Kevin Newman's financial life lesson - MoneySense

Kevin Newman’s financial life lesson

The national news anchor learns that keeping his lifestyle modest makes it that much easier to walk away.

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From the Summer 2010 issue of the magazine.

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I made a classic mistake when I purchased our first Toronto home — I reached too far. It was a shared brick building Torontonians call a duplex, in a downtown neighbourhood with good schools. As is customary in the news business, I was

given only a couple of days to house hunt when we moved to the city and it was the only house I saw that I felt I could credibly tell my wife and kids they would be happy in. It was my male / provider / “this move’s going to be great for all of us” nonsense. But we couldn’t really afford it.

Pretty soon I took on a second job lecturing at a local university, and to bring in some extra spending money, my wife got a part-time job supervising the lunch room at our kids’ school. But we were still falling behind on our minimum monthly payments, and it was putting me on edge. I had been brought up with a strong sense of parsimony—my parents paid cash for everything except their house. I hated the feeling of debt, falling behind, having to be the one to say ‘no’ to my wife and kids. And then I got fired. Kind of.

Late on a Friday night (as it always is) a manager told me I was being replaced on the broadcast I was hosting and that I couldn’t tell anyone until he returned from vacation. Good for him. Have a great time. Weeks went by, meeting requests went  nanswered, and when no new assignment was offered I knew it was a matter of time.

And here’s where my story moves from something many Canadians experience to something — I dunno — divine? I was sitting on the front porch of that unaffordable home one morning with my head between my knees to cradle myself. “This is it, isn’t it? I said out loud. “I’ve hit the ceiling in my profession. Do I need to do something else?” I think I was mostly seeking  the answer from myself, but once I arrived at work, someone else supplied it. There was a message on my phone from the head of recruitment at ABC News in New York. She wanted me to fly there right away for an interview to anchor an overnight

news program for the network. It really happened that exact same day. I’m a journalist. I’m not supposed to make this stuff up.

I worked 14 hours a day those first few years at ABC, leaving our small home in New Jersey at 10 pm every night and returning at noon the next day. Every weekend I would try to live in the daylight to be with our children, and I felt as you would if you flew to Japan and back every week — nauseous, exhausted, and short-tempered. The money was good, the lower taxes even better, and soon we could purchase things that were only a dream in Toronto. Practical things at first, like a better

mattress. Then a beautiful vase for the living room, and then carefully, over time, furniture to match it. I was determined to live within our means this time, so our home was barely 1,000 sq ft with one small bathroom for the four of us.

Eventually I was hired to co-host Good Morning America, one of those once-in-a lifetime opportunities that carry great risk  and reward. The day I signed, my wise New York agent, Richard Leibner, gave me this financial advice: “Don’t live up to this contract. Use every dollar to pay down debt and bank the rest. If we get another contract, then and only then should you step

up in life.” A colleague at ABC News, the respected political analyst Cokie Roberts, met me shortly after my new job was  announced and offered this: “I’ve seen so many get these opportunities and instantly start spending. Don’t let this job put velvet handcuffs on you. Always ensure you can walk away from it and the lifestyle it can provide.”

Good advice, because sometimes you don’t get to walk away, you’re pushed. By the time ABC News had lost faith in my ability to reverse a ratings decline in the show, nothing about how I was living had really changed, except for nicer furniture in our small home. But I had eliminated my debt. That remains the best gift of my life and I have honoured it ever since. To this day I never buy anything I can’t pay for with cash.

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