"BALANCING ACT" by Joanne Yaccato 


Additional thought of Graham White in highlights.

This is an excellent book for women.  It connects in a very personal way with many stories and insights specifically for women.  I have left out those stories and the detailed investing information in the second half of the book in favor of conveying the key messages that the book contains.

If you are a woman who does not know exactly what your personal financial plan is or should be, including women whose partners look after the finances -

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The Real Secret To Getting Rich

Take 10% after tax from every paycheque and invest it.  That should be the minimum.  It's called getting rich slowlyIt requires that you moderate your consumerism lifestyle, but in the long run, it is the strategy that will really get you what you want.

To find out how often your money is going to double, divide 72 by the interest rate you are getting.  To find out how often your money is going to double in value (value meaning how often you will be able to purchase twice as much), subtract the rate of inflation from the rate you are getting and divide 72 by that figure.  (12% return - 4% inflation = 8%  72/8 = 9 years).  So if you put away enough money to buy a refrigerator today, in 9 years that money would have grown enough to buy two refrigerators.


When I turned 30, I realized that I did not have the life I had imagined I would have when I was younger.  My house was rented, the car was leased, my closet boasted the finest quality clothing money could buy, but a family of moths had taken up permanent residence in my bank account.  I had $24 in my bank account because of my "live for the moment" type of existence.  It wasn't money that was my problem - it was my attitude toward it.

I had become fat and broke.  I wondered why, since I had discipline in other areas of my life.  If I was able to have a decent and fulfilling personal life, why couldn't I have a decent and fulfilling financial life?  The two, I decided were not mutually exclusive.  The only thing stopping me was fear - the task seemed huge.

I was afraid that learning new behavior about money was going to be unbelievably hard.  The idea filled me with tremendous fear until I realized it was going to be a cakewalk compared to the way I was living.  So I began with my weight (one issue at a time) and then moved on to my finances.

I knew how to make money - I just didn't know what to do with it or how to keep it.  I was spending money as fast as I made it, and I made a lot.  Bills got paid inconsistently, credit cars would sometimes be two or three months overdue before I got around to taking care of them.  The only payments that were on time were because of post-dated cheques that I'd had the good sense to write, or automatically came out of pre-authorized debit plans.

I did put money away into savings and investments, but when need arose, I would cash these in or if they matured, I treated them like found money and bought lavish gifts and holidays.  Money disappeared like a snowflake on a hot stove.

I had always wanted to own my own home, but never gave it very serious thought because it seemed completely out of financial reach.  I wasn't about to alter my lifestyle to try to save for a down-payment.

My career was a double-edged sword.  Income did not determine my lifestyle - lifestyle determined my income.  I was very good in sales an marketing, so if I needed more money, I would just work harder.  

In my early 20's I discovered the seductive power of credit cards.  The banks were pushing them at school and I jumped on with recl3ess abandon, without understanding the "dark side" of credit.


I became a "recovering spender".  More importantly, I put away childish notions that "he" was going to come and relieve me of this tiresome burden of money and all that it entails. You MUST put the proverbial knight in shining armor to rest.

Beliefs about money are based on emotional responses to certain life experiences.

A financial plan needs to be as individual as the person who has it.  Women in their 20's have dramatically different financial goals than women in their 50's and 60's.  This is the result not only of age, but of differing experiences and expectations.

At seminar presentations I often overhear women saying, "I don't know what I'm doing here.  I don't have any money to financially plan with!"  You will never have any money UNLESS you financially plan.

For people just getting started, financial planning can mean something as simple as getting organized, beginning to pay your bills on time, reading a book like this one, attending a free seminar - all of these are financial planning.  Any step you take toward financial literacy is part of the process.  And it doesn't have to cost you a cent.  Eventually, however, you are going to have to start organizing the actual dollars you spend and siphon some off to build your financial base.

You must invest time and energy into financial fitness the same as you would for physical fitness.  Pace yourself though, or you will be at risk of burning out, or flaming out (investing too much too soon and losing it because you didn't know what you're doing).

Credit Rating

The quickest way to establish a good credit rating is to borrow money from a financial institution and pay it back promptly.  Current income and ability to pay are factors, as is living at the same address for a long period of time.

Create An Emergency Fund

After recovering your credit (do this through credit counselling with a local agency - this step alone may take years if you've really made a mess, but you might as well start now rather than letting it get worse) after rebuilding your credit, it is time to create an emergency fund.

Death or Divorce

If you don't know anything about your finances, what is your plan should something happen?  Women are often motivated into learning about finances only after a crisis.  Women who become divorced or widowed can find themselves in a terrible bind when they realize they can't get credit and may become emotionally and financially destroyed because they left the finances to their husband.  

  1. Make it your business to know what is going on with the family finances.  At the very least, know where everything is filed!

  2. Always have your own account.  Too often the joint account is emptied by whoever gets their first in a nasty divorce.  If your partner dies, all the credit cards in your partner's name that you share can be frozen.  It is appropriate to have money of your own stashed away in case a crisis occurs.

  3. Get your own credit rating.  Open your own line of credit and have your own credit card in your own name.  Become an individual, an identifiable person in the eyes of the financial institutions.  You can use the things that you are mutually liable for payment of, but you must contact all your creditors directly and tell them to report the credit history of both you and your partner.

  4. Be sure to list everything that was yours and his before you were married that has value.  If you bring in something of value to the marriage and don't have it listed, chances are it will be considered equally owned by you and your spouse.

