Archive for February, 2011

February’s report card: A

It’s been a while since I gave myself an A for a month-end financial report card.

While I could wax on about how some of my spending was NOT in line with my budget, I could also boast that working my butt off has helped me be able to spend more, and still finish February with a small surplus.

This month, I overspent in the following areas:

  • Groceries, by a whopping $137 (pure laziness)
  • Home Decor, by $50
  • Public Transit, by $42
  • Dining Out, by $31

Here’s where I gained ground:

  • underspent in car rental by $45 (hope to see more of that in the future)
  • underspent in home maintenance by $30
  • underspent $11 in bank fees (that’s the interest on the LoC dropping like a rock…)
  • underspent cell phone expense by $25
  • changed internet package, saved $27
  • earned $833 more than budgeted with part-time gig
  • received reimbursement of some medical expenses for $680
  • received $125 gift from my step-mother for helping her search, screen and find a tenant for her apartment.

Oh, and I really overspent on debt reduction: planned $400, and actually put $2200 against my outstanding consumer debt. That’s where a person really wants to overspend! My outstanding debt is now just under $800. The next time the CIBC posts the interest and request for payment, presumably March 10, I’ll knock it out. I’ll see it sit at zero until April 30, when I’ll have to settle the score between my taxes owed for 2010, and the amount remaining in my financial parking lot. So, the March event won’t be a TKO, but it’ll be a crippling blow, none-the-less.

As I reported earlier, I’m going to use my cash on hand to pay for my new bike. This will leave me a bit short when my taxes are due. The shortfall will come out of my line of credit, and that will be the true indication of my existing consumer debt at that date.  Meanwhile, I will continue to plow any money I can into my financial parking lot, to make the hit on the line of credit as minimal as possible come April 30.

On a similar front, I still have an “account receivable” from my eldest daughter’s prescription expenses. Her employer finally connected her to the HR department, and she will submit her drug claim this week. That $540 will come in handy. Man, what an unnecessary hassle that has been.

Emotionally I’d say this has been a difficult month. I’ve felt tired and overwhelmed, despite having a bit of time off my full-time gig. I’ve found myself fantasizing about retirement, about living in an apartment or a condo, and about sipping cocktails near a pool somewhere in Italy. Italy will have to wait, but I’m really wondering if I’m cut out to maintain a property and all that goes with it, including the overwhelming expense. My youngest tells me I’d be certifiable if I didn’t have a garden and different rooms to live in, and cupboards to store things in, etc. I’m wondering if I might be certifiable anyway? I’ve fantasized about offering up my bedroom to anybody who would shop, cook, clean, manage appointments and give occasional shoulder massages without expectation of anything in return, other than food and shelter.

Most of the time I convince myself that I love my home (and I really do) and my neighbours (ditto) and my ‘hood (double ditto). Me and the kids and the kitties have a nice space to live and play in. I’m sure once the buds start pushing through the mud in the backyard, I’ll look back on this and wonder what kind of stuff I was on.

Meanwhile, the battle of fiscal sustainability wages on. Right at the moment, I’m winning.

Why am I waiting to put that $1000 toward my LOC?

After I typed yesterday’s blog, I made myself a few little financial notes around the office. As I was jotting notes, a question came to mind. On the weekend I discovered that I had a little more than $1,000 cushion in my “financial parking lot” that is earmarked for my personal taxes for 2010 and my final HST return. Why would I wait until April 30 to put it toward my line of credit?

Funny, I couldn’t come up with a good answer.

I promptly proceeded to initiate a transfer of $1,000 from my “parking lot” to my regular CIBC account. This morning, I plunked an extra $1,000 on the debt.

Wanna know the balance of my line of credit now?

$792.78!

Yep, that’s right, less than a grand! Let’s not get too excited yet. I’ll likely be debt-free for a month or so between March and April 30. This will be a false debt-free feeling. Once the CRA cashes my cheque for my 2010 taxes, I’ll know exactly where my new balance will be on the line of credit, since I’m using my existing cash stash to pay for my new motorcycle.

If I’m feeling particularly saucy today, perhaps I’ll put that $200 surplus that I’m projecting for the end of February toward the line of credit too. We’ll just see….

