The Ultimate Father’s Day Present

To celebrate Father’s Day yesterday, I want to close with something that’s becoming a bit of a tradition.

It began in 2014 when we lost everything in a bushfire.

Today, almost all our stuff has been replaced.

Almost.

You see, my wife’s father died a few years before I met her. And in the fire we lost some of the last remaining photos of him, the letters he’d written, and the paintings he cherished.

Those can never be replaced.How does my wife explain who her father was to me?

How does she explain who grandpa was to our kids?

The physical reminders are now lost in the ashes.

So, if you’re lucky enough to have your father still with you, here’s how you can give him the ultimate Father’s Day present (okay, today it’s a day late, but do it anyway). Whip out your phone, hit ‘record’, and ask your dad the following questions:

1. How did you meet Mum?

2. What advice can you share with me about money, life and happiness?

3. What does being a dad mean to you?

4. What are you most proud of?

5. How would you like to be remembered?

This is not for Facebook or Snapchat. It’s for you and your family’s legacy. One day, it’s all you’ll have left of him.

And you’ll treasure it.

Public Versus Private

This week was the cut-off for enrolling our oldest son into Primary school.

It’s been a highly stressful time for my wife, who’s been agonising over our choices: public, private, Catholic.

Not me.

I’m a big fan of public schools, especially for primary school. And so, when I went along to the open day for our local public school I asked just one question:

“Who is your school banking with?”

My wife rolled her eyes and then proceeded to warn me against writing about this highly contentious topic:

“You shouldn’t write about public versus private schools … you’re going to to upset a lot of parents who’ve already made their choice.”

Excellent point. But I’m a finance guy ‒ and I don’t give a semicolon.

So here goes:

In Australia, around 35% of kids go to a private school, which is one of the highest percentages in the world.

And it’s bloody expensive. Private school fees have been growing at twice the rate of inflation. Australian parents spend, on average, $50,000 on their kids’ education, according to a report by NATSEM (the National Centre for Social and Economic Modelling).

And many parents can’t afford it. The Australian Financial Review recently reported that a quarter of parents borrow for their kids’ private school education, and one in seven run up a credit card to pay for school fees.

So is it a good investment?

Well, multiple long-term studies have proven that there is zero correlation between school fees and academic results (if you want to get a real eye-opener, read Free Schools by David Gillespie).

Still, some parents argue that if you send your kid to a private school they won’t be hanging out with a bad crowd. Then again, the best drug dealers go to private schools (or at least they did when I was a teenager).

So if school fees aren’t a predictor of a child’s success, what is?

Well, the biggest predictor of your kid’s happiness and success in life is how much time you spend with them.

Here’s the point: parents are often forced to work longer hours just to pay the ever-increasing fees. Personally I’d rather dial down the cost and spend more time with my kids, which would make me less stressed to boot!

So our son has been enrolled in a local public school. I think he’ll be fine. After all, I’m going to put my hand up to teach the school’s financial education class.

Tread Your Own Path!

A Total Disaster

Hi Scott

I am a 50-year-old widow with an eight-year-old. After nursing my partner through cancer (he lost his battle on Boxing Day), I have just refinanced my house to consolidate some credit card debt. I have also borrowed an additional $100,000 to invest. My financial planner suggested this as a way of getting my mortgage down. Now I am starting to panic about maybe doing the wrong thing, but I don't see any other way of reducing my debt quickly and setting myself up for retirement. I am really nervous.

Rachel

Hi Rachel,

I’m really sorry for your loss.

Now I don’t know your personal situation, only what you’ve written. So, like everything I write, this is general advice from a guy who doesn’t have a vested interest in flogging you anything.

I’ve had the privilege of working with many widows over the years, and if I was sitting across from you there is absolutely no way I’d advise you to borrow $100k to invest.

Why?

Because your partner just died, and you have a young child. This is not the year to be making major financial decisions. It’s the year to hold on and grieve.

Yet I totally get that you’re clutching for security when your life has been turned upside down.

