No Spend Month: October 2016

31 DAYS OF NO SPENDING  

Follow me on my journey and see if you are inspired to try it out.

First thing you need to do in order to start: have a plan!

1: Budget

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image courtesy of pinterest

  • I have my budget set up already and have been diligent about following it each month so if you are thinking of starting a no-spend month, start with creating a budget allocating your pay for the month to only the essential items.

2: Upcoming Events/Functions

  • Knowing what events/functions are taking place within the month you are challenging yourself to not spend is important.  Looking ahead and seeing what is coming allows you to budget accordingly and allocate your budget to include an ‘allowance’ for just those specific events/functions.  October is the month with Thanksgiving and Halloween.  I don’t have children and I live in a condo so I wont be buying any costumes, decorations or handing out candy (savings).  Thanksgiving, I have been invited to a friends place to celebrate therefore with my allowance allocated to me in my budget, I will pick up a nice hostess gift and bring a dish. Not hard, super easy and affordable.

3: Free/Cost Effective Activities

  • Make a list of free/cost effective activities or social engagements you could do or attend to satisfy your need to get of the house and not think about spending.  Going for long walks in a new neighborhood, bike rides, car rides to small towns, dinner a friends place, host a party where friends and family bring food and drinks.  You get the idea.  There are ways of still having fun while not spending any money or using your budgeted money towards those activities (ie gas for the car rides).

4: Write it Down/Notebook-it

  • This may be a hard one for some of you however I think it’s important to document your progress.  The challenges you’ve encountered, things you’ve discovered, the good/the bad, the unexpected items that you have to pay extra for.  Jotting your thoughts in your notebook holds you accountable and also you can keep a list of things you would change for the next time ie increase spending allowance or pre-purchase your thanksgiving fixings in September if you know you will be hosting the dinner for friends and family.  You can also keep a running list of things you have noticed you can live without, a new activity that is cost effective you would like to try out, a clothing item you realized you need to pick up as the temperature changes.  You get the idea.  A funny thing about jotting things down, it becomes fun and soon you just start jotting everything down and your ideas are growing and evolving.

So now that I have a plan in place, being October 1st, it’s time to consciously not spend over and above the necessities.  Wish me luck!

J.

How I Need To Bring in Extra Money and Why

I presently pay a mortgage on my one-bedroom condo just outside of downtown Calgary, Alberta.

I love it, it’s cute, it’s manageable, it’s easy to clean and I have been renovating it since the day I bought it.  Most importantly it’s affordable and inpig-calculator a well managed building.

Recently a neighbor confided to me that she was looking at selling her top floor 2 bedroom end unit and would allow me to make a first offer when the time came.  She gauged approximately one year from now.

It has always been a goal of mine to own one more property as a rental unit and since she voluntarily offered this information to me, I considered it a sign that this goal of mine could be reached within a year from now.

In order to achieve this goal, I would need a 20% down payment (as a law all second mortgages need a 20% down payment on the selling price regardless if you choose to move into the property or use it as a rental)

Knowing this and that she would be considering selling her place for approximately $250,000, I am now know that I would need roughly $50,000 for the down payment itself as well as between 1.5-4% for closing costs, which includes the following:

  1. Home Inspection
  2. Land Title Transfer
  3. Legal Fees and Disbursements

Let’s use 4% in closing costs on $250,000, that would be $10,000 in addition to the down payment of $50,000, that I would need to save to be able to purchase her condo.

So now that my numbers have been researched, crunched, thought out, I now need to figure out how I can have that much saved and how I need to bring in extra money to do it.

Option #1 – sell items on kijiji but since I have a small condo, I have limited number of items that would produce a small profit.  Yes something is better than nothing.  So I will be adding this ‘action item’ to my to-do list to find things in my condo that I can part with and see if I can sell them on kijiji.

Option #2 – getting a part time job.  I would need to figure out where I would be interested in working in my off-hours from my regular day job.

  • Restaurants: I have my serving licence but most serving positions are in restaurants that are open till 2am.  Would I be able to commit to those hours while also having a full time day job?  I have to give this option some more thought, because if I am going to give up my evenings and weekends to working more, it needs to be at a place that I don’t mind losing my weekends to.
  • Retail (Clothing).  Yes it would provide a discount to clothing that I could wear to work therefore reducing my clothing budget but being around all that temptation, again, I need to think about this.
  • Catering: this could be an extension of restaurants however, I am registered with a catering company where they send out emails for upcoming events and I can pick and choose which events to work.  They pay more per hour and are mainly on the weekends so this a more viable option for me with more flexibility.

Option #3 – Offering a service.  I could offer to pet sit while my neighbors are away on holidays, draft up people’s resumes, babysit in my area.  Another option is that I dabble in photography so I could potentially create some stock photography and sell that online or offer to take professional corporate headshots within my neighborhood.

Option #4 – Work extra hours.  I work for an accounting firm and our busiest season is always January – April each year.  This naturally comes with longer hours to meet the deadlines and allows for some overtime which will help…next year.

With the Christmas season now starting and companies are advertising for seasonal help, I will need to narrow down my options and start sending out resumes.

I think I am on a good path with with some concrete planning.  Stay tuned to see what  I have decided to do in order to reach my savings goal.

Have you ever had to consider bringing in extra funds for a goal you really wanted to reach?  What steps did you take, what was your goal and where you able to achieve it?  Was there option that I left out?  If so, let me know.  I’m still only planning so I’m open to your feedback

J.

