Archive for April, 2010

Give Peace a Chance…

Last night, as I was preparing my month end stuff and planning ahead for May, I was amazed at how peaceful I felt. Dare I say I was even happy doing it.

Once upon a time when I did these tasks, I’d get anxious and my heart would race. Normally I walked away from my computer hoping somebody would throw me a life ring. I felt hopeless.

Now, I have a way bigger mortgage, responsibility for my two daughters and I don’t dread preparing for a new month, or reviewing the month that’s passed. It is so peaceful having a solid plan, sticking to it, and seeing results. Want to give yourself a mental break – be good to your financial self.

Sure, it’s only 30% of the way through the year. In that time, I’ve managed to knock off 34% of my line of credit. The great thing is, I totally see the way the other 66% will get paid off.

This is the year of working hard. Both in my jobs, and at home. I’ve put up my hand for extra shifts for my part-time gig, and that helps a lot. Some weekends it means I get up at 5 a.m. in order to get there. Why do it? Because it helps me achieve my goal. Is it a drag? No, it’s a pleasure. The harder I work now, the more choice I’ll have in the future to lie in bed in the morning.

As April draws to a close, and I see that I still have debt, and I spent more than I earned this month, I know I didn’t make one stupid decision. I’m thankful for the plan, thankful for my family, and really thankful that excel shows me the long-range results when I stay the course.

Now the challenge will be, what kind of a mark will I give myself on my month end report card?

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I want a bike!

I’ve had a really hard time this last week. There’s a battle going on in my head, and it’s not over yet.

Since I’ve decided to live without a car, every so often I toy with various ways to transport myself around the city.  Yes, I make use of the Toronto Transit all the time. It’s cheap and efficient.

Now that the weather is nicer, my head has returned to thinking of more ways to get from A to B. If you live in a larger urban centre, chances are you’ve seen an increase in the amount of gas powered scooters, vespas, and electric bikes on the road.

Last year was the year of the Vespa for me.  I really wanted one. After doing my research, I determined that the cost of the bike, combined with the cost of training, insurance and license was too much.  No Vespa for me.

This year, manufacturers are turning out electric bikes, or ebikes, that look a lot like the Vespa, and the Ontario Government has introduced a pilot project that allows the ebikes to ride on the roads without a special license, as long as the ebike meets certain specifications.

Earlier this week, I took one of those ebikes out for a test drive.  OH. MY. GOODNESS!  What fun it was! Not only was the ride pretty cool, but add the fact that I felt like some silver screen actress driving around Venice, and I’m hooked.

What started this whole thing? Truthfully, I get asked to fill-in for other people for my part-time gig on Sundays often.  I can rarely say yes because the TTC doesn’t operate early enough on Sunday to get me to work on time. A couple of weeks ago I did say yes and rode my traditional bike to work.  One hour there, one hour back.  Not a bad ride, but not something I’d really enjoy doing too often.

I almost laid down my credit card this week and purchased one of these snazzy ebikes.  Thankfully, when I took my daughters and sat one of them behind me, our combined weight was too much for the shocks. The manufacturers specifications said the weight limit was 10 pounds higher than our combined weight, but still, it didn’t look like enough to me.  The credit card stayed in my back pocket.

When I speak to people about this ebike bug that I have, I hear “you deserve it” and “it sounds like you’d have a lot of fun on it” and “wow it’s so cool looking”. Only my youngest has asked “is it in the budget?”

No, it isn’t in the budget. The total cost of this kind of an acquisition would be just under $2,000.

In order to talk myself off the fiscal ledge, I’ve made a pros and cons list.

PROS:

  • transportation at my disposal (in fair weather)
  • cheap to operate at only three cents a charge
  • no parking fees, no license, no vehicle insurance
  • can drive one of the girls to wherever they want to go in town
  • the girls can both drive it legally without a license
  • I can say yes to part-time gigs when the TTC isn’t operating
  • it’d be fun just to go for a ride
  • I’d feel stylish and hip

CONS:

  • the cost would add to my debt, therefore my debt would most certainly not be paid off until February or March 2011
  • I’d have to add a rider to my house insurance to cover the value in the event it’s stolen, which is likely about $150 more/year
  • I can’t ride in the rain or the winter
  • need to find a place to store it in a heated place in the winter (some models)
  • I wouldn’t be a very good example of somebody serious about wiping out debt if I go and add to it. Would you come back and visit? What would my kids think?
  • I worry that I’d get less exercise, and walk less in favour of riding the new bike
  • cost of regular maintenance and repairs would add to my annual operating budget
  • I’d be inclined to look for other purchases to complement the bike, even fancy scarves or gloves or glasses

I’m likely to do a bit more research, but I do feel less likely to reach for my credit card now than I did a few days ago. People with medical costs as high as mine shouldn’t be out looking for a zippy little bike.

