Posted by Canadian Dream on May 12, 2011
Last month during our grocery shopping run I decided to switch to a new coffee and am now paying almost double the price. Did I hit my head or something? No, I decided I wanted to drink a better cup of coffee in the morning and I was frankly willing to drink less coffee overall to do it. Overall it is still costing us more, but I’m ok with that. You see despite the fact this blog has lots of posts on how to reduce your spending on food, housing, insurance, and tax, there are points in your life when spending more is really worth it either for a personal reason like my coffee or to invest in quality.
The problem with spending more is it isn’t always obvious that paying more means you are getting better quality. In some cases you pay more to just get ripped off. So when does it makes sense to pay more? Here are a few places you should consider looking at:
1) Your Bed – You will spend more almost as much time on your bed as you do at your job. So please take the time to do some research and get yourself a good bed. A good bed will actually help your health if you have issues with your back. But be carefully here as a lot of beds are very similar and there is a price difference on brand names that won’t always give you quality. Personally, I happened to inherit a foam mattress when I moved out that had barely been used and I’m still sleeping on it 13 years later. I just have to rotate the mattress every six months or so and regardless of the price when I buy a new one I’m going to get another foam one.
2) Your Cookware – Cheap non stick pans and crappy pots aren’t worth it is they must be replaced every few years. Suck it up and invest in cookware if you are using it daily. Think more in terms of cost per use. If a pot costs double or triple your previous one, but lasts 10 times longer it is a bargain. Pay the money and take care of it. For example, never put a post on full power on your stove top…you don’t need that much heat to boil water. Most often 3/4 power will work just fine. Also just because you can put something in the dishwasher doesn’t mean you should. We never put our pots in the dishwasher and guess what…they never warp on us.
3) Your Coat and Boots – If you live somewhere cold in the winter, please for the love of your fingers and toes invest in some good outerwear. Trust me I’ve tried the cheap boots method and I didn’t like the results as all, so my next pair I’m sucking it up and investing in a good pair of boots again. Also the same applies to a coat, get what will work best for your climate and don’t worry if you have to pay more. Think again of cost per use.
4) Your Business – About five years ago I bought a good laser printer for my writing work. At the time it cost about three times the cost of a cheap inkjet. I recently just paid over a $100 for a new toner for my printer (since it finally was running out), but that should now last me another 4 to 5 years. So yes it was expensive, but given what I use it for it pays for itself nicely and it does a much better job. Depending on your business, it pays to invest in good quality things that you will use a lot or if it will save you a lot of time.
So as you can see a good place to invest in quality and pay more are things you will use often. Paying more for something you only use once a year is a questionable investment. Also you have to change your mindset when shopping for quality to cost per use rather than the initial price tag. If you can buy a solid hardwood table than you kids can use once you die, it might be good idea to spend some money up front and then never replace it.
Posted by Canadian Dream on May 4, 2011
Debt is so ingrained into our everyday life that most people would consider it almost unusual to meet someone who is completely debt free. No mortgage, car payment or even a line of credit. In some regards, life after debt sounds a lot like life after death…it sounds good, but until you see it, it is a little hard to believe in.
While I’m not debt free yet, I have made a lot of progress to becoming debt free. It hasn’t been easy road to travel, since too often the lure of new goods can pull you back off the path (for example: ebook readers, new surround systems, or shoes…depending your particular vice). Perhaps that is why life after debt is hard to understand for some people as once you achieve that level of success the results are invisible to most people. Being debt free in some regards would often result in you looking poorer to others as you tend to drive an older car and live in a modest house.
Often the accumulation of debt is a direct result of a desire to compete with others. In an attempt to keep up with the Jones, we buy the newer car even if the old one was fine or get a kitchen reno even when we don’t cook that much in it. In some regards being debt free is the exact opposite behaviour as you often can’t be in competition with your neighbours since you don’t know what their debt levels are at and may in fact never know. So be choosing to go after being debt free you exchange an external competition for an internal one. While some blogs like this one, do you give you an idea of others debt loads often the comparison isn’t correct because of geography, income or even goals. So in the end the desire to move past your debt is a battleground that solely exists in your head.
