Posted by Canadian Dream on March 13, 2009
So is it just me or did people finally wake up to throwing away a few billion plastic bags each year can’t possible be good for the environment? I mean the Walmart by me now is accepting their bags back for recycling. Then I’m seeing just about every store has some kind of reusable shopping bag for sale. Heck some places have banned them while others have fees on them.
So the question is with all this critical mass on getting rid of them can I live a life without them? I decided for the last week to give it a try. Previously I had not used plastic bags for most of my groceries but I still got the occasional one during a shopping trip. So far so good I have yet to use a bag for a week now, but I have learned a few important lessons.
- You must tell the clerk you don’t want a bag. I mean just about everyone I see puts stuff in a bag before you can speak, so you have to make sure to say it right away to avoid a plastic bag.
- You must make sure using reusable bags are easy for you. I personally got a second set of bags so I can leave one by the front door of my house, one in the car and one in my bag I take to work. I notice I used to tend to get plastic bags when I kept forgetting to take my reusable bags with me.
- Make sure you have some washable bags. I used to keep thinking I needed some plastic shopping bags when I get the odd thing that is potentially going to make a mess when I transport it. Then I realized if you have a bag or two you can wash you really don’t need a plastic bag for potentially messy jobs. If a mess happens just toss it in the wash.
- You have to make the change of habit. More than anything else I just have to get in the habit of not using plastic bags. I know that half the battle is in my own head.
Now some people like to say “Oh, but I NEED a plastic bag for X.” Really? So what did people do before we invented plastic bags? My point is saying you “need” something is just avoiding getting creative on finding another way to deal with the problem. I’m not saying it is going to be easy, I’m just saying you likely have another way to avoid that bag.
So how about you? Do you still use them all the time, do you try to use reusable bags or are you a full blown plastic bag free existence?
Posted by Canadian Dream on March 12, 2009
So if you have noticed a bit of an increase to the happiness theme of the blog lately you can firmly blame me for reading Stumbling on Happiness by Daniel Gilbert. The book isn’t on how to be happy, but rather on why people are so bad at predicting what will make them happy. Which when you think about it is almost more useful.
Now I will warn you the book is a touch heavy in spots for content. My reading rate noticeably slowed while reading this book to let my mind suck up all the interesting fact and ideas he presented. I can’t possibly summarize the entire book here because there was so many fascinating concepts he explored. So instead I’ll point out a few of my favorite ideas.
This is the book that spawned my post on relative money. Basically he explored the fact we don’t think in absolute dollars but rather relative ones. So $50 should always be $50, but we always end up comparing it to what we are buying. So hence people are a lot more relaxed about spending an extra $2000 on a house than a car or even a new TV. The higher the cost of the item the more tolerant we are likely to be to spending more money on something.
Another interesting idea Daniel explores is how we tend to compare the present to the past rather than the present to what is possible. We have a internal bias towards keeping things familiar so they is why it is often hard to clearly imagine living a different life than the one you are living. We tend to focus on what we would like to see rather than what practically would happen. Hence to us we think the grass really is always greener on the other side of the fence regardless of the fact if we raised our heads a bit we would see the grass over there is actually brown.
Perhaps the most interesting concept he explored was the fact major blows to your mental well being are easier to deal with than minor one. Your brain basically has an ‘immune system’ for dealing with negative things in your life. You justify and alter your perceptions to cope with the major situation. For example, if you were stood up at your wedding by the bride. You would feel bad, but then ask questions to your mom like “She was never right for me, right mom?”. We fish for what we want to hear to help us out. Yet when we feel a little off one day we don’t do the same thing. So in the case of your mind a death of a thousand paper cuts really is worse than a knife to the belly.
So what does all this mean? Well in practical sense there are two main myths that are really false.
- More money makes you happy. Well yes from $10,000/year to $50,000 is a good jump, but after that it just falls apart. $250,000/year isn’t significantly more happy than $50,000. There is lot of research to back this up. Adding excess money to your life doesn’t increase happiness you just get bigger piles of coloured paper or bank accounts with more digits.
- Children makes us happy. No realistically children are a LOT of hard work and studies have shown that that when they leave the nest your happiness typically goes up. Now here’s the fun bit, after the kids leave your happiness goes back to where you were before you had kids. So logically kids don’t make us happy, but we colour our memory to keep this myth going. Let’s face it, you don’t remember each diaper you changed or how many times your kids were sick this year, but you do recall playing with them at the park last week and how much fun that was.