This past week has shown me how easy it is to get sucked in to something. It’s not like this is a brand new idea or an impulse thing, it’s been on my mind for about 8 months.  It’s just that the picture of what IT is keeps changing. From gas to electric. From $5K+ to just under $2K. From just for me to for me and the girls.

The girls and I have been so good talking about money and goals. I’m sure that there won’t be a new ebike in the driveway this year. Next year I want to save for a vacation. Maybe there won’t be an ebike in the driveway for a few years.  Think of how cheap they’ll be by then!

How do you keep your credit card in your wallet when you got it bad?

Know about the Scanning Code of Practice?

A few years ago, the Retail Council of Canada introduced the Scanning Code of Practice.  If you’re a consumer, it’s something you should know about.

In a nutshell, the code asks retailers to voluntarily commit to scanning accuracy of their products at the checkout. It also allows consumers to expect a standard resolution for instances where a product is scanned for more than it appears on the shelf.

According to the code, if a product scans too high at the checkout, the consumer can ask for the lower price.  In addition, if the correct price is $10 or less, the consumer can request the item for free.  If the item is more than $10, the consumer will get $10 off.

I remember when this first came out.  I was elated.  There were many times in the past when I’d take an item to the checkout and it looked like I was charged more.  Zellers kindly gave me four towels when the code first came out because of the code.  I’m still using them!

On the weekend, I was shopping for feta cheese for homemade greek salad. Feta cheese is an awful price, but we love to make our own greek salad, so there’s usually some in the fridge.  When I got to the checkout it scanned at $9.29.  Ouch!

I let the cashier know that the price on the shelf was $8.79.  She had somebody check it out.  They returned confirming the price I recalled. As she was manually changing the price I said “do you abide by the scanning code of practice?”  She paused.

“I have to call my manager” she said.

“No problem” I responded.  Even though I had a tinge of guilt as the lineup was growing behind me.

I overheard some of the conversation and the cashier saying “the customer wants it for free.”

Frankly, I was both embarrassed and a ticked off when she said that.  I didn’t go into the store wanting free feta cheese. I was willing to pay a ridiculous price of $8.79 for the container. It’s the code that lets me know that I have a right as a consumer to ask if my grocer volunteers to adhere to that code.

Honestly, I didn’t make up the code!

She hung up the phone and said “you get it for free” and adjusted my bill. I just smiled and said “cool! thanks!”

It’s been a long time since I spotted an error like that. It pays to know what the items in your cart cost, and it also clearly pays to watch as they’re scanned in.

Have you called a cashier on the code? What’s your story?

Loving the Library

The New York Public Library, May 2009

Last year, when my eldest turned 21, we took a trip to the Big Apple.  Just her and I on a three day, whirlwind tour of NY.  One of our detours was to the Public Library.  The place was jaw droppingly beautiful, in majesty, architecture, and steeped in history.  At the time I thought if my library looked like this, I’d go more often.

Right now, I’m starting a new love affair with my local library.  Honestly, I feel like a real loser for just entering into this relationship at 46.  Like every new love affair, I’ll tell anybody who will listen how great the library is. Most people look at me with a “yeah, duh!” look on their faces.

When I was really little, my Mom and I lived in a big enough city to have a great library.  My Mom was a single parent, and worked three or four different part-time jobs to support us. There was no long arm of the law to enforce child-support in those days, so there was nobody supporting the two of us but Mom. We didn’t have a car. The library was on the other side of town.  I remember visiting a few times for special events, but I never signed out a book, because getting back to return it would have been too great of a risk factor.

I recall taking some picture books out of the school library, but not too many. I think Barbie was more interesting to me at the time.

In my teen years my Mom remarried and we moved to the smallest town in the universe. No library. I do recall a small school library where I signed out a book or two, including Johnathan Livingston Seagull. It apparently left a big impression on me, since I still remember reading it.

At University, the books I took out of the library were utilitarian. Needed in the research and writing of essays and to help enhance my higher learning. Never once did I sign out a book for pure pleasure. Come to think of it, I’m not sure if a section like that ever existed in the University library.  If it did, I never walked past it.

