Goal Review End April

I would like to take this chance to apologize to any of my neighbors who saw me in my front yard last week dancing like a loon.  I’m not crazy, just happy . . . promise. 

Financial

- Set up RRSP investments with my return of value pension from the military and contribute $359 a month for the year, along with any tax refunds. CHECK [Savings are happening as planned.  The return of value has arrived and was promptly invested. See how here.]

- Pay off house in 5 years.  I should be able to accomplish this by doubling up every payment and paying a 10% lump sum every year.  CHECK [Made my double up for the month.  Also got $4,300 of scholarship money for my upcoming Master’s Degree which frees up some of the money I had previously put aside for my education.]

Educational

-Start Masters of Science / Masters of Science in Nursing in the fall.  CHECK [I have been officially accepted, hence the impromptu dance in my front yard last week.  I even have my supervisors all ready assigned.]

Social

-Join two new clubs in the local area.  CHECK [Quilting club is going strong and the writing group is meeting at my place every month to avoid paying for a venue.] 

Other

-Have my novel accepted to be published.  I plan to have it ready by the end of the month (January), so I can start sending it out. CHECK [The whole manuscript is done (and I’m avoiding making huge changes except for grammar, and I’ve sent out a query letter.)  Now comes the waiting.] 

-Become a respite foster parent. CHECK [I’m meeting with my Social Worker tomorrow and have been loaded on the next course.  I do need to follow up on getting the medical side sorted.]

-Take a big backpacking trip solo. CHECK [Saving is going as planned and I haven’t touched my vacation days yet.] 

-Finish my current crafting projects.  CHECK [The important one is being worked on almost every night.] 

I’ve seen progress on each of my goals for a lovely 100%.  In May I want to focus on a couple of things.  1.Set an appointment with my family doctor to get my medical forms for my foster care application filled out. 2. Review my Mortgage Plan and continue to work towards saving the extra money I’ll need for my 10% payments.  3. Keep up the good progress on my embroidery.  

Have a question?  I'd love to hear it!

Investment Proportions

I've finally done it.  All the hemming and hawing is done and I've come up with a plan for my retirement portfolio.  It stands as follows:

25% - Canadian Bond Index Fund
10% - US Stock Index Fund
20% - International Stock Index Fund
45% - Canadian Stock Index Fund

Which means I have 30% of my portfolio in foreign markets, 75% in Stocks and 25% in Bonds.  I am planning on keeping this ratio until at least halfway to retirement at which point I will start slowly moving towards a higher percentage of fixed income.  All of the Funds that I chose follow well known and established Indexes.

I chose this set up because:

- It will be 10+ years before I need to touch this money (perhaps as long as 40 years depending on how long I feel like working)
- I have a moderate to high risk tolerance, which means that I won't sell if my portfolio suddenly drops
- I have no desire to try and beat the market, I would prefer to match it
- If the economy in one area of the world plummets I have investments in other parts of the world*

*Of course all the markets in the world could plummet at the same time, the earth could also be hit by a meteorite, the odds though are fairly low.

Have a question?  I'd love to hear it!

Investment Rules

I'm a rules person.  Not in that I like people imposing rules on me.  That doesn't always go over so well.  I am, however fond of structures and guidelines on my own terms.  I make my own rules so that I know  that everything is in order.  Which means I have investment rules, of course.  While these rules are not hard and fast they give me a good guide of what to look for when buying investments and are the compilation of many many books that I have read.  They are as follows:

- Don't try to beat the market, match it using Index Funds.
- Never hold more than 75% of your total portfolio in Stocks or Bonds
- Never hold less than 25% of your total portfolio in Stocks or Bonds
- Keep at least 30% of your portfolio in foreign investments
- Use monthly dollar cost averaging instead of trying to time the markets
- Always look at the mutual fund/index fund's annual operating expenses, they should not be more than:*

·      Taxable and municipal bonds-------------------0.75%

·      U.S. Equities (large and mid-sized stocks)---1.0%

·      High-yield (junk) bonds-------------------------1.0%

·      U.S. equities (small stocks)---------------------1.25%

·      Foreign stocks-------------------------------------1.50%

There are guide lines that I try to follow with all investments.  These guidelines do still offer a lot of flexibility depending on when you intend to use your money and what your risk tolerance is.

**Maximum annual operating expenses are courtesy of Benjamin Graham's "The Intelligent Investor"

Have a question?  I'd love to hear it!

Raise a Little Hell of Your Own

It probably doesn't come as a shock that I am a big fan of Gail Vaz-Oxlade and subsequently have been watching her new show Money Moron.  Just as good as her other shows ('Til Debt do us Part and Princess) Money Moron illuminates the mistakes that so many in our society make on a daily basis.

One of the aspects that really struck me was how hard the people in the show looked for some place to put the blame, they certainly didn't want the blame to fall on their shoulders.  Sometimes it was their partner's fault for not being strict enough, or the world's fault for judging them too harshly, or the government whose tax laws were simply unreasonable.

