Where Did All My Money Go? – Part 1

paper showing finance, saving, and computer

How many of you have eagerly looked forward to payday, only to discover three days later that you’re already broke again?  Probably a lot of you!  This can be a common theme for people struggling with their finances – you always get to the end of the money before the end of the month.  And you can’t seem to figure out what you spent the money on!  Why does this keep happening?

It’s likely because you aren’t paying attention to what you’re spending.  Debit and credit cards make it really easy to thoughtlessly spend money. But using cash is often not any better, as it’s harder to track. So regardless of your preference, you need a good way to track your spending closely.  You need to record everything that you spend your money on, whether it’s $200 on groceries, or $3 on a coffee from Tims.  EVERYTHING.  You can do this different ways – you can write it down in a spending journal, carry a little notebook with you to record everything, or you can make a list on your phone. 

However, my favorite way is to use an app that keeps track of your spending.  There are a lot out there, but the one I use is called Expense Tracker.  It lets you enter your income and your expenses into different categories. Then it uses this information to create charts so you can see what you’re spending each month.  For example, you can create a specific category and then assign it a color.  Do this for all of your spending categories – groceries, cable, gas, etc.  Once your information is entered, the app will then create a colored pie chart or bar graph incorporating all the different categories, so you can see easily how much of your money is going to each category.  It will also give you a bar graph if you rotate your phone, so you can do it either way.  It’s a really handy app, and it lets you add additional categories so that you can tailor it to your needs.  And because it keeps a running tab of what you’re spending on each category each month, it really helps you see where your money is going.  There is also an upgraded version that you can buy for a few extra dollars which lets you input recurring expenses, like your mortgage payment.

So you need to track all of your expenses for a month or two (two is better).  Once you’ve done this, then you’ll have a better idea of what you’re spending on different things.  Now you can start figuring out how to make the best use of your money – do you really need to go to Timmy’s every morning and spend $3 on a coffee?  Wow, am I really spending $50 a month on lottery tickets?  Or you’ll notice that you’re not actually putting as much money into savings as you thought you were, or you’re spending way too much money at the App store.  All those little purchases for $6.99 or $2.99 can really add up! 

Another feature I like is this:  because you can also put in dates for each expense, you can tell if there are days where you spend more money than other days.  You can even sort your expenses by date.  I discovered that we typically spend the most money on Fridays and Saturdays after a payday, so I am now consciously making an effort to watch my spending on those days.  Instead of going out Friday and Saturday, maybe we’ll just go out one day and not both.  I also try to have days (during the week is easier) where I will not spend any money at all, which means no stops at the grocery store, no buying gas, no spending money at the App store, that kind of thing.  If you can string together a few days where you don’t spend any money at all, that’s even better!

So go ahead and start tracking your spending whichever way you chose.  In my next article, I will tell you how to take the information that you’ve gathered and use it to create a spending plan for the two weeks after payday, so that you don’t always end up broke by Monday.

This article is by Sharon Skwarchuk, freelance writer. 

Meena’s Note:
I like to use tracking methods that are cheap, easy, and electronic. I’ve experimented with Mint and used You Need a Budget for a while. But this year I noticed that banks are getting into the tracking game. I bank with ATB and they include a great tracking option. You can create categories, budgets, and use your phone app to see where you are at for the month. 

RRSP Loans

Hour glass with pink sand and clock in the background

As you know, the deadline for RRSP contributions for the previous tax year is usually March 1. That means you have time to think about your taxes and still purchase more RRSPs.

If you are a procrastinator and didn’t contribute to your RRSPs throughout the year, or you start working on your tax return and realize you are going to owe money, you may want to make a lump sum RRSP contribution ASAP.

Banks will take advantage of this urgency by advertising RRSP loans. How it is supposed to work is that:

  • you borrow money with a known interest and payment plan
  • make a larger RRSP contribution
  • get your tax refund
  • partially pay back your loan
  • continue to make payments for the rest of the year or until the loan is paid off
Occasionally an RRSP loan is a decent idea, but usually there are some SIGNIFICANT downsides to this plan:
  • You must have enough discipline to actually use the refund to pay back the loan. Unfortunately a lot of people get that money and use it as fun bonus money, figuring they can just pay down the loan every month as planned.
  • Taking on debt can be risky. You never know what the future holds, and you or your spouse could lose your job tomorrow.  Then you might need your tax refund for living expenses.  And even worse, you’d still be stuck with your RRSP loan payments.
Plus, the math often doesn’t work in your favour. 