February is looking pretty good…

February is shaping up to be a reasonable month, at least from the personal finance perspective.

While I overspent on groceries and booze and dining out (hey, I was on vacation), I’ll still manage to come out in the black, with an extra $800 toward my line of credit. Seems I was busier in my part-time job that even I recalled, and the financial benefits are starting to show up. Nice.

I think too, since it’s been a couple of months since I’ve been an “employee” with my full-time job, and the dust over a changed cash-flow is starting to settle now. I’m finding myself in a reasonably comfortable groove again.

Looking ahead to March, despite having the bill due for the new Piaggio Fly, will be okay too. Here’s my strategy for the next few months, and some decisions I’ve made:

  • I won’t contribute any additional amount to my RSP prior to the deadline of March 1 this year. I’m going to stick to my knitting, as it were, and continue to focus on debt retirement, now paying for my new wheels, and saving for a family vacation and for additional TFSA contributions
  • I’ll pay for Piaggio Fly out of my financial parking lot in March. This is money that is earmarked to pay my 2010 tax bill.
  • My 2010 tax bill is due April 30. Once that date comes, I’ll take money out of my line of credit to make up the difference between what I have (minus the Piaggio) and what I need for the CRA. This way, I’ll pay less interest if I just pay for the Piaggio now with the line of credit, instead of continuing to pick away at the debt between March and April.
  • I expect to continue to earn a bit more than budgeted through my part-time  gig over the next month or two. I won’t adjust my budget, however, and put any additional funds toward debt reduction.
  • I’m not going to say yes to any more fill-ins for my part-time gig. The snow will melt soon, and I want to do a bit more playing outdoors. I’ve said yes to anything I thought I could manage between January 2010 and now, and that’s served me well financially. At least, I’ve been able to retire an extraordinary amount of debt for a single mom, and also see the light at the end of the tunnel. I need to give myself a break…

So, as February winds up, I’m feeling pretty good about the finish line next Monday. What’s really exciting is that in May, I’ll be able to do a year-over-year review of my net worth. I’m excited about that.  Why May? It’s post-tax month to post-tax month. In the months after May 2010, I’ve accumulated funds that are earmarked for taxes. Now, once this May passes, I won’t have any more of that as an employee. My finances will be more straight forward, less work to deal with, and easier for me to see my progress month to month.

It’s going to be a good year.

2010 Income Tax

How do you know a person is really dull? They start their income tax on a Sunday night of a long weekend  🙂

Yep, that’s me. I looked into TurboTax and started using their software online using my MacBook. I haven’t paid them a cent yet (but expect they will bill me eventually). The online price of $39.99 was a far cry from the $99 version sold at Staples. Plus, I didn’t have to leave the house to start using it, nor install anything on my hard-drive.

I have to say, TurboTax is pretty easy to use. The only caution I’d pass along for those of you who want to try it, is save often. It’s not quite as intuitive as it might be, but it’s intuitive enough for me. I did get automatically logged out a couple of times (due to inactivity) and noticed my recent work wasn’t saved, and I had to do it again. I only did that a couple of times before I learned my lesson.

Normally, I like to do my taxes early. Over the last few years, I’ve paid professionals to do my taxes for me. A few years ago I shelled out $600 to one professional. Needless to say, I never went back to him again. When I looked shell-shocked over the price and inquired why my friend paid exactly half of what I did, he noted “I got you back a bigger return, so the cost is higher.” Buh bye.

The fellow I’ve been using over the last couple of years has been more reasonable at about half of that, and it includes the returns for my daughters (which take about two minutes to prepare). Since I’ve made a big purchase this year, I thought I’d go back to the tax software and try my hand. In the past, I found it easy to use, and I never got audited unexpectedly. Now that I’m recording a T4 (WeightWatchers) and business income and rental income, I thought I might be biting off a bit more than I could chew. So far I’ll have to say that I’m feeling great about TurboTax, the ease of use despite having a tax return that’s not so run-of-the-mill.

This year, because I have a new set of wheels in the driveway, and I’m keen to know where things stand, I wanted to get a head start and not rely on somebody else’s schedule to give me some idea about where I stand in regard to my 2010 tax bill. Most of my data is now stored safely in TurboTax.