It got me thinking of a recent blog post that I had read that encouraged finding a theme song for your finances.  And no, "Money, Money" by ABBA is not what they were thinking about.  Like most people I had never really thought about finding a theme song for my money but I was intrigued by the idea.  After all what could be a better way to motivate yourself when tempted by the latest gadget or when you feel like just spending a bit of your savings.  My new money theme song is "Raise a Little Hell"  by Trooper, and the couples on Money Morons could probably use the advice in the song as well.

“In the end it comes down to your thinking

And there’s really nobody to blame

When it feels like your ship is sinking

And you’re too tired to play the game

Nobody’s going to help you

You’ve just got to stand up alone

And dig in your heels

And see how it feels

To raise a little Hell of your own”

I find the idea of no one coming to help me liberating as opposed to frightening.  I have no one to blame for my failures except for myself and no one else can take credit for my success but myself.  It means I can stop waiting for everything to magically sort itself out and work on setting things straight myself.  This attitude is probably the most beneficial attitude with which to face your finances, absolute accountability and infinite will power.

Food Waste - The loss of good intentions

I am generally pretty proud of myself over the last two weeks.  Due to the new room mate situation and some poor planning that was the result of a number of weekends away I ended up eating leftovers for an entire week.  Yes, literally the whole week, lunches and suppers were leftovers from the week before.  It was convenient in that I didn't have to cook, but as fond as I am of leftovers a whole week of them was a tad excessive.  Of that whole time the only thing that got pitched were some refried beans that tasted just a tad funny.  Unfortunately they got dumped unceremoniously in the green pin without a picture for posterity.
I did however snap a picture of the unfortunate eggs which I had the good intention of turning into some sort of baked good.  As you can probably see from the date on the box my good intentions kept on being put off resulting in an unfortunate loss of two eggs.  Oh well, life gets busy and you have to prioritize.

Early Retirement.

The next scenario I am considering is Early Retirement.  Of course this means a lot of different things to a lot of different people.  For the sake of this article it's me retiring as soon as possible while maintaining my current standard of living.  (Which is quite frugal compared to most folks but it works for me.)

Over the next four and a half years I will be concentrating primarily on paying off my mortgage.  Meaning that my contribution rate to my retirement savings will stay at $359 per month.  While earning 7% interest and taking into account the current value of my savings $21,395.72 I can expect to have a retirement portfolio of $51,600 when I'm done paying off my mortgage at the age of 28.

Then things get interesting.  Since I no longer have mortgage payments to make I will have a fair bit of money each month to play with.  Anywhere from between $1,200 per month to $1,900 per month depending on how much of my mortgage I am paying directly from my pay check and how much I am paying from other sources of income.  (See original mortgage plan here.  Though it is due to be updated.)  Looking at my monthly budget I am confident that most, if not all of the $1,900 will come from my monthly pay check.  However, I will go slightly conservative and say that loosing my mortgage payment will free up $1,779 monthly.

At that rate I will have the $700,000 (plus a paid off house) that I need to retire 15 years after my mortgage is gone.  At this point I will be 43 years old.

The advantage of this plan are that I will have the freedom to retire relatively young, certainly before the age of 45.

The disadvantage of this plan is that the budget does not allow for kids in my life either before or after retirement.

Bottled Water

I have been long a fan of bottled water.  It's great for delicate medical devices that need to create humidity and can't risk having sediment in the water.  It's also great for reconstituting certain very delicate medications.

Of course if you're not reconstituting medications or using it with a medical devise, bottled water is a dumb idea.  Yet I see many people (seemingly healthy) drinking bottled water and then tossing the bottle. Apparently it is more convenient to go find some crude oil, dig it up, ship it somewhere to be turned into plastic, shipped elsewhere to be filled with water, and then shipped to a store where you can pay a ridiculous amount of money for it than carry around a refillable bottle or canteen (which you can probably refill at a TAP, because chances are if you're reading this you live in a country with potable water).  Of course I've heard some people complain that tap water tastes funny.  I'll be the first to admit that I'm not a big fan of water, give me milk or juice any day.  However, if you are that sensitive to the taste of water might I suggest that you use a reusable water filter?  It is considerably cheaper than buying bottles.  If, on occasion, you need to drink potable yet unfiltered water might I suggest that though it may not taste the best it is much better than the bitter taste of our planet's resources being wasted?

At a bottle of water a day (about $2.50 per bottle) you are wasting $912.50 a year on something that you pay pennies for out of the tap.  Save yourself some money and go buy a water filter ($20) and fill up that old water bottle that's been gathering dust.  (You know that one you probably got as a promotional item or at a charity even.)  Then, may I suggest, you send the money I just saved you to a charity that digs wells in areas that don't have access to clean water.  That way every body gets what they need and the planet might actually be habitable for our grandchildren.