The amount of money you will save when using an RRSP loan relies on three factors, only one of which is a guarantee amount.

  1. The difference between your tax rate when you invest the money and when you withdraw it. 
    We can make some assumptions, but your retirement income and the tax rates then are out of our control. If you end up having to pay more tax during retirement, then the RRSP was pointless, from a pure math standpoint.
  2. The rate of return you will earn on your investment. 
    Only GICs give you a guaranteed investment return, and the rate on an RRSP loan is going to be higher than on a GIC so this is something you are unlikely to ever do.
  3. The interest rate on the loan. This factor at least is known, as RRSP loans are typically at a fixed interest rate.

So this strategy can be beneficial to you IF:

  • You earn more on your investment than you pay for your loan, AND
  • You tax rate at retirement is the same or less as you are paying now

Instead, a much better strategy is to make automatic monthly or biweekly deposits into your RRSP account. Then you are earning every month, instead of paying the bank every month. 

What’s your opinion on RRSP loans?


A road sign that shows 4 different "right ways"

This article is by freelance writer, Sharon Skwarchuk. Ironically, due to my busyness and procrastination I didn’t get this posted before the 2017 RRSP deadline. So don’t be me – don’t wait until the last minute. Start your investing ASAP using automatic contributions so you don’t miss next year’s deadline – Meena

RRSP Basics

So it’s RRSP season once again.  What exactly is RRSP season?  It’s the time of year when people start thinking about filing their tax returns, and whether or not they need to buy RRSPs in order to create or increase a tax refund.  The RRSP deadline for 2017 is March 1, 2018.  This means that if you want to contribute to your RRSP for the 2017 tax year, you must do so by March 1, 2018.

Many people, including me, wonder if the RRSP is still the best solution for our retirement savings.  Not so long ago, it was really the only option for reducing your potential taxes while saving for retirement.

There are a number of rules that must be followed with respect to RRSP contributions and withdrawals.  But in a nutshell, the reasoning behind an RRSP is this: 

You put money into it now while your income is higher.  The money you deposit does not get taxed until you withdraw it, hopefully at retirement.  And when you retire, your income will be lower (and you may have more tax credits), so the amount of the tax that you pay at withdrawal will be less than you would have paid when you earned the money. 

That’s the logic, which makes sense if you can actually go the distance and not withdraw the money before retirement.  But how realistic is that? 

Withdrawing RRSPs

Speaking for myself, I had managed to save up about $25,000 in an RRSP over about 15 or 20 years.  Then the oil recession hit Alberta, and my boyfriend‘s hours started getting cut.  His annual income dropped from $110,000 to less than $30,000 over a three year period.  When he got laid off, he was out of work for almost 15 months.  And when you’re trying to make it on about less than half of what you were bringing in, you can’t get ahead – especially when you’re buying groceries and gas with your credit card.  So our bills started piling up.  I made the very difficult decision to cash in my RRSP. 

But as some of you probably know, when you cash in an RRSP, the financial institution withholds a certain percentage immediately, (just like your employer does on your paycheques) and then the actual tax owing is calculated when you do your tax return.  Needless to say, I ended up paying about 30% of that $25,000 to the government in taxes at a time when I really could have used that extra cash.  So this was a definite downside to RRSPs.

Something else people often do in February is take out an RRSP loan. There’s a separate article about them here. To summarize, I don’t usually recommend an RRSP loan.  An automatic savings plan throughout the year is a much better option.

TFSA Basics

So what about a Tax Free Savings Account instead of an RRSP?  With a TFSA, you are currently allowed to contribute up to $5,500 per year into the TFSA (plus unused amounts from prior years), and you don’t have to pay income tax on the interest that you earn within that account. 

Normally, you have to pay tax on any interest that you earn from an investment, but with this account, you don’t have to pay the tax.  So if you earn $300 in interest, you don’t pay tax on that amount.  That’s the great thing about this investment.  You can also withdraw money from this TFSA without having to pay taxes on your withdrawal, because the taxes were paid on the money before you put it into the TFSA. 

However, there are also certain restrictions with respect to this account, including how much you can deposit, so you need to make sure that you follow the rules. 

So which is better – an RRSP or a TFSA? 

Personally, I prefer a TFSA.  I want to be able to take out the money when I need it without having to pay tax on it.  Plus all the interest that I earn within the TFSA is tax-free.  And for some reason, I find it easier to contribute to a TFSA than I do an RRSP.  Don’t ask me why – I think it’s psychological.  I think I feel better knowing that I’ve already paid the taxes on this money, and when I withdraw it, I can have it all because the government has already taken their share. 