Using Credit Cards

If you carry a balance on your credit cards, cut them up.  You can apply for new cards when you've proven that you have the ability to wait until you have cash to pay for your purchases for 6 months.  

Save for your purchases until you have enough cash to buy it outright.  The only way you should be using a credit card is if you have created a habit where you always pay off your credit cards every month, then you can use your credit card.  This will extend the length of time you have to pay for your purchase by up to 51 day.  (Tip: Make your purchase on the first day of your new statement.  You will then have a month before the statement date and 21 days from that date)


The average rate of inflation in Canada has been about 5% per year for the past 20 years.  The problem is, that is only the average.  The rate changes.  It is sometimes more and sometimes less.  If you are in debt when the rate goes up, it costs you a lot.  If you have investments when the rate goes up, you make a lot.  Invest when the rate starts going up and borrow when the rate hits lows.

 A dollar in 1974 was worth 14 cents in 1996 and much less today.  If you earn $40,000 a year at 30, you will probably be paid $135,454 when you are 55.  You won't be able to buy any more with that money than the $40,000 because you are simply keeping up with inflation.

Many women have money in a bank account earning a limited amount of interest and believe they are increasing the value of the money by doing so, but because the rate of interest on savings accounts is so low, it often doesn't keep up with the rate of inflation.  This means that if you put $10,000 into savings and leave it there, 20 years from today it will still only buy you something that cost $10,000 20 years earlier.  Even though the amount in your savings has increased to $17,000, it will still only buy you what $10,000 would 20 years ago because of the rate of inflation.

Your return on investment must be higher than the rate of inflation in order to be building equity for you.  To find out your true rate of return, subtract the cost of inflation from your rate of return (7% rate of return minus 3% cost of inflation equals 4% actual rate of return).  You should look for a minimum growth in your net worth of 10 to 12 percent to keep growing.  Five or six percent growth will keep you afloat, that's all.  You still want cash for an emergency, but don't fool yourself into thinking it is building true interest for you.

Don't put yourself in the position where you have put money into savings that you haven't touched and think that you're saving for your retirement.

Habits of Saving and Investing

Having an adequate emergency fund can buy you time for making important decisions that will affect the rest of your life.  The worst time to learn about financial planning or to make financial decisions is when you are under tremendous stress.  It can also buy you the freedom to leave a failed marriage or relationships.  Too many women are forced to stay in unhappy or unhealthy situations because of financial dependence or ignorance.

Begin by creating a safety net.  You need to be taking a minimum of 10% after tax and putting it away.  Don't just invest in RRSP's.  If you need quick access to cash, RRSP's are the worst form of an emergency fund!   If all your money is in equity mutual funds or the stock market, you can rest assured that your catastrophe will coincide with the day the stock market nose-dives.  You are then at the mercy of the market.  Having an emergency fund protects the integrity of each of your investments and allows them to do whatever they are designed to do.  And I repeat, "investments" does not mean a savings account.

For those who have a problem with saving money, only to spend it in order to reward them self, life insurance companies have a type of savings account often called an investment account.  You can set it up through preauthorized chequing, but what makes it particularly appealing is that you can't access it through a bank machine or write cheque on it or go into a branch and walk out with money.  It usually takes 7 - 10 working days to get your money.  This may be a good solution for you.

Ideally, you should take three months' salary net (after taxes) and put it aside into something earmarked for emergencies only.  (Emergencies don't include buying a framed, mint condition, original album that your life is meaningless without).  If it is an emergency fund you are trying to build along with RRSP's, put half your 10% into savings and the other half into RRSP's. 


People are outliving their savings these days because of ever increasing life spans.  By waiting 9 years to invest, you will have to put away twice as much.  Don't imagine you'll have twice as much to put away, because we have a natural tendency to increase our quality of life as we make more and don't have any more to invest.  Instead, invest early so that you can quit working early too!


Budgets don't work.  People don't stick to them.  Human nature runs contrary to the very idea of what a budget is about.  A "want" quickly becomes a "need" and your budget is quickly out of balance.   Very few people can budget effective, and those who can aren't very fun people.

People fight budgeting.  To many, a budget means life is over as they know it.  Budgets only give you a sense of your situations.  It is impossible to calculate your comings and goings down to the penny.  It is, however, important to know how much is coming in and going out consistently each month.  Things like rent or mortgage, savings, insurance, anything that remains reasonable constant, are easy to account for.  If this is difficult for you, you're in good company, even people who work in the field of finances have a hard time managing their own money.  

To manage your money more effectively, set up all of your bills on pre-authorized withdrawals from your chequing account, or use pre-authorized cheques.  Arrange it to come out shortly after your cheque goes in.  If all your bills are paid and there is money left over, feel free to spend it (as long as part of the automatic withdrawl is going into savings and investments too).  

This is the simplest way to create a safe secure lifestyle with the minimum level of having to actively manage your money.  It doesn't matter how much you earn or  think you can afford, if you do nothing else but save 10% of your net income, the chances are very high you will be financially secure.

Gender Tax

I'm not going to include what this chapter says, other than to mention what women already know - women pay more for men for many of the same products and services when it comes to beauty and appearance.  If the service is identical, refuse to pay more and tell your friends to do the same.  

Joanne Thomas Yaccato More About Joanne Yaccato 


Much of this book is and none of the detailed investing information is not contained in this synopsis.  If you would like to learn more:

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