However, this isn’t the way to do it. The truth is that debt always makes life more complicated. It always makes life more stressful. And heaping on more stress right now is the last thing you need.

You have 20 years (or so) before you retire ‒ so there’s no need to panic. Amazing things can happen when you work diligently towards a commonsense goal, but the first thing to focus on is getting yourself right.

Scott

The Reality Check

Hi Scott,

I’m in trouble. I am 33 with three young kids, and waiting for my divorce. The thing that is holding it up is our family home, which has been on the market for eight months. My kids and I moved out six months ago to live with my parents in Brisbane, so it is sitting vacant. We took advice from our first real estate agent, who said that we could get $720,000. He was hopeless. After five months we did not get one offer!The new agent started out all happy and confident. He convinced us to list it for $670,000. So far the only offer has been $570,000! We have a $660,000 mortgage ‒ I cannot leave with debt. This week he suddenly changed his tune and is now saying the property is at risk of going ‘stale’ and we need to drop our price. I am sick to the back teeth of real estate agents! What can I do?

Fiona

Hi Fiona,

A divorce doesn’t happen overnight, right?

It can take years of bulldust, blaming and baggage before you finally admit to each other that it’s over ‒ and make the decision to move on with your life.It’s the same situation with your home: it’s time to break up … with your price.

It’s been on the market for eight months with two different agents, and the only offer you’ve received is 20% below your original price. That’s the (real estate) universe telling you that your price is too high. Buyers don’t give a toss what the house has cost you, only how it compares with other properties on the market.

So what should you do?Focus on the things you can control.

Your real estate agent’s job isn’t to dig you out of your financial hole.

His job is to go out and find you the very best price in the current market.

Your job (and your ex-husband’s) is to decide what to do next.Houses aren’t like bread: they don’t go stale. However, it is true that, if a home sits on the market for months, buyers may start to think there’s something wrong with the property, or something wrong with the vendors.

And they’ll lower their offers accordingly.

Sitting around waiting to break even sounds like it’s already broken you.It’s time to act.

Scott

What About Helping ‘Tweens’ Too?

Scott,

Last night I was reading your book and my 11-year-old son asked me about it. I was reading the chapter about credit cards, so I explained the dangers of them to him. Would you consider revising your book and targeting ‘tweens’ like my son? He is faced with so much more ‘negative temptation’ than I ever was. He talks about an online shopping site called Wish, and he also talks about gambling because of those horrible Lottoland and Sportsbet ads. I think your advice and guidance would help reinforce some good financial messages for kids.

Nikki

Hi Nikki,

As luck would have it, I’m currently writing a new book ‒ The Barefoot Investor for Families: The Only Kids’ Money Guide You’ll Ever Need ‒ that helps parents to raise financially fit kids of all ages, including tweens. While my last book focused on doing ‘Barefoot Date Nights’, this one focuses on the entire family having ‘Barefoot Money Meals’.

It’s due for release in September. (Calm down, Bill. I told you not to read this!)

Thank-you for reading,

Scott

Can I Afford to Become a Mum?

Hi Scott,

My husband wants us to have a baby, but I am petrified at the thought of not earning money. How far backwards would we go if I can work only a couple of days a week, and/or have to pay daycare fees so I can work? Hubby runs his own business earning around $120,000 a year, and has two small business loans for equipment. His income varies month-to-month, so it is my wage ($57,000) that gives us the steady money. We have no loans other than our mortgage, and have Mojo tucked away. But can we afford a baby? Please tell me it’s going to be OK!

Hannah

Hi Hannah,

It’s going to be OK.

(Well, so long as you haven’t gone all ‘postcode povvo’ and got a supersized mortgage.)

I’ve spent my entire married life as a small business owner, so I have some ideas.

First, you are very much a part-owner in the business, so you need to be across the numbers, even if that means sitting down with the family accountant and having them explain the current state of the business to you. Fact is, you’re going to be relying on this business to take care of your family, so you need to know it inside out.