I also think that I prefer to contribute to a TFSA because it feels more like a choice than an obligation.   To me, an RRSP feels like an obligation- it’s like something you have to do because you’re a responsible adult.  And I hate it when people tell me that I have to do something.  

Finally, I want to say that I am not a financial advisor in any sense of the word. All I am giving you is my own personal opinion from my own research and my own experiences and observations.  As always, the final choice is up to you.

Meena’s Note:

As a financial planner, I can discuss with you the reasons why a TFSA or an RRSP is preferable in your situation. A case can usually be made for some of both. But on a strictly mathematical sense there is a rule of thumb to follow. (Unfortunately, it requires some guess work.)

   Your Situation                                                             Best Option

  • Current income is lower than planned retirement income             TFSA
  • Current income is higher than planned retirement income           RRSP
  • Current income is the same as planned retirement income          Either

I think the suggestion to contribute automatically monthly or bi-weekly is an excellent one. You earn more money by contributing throughout the year, and it’s easier on your budget, than doing the lump sum contribution next February. So start today! I’m working with the robo-advisor WealthBar, and they are an excellent tool for low cost, super easy investing – in TFSAs, RRSPs, and RESPs.

Should I Give My Kid an Allowance?

a small child facing a standing adult goat with a baby goat on the ground

Many parents struggle with the question:  should I give my child an allowance?  Does this help them or hurt them?  There are two sides to this story – some parents believe that children should not receive an allowance, as it teaches children that they don’t have to work for their money, while others feel that giving them an allowance is the only way they will learn about money. 

My personal opinion is this:  children should definitely receive an allowance.  After all, if they aren’t given their own money, how will they ever learn to manage it?  The real question may be whether or not it should be linked to chores – in order to get your allowance, you have to do chores around the house. If you don’t do your chores, you don’t get your allowance.   Some people take this approach. 

However, if your child never does his chores, then he will never get any money.  So how will he learn to manage it?  Some experts believe that an allowance should be given unconditionally, and that children should be expected to do chores because they are a part of the household and “everybody needs to chip in around the house.” 

This is the approach that I took, for the most part.  And if my son wanted to earn some extra money, then I gave him extra chores.  He had specific chores that had to be done regardless (keeping his room clean, cleaning the bathroom, etc.), but he could also vacuum the house or clean the basement if he wanted to earn extra money.  I was trying to teach him two things:  one, you need to contribute to the household, and two, if you want money, you have to work for it – it’s not just going to be given to you. 

A hand holding a paintbrush that appears to be painting a fence

I think I’ve been fairly successful.  He started working a part-time job when he was around 16 or so, and he’s been pretty responsible with his money.  He’s 24 now, and every time he gets paid, he makes a list of bills he has to pay, and sometimes if he has a little extra, he’ll put a bit more on one of his bills in case he’s short next payday.  However, he does still make bad financial decisions at times and runs short of money (he spends $50.00 on pizza for one night, when he should have bought groceries for a week), but overall, I think having an allowance helped teach him about money.  Hopefully he will make better decisions as he gets older.

However, I don’t think you should just give your child an allowance and leave it at that.  You have to teach them how to manage their money.  Tell them that this $10 has to last them an entire week, so they need to make it last.  Don’t blow it all in one day.  If they do, do not give them an advance on their next week’s allowance.  This is not how it works in the real world.  You cannot spend your entire paycheque in one weekend and then go to your boss to get an advance on your next cheque.  And the sooner your children learn this lesson, the better.   And it is your responsibility to teach him this lesson. 

a pink piggy bank

Some people also believe that you should divide money into jars – 10% savings, 10% charity, and the rest for spending.  I do think that this is a good idea, but I was a single parent and my son didn’t get very much money for an allowance, so I felt that he should be able to spend it as he saw fit.   And there were times when I had lost my job and he didn’t get an allowance at all, so when he had money, I didn’t want to tell him how to spend it.  You also have to let them make their own decisions and learn from those decisions, both good and bad.   I certainly did tell him that he needed to save money to buy certain things, and he was pretty good at this, but I must confess, the charity donation just didn’t happen.  However, we did contribute to charities – it was just in a different form.  We never threw out anything that could be donated to charity (clothes, toys, etc.) so he learned about giving to charities in that way instead.

How much do you give?  Gail Vaz-Oxlade, suggests a dollar a week for each year of the child’s age.  So a 13 year old would get $13.00 per week.  I think this is a pretty good guideline.  However, it’s up to you.

