuted into the top job, stay there for five years, and rocket out with $40 million. Their main job is to stick to the script: “keep lending”. (And we’ve all witnessed how bad things go when bank bosses go off script, like getting into wealth management.)

So why is NAB’s CEO sticking his neck out?

Well, that brings me to my second point: he obviously doesn’t like what he sees on the horizon.

And know this: McEwan isn’t peering into a cloudy crystal ball. Over the years NAB has invested billions into tracking its customers’ every financial move. In fact, all the banks have incredibly detailed customer analytics that tell them what people are doing — or not doing — with their money, in real time.

Now, according to the banking regulator, APRA, roughly 1 in 10 mortgages in Australia are paused.

Which gets me thinking ...On one side, how long can the banks cop 10% of their customers not paying?

On the other, when will customers who are really struggling finally bite the bullet?

It’s a grim situation.

My hunch is that the banks are betting that the overwhelming majority of their customers will get through this. Yet they also know a small number of their customers won’t, and so they (well at least Ross McEwan) are turning up the heat on them.

My advice?

Please don’t misquote me: I am not saying you should sell your home.

What I am saying is don’t be a frog … if you were in hot water before COVID hit, don’t just sit there bubbling away.

We’re still early on in this crisis, and you have more options than you think. And if you want someone independent (and free!) to walk beside you and carefully lay out your options, call the National Debt Helpline on 1800 007 007 and speak to a financial counsellor (like me) immediately.

The last word goes to McEwan:

“We’ve seen in other crises around the world, when people try to hold on they end up walking away with nothing.”

Don’t say you haven’t been warned.

Tread Your Own Path!

The Broke Accountant

Hi Scott,

I am a single parent of two kids and, financially, I am hemorrhaging. I have been trying to domino my debts for three years, often paying off too much and leaving myself struggling (then ending up in more debt). I have multiple family debts and multiple payday loans that end up costing me a fortune to repay. I have accessed my super twice in the last five years, and have only $9,000 left in super. But here’s the kicker: I am a qualified CPA accountant — I should know better.

Jane

Hi Jane,

That must have felt good to get off your chest, right?

Well, I’ll let you in on a dirty little secret: I know a couple of financial pros who are broke. I also know a doctor who smokes, and a manic-depressive motivational speaker.

Look, let’s be honest, going to school and learning how to read a balance sheet doesn’t stop you from ordering $50 worth of UberEats instead of cooking a $5 spag bol. Managing your money is about your behaviour and the story you tell about yourself. Which for you currently is, “I’m a fraud, and I’m ashamed of myself, and things won’t get better.”

It sounds like your life is out of control.

And you know what?

As long as you believe it, you’re right. Your life will continue to spin out of control, and you’ll end up bankrupt.

So you need to find a new story. For example, you could say to yourself, “I’m an educated single mum raising two beautiful kids. I’ll do anything for them. No one messes with my family.”

You Got This. 

Scott

Nor Way! My Mother-in-Law is a Thief!

Hi Scott

We have had a bit of a shocker the past few days. My mother-in-law, who was visiting us from Norway, was arrested for shoplifting. We thought it was all a misunderstanding over a jar of manuka honey but, shockingly, she later admitted it was deliberate as she “didn’t feel like she’s worth much”. She also shared that she had incurred a huge debt (AU$1.7 million) on a bad business deal. She is 54 and is super-fit and organised, but she has not worked full time in a while and her main source of income is renting out rooms in her home, plus government handouts.

With my daughter-in-law hat on, I tried to encourage my husband to get her to see a counsellor. And, with my Barefoot hat on, I suggested she could sell an apartment she has that is worth $1 million. (She refuses to downsize from her main home as she is very attached to it.) Most importantly, I suggested she should get a job — any job! — because, aside from the financial upside, it would give her some purpose and a social life. But my husband tells me “she won’t get her government handouts” if she does. ARGH! What would be your 2 cents’ worth on all this?

Lexie

Hi Lexie,

Oh, I would be staying the hell away from this.

It sounds like your mother-in-law needs to sit down with a counsellor to help with her mental health.

If I were in your shoes, I’d encourage her to make an appointment with her GP, or call Beyond Blue (1300 224 636).

They’re qualified to deal with her situation, and they can refer her to a free financial counsellor.

Just understand that if she doesn’t want to get help then there’s nothing you can do. So, after encouraging her to see a professional, that’s exactly what I’d do: stay out of it, not lend her any money, and support your husband. That’s my 2 cents!