Second, the benefit of understanding the true state of the business isn’t just that you’ll stress less, but that the two of you should be able to set some realistic 12-month business goals, both in terms of lowering costs and increasing income. Write them down, and review them at least quarterly.

I actually do this with my wife on our Date Nights. At the start she was more ‘nah’ than ‘yeah’, but after seven years of being my partner in the business she’s shown insights I would never have had. Plus she’s actually way more hard-nosed than me when it comes to negotiating deals.

Finally, I’d go out on a Barefoot Date Night and sketch out your buckets – Daily Expenses (60%), Splurge (10%), Smile (10%) and Fire Extinguisher (20%) – and base it only on a conservative estimate of your husband’s income from his business.

If the numbers stack up, it’s time to become a mum!

Scott

Helping Out My Mum

Scott,

At the age of just 30, I am VERY aware of the importance of super. Here’s why. My mum is two years off the pension and has $8,000 in super. Yep, not a typo. I am going to ‘gift’ her $200,000 or so from the sale of my house (I have another, so will not be homeless), and she will be able to buy a house on which she will owe nothing. I have two questions for you. How might this ‘gift’ affect us? And how can Mum, who works full time earning $40,000 a year, maximise her super in the two years of work she has left?

Tracy

Hi Tracy

I hope my daughter looks after me as well as you do for your mum!

First up, let’s look at what you’re trying to achieve: you want to put a stable roof over your mum’s head so she has a sense of security and doesn’t have to worry about moving.

If I were in your shoes, I wouldn’t just give her the cash.

Instead, I’d consider buying an investment property in your name and renting it out to her.

There are three advantages to this:

First, when she goes on the age pension she’ll get rent assistance ‒ the maximum payment is $134.80 per fortnight.

Second, as long as it’s an arms-length transaction, you’ll be able to claim the interest and related expenses of the property against your tax, like any other investor can.

Third, it makes things a lot simpler. You should have a written tenancy agreement that sets out who pays for what, and what upkeep she’s expected to do, just like you would for any other tenant. That’s not only going to help you prove this is an arm’s-length transaction, but also manage everyone’s expectations. Also, in the event of her passing, the property is yours and is separate to her estate.

Now, as far as how your mum should manage her money over the next few years before she retires, here’s what I’d suggest if it was my mum:

When she retires she’s going to live on $23,597 per annum (the maximum pension for a single person, not including rent assistance and the health care card, worth at least $1,500 a year).

I’d encourage her to be a ‘practice pensioner’ – by living off that figure now and saving the rest of her wage.

Her aim should be twofold:

First, to have a goal of at least $100,000 in super when she finishes full-time work in five years (not two!).

Second, to never retire … keep working part time at least a day or so a week, and supplement her pension by up to an additional $6,500 a year (which, thanks to the Budget, will increase to $7,800 on 1 July 2019).

The upshot is that you’ll have an investment property with a great tenant. Your mum will have the security of a home, plus $100,000 in super to draw on, and she’ll be earning more in retirement (after tax) than she is right now!

Of course, you should run this past your accountant and financial advisor, but that’s how I’d do it.

Scott

The Ambulance Ride from Hell

Last year my two-year-old decided to do a swan dive off his highchair.

He landed on our wooden floorboards.

On his head.

As he lay in my wife’s arms, concussed, I rang triple zero, and then quickly jumped in my ute and drove all the way to our farm gate to meet the ambulance. As I sat there waiting ‒ without knowing what was happening to my son back at the house ‒ I made a promise to myself that I’d get first aid training.

It ended up taking the ambos an incredibly stressful (for me) 25 minutes to arrive. Thankfully, they were amazing. And, thankfully, by that stage my son had come to and was re-enacting the fall for them by performing headstands in the kitchen. Still, just to be sure, they took him to the Royal Children’s Hospital, where he was given a clean bill of health.

Fast forward to this weekend, and I now have my Certificate in First Aid.

For my wife’s Christmas present, I paid for our 10-strong family (me, Liz, my mum and dad, etc) to come over to the farm and do the full-day course with an instructor from St John Ambulance. It was actually a fun experience for all of us to do together. I got to wrap my mummy up like a mummy, and I luckily avoided giving my father mouth-to-mouth resuscitation.