Now that the planets have aligned in such a way that I have more opportunity and desire for pleasure reading, it seems I can’t get enough of it. I’m like a starving reader at the altar of an all-you-can-read buffet. The thrift stores have offered up a number of treasures for a buck or less, but with my commitment to personal finance, books with a price-tag of $1.99 or more seem out of my price range.  Still, I’ve scooped up a number of books that I’d like to read for dirt cheap.

Recent releases, however, can’t be found for even the steep price of $1.99 at the thrift store or at yard sales. I’ve returned to my local library.  Now I’m in a whole new stratosphere.  The Toronto Public Library system boasts almost 100 branches.  All I have to do is sign in online and order any book from any branch and they’ll bring it to my local branch for me to pick up.  It’s absolutely brilliant.  I just returned a library book this morning.  It took 4 months from the time I ordered it until it was my turn to read it. That’s absolutely fine.  I had a few books to read at home in the meantime.

Another book I ordered has also come in. I feel so plugged in to my community by having a library card and using it. I’m reading recent releases for free.  Better yet, I don’t have to find any space on the bookshelf to stash them away. I get to take them back to the library to pay it forward so somebody else can have the same pleasure I did. All this pleasure for no cost. Sure, I pay taxes to the City for the pleasure of all the municipal services I get.  I pay whether I take advantage of them or not.

For now, I’m overjoyed with my new love affair. I’m thinking of ways to enhance our relationship. Maybe I’ll drop in and occupy a chair and read a newspaper or magazine? Maybe I’ll sign out a movie or a CD to listen to. Maybe I’ll pick a stub off a flyer on a wall and join a local book club.  I don’t know how this relationship will turn out, but I’m excited to know that the library will be hard-pressed to disappoint me, and can offer me up new adventures for as long as I care to take advantage of it.

Battle of the lenders: chapter 1

Five years ago, I thought my financial future was dismal.

I had a good job, equity in my house, and no debt.  Funny how the mind works, huh?  At any rate, after much thought and research, I thought one way to secure my long-term future was to make a real estate investment.  I talked to a few people who owned rental properties, searched for the best advice I could, then I purchased a little townhouse. (Just after that, I spent some time on my knees on the bathroom floor wondering what the heck I had just done!)

The downpayment was leveraged from the equity in my principle residence. I had no other money.

I totally get that not everybody who thinks they’re going to hell in a fiscal hand basket rushes out to buy a house. Truth is, I thought my day-to-day finances would be sufficient, it was down the road that worried me most. I don’t pretend to be a real estate expert, nor a financial expert, but I’ve owned one house or another  since 1987, and I’ve experienced first hand what happens in the market – good and bad.

Since I purchased this little townhouse, it’s been rented out to good tenants. Other than my initial downpayment investment, it hasn’t cost me much, perhaps a few thousand dollars over five years.  Meanwhile, the value of the property has increased about $40,000.  This is what I’m banking on  –  increased property value. When I’m old and retired, that’s when I intend to sell it.  Until then, I’m hopeful that good tenants will continue to reside there, call it home before they move on to their next place.

Almost five years has transpired since I made this gutsy move, and I have no regrets doing it. Now my primary lender is calling me wanting to renew early, to avoid the inevitable rate increase.  A different lender called me four weeks ago and wanted to take over the mortgage, also citing rate increases.  This mortgage has never been fixed, it’s always been variable.  I have totally won that bet over the last five years.  Saved a fortune in interest costs.  Right now my rate on that property is 1.4%.  Yep, that’s right – one point four percent.

I’m not expecting to get that rate, and the lenders are trying to talk me into locking in for a five year fixed rate of 4.39%.  I’m really reluctant to do that.  If I renew early with my current lender, I can still lock in to the way they calculate variable, which is prime minus .4%.

The banks would have to raise prime to 4.8% for this to be a draw, and increase it more for it to become a loss. Right now, at 2.25%, the rates would have to double.  They will likely, but the question is – over what period of time. If I win the bet over two or three years, then call it a draw or a slight loss over the last years, it could still be an overall savings.

Right now, two different bankers are hammering out some numbers for my little townhouse. Should be interesting to see how this shakes down.

What would you do?

April’s budget heading south of the border

Life just happens, doesn’t it?

This week has been quite busy with work commitments, but on the sidelines, I’ve watched the family’s budget head south of the border.  Yep, into the negative territory. I know, I know you hard me belly ache about this last month.  Truth is, this month it’s gone far enough south that I can’t recover from it, at least not in a way that I can see clearly right now.

The difference between this month and last month is my attitude.  I don’t feel like a failure this month.