Retirement - Traditional

I don't know what I'm going to do for retirement.  (See why here.)  But I thought I'd start ball parking numbers and roughing out plans to try them on for size.

The first possible retirement plan is the traditional one.  Work to the age of 65, then take the typical quiet retirement, visit friends and family, take the occasional trip and spend a lot of time reading and sewing.

I don't see a whole lot changing from my current lifestyle so I took a look at my monthly budget and subtract the areas I'll no longer need, namely Savings, Debt Repayment, Mortgage Payments (mortgage will be long payed off), and about half of my Transportation budget.  I could live quite comfortably on $2,000/month.  If I want to see $24,000 per year after taxes that will mean that I'll need $28,000 before taxes according to this site.  At a safe withdrawal rate of 4% I'll need a total of $700,000 for a traditional retirement.

I currently have $21,395.72 set aside for retirement savings.  I add an additional $359 a month (which will increase with inflation) and I expect to earn 7% after inflation over the next 40+ years.

I will assume that I will see no help from the government and that I will not have a pension, since the company I work for now does not have a pension plan.

That all taken into consideration I should retire with the hefty sum of $1,500,340.79.  More than double what I will need to survive on.  In other words at the moment, even though I don't have a company pension I should be in excellent shape to retire by the time I am no longer able to work.

Have a question?  I'd love to hear it!  

FP - Cheese

I've always been fond of cheese.  I mean who's not?  Cheese on pizza, on crackers, grilled cheese
sandwiches, there are just so many possibilities.  It's become especially important for me over the past couple of months.  When you become a casual vegetarian like myself cheese is a wonderful source of protein.  Problem is that it can also be expensive.  Not as expensive as meat perhaps, but still it can eat up a fair bit of cash when you throw it in your cart.  So I started wondering about making it cheaper myself.

The process of making cheese is quite interesting and I've taken the time with looking it up in books and on the web.  Traditional cheese making is a lengthy process, requiring precision, and a fair bit of start up cash.  While traditional cheese making looks interesting it looks to me to be more of a hobby than a way to save money on your grocery bill, not precisely what I'm looking for at the moment.

Then I stumbled across an interesting recipe for making Yogurt Cheese.  The process is quite simple.  Get some plain yogurt with no additives just milk and live bacteria cultures.  Line a sieve with a damp cheese cloth and place the sieve in a bowl.  Pour in the yogurt and let it sit overnight.

Voila!  You have some tangy cheese, that I personally enjoy quite a bit.  You can add herbs to it if you want to.  I've enjoyed it thus far on crackers and in salads.  I would comfortable replace any type of cream cheese or goats cheese with Yogurt Cheese.  I've even mixed it with tuna in place of mayonnaise.  The only place where it has failed to replace traditional solid cheese is on nachos, it simply doesn't melt the same way.  But as far as imperfections go that's pretty minor.

How does the cost add up?

One tube of yogurt - $1.90 (I got mine on sale but this is the normal price)
Cheese cloth - $0.10 (This is a bit harder to cost out since the cloth that I bought can be cleaned and reused many times, but this is a high guestimate)
Total cost $2.00

Cost of traditional cheese $5.00 (for the same amount)

Savings = 60% or $3.00 per go.  At the rate I eat it I'll probably save $72 a year.  This is certainly a keeper.

Have a question?  I'd love to hear it!  

Making do - Power Cord

Yesterday was a sad day indeed.  My lap top power bit the dust while I was at work and I was down to one computer.  (Yes I know I sound over privileged but ask any computer programmer and they'll tell you that two screens make life a whole lot easier, and since I work in a techie area it can be a lot easier with two computers going at once.  But I digress.)  While I stared at my solitary working screen I bemoaned what the replacement was going to cost me.  Not to mention that I had just replaced my power cord a year and a half ago when a cute little kitten mistook the old one for a toy and put a couple of holes in it.  I knew that there was no point putting off the problem since when my current power cord is plugged in it makes crackling noises and smells of burnt metal.  (Does any one know what causes this by the way?)  I have absolutely no intention of burning down my house thank you very much.  

Components Are from left to right - A, B, and C

Enter one of my favourite frugality sayings: “Use it Up, Wear it Out, Make it Work, or Do Without!"  Of course my power cord has already passed by the first two suggestions being completely used up and worn out.  There is the option of doing without, however that means no computer at home, no online banking, limited communication with my family, no e-mail, no access to the many blogs I read or recipe sites, no TV shows or YouTube and no access to the many records that I keep electronically.  Needless to say, being without my computer is not something that I particularly want.  So I started thinking about making it work, without burning anything down.  Then I realized that it's not the entire power cord that's shot, simply component A.  There is no problems when I use the main cord (B) with the extension cord (C).  I can make the power cord work by simply excluding component A and using B and C together all the time.  Sure, it is a bit awkward because of the length, but it is much more preferable to tossing the lot and running out to buy a new one.  Add to that the fact that I saved components A and C from the cord demolished by the kitten which means I have the added flexibility of two components Cs.  (I did have two As but I haven't been able to locate the second one since my move.  I'll let you know if it ever reappears.)  

