Saving on Big Ticket Items - The Dresser

The latest on my list of BTI's was a dresser for my spare room.  I wanted to get it right away so that I could have the possibility of renting out one of my spare rooms to a colleague who will be working for my company for a few months.  I haven't heard anything back on that front yet, however it will get used since I plan on applying to be a respite foster parent.

I started, and ended my search at a furniture surplus store in town.  To be entirely honest the front of the store's prices were not all that much lower then, say waiting for a sale at a big box store.  Fortunately  the store also has a back area where they keep the scratched and dented furniture.  There were only two dressers in the section.  Both were rather nice looking, though not solid wood.  That said at the moment I am happy with a dresser that will get 10 years of good use and then can be down graded to a lighter task.

I was undecided weither to buy then and there or to shop around some more and see if I could find something better in another store.  Then I got talking to one of the sale's persons who noticed that the price on the dresser was lower then it was suppose to be.  He told me that he would honour that price if I decided to buy right away, but once I left the price would be corrected.  So I took the deal.  Instead of a regular price of $415 after tax I got it for $157 after tax, for a savings of 63%.  Not a bad buy considering the only thing wrong with it is a chip in the corner the size of a pea.

Lessons Learned

-Surplus stores have a slight markdown on prices but are not the cheapest way to go.  

-When it comes to the dented and scratched sections of a store you need to be patient and check regularly.  Often the selection is very small and there is no guarantee when new stock will come in or how much it will be marked down by.  

-Learn to be patient.  (I have trouble with this one.)  You need to take your time and look.  Preferably the scratch and dent section of a store should probably be one of a couple options that you are considering.  

On the bright side, my spare room is now fully furnished.

Saving on Big Ticket Items - Kitchen Table + Chairs

When it came to furnishing my first house I wanted a really good kitchen table.  I also didn't want to spend an arm and a leg on them.  (And let me be honest, I didn't have all that much left to spend on them.)  While in the strictest sense I didn't NEED a table and chairs, the idea of sitting at my desk on the one chair that I owned every night for dinner was even worse than the idea of being 23 and still sleeping in a twin bed that is part of a bunk bed set.

I did a bit more looking and research for the table than I did for my bed frame.  A new set was pretty much out of my price range, so I started my search in the scratched and dented section of some furniture stores.  While I did find some tables marked down for some minor cosmetic scratches there wasn't a whole lot of variety, so I expanded my search.

Enter Kijiji.  Truthfully this was the first time that I looked for something to buy on Kijiji, and it took a little getting use to.  I was tentative and not quite sure I was up for the idea of going to strangers' houses to look at furniture.  However, I was even more put out by the idea of paying lots of money for a table, so I sent out half a dozen inquires.

A few days later I went to check out one of the tables that I had asked about. (With my Dad-even though it was a perfectly respectable neighbourhood, you can never be too careful.)  I walked away with a solid wood table and four chairs for $75.  (Incidentally, the set was made the same year I was born, which is the same year my house was built.  What can I say?  1989 was a good year.)

I have since compared the table to what a new set would cost.  A similar new solid wood set would cost about $490 after taxes.  Which means that my set was about 85% off with plenty of wear left in it.

Lessons Learned

-Send out lots of inquires.  Make sure you are polite though; when you find what you need send an e-mail out to all those you had contacted and let them know that you are no longer interested.
-Be patient.  The best time to look is long before you need it, that way you can wait for the right one to come along and you won't feel like you are settling.
-Set criteria for what you want, it may be price, size, colour.  Have a good idea what you want.  At the same time don't be overly restrictive.  If you want a solid wood dark brown table that seats 8 and was built in the last 5 years for under $100 you are probably going to be waiting for a while.
-Safety first.  When it comes to furniture, obviously you can't meet the seller at the local Tim Horton's, but be sensible.  Go during the day, bring a friend, make sure people know where you're going and when you're going to be back, and for goodness sake, if any thing about the situation seems off make a quick exit.  A good deal isn't worth getting in harm's way.

I would use Kijiji again to find furniture: I had a great find with my table set.  Follow some common sense, do some research, and I'm sure that you will have the same satisfaction.

Saving on the Big Ticket Items - Bed

Since buying my first home I have had the chance to make a number of large purchases.  As much as I tried to avoid going all out in the first month, buying stuff for the new home was reality, as I was moving from a two-bedroom apartment to a three-bedroom house.  Naturally, not everything in the apartment was mine; some was my sisters', and a large portion was on loan from my parents.  I was lucky enough to inherit a fair bit of furniture from the apartment, but there were some major gaps that needed to be filled.

When I first moved into my house I needed a number of things:

-Full sized bed
-Kitchen table and chairs
-Dresser
-Couches
-Washer and dryer

I acquired these in a number of different ways, some saved me money, some less so.  Fortunately I managed to learn every step of the way.

THE BED

Granted, I already owned a bed.  Actually, I owned two.  They are a detached set of twin bunk beds, and I have been sleeping on one or the other for the last 20 years.  (Same mattress too.) I could have kept on sleeping on one of the twins, but to be entirely honest, I really wanted to move to a full sized bed.

