Archive for August, 2010

There’s good news, then there’s good news!

It’s been an awesome weekend. I went away this weekend to visit my parents on Georgian Bay and a friend too. It was mostly without kids. Love the girls, but you know…

First, my visit with my friend was terrific.  We sat by her neighbours pool (they were away too), had a cold drink, talked, swam and collected some new tan lines. I literally cannot remember the last time I did something like that. It was totally wonderful. Then had a great visit with my parents.

There are two bits of good news out of this past weekend:

1.The kitties are home!

Sunday night we drove home with 7.5 week old Moo and Mia. They are so adorable. I’ve only taken about 150 pictures, so I’ll have to post some this week. They’ve been introduced to the other cats, and all is well. We are living in a too-cute world right now!

2. My eldest got a FULL TIME job!

My number one daughter is now a full-time employee for Longo’s. (If you’re not sure what that is, it’s a grocery chain that operates in the GTA). There’s a new store opening up down by the Air Canada Centre, and she’ll be one of the new crew members. This is a triple-whammy good news story.

Not only does she get to work full-time, BUT she also gets an employee discount (no idea how much), AND in three months (drum roll please), she gets drug coverage!!

I am so proud of her! She’ll be able to pack away some serious coin now. The drug coverage will give me a little bit of breathing room on the budget, which is terrific.

Wow, what a whirlwind of a weekend. Now proud Mama is off to work.

A love letter, from CIBC

Funny thing happened on the way to the mail box yesterday. I received this letter from CIBC.  Here’s what it says:

Dear Middle Class Mom in Toronto,

In recognition of your valued relationship with CIBC, we have changed your minimum required monthly payment on your Personal Line of Credit (PLC) to offer you greater flexibility in managing your account.  Effective August 20, 2010, your minimum payment will be Interest, plus insurance premium (if any) owing on your PLC account as of the Statement Date. Previously you were required to pay a minimum payment of the greater of 3% of your outstanding balance or $60.”

It goes on to tell me how this will allow me to do the things that matter most to me, give me greater flexibility, manage my finances, etc.

Honestly, I think I actually did laugh out loud when I opened it!  I took this as a solid indicator that I’m paying down my line of credit at an aggressive rate, and CIBC has taken notice. Seems even funnier when CIBC just posted record earnings earlier this week.

As you probably assume, I’ve never paid the minimum on my line of credit this year, and I’m not sure I did previously. (Although previously I obviously didn’t have that extra money I was paying against it, because my debt only grew). I started the year with a balance owing over $13,000, now it just sits just north of $5,000. Not bad for a woman with ridiculous medical bills.

It was kind of the CIBC to give me this tool to “manage my finances”. I hope I won’t be taking advantage of their offer. At least that’s not in the plan.

If I were to re-write their letter, here’d be my (slightly sarcastic) take on it:

“Dear Middle Class Mom in Toronto,

In recognition that you’re paying down your line of credit faster than we anticipated, we’d like to tempt you with new interest only payments. We gave you access to $20,000 in hopes you’d rack it up and pay us the interest on that for many years to come. You played along for a while, and now something has changed.

With our new offer, you can pay us interest for the rest of your life. You’ll never pay off the principal, but that’s ok. Just use the money – it’s there for you to do the things that matter most to you. We’ll make it easy for you to be irresponsible with your money. Oh, it’s not really your money, it’s our money, but that’s just semantics.

By our calculations, you’ll cease to be paying us any interest at all in five or six months. Frankly, that worries us. Sure, we made a little more than $650 million this quarter, but we can’t sustain that kind of growth if we have more clients like you. ”

Hope you laughed out loud too. What else is a body to do on a Friday?  TGIF!

I was a dufus in July. I’m not a dufus in August.

Yesterday I confessed to being a dufus.  Busy Mommy of 3 kindly offered up her perspective.  She was sweet enough to suggest it wasn’t me, it was an affect of using Gail Vaz Oxlade’s jar system. She said “It would be too much work to take the cash out every week and figure out how much to leave in the bank for automatic withdrawals and cheque writing. ”

First of all, big hugs to Busy Mommy of 3. I love that you came to protect my honour! How cool is that!

Truthfully, I’d happily lay the blame on the jars, or in my case, the envelopes, but I can’t. I totally get what BMo3 is saying, but the problem was a lack of attention to detail on my part. Full stop.