Have a question?  I'd love to hear it!

Meeting with Financial Advisors

I recently met with my Financial Advisor to iron out what to do with my return of value that I was paid by the military en lieu of a pension.  (The fact that the payment was only two and a half months late should not reflect poorly on military bureaucracy.  After all only losing your paperwork twice is pretty good for them.)  There are a couple things that I advise people do when they meet with their advisor.

1 - Bring your actual numbers and know where all of your money is located.  When your advisor asks you for a fact you should be able do give him/her an answer in 30 sec.  Otherwise you are making the process much more difficult.

2 - Start by letting your Financial Advisor know what you know on the subject.  I have found that most advisors assume that I don't no what a TFSA or RRSP is let alone how the stock market works.  As a result they tend to start with the very basics, which I am already familiar with.  Same goes for the reverse.  If you need them to explain things from the beginning tell them that.

3 - Have a list of what you want to know by the end of the meeting.  You've told the Financial Advisor what you do know.  Now tell them what you want to learn.

4 - Keep in mind that every one has a different investing strategy.  Listen to other peoples explanation but stick to what your research has told you is the best course of action.  You know your needs/wants and you're the only one who'll be advocating for them.

At the end of the day your Financial Advisor is a resource, a source of information, not the one in control of your money.

Have a question?  I'd love to hear it!

RQ: On not having a car

I recently had the following question from one of my readers: 

Do you enjoy not having a car beside the money you save?  (You can read about my decision to go car-less here.) 

The simple answer, YES!  For a number of reasons. 

1. I like taking the bus to work every morning, it gives me a chance to sit and read.  Sure I could shave 30-40 min off of my commute every day if I bought a car, however I’d spend that extra 30-40 min a day reading so might as well pay less for that small luxury and bus it. 

2. Whenever I start thinking about my chosen modes of transportation I get a warm and fuzzy feeling.  It’s nice to know that I’m doing my own little part for the planet and not burning fossil fuels.  This way I can hopefully make sure that my grandchildren have air that is as clean, or cleaner than, mine. 

3. It’s good exercise.  I walk every week to the grocery store.  It forces me to get out into the fresh air and get some exercise.  Again, it does take longer to get the chore done every week but I have learned to enjoy it.  Most of the time I’ll take it as an opportunity to enjoy the scenery and the solitude of my own thoughts.  Other times I’ll download a free lecture from iTunes U and give both my brain and my muscles a workout. 

4. It’s stylish.  When you arrive at the grocery store dragging a wagon, which matches your jacket (it was accidental, I swear) you’re sure to be noticed.  In fact I’ve had a lady comment on how “cute” it was and wished that she had thought of it first. 

5. I don’t have to take time out of my workweek to get oil changed, tires switched, and breakdown’s fixed. 

First I went car-less for the savings.  Now I’m staying car-less because I love the lifestyle that comes with out having a car.  Give it a try, I dare you!

Got a question?  I’d love to hear it!

April Mid Month Check-Up

Here comes the mid-month review. 

Mortgage - Successfully doubled-up

Retirement/Emergency Savings - On Track

House Maintenance - Savings are up to $1,021.49. I could easily replace my water heater if it went at this point. 

Housing Taxes/Insurance – Taxes savings are at $634.60 with the bill (about $1,200 due by the end of June.  There was a nice jump thanks to some provincial tax refunds.  Insurance is on Track

Big Ticket Items - $143.14 in savings, just a bit frustraiting that this is growing so slowly. 

Travel - On Track

Health Insurance - Spent

Bus Pass - Spent

Cell Phone/Internet - Bills have not yet arrived, but I have a bit extra hanging around in this category just in case. 

Car Savings - Going well, and I am so not in a rush to get a car. 

Train - $89 still there.  Almost two sets of round trip tickets. 

Other Transportation - $90.70 set aside, my city has an awesome bus system.  

Utilities – Billing cycle got a bit convoluted this month, I’ve already paid and I still have $146.86 for next month. 

Food - $169.42 left.  Yes, I know there is a ridiculous amount here, but I’m not sure of the costs of starting a garden so I’ll leave the excess for a bit.   

Miscellaneous - $2.09 left.  Plus a bit in my wallet. 

Entertainment - $5.  Lucky the library doesn’t cost me or I’d be broke! 

Social/Sports - $10, slowly saving for next years dues.  

Clothes - $40

Gifts - $18.73.  

Financial Planning - $25 For some reason they haven’t started my monthly deductions.  Oh well. 

Little and big seem to be on track, and I can happily report that my houseguest has paid her rent ($420) and my double up mortgage payment for the next month is ready to go!  