Since I was self-employed throughout 2010, I haven’t yet paid the Government a cent in income tax. I’m not expecting a refund. The matter is – how much (or how little) can I pay. Throughout the year, I park money that’s earmarked for taxes and HST in a high interest savings account and TFSA. In 2010, as I was aggressively paying down debt, there were a number of months that I overspent. Each month I overspent, I worried that I wouldn’t have enough money parked for tax time.

Now that I’ve done the majority of the calculations, I can boldly say that I have the money to pay my taxes, and my final HST return. I’ll also have about an extra $1,000 to put toward my Line of Credit after it’s all said and done. I’m overjoyed about that.

TurboTax, however, is tempting me. The software has an RSP maximizer tool. This allows you to pretend you’ve made more of a contribution to your RSP and then see how it impacts your tax owed/refund. You can bet I’ve played around a fair bit with that tool!

If I contribute an extra $2,000 to my RSP prior to March 1, the net cost will be an extra $1,131.74. If I contribute an extra $3,000, I’ll be out an extra $1,697.71, and heck, if I contribute another $4K, it’ll be an extra $2,263.61.

So I’m asking myself (with only a few days to spare), if I want to go further into debt in order to inrease my contribution to my RSP, and reduce my taxes owed. I think I read on Radio Girl’s blog that interest on investments is a deduction? I’ll have to investigate. Right now I’m torn about just holding the status quo, or thinking about my future self with additional money invested, when I’ve long forgotten about a minimal consumer debt (hopefully).

What would you do?

(Turbo Tax told me if I contributed $40K, I’d pay only about $15K in taxes. Sorry, my head would come off thinking about that one!)

For the rest of Family Day, I’ll ponder my options. Meanwhile, I’m glad to have finally scratched my HST return and the majority of my Tax return off my to-do list. They were on my vacation to-do list. Seems to-do’s weren’t very important on vacation.

 

Wheels baby, wheels.

If you’ve been around here for any length of time, you’ll occasionally hear me gripe about talk about life without a car in the city. For the most part, it’s liveable. There are times, lord there are times, when it would just be nice not to have to wait for a bus, a subway or a streetcar. Times when you could just pick up and go somewhere without a big ordeal.

If you’ve been around, you’ll also know that I fully explored the idea of car ownership last fall. After the insurance company weighed in, I knew a car was not in the cards for me, at least not right now.

For about two years I’ve toyed with the idea of an electric bike, or a motor scooter. The early part of last year, an electric bike had the upper hand. Since last fall, my research (non-scientific nor academic) has caused me to lean away from ebikes, and more to motor scooters/motorcycles.

Friends – meet my new Piaggio Fly, 150 CC.

Here’s the back story: While on vacation, I went into Motoretta, a sweet little shop here in Toronto. I’ve intended to drop in to Motoretta for about the last 18 months.

Last week I wandered in. It was dead. Clem, a cute and patient Australian guy had all the time in the world for me. I admitted to him that I didn’t have a motorcycle license, but I’d looked at Vespa’s and their cousins on-line for quite some time. He quizzed me on my knowledge and I came out pretty fair, I think. At least Clem didn’t treat me like an idiot or a random tire kicker.

I confessed that despite my love of the european styling of the Vespa (and particularly the pink one in the window), it wouldn’t get along well with my pocketbook at about $5K. Enter the Piaggio. Made by Vespa, but fibreglass body instead of steel. Vespa engine and parts.

Then Clem mentioned that they were closing for a few days due to upcoming renovations. He also mentioned that he had a few 2010 models. The price started dropping. Clem held my attention with more than just his cute Australian accent.

After a consultation with his computer, and a confirmation that there was still a silver one (’cause hey, colour matters to chicks), he offered it up at $1999. Now friends, I’ve looked at these things for a while. It’s pretty hard, if not near impossible to find a new, 150 CC, 1 year warranty for that price. An reasonable electric bike is about $1495. For another $500 I’ve got a motorcycle.

