Where Did All My Money Go? – Part 2

A jar full of coins, seen from the top.

In this article, I’ll discuss how to create a two week spending plan so that your money will last until the next payday. (For tips on determining your expenses, see part 1.)

Let’s assume you’ve now figured out your spending, and your monthly fixed expenses look something like this:

  • Mortgage/Rent                                $1,100
  • Groceries                                            $   400
  • Power                                                   $   105
  • Heat                                                      $     95
  • Cable/Internet                                 $   150
  • Cell phone                                          $   105
  • Car insurance                                   $     75
  • Credit card payment                     $     60

Total:                                                     $2,090


I know this is not a comprehensive list, and I also know that it doesn’t include anything like entertainment or unexpected expenses.  I have included only fixed expenses. These numbers also represent a single person living alone.  When you calculate your own numbers, make sure you include all household income, as well as all fixed expenses related to children, such as daycare, soccer, etc.

So you now know that your fixed expenses total $2,090.  Let’s assume that your annual income is $45,000 and you get paid twice a month.  Taking into account tax deductions, CPP and EI contributions, you would probably be taking home approximately $2,900 per month, give or take, which is $1,450 per cheque.  I would suggest that you divide your monthly fixed expenses in half, which is $1,045, and set aside $1,045 out of each of your two pay cheques to pay these bills.  I actually have a separate bank account where I keep all the money for my fixed expenses.  This account is not linked to my bank card, so I can’t accidentally spend it.  And I also know that I cannot take money out of this account for anything else.

Once you’ve deduced your fixed expenses from your cheque, you are left with $405 out of each cheque to pay for all your other variable expenses, like gas, entertainment, etc.  This amount is what you can spend over the next 15 days until your next cheque.

The final step is to divide your $405.00 in half once again.  This gives you $202.50 to last you for approximately 7 days until your next paycheque.  Keep $202.50 in your account that’s linked to your debit card and then move the remaining $202.50 into your savings account.  If you don’t have a savings account, you should get one.  Just find one where the bank fees are not too high.

Okay, now all your money is divided up.  Now comes the hard part – the discipline!  You must have enough discipline to spend only the $202.50 during the first week.  If you can exercise that discipline, you will be rewarded with $202.50 in your savings account to spend the next week.  And if you were really disciplined, you might even have some of that original $202.50 left over!

I also suggest that you always put some of this money away into long-term savings, as well as short-term savings.  I know it’s not easy, but it really needs to be done.

Please note that this is a very bare bones outline of one way to manage your paycheque.  I know that I have made this seem very simple and straightforward.  I also know that people have many more expenses than what I’ve listed here.

There are many different methods out there.  I have chosen to write about this one, because this is how I manage my money and it seems to work for the most part.  Having said that, there are certainly times when we’ve spent too much in one week and had to stay home and watch TV the entire week before payday because we blew two weeks’ worth of spending money in one weekend.  But live and learn!

I hope this method helps you make your money last until the next payday.  Good luck!

Article by freelance writer, Sharon Skwarchuk.

Saving Money on Groceries

produce section of a grocery store

So the holidays are over now, and if you’re like most of us, you probably spent too much money in the past couple of months.  And once the credit card bills start rolling in, you’ll need to find money to pay them.  One way is to cut your grocery bill.  I have a few suggestions for you:

  1. Don’t go shopping when you’re hungry! This is a major mistake.  You will buy everything in sight, including those chocolate chip cookies and the pumpkin pie that look so good.  So make sure you eat before you leave the house.  It will save you a bundle of money.

  2. Do your meal planning for the week before you go so that you know what you need to buy. This also answers the age-old question that arises every day at 4:00 pm – what should I make for supper tonight?

  3. Make a list and stick to it. If your husband likes to throw things in the shopping car when you’re not looking, like mine does, leave him at home.  I also write down the approximate price of items as well – I usually have a fixed amount of money to spend on groceries, so I have to make sure that I don’t go over that amount.  And while you’re shopping, write down on your list the exact price of the item you’re buying – more about that in paragraph 9.