Financially Self Sustaining

True to my post yesterday I have been trying to broaden my horizons by reading areas of personal finance which I had not give much thought to before.  One of the concepts which peaked my interest was that of Early Retirement Extreme.  For those not familiar with the concept it is the idea that by reducing unnecessary expenditures you can save (and invest) the lion's share of your earnings and thus retire in 3-8 years.

Naturally I spent the next two days running numbers and seeing how this system would work for me.  I came to the following two conclusions:

If I downsized my house I could in all likelihood live comfortably on $7,000-$9,000 a year.

Early Retirement Extreme is not for me.

Why not?  The simple fact of the matter is that living on such a budget would not allow for me to foster and adopt kids, which for me is huge.  The idea of spending a large portion of my life in relative solitude holds no appeal to me.  I would rather work longer and have a house full of children.  There is also the fact that the more that you fly in the face of social convention the less likely you are to be approved as a foster/adoptive parent.  I understand where this comes from so, for the moment, a tiny house is out of the question.

So instead of shooting for Early Retirement Extreme I will be aiming for what I have chosen to call Financial Self Sustainability.  The idea behind FSS is that losing my income would not affect my ability to support myself.  I would be able to keep a roof over my head and food in my stomach by living off my investments.  It would mean downsizing to a smaller house (and using the equity in my current house) and it would mean no kids.  But I could survive.

How much would I need to be FSS?  It breaks down like this:

Housing
One time costs - Land: $20,000-$30,000 in my local area
                        - Tiny house $25,000 based on the Tumble Weed Tiny home that I like, though I could potentially go lower.

Monthly costs - Utilities, taxes, and maintenance: $300

Transportation
Monthly costs - $150

Life
Monthly Costs:
Food - $100
Cell - $30
Internet - $50
Health Insurance - $23.52
Clothes - $10
Misc - $10
Yearly expenses (like fees to maintain my RN's status) - $50

Total one time costs - $55,000
Monthly costs - $723.52 = $8,682.24

Since I would not want to withdraw more than 4% of my portfolio per year I would need to have investments equaling $104,400 to generate an income of $8,700 per year.  Add to that a one time costs of $55,000 and once I have hit a net worth of $159,400 I will be FSS.

My current net worth is $134,800.06.  Which is a shortfall of only $24,599.94.  In other words I am 84.6% of the way there.

Until I started writing this article I didn't know that I was that close.  Needless to say I am pleasantly surprised.  Of course unless I am awarded a scholarship, approximately $20,000 of my net worth will be magically (via a lot of hard work) transformed into a Master's Degree over the next 2 years.  So at my current rate of savings ($1,660 per month) I should reach FSS in 27 months.  Which I will naturally track with one of my nifty sidebars.

Have a question?  I'd love to hear it!

Strong Financial Learning

If someone were to ask for one piece of advice, and only one, when it came to learning about finances my advice would be as follows:

One third of your reading material should be information you agree with, one third you should disagree with, and one third should cover topics that you hadn't really thought about.

Actually this advice pretty much sums up what I would tell you if you wanted to learn about anything.  (For those who are less old fashioned than me, substitute reading for podcast/video documentaries etc.)

The first third is fairly easy.  This material will enhance your general knowledge on a subject, they will supply new ideas and variations on tactics that you may not have though of before.  On top of that you will have the pleasant experience of patting yourself on the back every so often as you confirm that what you are doing is perfectly correct.  Myself I have a number of blogs, whose philosophy I generally agree with, that I follow on a daily basis.

The second third is the hardest.  People generally don't want to believe that they are wrong in any way shape or form.  However, it is essential to becoming well rounded on a subject that you read disagreeing material (and not so that you can go to the comments section and insult a person's intelligence.)  Think critically about what you read is it possible that they have a point?  Can you form a well founded counter argument using logic and scientific data?  Is it possible that the other person's solution works for some situations but not yours?  I have a couple of blogs that I read with whom I am not in complete agreement (actually some are quite insulting in tone).  However this forces me to think about the issue being discussed from another vantage point.

Finally the third third is a bit ambiguous.  It is somewhat hard to read on a subject that you have never, in your whole life, had a single thought about.  Rather see this as a challenge to look for topics that are related to your primary topic but branch out.  For example I have long been passionate about personal finances but have just recently begun looking at literature on macroeconomics as they shape and are shaped by culture.

Without all three components you will have difficulty mastering any subject.

Have a question?  I'd love to hear it!

Food Waste - The House Mate Dilemma

I skated through the week with no waste.  I do have a fair bit of leftovers in my fridge, and a well stocked freezer with pre-made meals that only need to be reheated and served.  However, none of the leftovers are foods that will waste particularly quickly so they should all get eaten over the next week.  That said I seem to have developed a 2 week cycle when it comes to groceries.  Most of the fruit and produce that I buy will last me two weeks simply because I buy in bulk anything that will last two weeks.  Same goes for milk as I frequently buy enough for two weeks when it is on sale, knowing that I'll get though it by the best before date.  That said I am toying with the idea of dropping my weekly shopping to bimonthly.  The main advantages being that it will save me time (it's a 20 min walk to my grocery store so min. an hour a week is spent procuring my groceries.)  It will also save me the pain of having to walk the distance every week, particularly if I have been standing a lot at work and my knee is bothering me.