So should you give your child an allowance?  I would say yes, but at the same time, you must also give them the proper tools to learn how to manage money.  This is an extremely important life lesson that every child must learn.

Article by Sharon Skwarchuk

Meena’s Note: On the topic of how much of an allowance to give, it’s important to decide what items the allowance is meant to cover. In some families, all “essentials” such as food, clothes, school activities are paid by the parent, so the allowance is only meant to cover some extra fun items.

But in some families, once the child is a certain age, they are given full responsibility for buying their own clothes for example. So then a much larger allowance will make sense.

And don’t worry if you can’t afford to give an allowance or can only give a very small one. I think that if you explain in a calm, rational way, that you have limited money, children will understand enough. Of course, there will be some whining; but as adults don’t we still whine sometimes about having to go to work, or do chores? And then we deal with it. Kids have to learn this too.

When it comes to money secrecy is never a good policy, especially when it comes to your children.

My Basic Investing Rules

Simple Investing Tips

A bar chart with a line graph over top of it, slowly increasing in height

I get a lot of questions about investing.

  • How should I start?
  • How does the stock market work?
  • What is high risk or low risk?
  • How do I not lose all my money?

I have plans to write a mini-book. But in the meantime here are my simple rules for investing*. If followed I think these will give you reasonable returns with a reasonable amount of risk.

  1. Use a diversified method.
    Buy stocks (shares in Canada, also called equities) and bonds. Invest in various countries and industries. Don’t put a big chunk of money into Bitcoin or marijuana stocks or whatever other fad of the week, unless you can afford to lose it all.
  2. Use a passive investing method.
    Numerous studies have shown that active management only sometimes earns you more money than the average stock market increase.
    From the Globe and Mail

    From CNBC
  3. Use a low cost method. Related to the above point, when fees are taken into account it is rare for high cost, active methods to outperform the low cost, passive methods over time.
  4. Perform routine rebalancing between asset classes, or have the company do it for you (as happens with robo-advisors and passive-method portfolio funds). This means you will always be buying low and selling high, without trying to time the market.
  5. DON’T PANIC (any HGTTG fans?) Sell. Some ways to avoid panic selling are:
    1.  Don’t sell until you actually need the money.
    2. Don’t put short-term investments in the stock market.
    3. Ignore the noise. When everyone else is panicking, stick to your strategy. During the big stock market drop in the USA in 2008, within a few years the markets recovered nicely. If you didn’t sell when everyone else did you wouldn’t have lost any money.

*I did not invent these rules. I just agree with them and invest by them. And I think most people should, too.

Want more info? Book an appointment and we can talk about your particular situation.

Want more reading material. My two favourite sources for Canadian investors are the website, Canadian Couch Potato, (start with the top tabs) and the magazine, Canadian Money Saver (check your library; you might get lucky).

My Anxiety Crisis

A orange cat sleeping on my belly
One of my “therapy” kittens.

I’m not much of a joiner, but mental health is such an important topic to me that I’m going to use #BellLetsTalk day to share my story. 1 year ago, I was having the worst anxiety crisis of my life. I was scared of everything. I couldn’t go through a car wash, or drive, or shower, or work, or sometimes get out of bed. I couldn’t sit still; I couldn’t stop crying.

I’ve struggled with anxiety for most of my life, long before I knew what it was. I had been one of those people who just dealt with it as best I could. I didn’t know there was an alternative. I hadn’t had much luck with doctors in the past, especially when my symptoms were vague, so to break through my usual fear of medical appointments, to talk about something strange and undefinable, and to risk the doctor being completely unhelpful and/or uncaring – it wasn’t something I was willing to do.

But when the crisis hit I was non-functional. I had to do something if I wanted to stay alive. And enough of intellectual me was left, that I knew living was the better choice in the long run. Luckily 2 of my friends mentioned the outpatient program at the U of A hospital psychiatric unit. I had no idea such a thing existed. People who specialized in mental health issues? That sounded like a good place to try. Plus no waiting for a referral.

I drove down there (a terrible idea in hindsight) the next business day. Now, trying to drive and park at the U of A hospital is enough to give someone without anxiety a fit; me already in the middle of a crisis, by the time I finally parked and found a hospital entrance, I was in such a state I was ready to just lie on the ground in a ball of tears. Again, a person came to my aid. A hospital volunteer, that I will never forget, immediately found me and walked me to the right area.

Within a few hours I’d completed a long survey, spoken to a therapist about my issues, been prescribed a medication to try, and was on the list for follow-up care.