  4. When you are making your list, go through all the flyers to see if another store has your items on sale. If so, take the flyer with you to your regular grocery store – most of them will price match on those items.  This saves you driving around to different stores to get the best price.

  5. Make sure that you’re buying enough groceries for an entire week. Do not go to the store every day to pick up one or two items.  Shop once a week and that’s it.  You know as well as I do that when you “run to the store to pick up some bread”, you invariably come home with at least five or so other items as well (and this usually includes some cookies, because you’ve gone after work and you’re hungry!)

  6. Bring your coupons along (and your own bags, so you don’t have to buy them). But remember, make sure the coupon is worth using (see my previous article about couponing).

  7. If you are limited in what you can spend, you have to prioritize your groceries. Don’t buy chips and then realize that now you don’t have enough money to buy milk for your kids.

  8. Check the prices on items. Buying larger quantities does not always save you money.  A 3 pound bag of apples for $4.25 isn’t a better bargain when you can buy those same apples for $1.10 a pound in bulk.  This is often the case with shampoo and hair products as well.  When the smaller bottles go on sale, you’re often better off buying two 500 ml bottles for $2.99 each than a one litre bottle for $6.99.  Pay attention to the price and the size of the container, and do your math.

  9. Watch the prices on the display as your groceries are being scanned. Sometimes the prices are incorrect and scan higher than the price tag on the shelf.  If this happens, make a note of the item.  Once you’re done paying, go to customer service and point this out to them.  Tell them that the item was marked at $4.99 on the shelf, but it came up as $5.99 at the till.  You are then entitled to get that item for free!  Yes, free!  If the price at the till is higher than the price marked on the shelf, you can get that item for free in most stores, up to a value of $10.00.  If it’s over $10.00 (for example, it’s $12.99), you get $10.00 of the price, so you would pay $2.99 for that item.
    This is called the Scanning Code of Practice
    .  I’ve actually gotten quite a bit of free stuff doing this.  However, I’ve also been wrong because an item was put on the wrong shelf –now I always check the bar code on my item to make sure it matches the bar code on the price tag on the shelf before I take it to Customer Service.  (You can also do this at the till, but sometimes the cashier doesn’t know about this Code or there’s a long line up behind you and they have to wait while someone is sent to check the price, so I just always go to Customer Service because it’s quicker and doesn’t inconvenience anyone else.)
    I’ve also started taking pictures of the price tag on the shelf and just showing the picture to Customer Service.  (I’ve done this so often where I shop that they don’t even go and check the price anymore – they just look at my picture and then give me the discount.  So always check your receipt before you leave the store to ensure you haven’t been overcharged on anything. 

I hope these tips can help you save some money!

Article by freelance writer, Sharon Skwarchuk.

Meena’s Note: I’ve been considering using the Superstore Click and Collect where you order online and then just pick it up. I was hoping it would reduce impulse shopping and save me money, but when I was putting together my list I found it was even easier to add impulse items online, as it’s just a few clicks, no walking. I think if I allowed myself 1 treat food a week and that’s it, it may work. I think it will definitely save me time. Also I believe you can save a list; it would be great if I created a weekly list and just got those items every week. Much better than my haphazard shopping right now. 

How about you? Are you using the new pick up services? What tips do you have to save money at the store?


Building an Emergency Fund When You Can’t Afford Anything

a man holding his pockets inside to show they are empty

I was clicking through the headlines on MSN the other day, and I came across an article entitled “20 ways to save $1,000 a month.”  That sounds good – let’s check it out.  However, I only got through the first three suggestions before I gave up.  (1) Track your spending and see where your money is going.  Well, duh.  (2) Pack a lunch each day instead of going out to eat.  Not really helpful – I’ve done this for years.  (3)  Stop going out for dinner several times a week.  Seriously?  Several times a week?  Who does that?  And who writes these articles anyway?  I didn’t even bother reading the rest of the “tips” – they probably wanted me to trade in my Hummer for a more fuel-efficient car.

