Posted by: saveafewbucks | June 4, 2011

Net Worth Update: May 2011 (21.89%)

21.89%. It’s deceiving. Looks good because my NW is so low. 21.89% equates to a paltry $1,075 gain this month. Despite it small size, I’m actually quite surprised that it increased THAT much. I truthfully can’t determine how it increased so much as my spending has felt the same.

Overall the major changes were:

Cash (-$3,050)

Student Loans (-$2,655)

Credit Cards (-$1,290)

The decrease in cash is directly due to a lump-sum payment made to my student loan for the hell of it. I’ve also decided to make semi-monthly payments to my credit card. That way I’m not transferring money to/from my savings account during the month. I think I’ll have a better view of what is truly entering and staying in my savings account each month.

Up next for June is sticking to the budget I’ve set of $175 per week for all discretionary spending (groceries, fuel, eating out, etc.). To reach this goal I have to exercise quite a bit of restraint in a normal month. On top of this, I have a wedding/ wedding related event/ other special event every weekend this month. :s

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Posted by: saveafewbucks | May 15, 2011

How to justify paying more for rent?

I moved out of my parent’s place in March 2010 to move in with the boyfriend.

In this city, getting everything you want in a place to live will cost you. So when we picked our first place to call home, we had to make some sacrifices. In order to have a one-bedroom apartment near a subway which was affordable (just under $1,100/month) we gave up all those other nice-to-haves such as ensuite laundry, a dishwasher, air-conditioning and a new building. What we didn’t realize at the time was that we also gained (good and bad):

  • 5 extra minutes of thinking time as we wait for the elevator to come around (multiple times daily)
    • could also be thought as incentive to get a daily dose of exercise by taking the stairs
  • lost money in laundry machines that occasionally decide they don’t want to dry your clothes either (bi-monthly)
    • incentive to save the environment and dry our clothes on our doorknobs, curtain rod, chairs, etc.?
  • random shots of scalding hot water in the shower (daily)
    • teaching us that in other parts of the world, some people don’t even have hot water
  • days of no water at all as they attempt to “fix” the plumbing and today no hot water with no explanation at all (ranges from once every couple of months to multiple times per week…)
    • again teaching us to appreciate readily available water

Despite the daily teachings that this place gives me (and the hundreds of others in the building) on a daily basis, it’s beginning to grow old with me. Fortunately for the BF and I, we chose to live here to save money and can also choose to move out, which were are seriously contemplating. The only issue is, a better place with an equally convenient location is going to cost us more. These are the same place which we determined were too expensive for us a year ago.

Is it Worth It to Move?

At this point neither of us want to move far from where we currently are. We both work about a 10 minute drive away which is QUITE convenient. It’s also close to restaurants, shopping, grocery stores (not like it matters right now :(… ) and the subway. So we’re staying put in the area. However, the area is very limited in what is available. Houses are out of the question due to price. Period. Then you have high end condos (think over >$2,000 in rent per month), new starter condos (between $1300 for a one bdrm to $1,800 for a two bdrm), old apartments ($900-1100 for one bedroom) and basement apartments ($500-900).

Right now we’re in the “best” of the old apartments. Sadly, even with all the troubles we have with the building our apartment is better than many of the apartments around us due to the lone fact that it is safer (see: less crime) than the ones surrounding us (minus the break-in down the hall from us last month). This means, there will be no bi-lateral movement. Only way to go is up (note: I find basements sad and scary).

The good news about moving up into starter condo territory is we get the two things I long for: ensuite laundry and a dishwasher. The BF also gets his air-conditioning. Another added benefit which we would both benefit from is a gym. In return, we give up money (minimum $200) and space (100-250 square feet). The space isn’t as big a deal to me as the BF (he’s significantly larger than me) but we both worry about the money. What if one of us loses our jobs again? What if we don’t? It’s still at leat $1200 EACH per year that we would pay for these upgrades. But at the same time, you almost don’t realize the toll that all the little headaches of our current situation take on our happiness each day. Especially for two homebodies like us who spend 90% of our non-working time at home.