The cost of the basic one-day first aid course is around $200 per person, and you can do it at one of St John’s training facilities, which are located throughout the country. Alternatively, like we did, you can arrange a bunch of your family or mates and make a day of it.

Now, if you’re reading this and thinking to yourself “I really should do this”, please do me a favour: right now, whip out your phone and type in http://stjohn.org.au/. Book in a class for a weekend within the next few months.

It might well be a life-changing investment.

Tread Your Own Path!

GoFund My Lifestyle!

Dear Scott,

A young relative of mine, a single mum with a one-year-old, is in such a bad state that she posted her financial hardship story on a ‘crowdfunding’ website. The only donation she got was from her own mother — which (to me) says her mum is happy for her daughter to beg! She owes money for bills, a car and other things — and has even been to one of those debt companies you see on TV that ‘help’ you pay your bills, but to no avail. I genuinely want to do something, but I have learnt from trying to support her mum over the years that you can’t help those who won’t help themselves. So I am writing to you to get some constructive advice. I can’t sit by and watch her become homeless!

Nadine

Hi Nadine,

So you’re annoyed that her mum took your hard-earned money and started weeing it up against the wall!

Now you’re wondering if the apple doesn’t fall from the tree.And you know what? You’re probably right.

However, if you genuinely want to help this young woman, you’re going to have to really connect with her.

So, let’s you and I look at life from her perspective:

She’s a single mother, deeply in debt, unable to pay her bills, and now resorting to begging for a buck. Trust me, she doesn’t need your judgement — she’ll be judging herself more harshly than you ever will.

The bottom line is that she’s scared she’ll never get out of her situation … just like her mum.

What she really needs more than anything (much, much more than a handout that enables her bad behaviour) is someone in her corner who truly believes in her. Someone who believes she has what it takes to eventually dig herself out of the hole she’s dug herself into. Right now she probably believes it’s a hopeless situation.

So take her out for coffee and show her page 189 of my book. It’s a profile of a single mother who I nicknamed ‘Mojo Mamma’ . This young mum was once all alone, with thousands of dollars in debts, and trying to escape a bad family. It took her years of hard work, studying at night, and scrimping and saving.

But she made it.

And today that woman is one of the strongest people you’ll ever meet.

Even better, her young son is going to grow up knowing how much of a fighter his mother is. Now of course your support and encouragement may not work … but how amazing would it be if it does?

Scott

Can I Trust My Parents-in-Law?

Hi Barefoot,

My parents-in-law (both in their 60s and retired) have put a proposition to my boyfriend, and I am very uncomfortable about it. He is in serious debt, with credit cards and personal loans. In two months they will lose their cheap rental home (they’re renting from a friend, who is now selling the place).

So they want my boyfriend to buy a home in his name for them to live in. They say they will pay him $5,000 a month and cover all other costs. For income they have four pensions -- two for themselves and two ‘carer payments’ they receive for having two people in their 80s living with them. They say it will not cost him a cent, so he can pay his debts and, when they all die, he will have a house. They all think it’s an amazing idea, but alarm bells are ringing for me!

Abbie

Hi Abbie,

Ding! Ding! Ding!

I’m hearing the same alarm bells!

I could be wrong, but it sounds like your parents-in-law have been moved on from mooching off their mate … so they’re looking around for their next meal ticket, which just happens to be your boyfriend.

Make no mistake, they’re looking out for themselves -- not for their son.So, at the risk of being the party-pooper, let me poop all over this plan:

First, retired pensioners can’t underwrite a mortgage -- especially when part of their income is supplemented by carer payments which may go to God at any stage.

Second, it sounds like your boyfriend would have trouble qualifying for a mortgage, given you say he is in ‘serious debt, with credit cards and personal loans’. And even if he can score a loan, it doesn’t mean he should.

What could end up happening is your deeply-in-debt boyfriend becomes your deeply-in-debt husband, and you both end up on the hook providing a home for his deeply dependent parents for for the next 30 years.