I use the jars (envelopes) for only a few expense categories: groceries, entertainment and dining out. These are the primary expense areas where I’ve found I over spend if I just use my debit card.  Having tracked my budget for many years prior to 2010, I only tracked my over spending. The jars create a huge shift for me, particularly with groceries.

Like BMo3, I keep a very detailed spreadsheet, with three tabs (home, business, rental property), that forecasts a year ahead. I even have my 2011 spreadsheet largely completed in draft form. Like most spreadsheets, when I change an expense or revenue amount, I get an updated variance. For each month, I have two columns: one for budget, one for actuals. I can see where I go off the rails very easily.You can see that for me, it isn’t actually too much work to figure out how much needs to be left in the bank for automatic withdraws, cheques, etc. I do it all the time. I just didn’t do it properly in July.

I’m am so organized that I try not to go on about it too much because it either makes people think (a) I’m just too weird, or (b) I don’t have a life, or (c) money is all that matters to me. None of the above is true. Well, it doesn’t matter too much if folks think I’m weird, but I do have a life, and money isn’t my number one value. However, I am solely responsible for myself and my two daughters, and I know how quickly things can go sour. I’m not wealthy, so I don’t have a big fiscal safety net. I want to act responsibly.

As I continued to think of my stupidity yesterday, I had an aha moment. I realized that I’m not actually over budget in August at all, I was over budget in July. Just as I suspected. I’m really only picking that up now.

Let me explain how I got myself into this: I get paid monthly. Because I’m self employed, I collect payments with HST. I don’t pay income tax on a regular basis, only annually. This means when I file my income tax, I know I’ll always owe. It’s because I haven’t yet paid for that tax year. In order to keep myself in a position where I can pay my tax bill on time, I always deduct a portion of my invoices and put it in a high interest savings account outside of my regular day-to-day banking at the CIBC. This I consider to be my fiscal parking lot. I put away money that’s for my provincial tax, for my federal tax, for my CPP and for my HST payments. The money that I live on month to month is my gross income, less the amount I ‘park’ for taxes, CPP and HST.

As the year goes on, my fiscal parking lot starts to look pretty attractive. I don’t even think about it. I don’t even consider it my money, because it’s really not. It’s only mine to responsibly care for until I have to pay the taxman.

What does any of this have to do with my recent budget issue? When August began, I started the month with my regular amount in my chequing account. Anything left over I just put in my financial parking lot. I didn’t review my bank statement to just ensure that some end of month obligations had cleared. SO, the money I had allocated for my mortgage payment, and that $85 cheque I actually put in my fiscal parking lot. All I need to do in August is unpark it back to my chequing account.

It means that my suspicion that I’d overspent in July was bang on. I was a dufus in July. I haven’t been a dufus in August. In fact, in August I’m golden. I should take back my grade in July and make that one a fail. I shouldn’t be penalizing myself in August for stupidity a month prior. I’ve been doing great in August. September, however, will be pretty challenging. I already see that.  I’ve completely accepted that the journey isn’t a straight line.

Thanks to BM03 for coming to my defence. Your comment made me reflect again on the situation, and see it for what it really is. Meanwhile, onward and upward!

Houston, we have a problem.

At some point yesterday, I realized there was too much month left at the end of the money. I figured surely there was some kind of mistake.

Since I’m up to my eyeballs in work right now, I vowed that in the evening I’d review my spreadsheet and try and figure out what the heck kind of error I’ve made. Now that I’ve reviewed the bank statement, and my spreadsheet, I see there is no error. The only thing that is clear is that I’ve been a dufus!

I’m projecting about a $700 deficit in August. God, I hate saying that.

According to my spreadsheet, I’m in the black by about $94. For me, being $94 north of zero is bloody brilliant. So, why will I come up short at the end of the month?

Cash flow.

Some of you may recall that I went on a little spending spree in July. When I was able to balance the books in July, I was mystified. In my month end report, I mused about how I had no idea how I managed to balance the books. I said “There’s a little nuisance on my shoulder who keeps asking me “aren’t you forgetting something?” It’s possible, but for the life of me, I have no idea what it could be.”  The little nuisance has spoken.

Here’s how easy it is to cook your own financial goose:

  • I pay the mortgage every other week.  In July, the payment was due Friday July 30. I had counted on spending that mortgage money in July, and my spreadsheet reflected the payment.
  • End of July came and went, and things were looking good.
  • Now, almost the end of August, as I review my bank statement, I see the July 30 mortgage payment didn’t clear my account in July. It came out August 3.

