Posted by Gwen on October 26, 2011
This is a guest post from Gwen in Ontario, who is 39 years old with a grown daughter, and is trying to rebuild her retirement dream just 20 years too late for early retirement.
I am looking for a free (or very inexpensive, and only if it is really worth it) spending tracker.
I have tried doing a budget (a la Dave Ramsey style), but have always found I do better to just know how much I have available to spend (i.e $200.00 for the next two weeks) and stay within that. I figure that as long as my fixed expenses are paid, and my debt has decreased, I’m on the right track.
I would like to take this a step further and start analyzing where my money goes. I’ve been playing with a few free programs I ‘ve come across, but they are not quite what I’m looking for. I would like a spending tracker that I can customize the categories, don’t have enter a “budget” at the beginning of every month, and preferably something that I can keep a running tab of my net worth. Something that I could compare month over month would be nice to have as well.
I’m not a compulsive spender, however, sometimes I feel I can do better, and I believe I have to know where I am to be able to make a plan to get where I want to go.
Any suggestions?
Posted by Dave on October 25, 2011
This is a guest post by Dave, who is also looking to retire no later than 45, but unlike Tim has no kids and doesn’t want any. Dave is from Ontario and is working towards his CGA certification.
I am all about self-experimentation. I lift weights at the gym and am constantly changing my workout in order to optimize my time (meaning I try to get the most gain with the least amount of work). On top of that, I tend to gravitate towards the more “fringe” trends in diet and health as I discussed a while ago in a post on intermittent fasting (how I save 20% on my grocery bill) for at least a short period of time, to see if they work for me.
A few weeks ago, I read Tim Ferris’ “The 4-Hour Body” which included a chapter on significantly increasing fat loss, up to 50% faster than diet and exercise alone. The catch – it involves immersing yourself in a bathtub filled with ice water for 20 minutes 3 times a week. The premise of doing something like this (which some would term insane) is the ice water forces the body to shiver, forcing it to burn significantly more calories than it would in its normal state.
I have yet to try an ice bath, it just seems too out there, even for me who “starves” myself for two 24 hour periods a day and gets most of my calories from “unhealthy” fatty meats, eating like a caveman. The premise of the ice bath is to throw off your normal balance (in this case freezing yourself for a short period of time) – the same thing can be applied to personal finance, especially when your goal is early retirement.
Your “ice-bath” could be challenging yourself like Tim, where he is not going to buy anything until the New Year, it might be an attempt to cut your grocery bill down to $10 per week following Jacob from Early Retirement Extreme’s grocery buying plan, or go car-free for a month to cut down on your expenses. On the income side, you could pick up a part-time job to add income to invest or pay down debt, or start selling the stuff you have laying around and not being used.
I am all for boring personal finance – paying off debt, investing for retirement and sticking to the plan but I need a jolt once in a while as well. I generally don’t spend a lot of money, but I am also a gadget junkie. I have found myself constantly looking at an iPhone and iPad over the past few weeks – neither of which I need. Because I don’t really spend a lot of money, I have found myself with a significant surplus in “personal” cash that could be used to purchase both of these toys. I was looking at my mortgage calculation though, and found that if I could come up with an extra 13,000 in the next 2.5 years, I could pay off this debt in under 5 years (which was my initial goal on buying my house).
So, rather than buying toys which I may really enjoy initially I am going to pay off my mortgage, so that I can get to my ultimate goal – financial freedom by the time I’m 45.
Can you think of a challenge that would shock your financial plan?
Bonus content: This American Life had an interesting show on last year where an individual intentionally infected himself with hookworm (a parasite) in order to cure his terrible allergies. If you haven’t heard about it, I would highly recommend reading about the Hygiene Hypothesis and the possible effect that our super-clean hand-sanitizing society is having on us (and also why you should let your kids eat dirt, among other things)…..Definitely on the same page as ice baths.
Posted by Robert on October 24, 2011
This is a guest post by Robert, who lives in Calgary and works as a financial adviser retired at 34. He is married, has three kids. Robert and his wife then plan to return to school and become teachers, eventually living and working overseas.
Steve Jobs died October 5, 2011. He was one of the richest people in the world, with an estimated worth of $7 billion. Just to get an idea of how much money that is, at current gold prices ($1645US/oz), it would be roughly equivalent to 120 (metric) tonnes of gold. Was his life better for all that money? Did it change him? Walter Isaacson wrote a biography of Steve Jobs, based on over 40 personal interviews. Yesterday, just before the book launch, CBS did a 60 minutes report, interviewing Isaacson.
Steve Jobs said, “I did not want to live that nutso lavish lifestyle that so many people do when they get rich.” He lived in a regular house on a regular street in Palo Alto. His kids could walk, go to neighbours houses. They had no live-in help or entourage. Steve Jobs was not materialistic. That may be a trait he learned from Buddhism.
When Apple Computer Inc. went public in the early 1980s, over 100 people became millionaires. But money affects different people in different ways. Steve Jobs felt that some people tried to play the part, started acting rich. They would buy a Rolls Royce, a huge home, their wives would get plastic surgery; he sums it up by saying they turned into “bizarro people.” For his part, he made a promise to himself: “I’m not going to let this money ruin my life.” You can watch the entire “money” segment here: http://www.cbsnews.com/video/watch/?id=7385676n (0:01:53).
I personally don’t believe that money changes people. Money allows people the freedom to express, without inhibition, who they really are. I was biking through my neighbourhood with my son, and we rode past the million-dollar houses that back onto the (man-made) lake. In front of one of the houses was a Rolls Royce. Granted, it was old and painted an unattractive brown. But I hesitate to conclude that the people living in the house are “bizarro people.” On the other hand, I know people who don’t have money, and are bizarre. As an example, one would have to be a little bizarre (and poor) to help organize Occupy Calgary.
Money gives a person more opportunity to express their true nature. Each of us, whether or not we acknowledge it, has positive and negative tendencies. I don’t worry that money will ruin me for two reasons. One, I never plan to have a great fortune, almost certainly less than a million or two. Second, and more importantly, I already know the type of person I want to be. I don’t feel that I’m more (or less) special than any other human being on this earth, and I don’t have any more (or less) right to enjoy my life. I also know that I enjoy life most when I’m working at something meaningful with people whom I admire. None of that requires obscene amounts of money.
What would you buy or do more of, if you had unlimited riches? How would you behave differently, if prices didn’t matter?
