Posted by Dave on February 23, 2010
Over the years, I have created a system of banking and spending that I thought I would share. It’s probably more complicated then it needs to be, but It works for me. I have 4 different bank accounts at 3 different financial institutions, as well as 3 credit cards and a line of credit. On top of these, my wife has 2 savings a chequing account and a credit card. Here’s what I use them all for:
My Bank Accounts:
“Big Bank” – Chequing Account (CIBC): This is my main account that I have my paycheques deposited to and any direct-bill payments made from. All of my accounts are linked through here. This account is also the only account that I pay fees on as well (approximately $5-$10 per month), which is the reason I have contemplated getting rid of it in the past. I have kept the account with the fees because from time to time it is convenient to have a “real” bank to go to – whether it’s for a certified cheque or a place to bring a grocery bag full of change to to deposit, I find myself actually talking to a teller about 3-5 times per year. In addition, the fees I pay are the only bank fees paid by our household as my spouse recently got rid of her “Big Bank” bank account in favour of an online account.
Online Saving Account (PC Financial): I use this for my emergency fund – it basically just sits accruing interest, hopefully never to be tapped.
Online Chequing Account (PC Financial): I rarely use a debit card, but when I have to(there are no other options) I use this account that has about $50 in it.
Online Savings Account (ING): This is the account I use for more long-term goals. In the past, I have used it for saving up for a car and for my wedding and honeymoon. Right now I’m putting aside a little bit of money each paycheque to fund my golfing habit for the summer.
I like to keep my savings split up (as opposed to Tim’s Super Fund) because it’s easier for me to see what I have to spend on things like golfing and other more personal expenses, as opposed to “Household” savings like the emergency fund.
My Credit Cards:
PC Financial Credit Card: This is the card I use for most purchases, from $2 and up (I don’t usually carry around any cash as I find I spend it much easier then using a credit card). I am probably one of PC Financial’s worst customers as I have probably cashed in around $500 in points and have paid $0 in interest.
CIBC Visa: This card has a very low ($200) limit on it that I use when I buy things online. I might be paranoid, but I don’t really trust some of the payment processors I see from a portion of online retailers.
Home Depot Credit Card: I like the do-not-pay for 6 months zero percent interest on this card. I don’t buy stuff unless I can pay for the purchase outright, but for cashflow purposes I’d rather take the 6 months to pay off what I’ve bought then front the money outright. I realize that making purchases like this is contrary to most personal finance wisdom. Most personal finance writers do not view credit cards favourably, but for larger (>$1,000) purchases I’d rather have the money in my account for 6 months earning interest then with Home Depot.
My Line of Credit: I have a $15,000 line of credit that I don’t use, but was offered when I signed up with PC Financial, so I took it. If necessary, I would use this to supplement my emergency fund, but can’t really see many situations that this would happen.
Other then the Home Depot card, I pay off my other spending credit cards biweekly when I am paid.
So, that is my system – writing it out makes it seem a lot more confusing then it actually is, but it’s what I use to keep my finances organized. I’m wondering how many different accounts and credit cards other people have and if you have a similar system of organization?
Posted by Canadian Dream on February 22, 2010
For long time readers you are well aware that about once a year I sit down and recalculate how much I need to retire. Basically I update my assumptions and find out if I’m any closer. Given that this year I’m looking a bit more at the semi-retired option I’ve decided to run this scenario instead.
So first off you need to determine what kind of lifestyle you want in retirement since that drives your expenses and that is one of the key numbers in these type of calculations. For me that is fairly easy since I rather like my life now. I just wish I had more time. So I’ll use my current spending as a baseline.
So on a monthly basis that is $3266, but I need to adjust that number. First off I won’t have a mortgage payment, so I’ll deduct $1276. That pushes me down to $1990/month. Then for this scenario I’m still planning to work so all I want covered is my bills, property tax, food, gas, regular spending on kids (but not RESP contributions) and insurance costs. Basically any spending money I want or vacations will have to come from working. Also any new cars or home improvements will also be coming from my working income. Good motivation don’t you think? So with that in mind I can drive the monthly spending down to $1500 or $18,000/year. This is much cheaper than my usual full-retirement calculation that has me at about $27,000/year plus any yearly vacation cost.
So overall I’m on the hook for working enough to raise $9000/year after taxes from some kind of work and then a bit more for a vacation. Yet that includes me and my wife, so given right now my wife can clear about $6000/year from the daycare this should be very easy to pull off between us both. I don’t mind doing some work, but I don’t want to be chained to a full time job.
Now given this is a new scenario I’m doing some crude guess work about how long I think I need to work full time to pull this off. I know I will currently pay off my mortgage about the middle of 2012, so obviously I need to work to that point in time. After that I’m taking a stab that I’ll need to keep working for another five years. So overall that will put me at 39 when I shift over to semi-retirement (if I’m wrong I can always redo the numbers at a higher age).
I’m also going to be a bit conservative on this number crunch and assume I don’t seek a second term with the school board (also I have no idea if I’ll still want to do it at that time), so after my mortgage gets paid off in 2012 that extra money will stop flowing into savings.
On Wednesday we will pick this series up again and find out where some of this money is coming from to pull this off.
Posted by Canadian Dream on February 19, 2010
I was struck a little dumb after reading the following from an article in the Globe and Mail:
A new report has found the number of home-cooked meals Canadians are consuming has dropped steadily in recent years. NPD Group Inc., a global market research firm, said Canadian households consumed 380 homemade meals on average in 2009, a significant decline from 398 the year before and 423 meals in 2003.
At the same time, the report found that the consumption of frozen food rose 15 per cent since 2004 to reach the highest level in a decade. More than 75 per cent of meals and snacks Canadians ate last year were prepared in 15 minutes or less, NPD group reported.
For a point of reference if you eat three times a day you should eat 1095 meals per year. So on average a Canadian home-cooked 35% of their meals in 2009, which leaves the other 2/3 to eating out or prepackaged food. Is it any wonder than that this country is getting fat and our debt loads are going up? Yikes!
Out of point of comparison I would guess that we are the complete inverse of that ratio, about 2/3 of our meals are home-cooked (if not more than that). It’s not like it takes much time or anything. A double batch of muffins on the weekend will provide breakfast for a week and can be done in 30 minutes and then frozen. Then heating up a couple in a microwave takes all of 20 seconds. Not to mention the savings our food budget is about $300/month for a family of four while our eating out budget is another $60/month.
For lunch and supper you just need to buy a 30 minute cookbook. Heck if your time during the week is that tight for time you can even cheat a bit and pre-cook a batch of ground beef and onions on the weekend. That way your can drive you cooking time down towards 20 minutes. Same idea applies to other meats if you are really that rushed.
Perhaps the only thing required of people when the cook home-made food is planning. Take 15 minutes on Sunday night and get a small whiteboard and write out what you are cooking each night. That way you can put meat in the fridge the night before to defrost and you avoid the last minute “Oh, what are we eating?” rush that drives a lot of people towards convenience foods. I always find our week flow so much smoother when we remember to plan out the meals in advance.
Also keep in mind it is ok to use some convenience foods. It’s completely fine in my mind to eat a frozen pizza on Thursday night if you know you have swimming lessons for the kids at 6:10pm. The problem occurs when you are doing that every night.
So in conclusion, with a little bit of planning and a small amount of cooking skills you can easily drag up your home-cooked to 50% of the time. Then from there you can get better at cooking and drive that percentage up. As you go you will likely notice a drop in your grocery bills and your waist line. So how does your family do for home-cooked meals? Are you closer to that 35% or up towards 50% or higher?