Since I moved money here and there, and didn’t actually look to see if the payment had cleared the account, I only put August’s money in my chequing account, instead of August’s money plus that one mortgage payment from July. Oh, and another cheque I wrote at the end of July for $85 didn’t clear until August.

In order to stop the bleeding, somewhat, I have taken the money set aside for August for entertainment and dining out and a few extra bucks from other envelopes and deposited it in the bank. This brought up the balance by $126. Not going to solve the problem, but it at least demonstrates as much discipline as I can execute with only a week left in the month.

The frustrating part is this: normally I look at all the costs that are at the end of the month and are yet to clear my account. For whatever reason, I didn’t do that in July. A costly mistake I hope not to repeat this calendar year.

You can anticipate a failing grade for August. You can also anticipate me paying more attention to that nuisance on my shoulder next time!

The big picture is still good. I’m still putting money toward retiring my debt. Still putting a pittance of money toward emergency savings and retirement savings. Still putting money into savings vehicles for the girls post secondary. Still paying all the bills on time and in full. Still excited thinking about the day I’ll be debt free. This is just one of those little hurdles along the journey. While today I’m thinking “Houston, we have a problem”, I’m confident that the mission will be a success.

I’ll be back tomorrow!

Hi everybody,

I’ve got a major work-related project on the go, that’s consumed me a bit over the last week. One needs to be excellent at their work, right? I’ll be back tomorrow, I promise!

A tale of two single parents

On the weekend I had one of my dearest, long-time friends for dinner. It was great to see her again.

We got talking about finances. Not explicitly, but just about how much it costs to run a household. Not just the day-to-day expenses, but the eventual need to replace a furnace, the windows, the roof, blah, blah, blah. Like me, my friend is a single parent. Unlike me, she has had a nasty divorce, and had to take the ex-husband to court after years of a gruesome legal battle. His job in law enforcement gave him some notion that he could just make up his own rules, or destroy his ex-wife by forcing her to extend the long arm of the law in the most costly way possible.  After years of an excruciating experience, she finally got court ordered child support. The back support that he owed was basically given to lawyers, plus a bunch more debt in order to settle the legal bill.

She lives in a cute little house that she owns. It’s an older house. Like most older homes, it has lots of things that it needs done to it. As the years go by and without routine maintenance, the list only gets longer and the needs can become more immediate. She recently had an infestation of mice. All this went on while her four cats (yep, four) rested their eyes and were generally uninterested in doing their feline duties to keep the place free of rodents.

We’ve had a conversation before about how all the single women we know could share a home and save themselves a fortune. In theory it sounds good. Things can get pretty murky in the details, but it could work. I mentioned that I’ve been living pretty lean lately. I felt bad as soon as the words left my mouth.

My friend lives very lean. She has a good job – in fact, her dream job, but the pay is crappy. She’s on the hunt for a part-time job. Her last kid at home will be heading off to University in the fall, leaving her living with those four lazy cats, and otherwise alone. The child support will stop, sadly. Stupid expensive lawyers got her a bad deal. It’ll be tough for her to hang on to her little house without a part-time income and/or renting out a room to somebody.

She mentioned what she paid in mortgage and municipal taxes. It seems a bargain to me, but I earn more. She lives in the country, I live in one of the most expensive real estate markets in Canada. Even though her cost of housing may seem affordable from my perspective, it’s too high for her. It really isn’t about how much we earn, it’s about how much we spend.

After the visit I felt bad for saying I was living lean, because her existence is much leaner than mine. I’ve apologized, and she’s kindly told me there was no need to do so.

She has no retirement savings, no RESP for her daughter, no emergency savings. I have all three, however meek or insignificant, at least it’s something. She has debt and is resigned to always have it. I have debt and know I won’t forever. She needs a vehicle and pays a fair amount of money to own one right now. I don’t need, nor own a vehicle.

Her child support is now gone. Mine will continue until my daughter is 25, or is finished post-secondary school, which ever comes first.

Her ex-husband will contribute nothing to her daughter’s post-secondary. Mine will.

Her ex-husband vowed he would put money in an RESP for their daughter and didn’t. Mine did.

This is not a woman with the poor me syndrome. She doesn’t complain, although I know she worries constantly about it. Makes me wonder if I worry too much about my situation. Perhaps I just worry out loud too much and I need to worry quietly.