The struggle didn’t end there. When I started the medication it took about a week for my brain to straighten out. That week was truly terrible. Some days I couldn’t get out of bed, some days  the anxiety was strong as ever, and most of the time I struggled with thoughts of suicide. I told my partner to hide medications from me.

I am forever grateful to the people who helped me out during this period of my life: my spouse, who is not unfamiliar with mental health issues himself, and didn’t make me feel bad for being ill, and was the right level of concerned, keeping some stability in my life; my sister who understood the days when I didn’t feel safe to be alone, and let me just hang out at her place; my long distance friend who texted with me in the middle of night, and remains a great advocate for me.

I will interject to say that I understand medications are not for everyone; there are many treatment options. For me, they allowed me to understand what had been my anxiety vs. my personality. They have almost eliminated the compulsive thinking and the generalized ill-at-ease feeling. I still struggle with social anxiety and I definitely still worry about things. But it’s like that background static has become toned-down. It is much easier to think and function and make decisions that aren’t strictly fear-based.

That’s my story. Now I want to talk about how you can care for a person experiencing similar problems, in my opinion.

It’s critically important to understand how absolutely terrifying it can be to admit that you are having suicidal thoughts or think you may need psychiatric help. We are scared of your reaction – will it be overreaction or underreaction? Will we lose our job, our friends, our relationship?

So if someone approaches you and says they are having trouble, assume they are screaming for help. They will likely tone done the severity of the issues, to feel the waters, as it were. We want to know if you are a safe person to confide in. Don’t ignore these signals, thinking that it is a “just a bad day”.

Calmly ask some follow-up questions and see what the person actually wants. Try to read between the lines if you can. “Where are you now? Are you safe? Have you eaten yet today? Are you having dark thoughts? Can I bring you anything? Do you want me to come over?” Of course if you think the problem is severe you should take them to any emergency department, call 211 in Edmonton, or use one of these numbers in Alberta. But assuming the person isn’t imminently suicidal there are other ways to help.

Some types of support you can offer:

  • Bring food and drinks to them. Sometimes the situation is so severe that going to the bathroom or kitchen feels impossible. Not eating or drinking isn’t going to make someone feel better. Sometimes there is only 1 type of food you feel like eating. This isn’t the time to worry about nutrition. Getting some liquid and calories in is what matters.
  • Give them a ride. If they want to see their doctor, or need to go the emergency department, or a place such as the U of A hospital, it doesn’t matter if they normally drive themselves or are independent. Help them out! Sit with them if it helps.
  • Take them to do something fun. For me this was playing with kittens or the Muttart Conservatory. Maybe it’s puppies, or the zoo, or Galaxyland, or a hot tub — whatever.
  • Hang out. Just be there. Watch a funny movie. Talk about whatever comes up.
  • Let them know that they can tell you anything without judgment, and STICK TO THIS! Everyone says they are non-judgmental until they start judging you. Don’t argue or say their feelings are invalid or crazy. Don’t tell them that “everything will be all right”. If they are more sensitive than normal, don’t worry about this; just go with it. Keep the conversation focused on them, on their feelings, what they need and want.
  • Offer help with daily tasks. Not everyone wants someone touching their stuff, so always ask first. But if spending 5 minutes doing the dishes takes a weight off of their mind, do that. Walk their dog. Buy some groceries.
  • Do things even if they sound crazy. During my worst week, I asked my husband to hang out in the bathroom while I showered. Normally I can do this perfectly fine by myself, but in a crisis you aren’t normal, you aren’t necessarily rational. But that doesn’t make the need less real.
  • If in doubt, just ask random questions, until something gets a response.

Be aware of their responses and that they will probably tone down their need, and not want to be an imposition. Assume answers like “maybe, if it’s not too much trouble, if you can, whenever you get around to it” mean yes, please!

I hope this post gives you some insight into at least one person’s experience. Please share your own experience and tips. We need to talk about this. We need to take care of each other.

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?


Try this New Retirement Calculator.

The company that makes the financial planning software I use, recently put out this little retirement calculator. You’ll enter a few pieces of information and it will tell you how much income you might have during retirement, and how that compares to other Canadians.

It’s completely free. And there’s no obligation to purchase anything or talk to anyone. Try different scenarios to see how retiring earlier or saving more will affect your lifestyle.

If you want to talk further about your retirement plans or other money concerns, contact me . . . who knows you might even get a free coffee!

Building an Emergency Fund When You Can’t Afford Anything

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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

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