Nonetheless that experiment will have to wait until July.  Why?  I currently have a colleague living with me (and paying rent which is going against my mortgage) and I am trying not to disrupt her life too much with my crazy experiments.   In particular I have given her free rein over the thermostat in my house and am moderating my insane curiosity of "I wonder if I can make that at home?"  (Though she did like my homemade crackers.)

At the end of the day though it is nice to have company in the house and I am resolute that this unknown variable will not lead to an increase in food waste.

Have a question?  I'd love to hear it!

Are you using what you pay for?

Most humans, including myself, are creatures of habit.  When the same thing happens regularly we tend to assume that it is normal and we should continue to do what we've always done.  I believe that this is a dangerous trap to fall into when it comes to your finances.

A prime example are monthly bills such as internet, TV and cell phone plans.  I know that during my University years I never checked my average usage for internet and cell phone.  The bill simply arrived, I paid it and life continued as normal.

This changed when I moved and I had to change service providers.  To be honest, I felt rather silly standing in the store wondering how many cell minutes I would use in a month.  After all I had owned a cell for three years.  Still, I wasn't sure what my usage was.  The same thing happened for internet.  I ended up going with fairly low packages for both of them and they have worked out quite fine.

Now I have a new routine.  Before I pay my monthly bill I take a look at my usage in minutes and GB. If I am using less than what I am paying for then I start looking at other packages that they offer.  Could I downgrade and save some money?

While I wish that during my university years I had paid closer attention to what I was paying for and what I was actually using I prefer to learn and move on.  I would advise everyone to check their monthly usage and if you are consistently (for the past 3 months or so) using less than what you are paying for start looking for cheaper packages.  Same goes for life changes.  Are your teenagers leaving the nest?  Could it be that there will be less web surfing than before?  Are you sharing cells with a spouse and can move to one phone?  You won't know until you ask yourself these questions.

Got questions?  I'd love to hear them!

Reader Questions

To date most of my content has been written with based on two things.  Personal preference and reader numbers.

1) Personal preference.  It's my blog, what can I say I write about what interests me.  I am of the general impression that if you are reading my blog you are either interested in what I am saying or you want to broaden your horizons.

2) Reader numbers.  If a particular subject brings more readers I write more about it.  If a subject brings fewer readers I skip it.  Not very complicated I'm afraid.

But I thought I'd take the chance to open the floor.  I want to know what you want to know about.  So I am inviting all and anyone to submit their questions.  Simply write a comment in any one of my posts with your question and I will do my best to answer.  If you don't want your question to appear in the comments section let me know in your comment and I won't post it.  (All comments go through me for approval to cut down on spam.)

Your questions could be anything under the sun, such as:

How do you . . . (budget, invest, get around town)
Tell me more about . . . (RRSPs, TFSAs, mortgages)
What would you do if . . . (you were in my shoes, you lost your job, you had this opportunity)
What do you think of . . . (debt, education, the Easter Bunny)

Seriously, send me a comment and let me know what puzzles you, or what you've been wondering about.  I'd love to hear from you.

Good Food Costs Less

One of the lines in my budget that gets the most attention is food.  If only because most of the other line items are set amounts which get paid every month.  Don't get me wrong I put a good deal of thought into them before signing up for my cell or internet.  But the fact is that I have already decided what is the best choice for me right now and I don't review the decision every week.

Food on the other hand is always closely monitored.  During the month to make sure that I have enough allocated to get me through and then every month I take another look at it.  Can I get away with less?  Should I loosen up and add a bit more?  While I would love to see my food numbers drop a bit more (I am so having a garden this summer) I've decided to take a look at how I've done so far.

As an omnivore I could just make it on a $150 a month.  Since I eat three meals a day plus three snacks (which combine to make four meals total) that means I eat 120 meals a month.  So I spend an average of $1.25 a meal.  Not a big number for a nutritious (99% of the time) home cooked meal.  While I've never been big on eating out I was curious how much it would cost to eat all my meals out.  From my perusal of various fast food web sites it looks like the minimum that you can get an adult size meal for is $5.

In other words eating out would drive my food budget up to $600/month, four times what I currently pay.  Don't even get me started on what all that eating out will do to your health.

Since I switched over to being a casual vegetarian (I eat meat maybe once a week) my food bill has dropped to $120 a month.  Or $1.00 per meal.  That's it?  I hear the grousing.  You gave up meat to save a dollar a day?  Well for one I didn't give up meat because it saves money.  I gave it up because it is healthy, ecologically sustainable, and promotes food equality.  Not to mention the happy side effect of freeing up $365 a year, every year for the rest of my life.