That reminded me of another article I read with the following scenario – “Let’s look at the case of a 56-year-old man named Leo.  He’s single and takes home $10,000 per month…”  and that was enough for me.  Honestly, how many people do you know who are single and take home $10,000 a month? 

I don’t know whose reality these articles are grounded in, but it sure isn’t mine.  That’s why I hate the financial sections of newspapers – those writers live in a different reality.  Their articles are written for people who are making six figures or more per year.  They are not geared towards people like me, who earn less than $45,000 a year (gross, not net) and have already cut their budget to the bone.  I would be happy enough to save an extra $50 a month to put away each month for emergencies.  And I think a lot of others feel the same way.  So in this article, I’m going to help you find some extra money to put into an emergency fund for unexpected expenses. (I call this my curveball account because sometimes life throws you a curveball – like when your fridge stops working and it needs to be fixed).

There are different ways to save money, but I will focus on some of your fixed expenses.  For example, do you still have cable?  Do you really need it?  Do you actually know what you’re paying for?  Are you paying for unlimited internet usage, when you are only using a fraction of what you’re paying for?  Are you paying for channels you don’t even watch?  You can probably save about $10 or $20 a month by carefully reviewing your bill and cutting out a few unnecessary things.

What about your land line?  I’m sure you have a cell phone.  Do you really need a land line as well?  Cutting off your land line should save you about $20 a month.

How about your utilities?  How can you reduce these costs?  There is one simple method that you can use to “reduce” your monthly costs – set up an equalized payment plan for your heat, water, and power bills.  Your provider will determine your yearly usage and then spread the cost equally over 12 months.  So if your annual heating bill is around $1,200, you will pay $100 per month for 11 months, and then on the 12th month, you will pay a “settle up amount”.  This means that if you went over $1,200 and used $1,300 worth of power, then you will pay $100 plus the extra $100.  The benefit of this arrangement is that now you know how much your bill will be each month.  This will allow you to set aside an extra $10 or $15 a month to put towards your curveball account.  If you do this for all three of your utility bills (heat, power, and water), you should be able to save a minimum of $30 per month.  A word of warning, however, – keep an eye on your monthly bills and make sure that you’re not getting too far in the hole each month.  You don’t want to end up with an $800 bill for heat in your settle up month!  If you notice that you’re running a deficit, pay an extra $20 or so when you have a bit of extra cash so you can stay on top of the bill.

So there you have it.  If you can cut four of your monthly bills by an average of $13.25 per month, you can save $50.00 per month to put into your curveball account for those unexpected expenses. 

Author: Sharon Skwarchuk

Are Coupons Worth It?

various groceries and cash register receipt

I’m sure most of you have seen the TV show where shoppers use coupons to get huge discounts and often end up paying $10.00 for $200.00 worth of groceries.  And they’ve managed to accumulate massive stockpiles of shampoo, toothpaste, energy drinks, etc.  No doubt this has inspired many of us to start clipping coupons frantically in order to reduce our weekly grocery bills.  Hey, if they can do it, why can’t I?

Well, I’ll tell you why.

First, if you pay attention, you’ll see that these people have created a list of items for which they have coupons – not a list of items they actually need.  They’re buying 30 energy drinks, 50 bottles of pop, or 15 tubes of toothpaste.

huge amount of groceries in cans and boxes on display in a store

 I have rarely seen anyone on that show actually buy real food – items like meat, bread, milk, fruit, eggs, etc – and come out with a grocery bill of less than $10.00.  

Second, these are American shows.  There are a lot more grocery stores in the United States than there are in Canada.  Therefore there is more selection for everyone, which means more competition for the consumer’s dollar.  Many of these stores also have some type of discount card, which Canadian stores don’t have.  Discount cards issued by a particular store are one way to get customers to keep coming back.

Finally, and most importantly, these people devote their entire day to clipping and sorting coupons.  It’s their full-time job.  And they’ve said as much on the show – they can spend up to 30-40 hours a week clipping coupons, even with other people helping them collect coupons and organizing them.  Do you really want to devote that much time to couponing?

The big question is: Do you actually save any money with a coupon? 
The answer: It depends on both the coupon and the product.