Scott

From the Depths of Despair

Hi Scott,

Not a question. I just want to say THANK YOU!

I know you receive hundreds of messages like this, probably each week if not each day, but I just wanted to share my experience of going Barefoot. At 31, having been married the year prior, I sat in my GP’s office crying my heart out, feeling suffocated by my $27,000 debt, feeling depressed like there was no way out. My GP listened to every word I said (in between sobs) and finally said, “I think we need a longer appointment”, and asked me to come back the next day.

Around that time a friend had suggested I read The Barefoot Investor. I had of course scoffed at the suggestion, but that day I decided I needed something, anything, to help. I read the book cover to cover in a day and felt so empowered that I began to draw my buckets and to have the conversation with my husband.

Two-and-a-half years on, I never did rebook that appointment! My husband and I are completely debt free! We own (outright) two cars, have had a baby, have been on a four-month holiday overseas, have saved $40,000, and are ready to buy our first home. Thank you, Scott. You will never know what your book did for our family.

Nikki

Hi Nikki

You bloody ripper!

In the sea of doom and gloom and depressing news, I’m craving good news stories, and hope — and that’s exactly what your story offers people.

You Got This! 

Scott

We Hit the Jackpot!

Hi Scott,

This month, my husband and I will finally be debt free! We owe nothing (though we also own nothing). My hubby used to have an addiction to gambling and a $120,000 debt on credit cards. We have spent the past five years paying every last cent off, while having three children under five, and I’ve also been studying at uni. My question is: moving forward, how can we make the best decisions to create wealth, and is trading shares just a form of gambling?

Kylie

Hi Kylie,

What a truly amazing all-of-family feat.

The fact that you guys bunkered down and paid off all your debts tells me a lot about the people you really are.

Know this: done right, investing isn’t the same as gambling.

You’re saving so you can provide for your family’s long-term security.

That is the polar opposite of gambling.

My advice?

Invest — but do it via your boring-as-hell low-cost super fund. Do it via a regular, automatic direct debit. Never look at the balance. Only check it once a year when your statement comes in the post.

And keep repeating to yourself: I’m not gambling … I’m providing a better future for my family.

You Got This!

Scott

The Hangover

Hi Scott,

My daughter lives with her partner and three children in a property that I own. They have many bills and are unable to pay rent. Her partner is wasting his money on gambling and will not change — he has even stated that he wants to keep his head in the sand. How do I get him to grow up? I have given him your book and my daughter is trying hard and has since started part-time work. However, they have three car loans and have debt collectors visiting frequently. Help! I feel powerless.

Jenny

Hi Jenny

It must be horrible to see your daughter go through this.

Now I know you’re coming at it from a place of love, but giving her partner my book won’t help one bit.

Why?

Because it sounds like he’s in the grips of a gambling addiction. And, if that’s the case, giving him my book is like giving an alcoholic a Panadol for a hangover.

So, what can you do?

A couple of things:

First, as hard as this sounds, drop the judgement.

I’ve learnt to view people with gambling addictions the same way I view anyone with a serious illness.

“When will you grow up?!” is like asking someone with a mental illness “When will you be happy?!”

Him telling you that he “wants to keep his head in the sand” sounds like a reaction to feeling judged.

Trust me, he knows how bad it is.

Second, encourage both him and your daughter to see a financial counsellor. Ideally, it would be a specialist gambling financial counsellor (call Gamblers Help on 1800 858 858 for a referral).

However, if he’s not ready to get help, encourage your daughter to go on her own. Reason being, the debt collectors will not let up, but a financial counsellor will sort them out and stop the calls.

Finally, you’re doing an amazing job providing them with a roof over their head. Make sure they keep getting the basics: food, power and schoolbooks.

You say you feel powerless. Just remember, that’s probably how your son-in-law feels too.

Scott

How to Honour Him

Hi Scott,

I am in my early thirties and feel hopeless. Recently I lost my brother to a very long and hard battle with cancer, and in his will he left me $10,000. I was thinking about spending it on a holiday or a nice piece of jewellery to remember him by, but I also have a $20,000 credit card debt that I have struggled to pay off for the past 10 years. Would you put it towards the debt or go on a nice holiday to get away from all the painful memories?

Bec

Hi Bec,

I’m sorry for your loss.

Here’s what I think: I think that losing your brother is a tragic, heartbreaking reminder that life is precious.

Bec, life is far too short to spend it being a slave to a bank.

And make no mistake: while you’re paying them $3,600 a year in interest, you’re effectively a financial slave.