Of course I'm curious (always), can I drop it a bit more.  I'm new in town and haven't had the time yet to scope out good places to buy in bulk.  Not to mention that lovely garden that will help feed me this summer.  The possibilities are endless.

Double your money the easy way

No this is not a get-rich-quick scheme.  (I said nothing about doubling your money quickly.)  Today is the 8th and most people who know me will attest to the fact that I'm having trouble sitting still today, because today I get to pay down just a little bit more of my mortgage.  (Oh goodie) which means that late today or sometime tomorrow I'll go down to the line on my basement wall and record exactly how much of my home I own free and clear.
There are a few people in my life who aren't entirely sure why I am so hell-bent on paying my mortgage quickly.  One of the reasons, besides the fact that I just love a challenge, is that it is an easy way to double my money with really no effort involved.  Take, for example, the 10% principal payment I made in March.  Being a curious little soul I wanted to know exactly how much interest I was going to be saving over the life of my mortgage from that one simple payment.  I paid $15,200 against my principal and, as a result, I will not have to pay $20,126.44 in interest.

Is it worth giving up that money now to save in the future?  I certainly think so.  There are a few factors that affect how much your prepayment will save you:

- Your interest rate.  Mine is at 3.09% and the interest saved assumes that that will be my rate for the life of my mortgage instead of just for the next 5 years.  Since I can't see the future that will just have to do.
- When you make the payment.  The sooner you pay the more interest you save.  Yes, most people have more money later in the life of their mortgage than at the beginning but every little bit helps.
- Length of your mortgage.  The longer the initial length of your mortgage the more interest you pay in total so the more you save with a prepayment.

Granted I won't see that $20,126.44 right away.  I'll see it incrementally over the next 30 years.  It is delayed gratification compared to running out and spending that $15,200 on a trip.  However, it also gives a lot more options to my future self than a week-long vacation.

Book Review - Little House in the Suburbs

I just finished reading Little House in the Suburbs by Deanna Caswell and Daisy Siskin.  Which was quite the interesting read, the tone was familiar and the comments in the book were often quite funny.  The book centred on backyard farming and self-suficientcy.  It covers a wide variety of subjects from gardening; keeping chickens, goats and bees; canning; making your own beauty products, house hold cleaners and gifts; and building a community in your area.
The instructions in the book are simple and easy to follow.  While it does not go into minute detail on all the subjects it gives you a beginners knowledge and additional resources that you can use.  The emphasis is on giving the reader the confidence to get out there and start experimenting.  I would highly recommend this book as a starting point for anyone who wants to learn more about the subjects mentioned above.
Of course one of the big questions is: why on earth is this relevant to some one who wants to save money?  Among the many other benefits associated with the self-sufficient lifestyle is that making your own, or growing, from scratch is often cheaper than buying something from a store.  Buying base ingredients for cleaners and soap in bulk and then mixing them yourself is often much less expensive than the store bought version.  A garden will give you fresh produce for a very low price all summer long.  As for keeping animals in your back yard the cost reduction for the products you receive (eggs, milk and cheese) may be minimal.  However, we live in a society that spends thousands a year on furry friends.  If I were to buy a pet I would rather buy one that will give me food as well as companionship.
All in all this was a great book which I highly recommend to anyone looking to push the envelope a little and develop skills that were a matter of fact 50 years ago.  I for one am looking forward to trying out the recommendations of this book.

Me 4 Leftovers 1

I did it!  Well mostly, I managed to get through the pile of leftovers that were hanging around my fridge since before Easter.  I am pleased to report that the only casualty was a small portion of the spinach that I had.  By the time it made it's way into a salad some of the leaves had gone kind of slimy.  Guess that next time I'll stick it in the freezer and use it in a lasagna.





Now all I need to take care of is some squash soup from yesterday (yum) and a pile of Easter Candy (Oh yeah, that's going to be tough ; )



PS.  Ok, this is totally and completely unrelated to food waste, frugality or personal finances.  But I'm posting it anyways.  I know what a troll is, I've been in the world of blogs long enough to know that there generally isn't much point it arguing with them.  Today though there was a comment that I just couldn't let go.  (First comment at the bottom, my answer is below it.)  I don't expect that the person who made the comment in the first place will change her mind.  I am hoping to change yours, or if you don't have an opinion on the matter of mental illness I would ask you to think about it for a moment.  I have a mental illness and the idea that someone would equate me to a criminal or a member of the "undesirable class" sickens me.  I am a nurse and have had both the chance to work with others with mental illness and in the prison system.  I can tell you from first hand experience that most people with a mental illness are truly wonderful, often very capable people.  More often than not they contribute more to society than they take.  Yes, some of the criminals I've worked with have mental illnesses, some of them also have diabetes.