All I can say for sure is that I’m still very thankful. Thankful that the path I ended up on wasn’t quite so heartless. I can’t do that much to be helpful to my friends, but I can still love them, support them, and whine less about money out loud.

Women and their hair

Photo credit: Mango

It seems I have an addictive personality. I mean, I can exist a certain way for a long time, until I can’t. Seems overly simplistic, but I’m not sure how else to phrase it.

I haven’t had my hair cut (by someone who professes to be a hair stylist) since November 2009. My eldest daughter has had her way with me with the kitchen scissors in the back yard a few times since then. Frankly, she’s done a fair enough job to keep me out of the hair salon, until now.

Women’s hair cuts are expensive. For many periods in my life my hair has been short. There are some men who have hair longer than mine. Mine still costs more. I totally understand why it might cost a bit more when my hair is longer. Once a stylist explained that women tend to like their hair styled and fussed with. This takes time. Time is money. When I was trying to come up with a lean budget I could live with in January, I knew the $55 plus tip hair cuts had to go. So what’d I do? I didn’t get my hair cut at all.

Let me reveal a dirty little secret: Often, I feel like Samson. The biblical Samson. First, I’m not a bible authority, but I recall a story about Samson feeling his power or strength came from his hair. Should his hair be cut, he feared his power would go with it. Every time I’ve cut my hair short, it’s been because I was unhappy in a relationship, or I thought I was punishing myself. While I enjoy the simplicity of short hair, I feel truly feminine when my hair is longer. I feel like I have more power, in the Samsonesque way. Even in my current frame-of-mind when I’m totally not interested in dating or being in a relationship, I want my hair to be nice.

This week, I’ve come to the end of my avoidance of hair care. I want a change.

My hair was pretty short in November of 2009. It’s now shoulder length, although in a gazillion layers. Last week, I pulled out a dress that makes me feel like a brunette Marilyn Monroe to go to an event. My hair wasn’t very “Marilyn”, so I walked myself down to the drug store and bought myself some curlers. Not the cool steamy or hot curlers that are $60 plus, but the $11 variety. Hey, I’m on a budget. I couldn’t escape without some hair dye either – thought I’d go a bit more red. Now we’re pushing $30.

Hanging over the tub like a bad morning after a drinking binge, I died my hair and tied it up in rollers. One of the kids remarked I looked like a 1950s housewife. Bang on observation. I totally did. However, at the end of the day, with the rollers away and the hair done and the dress on, I felt like a million bucks. People I didn’t know stopped me on the street to tell me how fabulous I looked. Good for the ego. So much for detached Torontonians – I was feeling the love, in a good, safe way.

A few days later my hair was starting to get me down again. Sure, it was a funky new colour, but I was needing it cleaned up. Then I saw a picture of Scarlett Johansson’s Mango campaign. Frankly, a bit Marilynesque if I don’t say so myself.

I’ve decided I want my hair cut like Scarlett. I’m not going to be blonde, tall or as drop-dead gorgeous as she is, but I can do the hair – I think.

Yesterday I toiled with going back to my old hair dresser ($55 plus) who rarely listened to me, always questioned if I really wanted to have my hair cut like the picture I carefully cut out and carried in my wallet. Nice man, not my favourite hair dresser. Anyway, he’s closed on Mondays. Then I figured “hell, I’ll go to Holt Renfrew to a Junior Stylist, I’ll be it’s about the same price, and perhaps I’ll discover somebody I really like”. I called Holts, got put on hold. I was on hold enough that I hung up. I figured the gods were telling me not to chat with them at Holt Renfrew. Eventually, I just went to the cheapo, total no frills hair place in the mall. No wash, no blow dry, no care.

When I showed the lady the picture of Scarlett, she said “your hair already looks like this!” What? It does? What the hell is wrong with my mirror? Anyway, she cleaned it up, so to speak, and took less off the length than I asked her to, thinned it out more than I asked her to, refused to stop thinning it out when I asked her twice, and I left with my hair spritzed wet and frizzy in the humidity. My logical mind knew she didn’t take enough off for me to be a freak, but I was feeling like one when I left. Sure, it was $16.95, but for the love of Pete…

After I got home and showered and styled it myself, I calmed down quite a bit. There’s no way I have Scarlett J hair, but I’m not a freak either. Truthfully, I think my hair has some growing to do in order to cut it the way I think it should be cut. Meanwhile, I’m going to start polling some women I know about where they get their hair cut and what they pay. I think I’ve officially washed my hands of the $16.95 hair joint in the mall.