If you keep on paying the minimum, it’ll take you 54 years to be free (and that’s if you stop spending on it today).

I think you should honour your brother, cut up your credit card right now, and live the rich life that he can’t.

Make him proud.

Scott

Terrified of Debt Collectors

Barefoot,

I am a stay-at-home mum with three kids. When my hubby and I moved to Brissie a few years ago, we had barely any money, so we got a credit card (and he also had a personal loan from a previous relationship). We could not keep up the payments, so we went on a debt agreement, but we ended up cancelling it as we could not afford that either. Long story short, we are now around $60,000 in debt. We have been ignoring calls as we cannot afford payments, and I am terrified debt collectors will come knocking soon. Help!

Jolanda

Hi Jolanda,

Your situation sounds … utterly exhausting.

Here’s the truth: feeling terrified is not conducive to making good decisions.The debt industry knows this, and they feed this feeling, because it’s the best way to get more money out of you.

That’s why debt collection companies hound you multiple times a day.

That’s why payday lenders like (Crime Converters … er, I mean Cash Converters) bombard you with text messages on short-term loans.

And that’s how someone signed you up for an expensive magic wand known as a ‘Part 9 debt agreement’.

Often these debt agreements are sold to people as a way for them to avoid bankruptcy … when the truth is that they are in fact an act of bankruptcy. In other words, you paid this mob thousands of dollars (that you didn’t have) for something that didn’t work.So what’s the answer?

It’s time to stop the terror, Jolanda, and get back in control.

Rather than ignoring the calls, it’s time to make a call:

First thing tomorrow I want you to call the National Debt Helpline on 1800 007 007.

They’ll put you in contact with someone like me — a free, independent, not-for-profit financial counsellor.

We can stop the calls from debt collectors, banks and other creditors, and negotiate a payment on your behalf.

It’s time to get you back on your feet!

Scott

From $500 to $15,000

Scott

I do not have a question, I just want to say thank you. Two years ago I walked out of an abusive relationship with $500 to my name and debts that should never have belonged to me. My sister and brother-in-law gave me your book and I quickly decided this was how I would take control again. After two years of hard work and sacrifice, I have paid off all my debts and saved almost $15,000, and I am hoping to buy my first home at the end of 2020. I keep all of your columns in a folder called “YOU CAN DO IT” — and I did! 

Rachel

Hi Rachel,

I love celebrating the wins of the Barefoot community.

Yet I love it even more that right now, hundreds (if not thousands) of people in abusive relationships are reading your story and getting a little inspiration and motivation from hearing about someone who’s done it.

You Got This!

Scott

Hello, I’m calling on behalf of my idiot husband...

I picked up the phone at my financial counselling office. It was a woman, breathing very heavily:

“I need to speak to a gambling counsellor.”

“Do you have a gambling problem?” I asked.

“No, it’s not for me. I’m not that stupid. It’s for my idiot husband.”

Turns out she’d just caught her husband of almost 20 years gambling on his phone.

He broke down in tears and admitted to her that he’d been gambling heavily for the past five years.

“How much has he lost?” I asked.

“Four thousand dollars”, she said bitterly.

“As in … total? That’s it!? Are you sure?” I asked, with both my eyebrows fully cocked.

“Yes, I am sure. I told him, “If you’re lying to me, I’ll cut your nuts off!”

Intense.

Then again, if my wife had threatened me with that, I’d have low-balled her too.

(Pardon the pun.)

Look, I have no doubt this poor woman was in shock and denial. 

And I also have no doubt that her husband’s losses would rise as she put down her butcher’s knife.

Here’s a ballpark of what he may end up fessing up to, courtesy of Graham, a real-life case study from Financial Counselling Australia:

Graham thought he and his wife were tracking along nicely. His wife enjoyed the occasional ‘flutter’ on the weekend. Besides, she couldn’t do too much damage — she only earnt $672 a week.

Then he got flattened when she confessed to running up $130,000 in debt.

They may well lose their home.

You probably know that we Aussies are the biggest punters on the planet ... but you may not appreciate that the biggest losers are the families of gamblers.

And the winners?

There are three:

The gambling companies (obviously). The governments (tax revenue). And … the banks.

You see, credit cards used for gambling are a huge money spinner because gambling is a cash advance, which attracts a higher interest rate, charged from day one.

Last month Financial Counselling Australia called on the Australian Banking Association to follow the lead of the UK, which last month banned credit cards being used for gambling.

A handful of smaller Aussie banks have already done so, but none of the big four banks have yet ... though they say they’re “considering it”.  