For example, if you find a coupon for something that saves you $0.50 or $1.00 on something you always buy, then it’s worth it.  However, before you use the coupon, ask yourself:

  • Is this item is something I actually will use?; and
  • What is the price of the generic version? Usually the generic item is cheaper, even after you deduct the coupon amount from the brand name.

I think this is the biggest mistake that people make.  They think, “Oh, I have a coupon – I’ll save money!”  But it’s a coupon for something they never buy.  So be sure to ask yourself those two questions first before you use any coupon. You’re actually wasting money if you purchase something you don’t need or could have gotten for a lower price just because you had a coupon.

There are also a number of coupon apps available which eliminate the need to “clip” coupons.  I haven’t tried all of them, but I do recommend Checkout 51.  The app is free and it’s very easy to use.  The list of items you can save money on is quite varied – anything from diapers to alcohol to dog food – and they regularly add new items.  And if you claim certain coupons regularly, they will send you more of those coupons – for example, I use Pantene shampoo, so I get those coupons often.  It’s quick and easy.  However, the offers on the list are only valid for one week, and there are only so many offers to go around, so you have to claim them quickly!

So in answer to the question – is couponing worth it?  Well, if you’re happy enough to save $5.00 or $10.00 a week on your grocery bill, and you can then use that money for something else, then I would say yes, it’s worth it.  But if you’re hoping to save hundreds of dollars a month, you’re probably not going to do it by clipping coupons.  So the final choice is up to you.

Meena’s note: The only “coupons” I use regularly are the bonus points on certain products that I get from my PC Financial credit card. I like that these are on produce and other items I actually buy frequently. I don’t pay any special attention to them though. If I happen to buy the item that week then I’ll get the money back, but I don’t have a system in place. I am curious about Checkout 51. So if you have used it, or have other experience with apps or coupons, please leave your comments.

Author: Sharon Skwarchuk

How to Save on Legal Fees!

The odds are good that in some point in your life you are going to need a lawyer and everyone knows that lawyers are expensive, right? That’s why nobody wants to hire them. However, lawyers have gotten a bad rap. Not all lawyers are out to get your money. Some of them are actually there to help you. Most of them realize that you are usually going through a rough spot at the time that you need them, so they’re not going to take advantage of you. Having said that, there are some shady characters out there, sure. But for the most part, lawyers aren’t as bad as Shakespeare thinks – we don’t need to kill them all!

So, how can you save money on legal fees?

If you just need to get your will done, for example, law firms generally charge a flat rate for this work. The cost will vary from law firm to law firm. So call a few before you commit to one. Get some quotes and then make your decision. Or, if you really want to use a specific firm but you feel the price is too high, just ask them if they’ll give you a discount. Because most wills aren’t generally complicated, lawyers don’t have to spend that much time with the client. The assistant likely does the bulk of the work. So the lawyer can give you a discount off the standard rate and still make money. What’s the harm in asking? The worst thing that can happen is that you get no for an answer.

If you need something really simple, like getting a document notarized, you don’t necessarily need to see a lawyer. Sometimes you can find a notary at City Hall, or you can check with your bank. Some banks do have notaries. But if you do need to go to a law office, again, call around first. Law offices generally charge from $50.00 to $125.00, depending on what exactly is required. If you’re quoted more than $50.00 for a simple notary, I would suggest that you keep calling – you can likely get it done for $50.00 (plus GST, of course!)

—-> Make sure that you need a notary rather than a Commissioner for Oaths. There is a difference! If you just need a Commissioner for Oaths, you can just stop at a law office and get your document commissioned – most of the legal assistants who work there are also Commissioners for Oaths. They may do it for nothing, or they may charge from $5.00 to $25.00. Again, do some research and call around.

So the bottom line is – do your homework! Don’t just go with the first quote you’re given. Some law firms are quite happy to give you a discount if that means that they’ll get your current business. They know that if they get a client in the door, that client will likely return when they need more legal work done. Just remember – if you don’t ask for it, you’re not going to get it!

– Sharon Skwarchuk

(Freelance Writer)