Having a mental illness doesn't make me or anyone else bad.  We're not dangerous or undesirable.  We're not even wired wrong.  We're just different, and even though we are that it is a good thing.  Unfortunately some people are scared of people who are different.  I hope I can convince you not to be one of those people.

Double Counting

            If there is one crime in the world of financial management that I am perpetually guilty of it would be the crime of double counting.  Double counting, that wonderful method of counting where the same dollar can be allocated to 2 or more different spots.  Then, all of a sudden, you realize that all those wonderful goals you were going to meet cannot possible be accomplished at the same time, simply because if you put your tax return in your retirement savings it can not also be used to pay down your mortgage.  Darn! 

            I began to notice this phenomenon when I was changing jobs.  As a result I had both large sums of money coming my way (severance pay, retirement savings, disability benefits etc.) as well as several large expenses coming my way (the move, retirement plan set-up, the house down payment, possibly a car etc.) all at the same time.  I would tally the incoming and outgoing in my head, usually concentrating on one piece of the puzzle at a time and not always remembering that I had already allocated some of the incoming money to a major expense. 

            So after a couple weeks of overconfidence, followed by confusion, followed by a sense of complete horror, I started looking at ways to overcome this major problem.  The simplest way I have found to do this is by writing stuff down.  Sounds simple, but the best solutions usually are.  Find a good place to record your finances; it can be a notebook, some files at home, or your laptop.  I keep my records on my laptop since it goes pretty much every where with me, can hold loads more information then a few scraps of paper and I can format and reformat again until my heart’s content. 

            A part of your records should be any long term financial goals that you have (with dollar amounts if possible) as well as a list of upcoming payments if your sources of income are irregular for any part of time.  Once you know for certain how much money is coming in when from a certain source assign it to the appropriate categories.  Make sure you think out your allocation before jotting it down because the less you move your allocations around the less likely you’ll be to forget where your money is going.  

Free, Fun, and Informative

I recently came across a very interesting website that I just have to share.  It’s called Open Culture and is one of the most impressive sites I’ve ever come across.  If you’re bored, go take a look at it.  If you want to broaden you horizons and learn something, go take a look at it.  It you have a particular interest in a subject, go take a look at it.  This site is a completion of free online resources on a wide variety of subjects.  At the moment it contains the following:

-Free Language Lessons (40 different languages)

-Free Audio Books (500 different books)

-Free eBooks (400 different books)

-Free Online Courses (700 from top universities)

-Free Films (500 of different genres)

-Free Certificate Courses (300 from top universities)

I’ve been cruising around the site for a couple weeks and to date everything that I’ve seen has been quality material.  The courses are from recognizable and reputable institutions.  The films are from a wide variety of genres and the books contain a wide range of contemporary and classics, though obviously there are more classics since they can be distributed freely. 

Furthermore the site is entirely legal drawing from already free resources on the web and I have yet to see anything plagiarized or of questionable origin.  While they don’t create content themselves they have created the most complete compendium of resourses I have every seen.  This reduces the need for you to search the web yourself and helps you to avoid the resources that are “free” for a limited trial, or of poor quality. 

I know that this site is going to keep me entertained for a very long while.  I have started going through the free courses that they offer.  There are so many that I find interesting that I decided to go alphabetically and I have started with the Archaeology section and with a course about Hannibal by the Stanford professor Patrick Hunt.  Walking to the grocery store, cleaning, and dishes have suddenly become much more interesting.  Spending only an hour a day with this site will give you both entertainment and food for thought.  Not to mention that at an hour a day it will take me roughly 32 years to get through their content; by which time I’m sure they’ll have added to their repertoire.  

Pay Day April 2013

So my monthly pay check is in for a total of $3,598.39

Housing 40% - $1,439.35

Mortgage - $646.62

House Maintenance - $315.00

Housing Taxes - $182.50

House Insurance - $72.00

Utilities – $223.23

Total – $1,439.35

Savings 10% - $359.83 – All going to my RRSP

Debt 10% - $359.83

Transportation 15% - $539.75

Bus Pass – $68.25

Train - $0

Other - $0

Car Savings – $471.50

Total - $539.75

Life 25% - $899.63

Emergency Savings - $240.10

Travel - $175

Food - $160

Cell – $30

Internet - $50

Health Insurance – $23.52

Clothes - $10

Gifts - $10

Misc - $10

Big Ticket Item - $100

Entertainment - $5

Social/Sports - $5

Financial Planning - $10

Slush – $71.01

Total - $899.63

A few notes on this month’s Budget. 

-       Train and Other Transportation are at $0 each because I have $89.00 and $90.70 in each account respectively.  I’ve not been spending these accounts from these accounts in the past little bit. 

-       Big Ticket Item is up to $100 put unless my employer is willing to spring for a course that I need that’s already spent L

-       Slush is nice and big at the moment, but that will likely help pay from my June property taxes which I’m trying to scrape together. 

All together it looks like it’ll be a pretty good month.