Ding ... Dong … don’t do it.

Scott

Three Is Enough, Barefoot!

Dear Scott,

You seem like a smart guy, but I think your wife is even smarter in wanting to limit the number of children you have to just three. The environment is freaking out, and curtailing the number of children born into our consumer society is one of the greatest contributions anyone can make. And all that money you save by not having those kids can be donated to worthwhile charities that help the environment, animals and people instead!

Jessica

Hi Jessica

You must be a real hoot at a baby shower.

I’m naturally an optimist, and on almost every measure right now is simply the best time in history to be alive.

Case in point: in his book Abundance: The Future Is Better Than You Think, Dr Peter Diamandis reveals that in the past century the average lifespan has doubled, and the average income has tripled. At the same time, food is 10 times cheaper, electricity is 20 times cheaper, transport is 100 times cheaper, and communications are 1,000 times cheaper!

Besides, a wise person once told me “no one ever regrets the kids they have … only the ones they don’t”.

Scott

The Ultimate Father’s Day Gift

Hi Scott,

I loved your ‘Ultimate Father’s Day Present’ column so much! My dad, who is 76, lives in WA and I have not seen him for five years. Today I called him to say I am booking a ticket for him to visit us at Christmas (and I will be recording his answers to your questions). As a single parent for over five years living week to week, there was no way I could have done that before. But I have saved, Barefoot style, and now I can! Your advice has changed my world (and my family’s).

Maya

Hey Maya,

Nice one. (For those of you who missed it, last week I urged readers to whip out their phones and ask their dads some simple questions, like ‘How would you like to be remembered?’)

Tell your dad what you just told me, and it’ll make him proud.

Thank-you for reading.

Scott

What Motivates Me

When I was younger, I was motivated by trying to attract women (largely unsuccessfully, but that’s another story).

That was a long time ago.

These days, I’m a dad, and my motivations have changed. It does have an upside though, I now get to wear the same jumper and chino combo most days (it’s my dad uniform), and I couldn’t care less if women looked at me … and they still don’t!

As a Dad, the thing that really motivates me now is being a hero to my kids.
(My wife? Well, the polish has worn off me, but, like a comfy pair of boots, she keeps me around.)

And let me tell you, it’s hard work impressing my boys.

Take this week, when I proudly announced:

Barefoot: “Today I’m meeting the most important man in the country!”

Four year old: “Donald Trump?”

Barefoot: “No … the Prime Minister of Australia!”

Four year old: “Does he know Jimmy Giggle?” (The ABC Kids host).

Barefoot: “No, I don’t think so … ”

Every DIK (Dad I Know) is motivated at a deep level to be a hero to their kids. (Of course, the only one who really nails it is Jimmy Giggle … he’s got it all sorted out.)

The thing fatherhood has taught me is that deep down your kids aren’t impressed with what car you drive, or the suburb you live in, or the clothes you wear, or even the fancy-pants people you get to meet in your job — all they really care about is spending time with their hero.

Pediatrician Meg Meeker, in her book Strong Fathers, says that if dads could look at themselves through the eyes of their kids — and see just how big and important and powerful they are to them — that’s all the status they’d ever need.

And to celebrate Father’s Day, this week’s questions are dedicated to dads …

My Totally Independent Financial Advisor … Sucks

Barefoot,

My wife are in our early 50s. Adult kids. We earn $180k a year combined, with $200k left on our mortgage, $200k in savings, and $350k (combined) in super. This week my wife and I met with a financial advisory firm who claim they take ZERO commissions and proudly claim their independence from EVERYONE. All good so far, but when we saw their fee pricing … bill shock moment! They want $7,500 up front as a project fee, then $600 per month thereafter. They were admittedly thorough in their fact-finding about our situation, but we just cannot accept their price as a good value proposition. Curious as to your thoughts.

Warren

Hi Warren,

Well done for seeking out an advisor that takes zero commissions. However, let’s be honest: your advisor is not truly independent … he has a vested interest in advising you to write him a $600 cheque each month!