Add some money for freight, a cover, a trickle charger and the back trunk and rack (oh and delivery) and it was a smidge over $3K. They threw in a couple of helmets. Do you like my new lady bug helmet? Isn’t it mature? I’m very happy with the price tag.

Oh, I spent another $14.95 on the Official Motorcycle Handbook and $17.50 at the Ministry of Transportation to write my M1 license. Yep, I even passed. Be forewarned that I’ll be on the roads very soon!

Insurance is about $800/year, but will no doubt go down next year as I graduate to an M2 license after my safety course ($450).

Let the knuckle wrapping begin. There is no plan in place to pay for this purchase. Yes, I’m almost debt free. If this adds to my joy and ease of living as much as I hope it will, I won’t grumble about paying for some groovy transportation. It won’t solve every transportation need, but it will sure help a lot.

Yes, I’m revising the budget – again. I’ll let you know how it goes. Meanwhile, I’m just feeling a bit of relief. At this point I’ve convinced myself that relief may well come with a price tag.

Starting to feel rested…

What an interesting vacation it has been.  Only yesterday I was starting to think that perhaps, just maybe, I felt a bit rested. I’ve certainly been a bit cranky. Not a side of me I particularly like. On Thursday I return to my full-time job.

As a follow-up to my last post, I can tell you that my eldest is dutifully taking her iron supplements, her manager at work reports he’s in constant contact with HR to get her a medical package, and I have a different strategy for her second cell phone. The youngest accidentally dropped her cell phone in a snow bank on the weekend, and it’s pretty much dead. Since we only have a few months to go on her contract, I’ll let that run it’s course and then switch her to the second cell phone. It’s a much cheaper plan anyway. This will leave me with only one more call to Rogers. The fewer the better.

Today I’m thinking about tax time. It’s been a while since I’ve used one of those DIY software kits, but I think I may use one for the 2010 tax year. Looks like it’ll be more economical than hiring somebody to do mine, and the girls returns. The one Staples sells (Turbo Tax) reports that it’ll do personal and business returns for $100. Do any of you have any experience with that program?

Last week was payday for my part-time gig, and I’m pleased to report it was about 300% bigger than usual. Have I mentioned that things have been pretty busy at Weight Watchers lately? It was a nice surprise. The next few pay cheques should be similar.

A bit more cash is a good thing because I spent a bunch of money last week – and I mean a bunch! I’m reserving that announcement for tomorrow or the next day, because I want to show you pictures too. While it may seem spur of the moment for some, those people who know me have said “thank GOODNESS you bought that – now we don’t have to listen to how badly you want one for another two years!”

So, today I plan on having another nap, starting a new novel and making something yummy for dinner. In general, I’m working on getting rid of the last bit of my crabbiness. I’m also going to think about how to tell you about my new purchase, and prepare myself for knuckle wrapping.

Until then…

 

My daughter’s keeper…

Parenting is a pretty tough gig. You see all sorts of people doing it, most people have an opinion about how it should be done. In reality, there is no rule book and in practice, you always second guess yourself.

It’s a role you never shake. Once a parent, always a parent. I know my Mom worries about me all the time. I’m pushing 50. There is a point, however, when every parent has to make some decision that they should keep their nose out of their children’s affairs. These last few weeks I’ve really struggled with that line between protecting/defending my eldest daughter’s rights, or just butting out. My logical side tells me I should back off, but my maternal side, much MUCH more powerful won’t allow me to.

At 22, she’s an adult. Still, she’s has not been out on her own. She’s still a student of the “school of hard knocks” and still learning. She’s no baby. This kid is almost at her two year anniversary of being diagnosed with Type 1 Diabetes. This has been a huge, life-altering event for her and she’s managed it with dignity and tremendous strength. She’s also recently landed herself a full-time job in a city where thousands are still looking for work. I’m really proud of what she’s accomplished.

Lately though, I see stuff happening which I translate into being “pushed around” and I can’t help but put myself between her and the situations. As I struggle with the lessons I teach my daughters about money and managing life, I struggle with knowing how my role as Mom needs to be played out.

