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Thursday, April 24, 2014

A Little Bit at a Time

Posted by Dave on November 15, 2011

My wife and I had a big day last week – we finally reached the top of our piggy-bank (an empty three liter bottle of Canadian Club – a remnant from a party in my past) and were able to count all of our change.  Although it may not be a momentous occasion to most, it’s fun for us because it essentially means we get free money to do something fun for a weekend (we’re thinking Niagara Falls during off-season or Toronto to see a show).  Because we rarely spend cash, this level of change saving (quarters and below) has taken us around three years to accumulate, so we are going to enjoy ourselves on this miniature “windfall”.

Besides our “adult” piggy-bank, I utilize an ING account for my own personal spending – I save $20 per paycheque that I use to save up for golf, video games, and other money-losing purchases.  Because I don’t make withdrawals from this account very often once in a while I’m able to have a balance over $1,000 to finance my expensive hobbies.

None of these savings amounts are working towards my end goal of financial independence.  Slowly but surely, I have built a buffer for my sometimes poor purchasing decisions, a strategy that could be carried into my early retirement years, either because I have stopped making these kind of decisions totally (which would certainly help in reducing the amount of stuff in my house), or because my “fun” savings has built up significantly.

This kind of long-term saving, something that I have done from a young age onward (something my parents both drilled into me) bodes well for an early-retirement goal – expanding the same type of mentality to gradually watch my debt decrease (my mortgage disappearing) and eventually passive income increasing (dividends or interest) is something I have “trained” for over a 20-year period.

If someone has never experienced delayed gratification, they would think I was nuts, waiting until all that loose change reached to top of the bottle before making plans for a relatively cheap weekend away in the grey days of January.  Yes, I could easily afford this purchase but I have already ear-marked a significant portion (around 75% of my paycheque) to paying down my mortgage.  If I chose to spend that money on a weekend away it would be putting me further away from my ultimate goal of exiting the workforce as quickly as possible.

Do you have a “piggy-bank”?  Do you never splurge, or how do you afford the odd amount of overspending?

Bonus content:

  1. This article shows how not to spend a $6 billion fortune (Not a problem I’m concerned with, but I’m not exactly sure what demographic reads this Blog).
  2. I recently taught myself how to bake pies (from scratch).  This discovery has definitely made it much easier to decide what to bring to people’s houses when you’re invited over – everyone loves homemade pie.  I would highly recommend learning how to make this relatively cheap dessert for the holiday period.

 

Comments

8 Responses to “A Little Bit at a Time”
  1. deegee says:

    I don’t have a piggy bank to store my loose change because when possible I spend my loose change as part of making everyday purchases. For example, if I am at the supermarket and the total bill is $21.58, I will hand the cashier a $20 bill, a $1 bill, 3 dimes, 4 nickels, and 8 pennies, ridding me of 15 coins and lessening the jingle-jangle-jingle of coins in my pocket.

  2. Gus says:

    How much change fits in a 3 L bottle of CC????

  3. Dave says:

    Gus: It works out to about $100 per liter :)

  4. I try and save money in a specified account, but every month when I make 2 cents of interest I say screw it and throw it into my trading account and buy dividend stocks.

    In fact anytime I see extra money sitting in an account I get antsy and invest it because it’s not working for me. I’m just tired of working for my money, and want it working for me. Is that a bad thing?! :)

  5. deegee says:

    Addicted2dividends, besides liking your screen name, I surely like having my money working for me in the form of living off its divdends (I am addicted to them, too) for the last 3 years.

    I have very little money in accounts which pay little or no interest/dividends. Just the small amount in my local bank’s checking account needed to satisfy minimum balance requirements while providing me daily bank services needed to pay my bills is enough. Everything else has some growth potential or pays me close to 4% tax-free or more. :)

  6. I keep the minimum in my checking account for free banking as well, Deegee. I think of the $1000 as a buffer and I don’t even miss it.

  7. Pearl says:

    Yes, I have 2 piggy banks; one for $2.00 coins, one for all others.

    I started earlier this year, dilligently emptying my change when I returned home from shopping. With the change I saved up, I was able to buy myself a tailor made wool coat – basically, for “free”!

  8. Mike says:

    My family runs on a cash system: Friday we withdraw our weekly cash (groceries, fun $$, allowances) and at the end of the next week we put whatever’s left into a jar.
    We’ve accumulated enough to pay for a great winter vacation which will cost nothing out of our bank account.

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