However, it may be worth having them review a simple, set and forget plan: pay off your mortgage. Review your insurance. Build up a three month Mojo fund for emergencies. Then continue working hard, but save harder: salary sacrifice $25,000 each into a low-cost super fund. Invest the rest via a family trust into low-cost index fund that you can distribute tax-effectively to your adult kids.

Think of it this way: if you invest the $600 a month into shares, in 20 years time it could be worth $330,000.

Scott

Any Advice for an Overwhelmed Widow?

Hi Scott,

It is with a heavy heart that I write for advice. Last week, my best mate of many years suddenly decided to end his life, leaving behind young wife and two primary school aged kids. He also left behind a financial mess. I have told his wife to call and get everything ‘frozen’ while she comes to grips with it all, but is there any other advice you can give her?

Tom

Hi Tom

What a heartbreakingly sad situation. I’m so sorry for your loss.The admin that’s required after someone dies can be overwhelming… especially if you’re grieving.

However, the first thing she should do is contact her husband’s super fund. The final payout is called a death benefit, and it’s a combination of his final balance and any insurance held at the time of his death.

To get the ball rolling, she’ll need his death certificate (or, if that’s not yet available, the interim death certificate), his passport, his driver’s licence (or birth certificate), a copy of his will (if there is one), and letters of administration (if applicable). Generally, banks and other financial institutions will need a death certificate before they can start the process of settling accounts.

From experience, she (understandably) won’t be in any state to make rational financial decisions for at least a few months. What she needs is someone who can help her get a clearer picture of her financial situation. And that’s the job of a best mate.

Note to the reader: I’ve offered to help them through this process.

Scott

Help! Money Just Appears in My Account!

Scott,

My in-laws are our ‘financial alpacas’ -- they keep giving us money! I hate it but my husband loves it. I have asked them to stop, but they won’t, so it just keeps appearing in our account. I know they do it out of love, but the fact is we already earn loads ($200,000 a year)! I honestly believe they want nothing in return. How do I cope knowing I do not have to do anything in your book and we will be just fine? I feel so unproud of myself.

Gemma

Hi Gemma,

Well, I can finally retire. I have now officially had every question under the sun. (I‘ve been waiting for the ‘money just keeps appearing in my account’ question for years). Only joking. They sound like they’re generous people who are simply driven by giving (I can think of worse traits to have in in-laws). If I were in your shoes I’d sit down with them and reframe the situation; you don’t need the money, but plenty of people do. So, as a family, could you work together to help the truly needy people in your community? That would make the both of you feel proud.

Scott

Sinking Not Swimming

Scott,

My stepdaughter is a single mum in her early forties, with two kids. She earns $60,000 working three days a week, and has never owned property. She has $10,000 saved. She wants her bank to second-mortgage my house for a deposit for her in country Victoria on a house worth $350,000. I have $102,000 in credit card debt and (at most) $100,000 equity in my house. I am struggling with my own debt but I feel sorry for her and would like to help. I am widowed from my second husband. What should I do?

Linda

Linda,

It’s beautiful that you are wanting to help out your stepdaughter ... but with $102,000 in credit card debt you are clearly not in any financial shape to help anyone. It’s like someone who can’t swim diving into the sea to rescue a drowning person. Who’s going to rescue you?

Scott

Help! My In-Laws Are Outlaws

Hi Scott,

Right now I feel completely helpless. At 21 I purchased my home and have been renting it out for the past six years. I have always been a good saver. I met my partner a few years ago and we have been planning our wedding. However I recently found out he has taken out a $50,000 personal loan on behalf of his parents as they have been struggling. They make the repayments, but the debt keeps getting bigger. Their current lifestyle exceeds their pension payments by 150%! They have a $2 million home that they have promised they will sell and repay the debt, but they’ve been talking about it for years! How can I help his parents and him make better choices and live debt free?

Emma

Hi Emma,

You’re entering into a family that’s built on denial.