Thankfully, self-isolation has meant that with the casinos and pokie-dens closed, we’re no longer gambling.

Yeah right!

Aussie spending on online betting increased a massive 142% in the last week of April compared to a normal week, according to analytics group AlphaBeta.

My view?

It’s high time the big banks put their nuts on the line and banned credit cards being used for gambling.

Do it for Graham. 

Do it for my ballsy client. 

Do it for every kid who has a parent afflicted with this terrible disease.

Tread Your Own Path!

Nursing My Debt

Hi there,

I know you are probably sick of hearing this … but thank you so much. Four months ago I picked up your book.I am a single dad who works as a nurse, owns his own home, and works three jobs to make ends meet. I was $3,000 in credit card debt, had $750 of my rates outstanding, and a measly but annoying $220 of my car insurance still to pay. Well, today I domino-ed the last of these debts as I paid off my credit card. I jumped around my bedroom listening to the song ‘Celebration’ by Kool & The Gang … I was so proud of myself! 

Sam

Hey Sam,

How impressive are you?

You’re working three jobs -- including one of society's most important jobs -- just to get ahead for your kid.

In my book Barefoot Investor for Families, I encourage parents to do a family backyard ‘bill burning ceremony’ -- literally setting fire to a paid off bill, credit card or loan.

They’ll likely remember that night 30 years from now, and the underlying lesson: work hard and get out of debt.

Celebrate good times, come on! Thank-you for reading

Scott

Too Broke to Go Broke

Dear Scott,

I am one of those ‘bastard bosses’ you talk about — I am still about $40,000 behind on my employees’ super (including mine — I have not paid myself any super, ever). I am also going broke. After six years of trying everything to stay afloat, including selling all my personal assets, my company ceased trading at the end of last month.Now I am trying to work out what the hell to do from here. By the time I liquidate what’s left, there should be enough to pay out the employees’ super, but there will still be about $150,000 in debt, mostly to the ATO. I’ve been advised to hire a liquidator, to do things correctly and end up with more to pay to their super, but I have been told it will cost about $15,000. I know it’s all on me — but do you have any advice on what I should do next?

Simon

Hi Simon,

I don’t think you’re a bastard boss -- you gave it a go and you couldn’t make it work. Fact is, more than 1,000 small businesses go broke each week in Australia, according to data analysts Illion.

One option you have is to pay your employees their super, directly into their funds, with any money you have left.

As for the ATO, there are two ways to go: appoint your own (expensive) liquidator, or wait for the ATO to eventually appoint their own. And if it works out that you’re personally liable, then really your only option is to negotiate a settlement with the ATO, or declare bankruptcy. My take?

The person who told you to see a liquidator was bang on. If you don’t, there’s a risk that you’ll open yourself up to even more trouble. It’s time to let the nightmare play out.

Scott

Dead Broke in a Beamer

Christmas came early for my kids this year ...

Daddy finally got a job.

(Well, to be accurate, 220 hours of community service as part of my Financial Counselling qualification.)

On my first day, the three of them surprised me by getting up really early and having a celebratory breakfast with me (possibly with the aim of making sure I really did have a job to go to).

And when I returned home that night I was greeted — for the first, and possibly last, time — like David Boon coming home with The Ashes.

“Didja have a lot of meetings, Dad?” asked my six-year-old, beaming with pride.

In the schoolyard, real dads go to work and have meetings. (Not bum around the farm in their trackie dacks.)

It doesn’t matter that he can see me on TV, hear me on the radio, and watch me do book signings with lines a hundred deep: when I’m wearing a tie, carrying a keep-cup and battling the morning traffic, I am THE MAN.

So now that I’m a couple of hundred hours into this job I’ve learned that it’s like being a (financial) E.R. doctor.

No one wants to be sitting in front of me.

They’re often embarrassed, humiliated, angry, scared ... and completely strung out about their finances.

My job is to sit them down, calm them down, and assess their situation.

It’s basically financial triage: you patch them up, stem the bleeding, and send them back out (where you can). Or, if you deem their situation terminal, you tell their creditors and cut deals on their debts.

(This of course sounds sexy but, trust me, if your life gets to the point where a bank is willing to write off your debts, you’ll be celebrating with spuds and spumante.)

Above all, what I’ve learned is that this job is relentless.

Debt in this country is an epidemic, and people of all shapes and sizes stream through the door.

Like a bloke in his 40s that I saw today.

He arrived to our appointment in a BMW X5.

