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Tuesday, March 28, 2017

Major Expenses in 2009

Posted by Dave on December 29, 2009

With Tim’s much anticipated Net Worth update coming, I thought it might be interesting to look at my financial year in review.  From a net worth perspective, it has gone up, but only slightly over the past year (I don’t have exact numbers, this is something that I have on my list as a New Years weekend project), but over the past year, there were two significant financial expenses that I incurred, the purchase of a house and a wedding/honeymoon.

I got married in March of 2009, the wedding and honeymoon was budgeted and saved for and didn’t really make much of a difference to our day-to-day budget, but for someone like myself who watches their spending, dropping approximately $8,000 on a wedding and another $2,500 on a honeymoon was tough to do.  If I had any advice for people looking at cost savings in their wedding it would be the following:

Limit your guest list: Guests can be viewed as a variable cost to the whole ceremony.  There is a lot of tradition around who to invite to weddings (I’m sure many people have been to weddings with 300-500 guests – how many of these people do the bride and groom actually know?) but by inviting people you don’t talk to, or in some cases don’t know but your families think you should invite, savings could be in the hundreds or thousands of dollars when you factor in food, drink and other minor expenses.

Don’t have an open bar: We had a toonie bar and it worked out well.  This may sound cheap, but I dislike open bars due to the waste that happens when people set drinks down, forget where that happened and just go get another – the $2 per drink  isn’t prohibitive to anyone’s fun and at least allows for a cursory look around.

Have your wedding someplace cheap: We got lucky because my spouse’s family all lives in a small town in an economically depressed part of the province.  Our costs were all approximately 20% lower then a comparable hotel in the city that we live in, and the place was just as nice or nicer then anything we saw in larger cities.  Might be difficult to do, but moving the venue could reduce costs as well.

Relax and have fun: Even if everything doesn’t go the way you think it should, in the end, in all probability the end result should be the same – you should be married and someone will do something ridiculous that everyone will talk about for a while (hopefully not you).

As for the house purchase, the only thing that I would really advise is going to a mortgage broker over a bank – in my experience the mortgage broker was much more flexible with rates then the bank.  Even if you decide you like your bank, you should at least shop around and engage in negotiations – we were able to reduce our fixed rate from the initial offer from a bank of 4.25% to 3.59% with a few calls for a 5-year fixed rate mortgage – probably about half an hour of time saved hundreds of dollars over the term of the contract.

Those were my major expenses incurred for the year – the wedding being (hopefully) a once-in-a-lifetime occurrence and the house expense happening probably only 2 or 3 times.

How about you?  Any large, one-time expenses in 2009?  Any you wish you could have back?

I hope everyone had a great Christmas – Happy New Year to everyone!

Comments

4 Responses to “Major Expenses in 2009”
  1. jon_snow says:

    I got married in July of this year, and despite all intentions, my net worth chart, which usually grows steadily all year, has a very noticable plateau during the period of the wedding and honeymoon.

    It has still been a very good year… the fact that I didn’t get involved in equity investment until AFTER the lows of March 2009 has been very rewarding so far.

  2. Andy says:

    I decided to deal with the banks instead of a mortgage broker. My reason is that I’m purchasing variable and not fixed. Just read a report where over 80% of people come out ahead with a fixed rate mortgage.

    My two big expenses this year were a trip to Mexico and rebuilding the car’s transmission.

    The trip was a little out of character for me and was a little irresponsible. Some other problems made it even more expensive than expected.

    Don’t worry, I won’t make the same mistake again :)

  3. Dave says:

    @ jon_snow – There seems to be quite a few incidentals that you don’t really think about in weddings that seem easy to justify at the time (the old “oh well, it’s once in a lifetime……..”)

    @ Andy – the “irresponsible” trips tend to generate the best stories :) with the other “problems” encountered, yours sounds like a very interesting adventure.

  4. JMK says:

    Finally had to replace my husband’s 1997 SUV. It decided to retire itself in January. I began working from home (I’m fortunate my company supports this) and my husband drove my car until we settled on a replacement in May. Between January and May we stopped our weekly payments to RRSPs and extra mortgage payments and let the weekly excess pile up. By the time we found the new(er) 2004 replacement we had the cash ready. We’ve cut the non-essentials from our life and generally live on 55% of our take home pay. As a result we don’t save in advance for big purchases. We just temporarily suspend the massive savings we are socking away as we work toward early retirement. When the dishwasher failed we hand washed dishes for a couple of weeks while we shopped for the replacement and then paid cash. We do the same when we want to take a trip, replace the roof, new tires etc.

    Rather than have money accumulating in various savings accounts waiting for large future expenses that can’t really be predicted we’d rather get the money into our RRSPs sooner than later. Yes this always assumes we’ll be making way more than we need to live on, but so far that’s been working for us. Most major expenses aren’t a surprise. You know your roof or tires will need replacing next year, or that the carpet is getting worn looking. We had expected the SUV to need replacing 2yrs before it happened. It just refused to give up and I’m glad the cash was busy working in our RRSPs rather than sitting in a savings account all that time.

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