I shopped for the bed at a used furniture store, and I was on a bit of a tight budget.  I wanted to keep my spending under $300.  I ended up with an antique double bed frame that was plain and a bit worn, but that I loved.  It cost me about $280 after taxes.  I probably should have taken it as an omen when I got it home, tried to assemble it and the slats that held the mattress were too long.  (I could have cut them but I didn't want the second-hand store to not have the slats that they needed for the bigger bed, so I sent them back.  Ironically, the owner decided to trim them anyways and sent them back.  Unfortunately they didn't manage to trim them to the appropriate size, so I had to trim them again once I got home.)

Because the bed was an antique I had to order a posture board instead of a box spring.  Fortunately this didn't cost me any more.  Unfortunately I had been so preoccupied about getting the right depth and width of mattress for my lovely antique bed frame that I never considered the length.  Turns out my bed frame is too short for what is now a standard double mattress.

I didn't want to part with my bed frame (and I doubt that the second-hand store would have taken it back.)  So I had to come up with another solution.  I bought a metal bed frame that can have my head board and foot board attached.  This cost me another $100.  So at the end of the day I was $80 over budget, but I did have a bed to sleep on.

Lessons Learned

-Second-hand stores aren't always a cheaper solution.  The bed frames sold at Ikea can range anywhere from $60 to $800.
-Measure, write, and measure.  Measure every dimension of what you are getting, write it down and bring it with you and then measure all of the parts in the store before you go home.  I don't care if they think you are silly measuring things in the middle of the store.  It is a lot better to know ahead of time than to find out later.
-Shop and compare.  I did do a bit of looking but not nearly enough.  The Internet makes it much easier these days to get an idea of the cost of an item.  It pays to get a good idea what is out there.

At the end of the day I don't regret my purchase.  I do love my antique bed frame and am planning on keeping it for a very long time.  I hope you can learn something from my experience and avoid the less than pleasant surprises that came up for me.

The Frugality Project

So five days into the month and every penny is accounted for.  In fact the city (finally) got around to informing me of how much (in general) my utility bill would be.  Unfortunately, it will be more like $300 instead of $200.  As a result I had to reorder my budget a bit in order to find $100.  The first $50 was easy; I had that left over anyways.  I did, however, have to pillage $25 each from my car savings and my planned spending.

I must admit I prefer to have a bit of a surplus in my budget.  So, here begins the frugality project.   Frugal - Sparing or economical with regard to money or food.  Ok, I have no intention of skimping on food.  I am, however, interested in seeing how I can reduce costs in an inventive manner.  So my attempt will to be to find one or two frugal projects a month and post them.  The only rules are that it has to save money, it has to be something that I would do/have/use anyways, and it has to be fun.

The big goal of the frugal project will be to reduce the amount spent per month by 10% of my take home pay.  This decrease needs to be sustainable by the end of 2 years without a decrease in quality of life.  I am not allowed to decrease savings to any account unless the savings accounts are up these respective amounts.

Emergency Savings - $10,000
Car Savings - $10,000
Big Ticket Items - $5,000

Retirement Savings and extra mortgage payments are off limits.

Let the experiments begin!

The Philosophy of Money

Reading my blog you will notice that while not all of the posts will be related to money a good deal of them will be.  Why write a blog almost entirely on finances?  Well if you are like me you will find the subject fascinating.  Some people will study botany, others study pottery I am a constant student of finance.  It is simply a subject that I enjoy.  However, it holds more importance than a simple hobby which can be set aside if there is not enough time.  I am a firm believer in the philosophy that those who do not control money are controlled by it.

It is easy to see the direct effects of poor money management.  A poor credit rating can lead to being being denied a loan for a car or a mortgage.  Running out of money before the next pay check can lead to credit filling the gap; and debt left unpaid can lead to bankruptcy.  But there is a more subtle, yet just as important, impact of poor money management.  It can lead to sleepless nights, strained relationships and sever limitations of opportunities, such as schooling.

While a careless attitude with money can lead to heartache, too much importance can also be harmful.  Money for the sake of money serves no purpose.  Expensive items and large investment accounts can not provide self-fulfillment or comfort.  Still so many people obsess on money for the sake of money: to see their name on Forbe's list of the richest people in the world.

So what is the correct way to look at money?  It depends.  (Big surprise there huh?)  I can only tell you why money is important to me.

Money for me is possibilities.  It gives me the capability to act as I see fit when I see fit.

Money gives me a modicum of security.  Owning my home completely and having a well stocked emergency fund helps to buffet the shocks that life will inevitable throw me.

In essence, I believe that all monetary goals should, such as saving a million dollars, be in the interest of furthering non-monetary and non-materialistic goals, such as having enough to stop working at the age of 65.

I have reached the monetary goal of being in a financial position to complete my Masters.  I will enjoy the process of earning my Masters, and this will move me on a career path that I want to pursue.

