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Monday, March 27, 2017

Balancing my Consumerism

Posted by Dave on April 30, 2013

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 really wish I was less of a consumerist than I actually am. I wish I could say that I never buy anything, I dumpster-dive for everything I own and invest 100% of my paycheque. The problem is, I like “stuff” just as much as the next person. I attempt to limit myself to consumables, otherwise I store it for a while and eventually have to throw something out. My impulse buys tend to focus around booze and food – both of which I will happily consume (in moderation).

Last week, I went with a friend to “Golf Town”, which is a store I like because I can see all the golf infomercial gadgets seem like they would cause significant injury when used (has anyone else seen the driver that has a hinge halfway down the club?? – that thing is a weapon). My friend had a bunch of credit card points he had accumulated and was thinking about using them to buy a new set of irons, which retail between $300 and $1,000. He was wailing away with about 4 sets he’d read about in various golf magazines and had probably hit about 100 balls before narrowing his decision down to 2 brands. Before buying them though, I asked him how many shots per round the new set was going to save him. He thought about it, and came to the conclusion that it really wouldn’t make much of a difference.

Personally, the last time I replaced my clubs was because it was going to cost more to get them re-shafted (due to safety reasons – one of them had snapped off while playing and could have killed my playing partner) than it would be to buy the 3-seasons-old new set that was on sale at “Play it Again Sports”.

I bought my commuter bicycle (well, my only bicycle) for work for $30 off of Kijiji. The furthest distance I will ever probably use my bike for is about 10km to get around the city, so it’s not like it needs to be an engineering marvel. I look at the extra work of peddling a heavier, less efficient bicycle as an added workout. I’ve ridden this one for 3 years now, about 50 days per summer and haven’t had any problems so far.

These are a couple of examples where I try to be efficient as possible with money, where spending more isn’t really going to change my level of enjoyment of an activity I’m taking part in. I try to balance this kind of decision with “Waffle Maker Decisions” that I will regret because I cheaped out on a lower-quality product, as I have previously done with the aforementioned waffle maker, cell phones, or computer parts (long-use, and don’t make sense to replace constantly to me).

How do you decide where to spend money and when not to? Have you been burned before trying to cheap out?

Spring Cleaning

Posted by Robert on April 29, 2013

I dropped my son off to play at a friend’s house today, and their family was in the throes of spring cleaning. We’ve been outside starting to clean up the yard. I don’t know what it is about springtime, but it seems to be the time to clean up and start fresh. So, in line with my focus on money, I’m spring cleaning my finances.

Net Worth and Cash Flow. Every three months, I calculate my net worth and my cash flow. I have a look at money earned (income, revenue) and money spent (debt payment, bills, spending) and make sure that we’re spending less than we’re earning. I just did that at the end of March. I also like to see if there’s room for planned one-time spending, such as a vacation. As long as we have more money coming in than going out, our net worth should be increasing. Unfortunately, fluctuations in investment values make it hard to tell sometimes. It also makes sense to look at the investments and make sure they’re still the best choices.

Recurring Bills. When coming income to expenses, there’s not always much room for cutting back. But it’s helpful to check recurring bills such as the phone bill, the heat and electricity, the water and any other utilities or services and ensure they aren’t increasing over time and that they’re still providing value for money. Not long ago, we cut back on our phone bill and increased our internet speed. We still pay about the same each month, but we’re happier with this level of service.

Taxes. This is practically a dirty word, especially in the spring. To be truthful, even getting a refund isn’t a good thing. That means you overpaid the government throughout the year, extending them an interest-free loan. The government gets annoyed if you owe more than $2000 at tax time, and will set up tax instalments for you. But you should get annoyed if you get a refund larger than $2000, and complete a form T1213 to reduce tax deductions at source. Another potential cause is if you receive a bonus that is fully taxed, instead of having it paid into an RRSP.

Charitable Contributions. Our family donates a certain percentage of our income each year to charity. At tax time, I calculate all of our income from investments and reconcile the amount that we have already donated against our goal. We can then plan what charities we want to support in the upcoming year.

Summer Vacation. The end of a long, cold, dark winter is a great time to plan for a summer vacation. As long as we’re spending less than we earn, our net worth is increasing on track, our taxes are paid and our finances are in order, we like to plan what we’ll do during the summer holidays. It takes money and planning, but in varying proportions. Sometimes it’s just an overnight camping trip, others could by more elaborate and costly. But I find that if we plan ahead, we can have a good time and control the costs.

When do you take time to look at the big picture? What areas do you find have room for “cleaning up”?

The Cell Phone Update

Posted by Tim Stobbs on April 25, 2013

So after not having a cell phone for the last six years I started 2013 by actually buying one.  Yet after having one for a few months I thought perhaps this was a good time for an update.

Well first off, let me say this:  I rarely use my phone for calls I have like two calls in the last three months and one of them was a spam call.  Um, so why do I have a phone?  Apparently texting.  Seriously I do a lot of texts to people.  It’s my primary way to ask short questions and often plan social events with it.  Actually now that I’m also on a cell phone my wife and I have noticed a serious drop off in the number of calls we get to the house.  Instead of a call to go over for coffee with some family we now often just text instead.

Other than that I’ve really like having the camera on my phone.  I’ve put more photos on my personal Facebook feed in the last three months than the previous three years.  It’s just easy.  Take a photo..then wait until I get somewhere with free wifi and upload the pic.  I still don’t have a data plan with my smart phone and I don’t think I’ll bother most of the time (I may breakdown on vacation..I’m still deciding).

Yet the truly great thing about a my smartphone…Evernote.  Seriously useful.  It’s my electronic memory bank of all sorts of things.  If I want to remember a quote from a book, take a photo and upload it to Evernote.  Remember a good bottle of wine at a dinner, take a pic and upload.  Like a movie preview, update my ‘To Watch’ list.  Need to remember a book to read, update my ‘To Read’ list.  Heck, most of my next book research is on Evernote.  It was literally worth buying the phone just to be able to use that app alone.

And what do I pay per month? $5 for 250 texts and $5 for the 911 fees and odd call or at most $10/month. So I have to admit I’m utter confused on why the hell people pay $65/month phone bills for unlimited text, data and local calls.  I could get it if it was to replace your home phone and you were often away from wifi, but for most people working in the city neither is true.  I suppose it is hard for people who get used to having data everywhere to clue in that you don’t actually need it if you are willing to just wait a bit.

Anyway, that’s been my frugal experience with my cell phone so far.  Obviously depending on your usage, the costs can change dramatically.  So what features do you use on your phone?