The first situation arose about a month ago, when her health care provider decided she needed to supplement with iron. They advised they’d call it into our local pharmacy. Since I’ve got the credit card, I went to pick it up. There was no iron supplement there for my daughter, no note on her file. When my daughter called her health care provider again, they advised they’d call it in again. My second trip turned out the same way. After my third trip with the same result, I got more than a little cranky. I happened to pick up the phone when her health care provider called one time and I said “hey, I’ve been to the pharmacy three times for this thing – what’s the story on this?”. Because my daughter is an adult, they would not provide me with the name of the supplement, only to assure me that it was being held behind the counter. Despite my trying to assist my daughter, and support her (literally and figuratively), I can’t get the one bit of detail that would help me in my FOURTH trip to the pharmacy. When I actually went the fourth time, the pharmacist has the nerve to say “I can’t hold drugs behind the counter this long, it’s been here an awfully long time.”

I didn’t hurt anybody. I really wanted to though.

The issue of drugs brings us to the second situation my daughter is facing. Despite being eligible for medical coverage at her employment since December 3, the company has failed to provide her with the paperwork necessary for her to register or to get reimbursed. Yep, we’re racking up the bills for the last 2.5 months. She sees lots of other employees getting their medical packages, yet hers is strangely MIA. The variable that makes this even more critical is that her employer will actually switch insurance companies March 1, which means if she doesn’t get her package in the next few weeks, we’ll actually be out of pocket for all of her medications which were to be covered, because the new provider won’t cover anything prior to March 1. So I’m riding her like a wild pony asking her every day “where’s the package” and she assures me she’s asking and everybody gives her the “it’s coming” story, yet it never does come. I totally see where this is going. We’ll be on the hook for her prescriptions until March 1 because nobody is going to bat for my daughter at her workplace. I can’t go in there and pull the Mom card. Trust me, I want to in the worst fricking way.

Finally, the last and perhaps most maddening issue is with Rogers. Imagine, having difficulties with a telecom company? Her boyfriend’s aunt promised a sweet deal on joining her on a cell phone package she got through her employer. No question about the deal, it is a sweet one. My daughter pays about $28/month for a veritable “all you can talk” buffet. The problem arose when the BFs aunt actually thought my daughter wasn’t going to get the cell phone she ordered for her, and made another call.  The result: my daughter has two cell phones, and two cell phone bills. Now, when we try and call Rogers to say “hey, you sent us two, we only need one” they say “that’ll be $400 to cancel”. I unloaded a can of whoopmom on them earlier this week, and finally they gave us a solution. The aunt had to call and say she made an error and to back the whole thing up. So the aunt did call, and instead of honouring what they told me, they merely said “she can cancel for $400”. The can of whoopmom will open up again when my daughter gets home from work and we can call Rogers together again.

I’m just struck this morning about the complete lack of accountability of some people. Where is my daughter’s manager when they know she’s diabetic and she pleads with them for over a month to give her the paperwork for her drug plan? Is he stupid? Does he figure since she lives at home that she’ll be taken care of so it doesn’t matter? Is there no honour?

Rogers takes notes on a file and then tells a different story to the person they told me could straighten it out? How come the aunt doesn’t say “geesh, I’m sorry I really screwed you up, let me help out in the solution”. She makes one call and hangs up her hat? It’s not acceptable to me. She only wants to pass on some good news, and clearly doesn’t want to get her hands dirty when things go sour – even when she initiated the whole event.

How can a pharmacist look me in the eye and say she can’t hold drugs behind the counter and then say “I saw you in here before looking for this!” Yes, and you also saw me leave without it. My daughter goes without an iron supplement her physician says she needs badly for one month because of client/patient privilege?

I’m beside myself with disgust. It’s hard to stop parenting when other people don’t do the right thing by your kids, regardless of their age. What lessons do we need to teach our kids about understanding their rights and just keep speaking up and speaking up and speaking up until somebody finally hears you? So easy for people to fall through the cracks in our society. My kid comes from a good home and she’s educated and smart. Imagine how easy it would be to walk away from this stuff when you don’t have a support system?

I’m in awe of parents today. For those of you who are parents I take my hat off to you for the work you do in protecting and keeping your kids, regardless of their age. Seems there’s precious few out there who will honour them as much as we do.