I want to pay off my mortgage in 5 years, to free up a good percentage of my income. Freeing this income would allow me to support not only myself but the children that I wish to adopt.

Saving aggressively now will not only allow me to retire in comfort but will allow me to retire earlier and spend more time and energy with my family.

By controlling my money I control a larger portion of my future.  Though my spending may seem somewhat restrictive to the outside viewer, it will give me the wealth necessary to live a life that I will find rewarding.

Pay Day

Pay day.  A day that is dear to every worker's heart.  The trick is not loathing the week prior to pay day as you watch the balance of your checking account fall into the red.  In the past I haven't had a problem with this.  I am, by nature, quite frugal.  Yes, I know the f-word.  It's not that bad, really.

Through out my university career I was able to track my expenses without a budget.  I earned about $1,200 net a month and expenses were kept low since the military paid my tuition (ROTP program) and I shared accommodations with my sister.  I could comfortably spend what I wanted and have over $500 a month left sitting in my checking account which would eventually make it to a savings account.  It worked well for me for 4 years and I left University with over $47,000 in my bank account.  Which allowed me to put a downpayment on my first house this November.

Unfortunately this system no longer works.  Being the proud owner of a new house and living by myself has somewhat stretched my dollars.  To complicate things I get paid only once a month so all expenses need to be accounted for at the beginning of the month so that I don't run out.  I now have to work off a budget.

Here is how my pay check will be allocated for the month of January.  I allocate in two ways, by percentage and by importance.  Percentage wise I generally follow the Life Pie numbers suggested by Gail Vaz-Oxlade.  The only change is I spend 40% on required housing payments (regular mortgage, taxes, insurance, and maintenance) and only 10% on debt repayment.  The reason for this is that I have no debt besides my mortgage (no car loan or line of credit and my credit card never carries a balance).  As a result, the 10% allocated for debt goes against my mortgage.  (Leading to 50% of my take-home pay going to housing, but keep in mind I fully intend to be mortgage free by November 2017.)

-35% Housing
-15% Transportation
-10% Savings
-15% Debt Repayment
-25% Life

I also allocate based on importance.  The most important categories get allocated first and are generally first on the list.  These include fixed expenses like mortgage and taxes as well as important savings such as emergency and retirement savings.  Obviously this list is not perfectly ordered.  If I found that my food budget was underfunded for the month, I would reallocate from somewhere such as travel or big ticket items.  However, numbers such as my food budget are based on what I spent per month on average over the last four years.  The hardest part about this month's budget was how much to allocate for utilities.  I have yet to receive my first bill and as such had to make an educated guess.

This months pay check will be divided as follows:

Pay $3,588.02

Mortgage - $646.62
10% Debt (to double up mortgage payment) - $358.80
Retirement Savings - $358.80
Emergency Savings - $240.10
House Maintenance - $315.00
Housing Taxes - $182.50
House Insurance - $72.00
Big Ticket Items (Planned spending) - $100
Travel - $175
Health Insurance - $23.52
Bus Pass - $68.25
Cell Phone - $35.00
Internet - $50.00
Car Savings - $350.00
Gas - $120.00
Utilities (Electricity, water, sewer) - $200.00
Food - $160.00
Miscellaneous - $20.00
Entertainment - $10.00
Social/Sports - $15.00
Clothes - $10.00
Gifts - $10.00
Financial Planning - $15
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Left over - $52.43

The $50 of wiggle room makes me comfortable and if all goes as planned this will eventually be spent on paying down my mortgage or padding my emergency savings.

The New Year

'Tis the season of resolutions.  Can't say I'm a big fan of making resolutions on New Years.  I have always been of a mind that if you come up with a goal there is no point in waiting for a specific month to start working on it.  So while I do have goals that I am working on they were decided on over time and most have already been started.

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.

- Pay off house in 5 years.  This is the term of my mortgage and the interest rate that I have is only going to go up.  I should be able to accomplish this by doubling up every payment and paying a 10% lump sum every year.  I have the numbers worked out for the next 2 years, thanks partially to my disability payments, and have a rough idea of how to come up with the money for the following three years.

Educational

-Start Masters of Science / Masters of Science in Nursing in the fall.  (I do need to get to work and get my application in order.)

Social

-Join two new clubs in the local area.  (I currently have my eye on three, two quilting and the new comers club for my area.)

Other

-Have my novel accepted to be published.  I have finished the first draft and am in the process of editing.  I plan to have it ready by the end of the month, so I can start sending it out.

-Become a respite foster parent.  I have wanted to do this for a while, and since I now have my own place, I can do it.

-Take a big backpacking trip solo.  I would like to see either mainland Europe or Australia / New Zealand.  I'm currently in the process of hoarding my vacation days and putting away $175 a month to pay for the trip.

-Finish my current crafting projects.  I have 1 quilt, 1 embroidered piece and a cross stitch in the works.  I have this really bad habit of starting new projects before I finish old ones.  (What can I say being perfect is boring : )