How do you mock-up a cost-benefit analysis on all those little things. How much are those intangibles worth? Will living in newer building with more amenities and less headaches really make us any happier? How much will current upgrades have on future goals?

Posted by: saveafewbucks | May 15, 2011

Mid-month Spending Review: May

I’ve recently revised my monthly spending budget from $300/week to $225/week. Sticking to it has proved difficult so far.

May 2-15, 2011

Total = $541.96 ($270.98/week)

(Over)/Under = $(45.98)/week

Breakdown by Category:

$ 20.53 Groceries
   161.12 Meals
    75.39 Clothing & Accessories
   133.20 Health & Beauty
    99.87 Fuel
    51.85 Other (gifts and parking)

Explanation for the spending above is pretty simple

  •  Total groceries of $21 vs. $161 in meals is self-explanatory. Complete fail on the part of my boyfriend and I. It all boils down to sheer laziness. 
  • Spending in all other categories were for gifts/events relating to bridal showers/ weddings/ babies of friends. This isn’t going to get any prettier this year. 1 wedding down, 4 more to go…
Posted by: saveafewbucks | May 11, 2011

Wishy Washy

It seems as if my short-term (2011) goals are constantly changing these days. Yesterday it was paying off debt, the day before investing, etc. Today, it’s purchasing company stock. I’ve decided that the large savings I have left will be used to purchase company stock at the end of this summer. Based on the program set up, the benefit should be a return of approximately 16%. However, given the various exchange rates that come into play at the time this could be significantly less. In the end, it still should provide more than the prime +2.5 I am paying on my student loan. Considering the effect of taxes (assuming a 30% marginal rate) and excluding foreign exchange gain/loss purchasing stock should yield about 11.5% not including annual dividend payments.

So it looks like I’m going to own me some stock! Possibly… I have at least 3 months before the contribution period begins and that much time to change my mind.

On a separate note, I’ve forgotten how to live without money. I’ve made “my budget” of $30/day, not including recuuring household/ transportation expenses and it seems like a stretch. If only my spending habits were that of my teenage self working part-time at the grand minimum wage rate (circa 2000s) of $6.85/hour….

Posted by: saveafewbucks | May 10, 2011

Lump-Sum Student Loan Payment #1

$2,500. In comparison to my honking student loan balance, this payment feels like a drop in the bucket. From $29,873.18 to $27,373.18. Whoopie! (note: blogged words don’t properly express sarcasm) 🙂 Despite the fact that this payment does not feel like much, it is actually putting a 8% dent in my balance. At 5.5% (prime +2.5), that’s a cool $137.50 savings per year. Momma’s gonna buy herself a new pair of shoes!!… Once the other $27k is paid… 😦

Posted by: saveafewbucks | May 8, 2011

Entering the World of Balance Transfers

I mentioned to co-workers the other day that I will be working on paying off my student loan as my next goal. Both suggested I should use a credit card with a 0% balance transfer to pay off a portion to lower the interest rate of prime +2.5 on the Federal portion and +1.0 on the Provincial portion. One co-worker used these loans to pay off a portion of his mortgage. It’s not that I haven’t thought of this trick, it just scares me given my past (see: last year’s period of unemployment). So I really must consider the benefits and risks with taking on a balance transfer.

Benefits

  • Saving moola. Lots and lots of moola.
    • The current prime rate is 3%, which means I’m paying between 4-6.5% on my loan.
    • For $30k, let’s say at 5.5% for simplicity sake, I”m paying $1,650/year or $137.50 per month in interest.
  • In addition, due to a decline in unemployment and projected GDP increase, the prime rate is expected to increase in the upcoming months. We just don’t know when.
    • Potentially saving more money
  • I’ll be debt free sooner which means I can focus on other financial goals. Such as saving up for a place of my own. 🙂
  • It would force me to focus on paying down my loan above all else (i.e. frivolous spending) as I HATE having non-government student loan balances.