So how do you compete against someone who knows your every move before you do it? You have to main weapons to defeat yourself and your debt: logic and emotion. The logic side is the one most people are familiar with, as it includes budgets, monthly saving targets and spreadsheet plans full of numbers. If logic worked by itself everyone would be rich since it would be easy to plan or even have someone help you plan your way out of debt. Yet it doesn’t work that way, since far too often the emotion side gets in the way. Emotion is a fantastic way to over ride logic as the ‘right‘ way to go ‘feels‘ that way, regards of the fact the numbers are saving: you can’t afford that.
Yet since we can’t get rid of emotion, you must instead try to accept that and then use it as best as you can to support your logical plan. This is where you start trying to get your mind to work with you by the oldest trick in the book…you bribe yourself. Do not under estimate how critical rewards are to changing and enforcing behaviour, but in the end it won’t be enough. You also have to make the behaviour easy to do and make the wrong thing hard to do. So how do you do that? Here is an example, you could set up automatic payments to your debt so you don’t have to do anything to pay it off. Then you also setup a few points in time where you reward yourself for paying off debt and even have a bonus reward if you get it done faster than the plan. Last, but not least, you leave your credit card at home and keep your limits on your debit card low so you can’t get back into debt easily. While doing all of this may seem like over kill, that is the point. Your playing poker here with someone who knows your cards…you only hope to win is massively over strategically plan for that fact.
So now that you are armed, go out there and slay that debt. Your opponent is a little to smart for their own good, so be careful for their tricks or you might end up in a cave clutching your gold card and calling it ‘your precious’ between rounds of saying ‘charge it’ at the mall.’
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Filed Under: Debt
Posted by Canadian Dream on March 31, 2011
In a consumer driven society you are basically supposed to have your one specialization that you work at and then you are supposed to buy everything else you need. Thus while you might be a great ‘insert job title here‘, you are suppose to suck at everything else. Too often this is exactly what happens and people really don’t have a skill set to address many of the minor repairs or jobs that could significantly reduce your costs. By having additional skills you can save on a large number of minor things that when compounded can help you retire earlier.
So what skill set should an early retiree have? Basically there is no limit on what you should have other than as many as you can learn and have an interest in. In my life I’ve noticed the following skills to be very useful so far:
- Cooking. Now cooking isn’t just a single skill but rather a spectrum of skills where you start at boiling water and work yourself up to inventing supper from the leftovers in your fridge with no recipe. Perhaps the most useful skill I’ve learned so far in this is the ability to substitute items in a recipe. From experience (and Google) I’ve learned how to take a recipe as a template and reinvent most of it based on what I have in the house. So rather than going shopping to make supper I end up using what I already have in the house. For example, if a recipe calls for buttermilk more often than not you can use sour milk instead (milk with a splash of white vinegar in it). The pay off of this skill for an average family would likely be reducing your food bill in half.
- Clothing Repair. While I don’t have a sewing machine (I’m not that good yet) I do keep a little basket in the house with needles, thread, pins and other useful items. To date I’ve fixed countless little things that were 98% useable except for one minor rip or fallen off button. For more complex projects like a new set of curtains or a cover for a bench I get help from friends or family who can do the project for me. While I can give an exact estimate of savings here, I’m fairly sure I’ve saved over $100 in clothes in the last six months. Mainly because I’ve got two boys that seem to be fairly skilled at wrecking pants and shirts.
- Minor House Repairs. This is a broad category with lots of sub-skills to it. Some examples include carpentry, plumbing, electrical, tiling, painting and installing new flooring. In general I grew up fairly clueless on how to do most of these things, but from various people over the years continue to learn how to do things and skip paying someone else when I have the time to do the project myself. So know I’m to the point I’ve leveraging my skills to fix other things like broken toys. I can’t even begin to calculate the thousands of dollars I’ve saved over the years because of these skills. But over two house I’ve likely saved at least $10,000 in flooring and painting projects alone.
Now there are other skills you can continue to learn depending on your interest and natural skill set. Other examples of skills include hair cutting, stain removing, deck building, patio installation, auto repair, electronic troubleshooting, computer repair … you get the idea.
If you have a spouse or partner feel free to leverage what the other one is good at to round out your combined skill sets. For example, when painting I’ve determined my wife should never be allowed to cut in the ceiling, but I’m good at it. Yet she is great with a roller, while I suck at it. So we split our paint jobs according to what we do best.
Perhaps the most important skill of all if don’t be afraid to try something out. For example, if the item in question is already broken and heading for the trash: try to fix it. Even if you fail, it only cost you a little time and if you make it work again you have saved some money.