When you track every nickel and then spend time thinking about making the right choices, the picture does become much clearer.  I have absolutely nothing to be ashamed about this month. There is no lack of discipline involved in the results I’m forecasting for end of April.

The first huge hit is medical expenses. I had budgeted $400, and I have spent just shy of $1500. Did I go to the drug store and stock up on extra-strength tylenol?  No.  My youngest went to see her specialist and he prescribed a new medication for her to try.  That alone is $700 per month. My eldest needed the last needle in an immunization program to protect her from HPV. That was almost $200.  These expenses aren’t optional, they mean my kids can live normal lives. Would I rather have that than a new pair of shoes?  Hell yes.

I also was hit with a fee from my retirement savings company, which I didn’t see coming.  My advisor and I have had a stern conversation about full disclosure of all fees and their timing.  I now know what to expect for 2011. He now knows that I’m serious about my personal finance, which he should appreciate as a finance guru.

Truthfully, I figure April will end with about  $200 in the red. Frankly, I think that’s pretty damn good considering that I have spent over 300% more than I banked on in medical expenses. I haven’t spent one dollar that was unnecessary. Just because the bottom line doesn’t shake down the way I’d like it doesn’t mean there was a lack of good management on my part.

This overage will not mean that I add to my line-of-credit balance or put me in overdraft.  In February I made a mini-goal to have a minimum balance in my bank account for the start of each month, to keep me in safe territory.  Since I have accomplished and maintained that, I can skate through this little blip on the radar easily. By June I’ll have recovered from it.

On the revenue side of the budget, I’ve had a few opportunities to take other people’s weekend shifts for the part-time gig, and this means a few extra bucks in the months ahead. I won’t win the battle of April, but I am rock solid confident that I will win the war against debt retirement and saving for the future.

The Incredible Bulk (Store)

I’m in love with the bulk food store. Yep, you heard it here first! In love!

This isn’t a new crush. I’ve been having a love affair with one bulk store or another for many years.Have you felt the love?

If you haven’t discovered buying at bulk stores, let me tell you why I think they’re terrific. Like to cook at home, like I do? If so, no doubt you have a well stocked pantry with lots of baking ingredients and spices. You’ll  know some ingredients for that special dish can be pricey. Ever buy slivered almonds? They’re not usually at bargain basement prices, so you want to buy how many you need without wasting some.

Need a cup and a half of something? You can buy exactly that at the bulk store. Why pay for more than you need if you don’t use it very often? When I make fruit cake over the holidays, we need gobs of golden raisins and slivered almonds. I take a measuring cup with me, and I get exactly what I need. No waste!

The big bonus of the bulk store is price. For years I have purchased my spices at a bulk store, and used my own reusable containers. I am always amazed at how affordable it is. See that little jar of oregano leaves in the picture above? It cost under .75 to fill it up. Check out what you’ll pay for a jar or a sachet of oregano leaves at the grocery store. I assure you you’ll pay at least three times as much, perhaps more.

I take my spice jars to the bulk store, and fill them up there. I get no more than I need, and I pay for exactly the quantity I want. My bulk store provides outstanding customer service. They’ll measure the tare weight of my container before I fill it up. I try and be helpful by taping a scrap piece of paper on each container to give them something to write on. Then I go and fill up my jars. The staff weighs the jar, and then subtracts the tare weight. Bottom-line: I get a bargain, the environment gets less containers and plastic. Everybody’s happy.

Over Easter, the girls made some sugar cookies and decorated them.  The chocolate sprinkles were depleted by the time they were finished.  I took the empty store container, and went through this same process, and just filled it up at the bulk store. I paid .48 for that entire jar of chocolate sprinkles.  Bought sprinkles lately? You know that they’re four or five times as much at the grocery store. Why don’t more people shop at bulk stores?

Finally, I’ve just converted my oatmeal buying habits to bulk as well.  My old stand-by, Quaker Oats, is about 1.22/lb when I buy this 1 kg package. When I buy it at the bulk store, it’s .79/lb. That’s about 40% less! Sorry Quaker Oats, but I’m leaving you for bulk oats. I’m a huge oatmeal fan. I have oatmeal for breakfast at least four times a week, and I use it in baking a lot.

With oatmeal, I don’t fill up my own container, I fill up one of their bags. I go through enough of it that I just keep filling up my old recycled spaghetti sauce jar in the cupboard to have it handy, and store the remainder elsewhere.

Despite an increase in home insurance, and a killer bill at the pharmacy this month, I thought it was time to tip my hat to one of my favourite money saving helpers – the incredible bulk!