“Why does this guy need to see me?” I thought to myself.

He sat down, threw his fancy keys on the table, and buried his face in his hands.

He confessed that he’d leased the car five years ago and now couldn’t afford the final balloon payment. (And if you don’t know what a balloon is — don’t feel bad — neither did he.)

The upshot was that he was broke, and the Beamer would soon be repossessed.

Yet you know what?

To the outside world he’s THE MAN. He’s got an awesome car that he drops his kids off to school in.

By the time he came to see me, it was too late for him to avoid his mistakes.

But it’s not too late for his kids.

And what this financial tour of duty has taught me is just how much we need a financial revolution in our schools.

My client grew up thinking that success meant leasing a $100,000 Beamer … and he paid the price.

I want his kids to grow up knowing that success is driving a $15,000 Toyota … that you own outright.

Tread Your Own Path!

The $32,000 Couch

Hi Scott,

Ten years ago I got a ‘buy now, pay later’ $4,000 ‘living room package’ at a retailer (couch, TV, coffee table). Actually, the deal was that they gave me a GEM Visa with a $6,000 limit … so another $2,000 credit, which I stupidly spent. Fast forward 10 years and I am still struggling to pay it back. I am a single mother with a chronic illness, and while I really want to work I just haven’t been able to. Yet so far I have paid back $32,000. Last year, while I was in hospital, my debt was sold to another group, Lion Finance. They arranged a $10-a-week payment plan, but my debt has increased by $1,000 in the last year. I need your help!

Lisa

Hi Lisa,

Your email makes me sad, and incredibly mad. (So today I’m going to be a little bad.)

What a bunch of … bankers.

The business model of these institutions is basically to take advantage of people like you who don’t understand the complex contracts they’ve signed up to.

Yet you have acted honourably: you made a 15-minute mistake and have steadfastly paid a huge price for 10 years because of it.

Now you’re probably thinking to yourself, “Well, I’m just a single mum on a disability benefit, there’s nothing I can do … these finance guys have the upper hand”.

No, they don’t.You have the upper hand.

Together, we’re going to get this debt wiped -- to zero.

Don’t get me wrong. Generally, I’m in favour of people paying back their debts, but you’re in a special situation:

First, you’ve repaid the principal plus more than your fair share of interest over the past decade.

Second, the Lion Finance deal is disgusting: you’re repaying $520 a year, yet your debt rises by $1,000! On a Centrelink income, you’ll never, ever, clear it. They’ve effectively trapped you for the rest of your life.

And, finally, what are they going to do if you stop paying?

Well, they’ll probably huff, and puff, and threaten to blow your house down. But the truth is they can’t do anything: you don’t have any capacity to repay the debt, and you have no assets.

So this week I want you to call the National Debt Helpline on 1800 007 007 and ask to speak to a financial counsellor. Tell them your story, email them the paperwork, and request a debt waiver.

Time to stand up to the bullies.

Scott

From Zero to Five Kids

Hi Scott,

My wife and I — who have had an ongoing struggle with infertility — foster three children. And it has been awesome. However, we have just been given news that has floored us. Last week our doctor called to say we’re pregnant … with twins! Having just picked myself up off the floor, I am trying to figure out how to fast-track our savings to raise five kids. You have helped us wipe out $55,000 worth of debt and save $40,000 for a deposit thus far. We would appreciate any extra advice you can give us now.

John

Hi John,

Now there’s a plot twist I didn’t see coming. I have three children under the age of six, and the most common greeting I get from people is “You look tired”. But you two have gone from a comfy Kia to Toyota Tarago territory in just one phone call!

If we’re looking ‘glass half full’, remember that you’ve already paid off $55,000 in debt and saved up a solid deposit in the bank.

Yet the truth is that one of you will have to take time off work, and, with twins, probably for quite a while.

My advice?

Well, I wouldn’t be rushing to buy a house anytime soon. Instead, the money you’ve saved up should stand as your financial buffer, at least until you’ve worked out the lay of the land. The last thing you need right now is mortgage stress. You’re already going to have sleepless nights — no need to add to them.

Scott

I Spent $2,000 on Powerball Last Night

Hi Scott,

I spent $2,000 on Powerball last night and apparently did not even win my tickets back. I feel pathetic.

On my way to work this morning, I began to listen to your book (for the second time) on Audible and decided to write to you — and be honest with you (and myself). My husband and I are both 33. Not young, not old. We have three home loans and a car loan, and plan to have a baby soon. I also have a hard copy of your book on my desk and feel I am on my way to financial freedom, but it seems a long way to go.