You won’t change his parents’ bad behaviour. But you can try and stop your fiancé enabling it.

The big risk is that you’ll end up ‘breastfeeding’ these Baby Boomers forever.

So here’s how I suggest you should handle it:

First, both make the repayments on their debt -- but only till the end of the year. This will give his parents enough time to sell the house and repay the debt.

Second, sit down with your parents-in-law and tell them that you can’t afford it, because you’re saving for your wedding and setting up your own family. But also tell them that you -- the loving but firm daughter-in-law -- want to help them out of this temporary tight spot.

Okay, so the thought of doing that probably makes your blood boil, right?

Well, here’s the truth: you and your fiancé are already effectively paying for the debt anyway. This way you get to cover yourself in glory, amp up the emotional pressure, and shine a light on their stupidity.

Third, I’d give them a copy of my book, which will show them how they can live a comfortable lifestyle with just $250,000 combined in super.

Finally, if your fiancé wants to keep living in denial with his parents, let him. Just don’t marry him.

Scott

Am I Going to Lose Everything?

Hi Scott,

About 18 months ago I put a $15,000 deposit on an off-the-plan apartment. The idea was to sell my home for the same amount as the apartment and move in. But I have not sold my home and it is now worth less than the apartment. I have been caught by the development finishing six months early, combined with a flat housing market in Perth.

I asked for an extension and got 30 days from settlement, but after that I get penalised. So can I legally get out of this deal, or can they just bankrupt me? I only have my house, my car and a very little super, as I had a stroke in 2002 and used my super then. I also get easily bamboozled due to the stroke.

I work two days a week and am on a disability pension, earning approximately $44,000 per annum. I am 71 (and single), so my ability to get a loan or pay one off are minimal. Please help me -- I cannot see any way out except one, and that would leave a big mess for my children. I would not do that.

Jenny

Hi Jenny

You’re definitely in the dung ... I just don’t know how deep you are.Now, some people believe they can walk away from an off-the-plan development and only lose their deposit.

Yet that’s not always the case.

Ultimately it depends on what’s in the contract you signed, and how desperate the developer is … and given Perth apartment prices are cratering at the moment, I’d wager they’re as desperate as I was at my high-school formal.

The worst-case scenario is that your developer swallows your deposit, hits you with financial penalties for not settling, and then sues you for the losses of on-selling your apartment (when they eventually find a buyer).

But that’s all in the future, maybe.

Let’s you and I just deal with the next 30 days.

It’s highly unlikely you’ll be able to settle in the next month, and it’s also highly unlikely you’ll get bridging finance. So here’s my advice: see a lawyer immediately.

Let me be crystal clear, Jenny. Put down the newspaper. Pick up the telephone. Call a lawyer.

Have them review your contract, then ask their advice on mounting a case for being released from the contract due to your impaired judgement.

What are you doing still reading, Jenny?

Get on the phone. Now!

Scott

Barefoot Confessions

Hi Scott,

I am 25 years old, newly married. I am the worst spender I know. I have about $8k debt that my husband doesn't know about.We want to start a family but I'm worried I’ll get stuck as a stay at home mum and be in debt forever. I can’t control my money. I want to pay off my debt and get my finances into order but I don't know where to start. I really need your help.

Jessica

Hi Jessica,

Where do you start?

You’ve already started, by admitting what’s going on in your head. Now you need to share it with someone who can help you -- your husband. The way you’ll get out of this mess is to fess up to the man you married, and tell him what you wrote to me: that you’re worried about being stuck as a stay at home mum, that you’re depressed, and that you self medicate by spending (okay, you didn’t say that -- I did).

The good thing is that you’re fronting up to him with an $8,000 debt. That’s not a lot of dough in the scheme of things. If you work together as a team, you can pay it off by the end of the year.

However, let me give you this warning: if you continue to keep this a secret from your husband, things are going to get a lot worse. Your debts will grow in line with your depression. The truth is that your current financial situation is a symptom of what’s going on in your head.

Luckily for you, you have a bloke that loves you, and wants to help you.

Let him.

Scott