Risks

  • Losing my source of income again and thus losing my ability to make the required payments
    • I currently have 100% funded government loans, so in the event I lose my job I can put the payments on hold.
  • See above. See above. See above…

There is a good chance that I will go through with the balance transfer. I guess it all comes down to how secure I think my job is/how long I want to stay at it. It might not seem like much, but I think once you’ve been unemployed the experience is a tad psychologically damaging.

If I do go ahead with the plan, there’s the issue of how much is managable so that it will be fully paid off before the promotional interest period ends.

Posted by: saveafewbucks | May 3, 2011

Net Worth Update: April 2011 (+157.21%)

The best feeling in the world is looking at the zero net worth mark and seeing that I am on the good side of it!

Agggghhhhh!!!

Fin.

Posted by: saveafewbucks | April 25, 2011

How do you budget?

I personally, budget like a crazy person. Crazy because 1) my budget’s are intensely categorized, scritinized and revised 2) I NEVER follow my budget.

I set out upper spending limits for various expenses in my life and then do nothing when they are blown. Basically, the entire exercise is useless for the most part. It is however, helpful in letting me know that if I wanted to I could save quite a lot of money. Quite a bit more than I actually save.

As such, my savings at the end of the month is whatever is left over and there is no way to determine how much that would be until the first day of the next month. As you can imagine, this makes it kind of hard to set and reach savings goals or plan for big life purchases (i.e., owning my own place one day).

Enter April and a new way of doing things. This month I’ve set a weekly budget for myself. Weekly, insead of monthly, because it is easier for me to control (see: short attention span and memory). The calculation for my weekly spending is as follows:

+ Income (monthly)
– Fixed/Required Expenses (rent, hydro, cable/internet, car lease, insurance, gas, groceries, etc.)
– Desired Savings/RRSP & TFSA contributions
———————————-
+ Free Cash Flow (monthly)
/4.5 weeks

So far, it has worked FABULOUSLY for me. I’ve been able to stay within my weekly budget resulting in less spending than previous months. But at the same time I’ve been able to do all the things that I’ve wanted without that feeling of “I can’t because I’m on a budget”. For me I find it is easier to say I’ll give up X because I really want Y instead this week.

Mind you, this isn’t the type of budget for everyone. I still indulge in frivolous spending. But I am able to save as I do it. I envy those of you who can have no spend days/weeks/years. Or those who have the self-restraint not to be self-indulgent. If I had these magical powers I would be RICH (well… have less debt at least)!

So I’ll end this post with what I threw my money away for this week. Because I can without feeling bad about it. 🙂

SHOES

Normally I don’t buy more than one pair of shoes in a month (at the most). But a couple times a year I will go to the Petite Feet Sample Sale and I can’t help getting more than one when there are thousands of shoes in my size. If you’re a size 6 (or 5.5 like me) and live in Toronto/Vancouver, I would suggest checking it out at least once. Assuming you’re already going to be buying shoes elsewhere… I personally have a handful of weddings to attend, so this will be a tough saving year.

Posted by: saveafewbucks | April 23, 2011

A Big Fat Update

I’m a Crappy Blogger

Because I get lazy. Hence this is my first post in 5.5 months… 😐

I can’t even blame my new job. The hours are good and I’m hardly stressed. Besides that, the rest of the PF bloggers do it. Many as they juggle multiple jobs. So from here on out I will make a renewed effort to start blogging again. At least once a week? Baby steps. Yay for 4 day weekends and an out-of-town boyfriend (woo personal finance party of one!!).

This Was Me Then

October 31, 2010: -$20,053

Almost Today

March 31, 2011: -$8,583

Thoughts on the Past

That means that in the last 5 months the change in my net worth was +$11,470 (average of ~$2,300/month) or 57%. ~+$6,200 in assets and ~-$5,300 in liabilities. But that seems so strange to me. I track these numbers every month (and obsessively look at them daily) and it doesn’t really feel like I’m making any significant progress in any balances.

Breaking it down a little further, I see that ~$10,300 of the increase is a result of  +$2,383 cash, +$4,117 RRSP and -$3,817 Line of Credit (stupid! stupid! STUPID!). My GINORMO student loan ($30k) and car loan ($14k) have hardly moved. 😦 So if I hadn’t wasted away money on that LoC, I could be hitting the $25k mark on my student loans. 😐

April Planning

This will be an unusually good month for me. I wish I could say it was due to my awesome self-restraint and budgeting skills. Or for being recognized for super hard-work at my job. But it’s actually a gift from a very generous family member to my parents, which they decided to share with my brother and I.