Bridget

Hi Bridget,

I’ve answered thousands of questions, but I have never had someone tell me they spent two grand on a lottery.

Powerball? Is that even still a thing? I remember it looking like some tricked-up vacuum-cleaner spitting out coloured balls. The odds of winning Division 1 Powerball (according to their own website) are 134 million to 1.Here’s you: “Yeah, but you gotta be in it to win it, right?”

Here’s me: “Yeah, but if you think that way, make sure you steer clear of vending machines.”

(Statistically, you’re more likely to be killed by a vending machine falling on you — 112 million to 1.)

Okay, enough of the gags: there’s something deeper going on here.

You’re either an addicted gambler, in which case you should get professional help, because it’s an illness that won’t go away untreated (call Gamblers Help on 1800 858 858), or you’ve got a feeling of hopelessness about your situation.

Either way, there are no shortcuts to anywhere worth going.

Yet know this: you don’t have to hit the jackpot to feel good about yourself or your financial situation.

Instead, when you see a path out of despair (and hopefully my book can help you with this), each step you take will build your confidence.

From there, it’s just a matter of time: you’re already free. 

Scott

My Girlfriend Was Hiding a Secret from Me

Hello Mr Barefoot,

Just finished your book and it has completely changed my perspective on money — I finally believe I will be able to buy my future home in Sydney. That was until my girlfriend of one year surprised me with her $30,000 debt (credit cards, personal loan and education fees). I had a grand plan of saving together and buying a home, but now I feel like someone has stolen my mojo. How do I attack this problem?

Chris

Hi Chris,

She deserves your respect: it would have taken a lot of courage for her to lay bare her true financial state.

Honestly, the number of people who don’t do this till after they’re engaged — or married — is astounding.

Explain to her how you feel, and that you’ll work together to help her get on top of her finances.

You won’t do this by giving her money — this isn’t your problem — rather, you’ll support her by loaning her a copy of my book, and reinforcing good money behaviours by going on lots of saucy Barefoot date nights.

By the end of the year you’ll have a good idea of how committed she is to fixing her finances. If she sorts herself out, it’ll be a source of strength in your relationship. If she can’t, well, at least you know what you’re in for.

Scott

I Vowed to Write to You Once We Were Debt Free

Dear Scott,

Ten years ago, my wife and I were drowning in debt, with a big mortgage and maxed-out credit cards. I came across a copy of your (first) Barefoot Investor book and vowed to change our circumstances and write to you once we were debt free. Well, this week, 10 years on, in our early 40s, we paid the final instalment on our home loan. We have also built a healthy share portfolio and have not used a credit card in 10 years. It is the most amazing feeling to get there. We are debt free, and we sincerely thank you.

Dom

That has made my week.

But let me tell you: it has nothing to do with me (well, apart from a little at the start).

It’s you who did it, internalised it, lived it. You are freaking amazing.

Most people don’t stick to anything, ever. The fact that you were able to do this for 10 years … that’s incredible.

You pulled yourself out of a pit for 10 years!

Now, here is my prediction: if you can stick to something for 10 long years, the next 10 years are going to be really exciting for you. Because, if you continue doing what you’re doing, you’re going to build serious wealth for yourselves (rather than the bank).

With the dedication you’ve shown, I want you to email me in another 10 years’ time and tell me you’re millionaires. You deserve all the success in the world. I’m really proud of you.

Scott

My Baby Sent Me Broke

Hi Scott,

Over the last two-and-a-half years we have had two babies and a wedding. Our first baby came earlier than planned so it wasn’t covered by private health, and we made the silly choice to pay for it out of pocket. Then, over a couple of years on one income ($240,000), we have accumulated two credit card bills totalling a hefty $60,000. We have now read your book and managed to pay off two large loans using your method, but we do not know how to get these credit cards paid off. Please help!

Katie

Katie,

Look, I’m all for blaming my kids for everything (especially on a Sunday morning), but $60,000?

Seriously?

The cost of having a kid in a private hospital, assuming no complications, is about $10k.

Other parents have weddings and babies, but they don’t have $60k on the never-never.

You’re earning $13k a month in the hand, but you’re broke.

Why?

Because you’re spending too much.

If you’re looking for a magic wand, you can go to MyBudget (see above).

But if you ask me, you’ve already proved to yourself twice that you can pay down debt, so three times is a charm.

Besides, you guys are high income earners ‒ you could have this debt paid off within the year.

Even better, you’ll set a great example for your kids.

Scott