So in the end I highly recommend this book for reading. It will really open your mind to what you are doing in your life to make you happy. So if you read the book, what did you think? If not, what did you think of the myths?
Posted by Canadian Dream on March 11, 2009
Well I’m typically not in the business of offering specific advise to a person’s situation, but when someone recently asked me to have a crack at their numbers I decided I would have a look and try for a change of pace. I made it known I’m not an expert on this, but will rather be just giving them my thoughts of the situation. Then much to my amusement I was told they both worked in the financial planning industry. So they already are experts compared to most people.
The couple has several questions including if they have a baby will they be alright during her maternity leave and afterwords would she have to go back to work (full time, part time or not at all). The second set of questions was could they retire early at 55? She is currently 35 and he is 37.
Ok before I even look at dollar number I’m already struck by something. They are waiting too long to have kids. After age 35 your odds of medical problems with your kids start increasing dramatically for woman. So to avoid things from getting worse for odds in a health sense you need to start having a baby RIGHT NOW. Do not pass go, do not collect $200 go straight to the bedroom and have sex. We will sort out the money after the fact. Also people generally assume you can get pregnant at the drop of the hat, which some people can. While other can not. You don’t want to find out the hard way it takes you over a year to conceive. Therefore get busy having lots of sex.
Now with that out of the way, let’s get onto sorting out the money issues. She makes $70,000/year while his is a bit more variable so I’m suppose to use the lower number of $50,000 to be conservative.
Expenses are currently as follows:
Expenses – Basic (monthly)
Car payment = $500 /month (will be done in April 2010)
Transit pass = $96
Groceries = $300
Toiletries = $100 (includes cleaning products)
Property tax = $280/month
Heat, hydro, water = $200/month
Cell phones, cable, internet = $200/month
Insurance policies (critical illness, health, life) = $200
House and car insurance = $200/month
Parking pass for husband = $100/month
General maintenance for car = $42/month
Gas for car = $100 month
Total = $2318/month or $27,816/yr
Discretionary Expenses (monthly)
Clothing = $150
Travel = $1200
Restaurants = $300
Entertainment = $100
Cleaning lady = $160
Total = $1910/month or $22,920/year
Grand Total = $4428/month or $50,736
Ok obviously they have a serious love of travel (they take a lot of cruises) and for those reading the above carefully would note they also own their own home free and clear. Instead of the traditional mortgage they pulled off a Smith Maneuver so they just have very large taxable investment accounts and very large investment loans to match. Yet for today I’m generally ignoring their assets to focus on their first baby related question.
Because of their Smith Maneuver I can’t predict their after tax income. It’s just too complex for me to even guess at. So after being assured that they get enough income from their investments to cover the loan interest and pay it down in 20 or so years I’m going to ignore it. Instead I just plugged in their regular income into a tax calculator and assumed no deductions and got rough estimates of after tax income of $52,800 for her and $39,150 for him.
So during baby’s first year when mom is off, life is fairly good. Mom would get about $400/week from EI and that with Dad’s income could cover their normal expenses and leave some extra to cover baby related costs.
Yet after that if she wants to stay home full time they are going to have to cut back a bit. Currently the difference between his income and their expenses is about $11, 500/year or $965/month. So the obvious solution would be drop the cleaning lady to cover off the baby expenses and then drop the travel budget to zero until the car payment is done. Then make some or all of the car payment money your basic travel fund. So then net their spending would be down $1200/month. That would leave a bit extra wiggle room since I don’t see any retirement savings in the above. The couple can use their Child Tax Benefit money to fund the kid’s RESP. Then if the husband has a good year they can bank it up in a travel fund for an extra trip or throw money at their retirement plan.
Now the above doesn’t consider yet the whole early retirement plan or the fact mom might decide she doesn’t want to stay home with the kid all the time. I know many mothers who like to work part time just to have a bit of their own life that doesn’t involve the kids. So just because you don’t have to work doesn’t mean you don’t want to work a bit. Consider part time work or even trying a home based business. I’ll touch these options a bit more next week when I look at the early retirement question.
So to summarize: yes have kids now, you can afford to stay home if you give up some travel and are willing to make it a bit more of variable expense to match the fluctuations in the husbands income. Any one else have some ideas for this couple so far? If so please share in the comments.