So far I’ve transferred some of the funds to my TFSA and the rest is waiting around in my savings account until I can figure out what to do with it. The choices are:

a) A hefty RRSP contribution with the remaining funds – which means I won’t have to worry about additional contributions this year

b) Pay off a large portion of my student loan (~20%) – I get to look at a smaller balance every day

Note that everytime I have any extra money, this is always the dilemma. RRSP or debt. So I made a spreadsheet. Obviously.

This is is quick and dirty. Please don’t judge.

In the past, I’ve put any extra money into my RRSP as a result of the above. Numbers don’t lie right? But what price do I put to the emotion attached to seeing my student loans in the low $20ks?

Thoughts?

Onwards

I spend FAR too much.I don’t share the details as it’s THAT embarrassing. Maybe I should start…

Posted by: saveafewbucks | November 9, 2010

Lucky

Every once in a while I’m reminded of how lucky I am. Today would be one of those days.

I started a new job on Monday and I think it’s going to be pretty great. Decent pay, good benefits, room for growth and a relaxed but professional work environment. After five months of unemployment, I embrace the opportunity for a great future. But at the same time, I realize that not everyone has it as good and it makes me appreciate what I have even more. After I had blathered on and on at dinner tonight about the new job to the bf, I finally got around to asking how his day went. He responded indicating it wasn’t so good with a somber look. Immediately I kinda freaked out and asked if he was let go. It’s been a running “joke”/sore point for the last few months since I lost my job. As always, relief washes over me when he says “no” because I know we can still pay the bills. But then he followed up his “no” by saying that his co-worker/subordinate was fired. Ugh. That sucks. I feel bad for the bf and for the co-worker as they were friends and worked well together. The company was cutting costs and after five years the powers from above decided they no longer needed him. Strangely enough, this is the third of his co-workers to be let go within 6 months. I say strangely enough as the store he works at HAD three employees (now only the bf) and the other co-worker was from his former store before he moved to my city.

So I’m feeling lucky for a few reasons. One, I found a job. Based on the 8% unemployment rate I’m lucky to have something. Two, I’m confident that I can find a decent paying job if need be (again) with my education, certification, work experience and hard work. I don’t think the bf’s former co-workers are as lucky. Based on what he’s told me, they lack the education and work ethic to obtain another decent paying job which means they may have to start again from the beginning. One of his coworkers joked that the only place which will hire him will be McDonald’s. Not to bash McD’s employees, but I assume they don’t get paid enough to be the main breadwinner of the family. Which brings me to my third area of thankfulness. I’m glad I don’t have a mortgage. Yes I have a large student loan. But the good thing there is I was able to put the OSAP payments on hold while I was unemployed. His coworkers all had families, mortgages and fancy car payments that can’t be halted. The bf even said that the member of upper management that broke the news to the co-worker had the nerve to ask whether his wife made enough to cover the mortgage and what size “nest egg” he had. The answer being “no” and “$10,000”. Wow. First off, I can’t believe the guy would ask that. The bf said he seemed to ask it out of genuine empathy for the guy… But that seems like a wound kicker right there. As for the answers. Sad face. I seriously feel bad for the guy. He must be so stressed out. At least I know that if the bf were to lose his job right now we could scrape by. Also, a nest egg of $10,000 could last me at least 6 months as I rent. However, I assume it doesn’t go too far if you have a mortgage and property taxes to pay. So as much as a hate my apartment most days, I am often slapped back to reality when I entertain the idea of renting a nicer place or purchasing a condo in the next few years.

My main goals for the next two years will be to reduce my student loan debt and build up savings (RSP, RRSP, TFSA, investments and emergency fund) as a cushion. That way if I’m faced with a less than ideal financial situation again I will be prepared the next time around.

Anyone else feeling lucky?

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