How to Build Up Your Savings

I am proudly debt free now for 9 months (since January 2016).

With that accomplishment came a whole new set of planning and strategic tactics.

I had dreams of building my savings accounts while I was still paying off my debt.  I wanted to be increasing how much I could save each pay and was eager to get that financial position.

One of the first things I did after everything was paid off, well, was double/triple check that they actually were haha.  It’s a weird feeling knowing you’ve done it and you doubt it for a long while so it’s only natural to look through your numbers again.

Then once that reality sets in, the planning starts.

To build up your savings, it starts with a plan

The planning shouldn’t just start when you have become debt free, if you can manage it, there is nothing wrong with working at building your savings while still paying off your debt.  I still made monthly contributions to my RRSP’s while still paying off my debt, but knowing once the debt was paid off, that I wanted to increase that amount.  Hence the planning; how much to increase it by?

I have an Emergency Fund/TFSA, RRSP’s and a Mortgage.  I have goals of building my RRSP and TFSA contributions and paying off my mortgage.

First; I set up my goals.  For my mortgage, one of my payment options is a lump sum payment once a year.  I have never utilized this option while paying down my debt.  I have mapped out that I would like to make a lump sum payment of $5,000 by December.  I had planned to start this with my first pay in February.  Taking the goal amount of $5,000 and dividing it by 11 months, I get $454.55 per month that I need to put aside for the lump sum payment.  Divide that number again for each pay (I am paid semi-monthly) and that comes out to only $227.28  I need to set aside on each pay into a separate savings account in order to make a lump sum payment in December.

I did the same with my RRSP’s and my TFSA.  I knew I wanted to increase my monthly contributions and I knew I wanted to have a goal of contributing at least $5,000 in to each by the end of the year.  Remember these are just goals.  Something for me to aim towards.

After working on my monthly budget and seeing how much money I am left with each pay, It turns out I am not able to meet the goal of $5,000 contributed to both based on what I have left over after all my house bills are paid and groceries.  I had to choose one or the other.  And that’s is ok with me, even if the goal for each becomes $3,000 each, it’s the fact that I am still contributing more each month.

I made a plan to do so and I am following through.

That is the point.  Just because I can’t contribute $5,000 doesn’t mean I can’t next year.  And who’s to say it won’t happen this year, I may get a second job, I may sell a few household items to supplement my groceries and therefore that extra money can be put towards my savings or who’s to say I don’t get a raise.  In any event, that is why I make a plan and I work on my monthly budget each week to see if I am still on track or if I am ahead of the game.

It’s still exciting knowing I am following through with building my savings, no matter how small.

When I first opened an RRSP, my contributions were $100/month ($50 per pay cheque).  Over the years, I have slowly increased that and it’s just like you might have read before, when it’s automated withdrawals, you don’t even notice the amount missing from your account and it’s being put towards your future.

How do you save?  What planning tactics have you used? What method works for you when deciding to increase a payment or pay down debt and build savings?

J.

 

Why it’s hard to stay out of Debt

DEBT FREE!

I am proud to proclaim that I have been debt free since January 2016.  That is 9 months of finally getting everything paid off since I qualified for my first credit card in my first year of college.

I thought It was the best moment ever, someone finally giving me a credit card when my mother wouldn’t.  What did she know anyway? 😛

Well after racking up the limit (which is normal for all college kids, it’s like a right of passage really) on the stuff that was crucial to my life at the time; cd’s, magazines and the latest Campus Crew hooded sweatshirts, I enjoyed the new items, enjoyed telling my friends about my new deals and purchases and freely swiping the card on weekends with my friends at the mall (thinking back, this sounds so cliche haha) but it all happened as I’m sure it did for most of us.

Working for minimum wage, at that time it was $6.50 / hour (hard to imagine) and only committing to putting the bare minimum towards the credit card each month because I wanted to keep my pay cheques and as much as of as I could for more cd’s, clothing and magazines.

Fast forward to my working at my first full time job in the big city of Toronto and I still had that credit card debt from years prior in College.  Still paying the interest on cd’s, magazines and clothing, that I’m pretty sure I had donated the clothing and recycled the magazines at this time.

But one thing remained constant throughout all those years and still to this day; I want to keep my money.

After moving to Calgary from Toronto for work, I had taken on a Line of Credit, still had the same credit card (the interest rate was and still is 9.99% which is undoubtedly amazing – no perks but low low interest and no annual fees – check it out here) and now had my first mortgage and car payments.

More debt and it was piling up.

As my friend from Toronto and I would complain and hash out our personal debt situations and listing off the dreams we have and the things we want to accomplish, together, we created a support system with each other to tackle our debt once and for all.

I found it really helped to have someone going through the same process with the same concerns, hunting for solutions and blog articles on tips and tricks and sharing about new books we need to check out.  Our conversations became more about celebrating our accomplishments (“I just paid off my car!!”) than complaining about being stuck with debt with no end in sight.

Those mini victories were encouraging, they were addicting.  All the tips and tricks we read about, we could finally try them out; such as snowballing your payments (once you’ve paid off one debt use that same monthly payment towards your next debt).  So once my car was paid off, I used that same monthly payment and put it towards paying off my line of credit and then my credit card.  That same credit card that I have had since college.  Yes the purchases have changed, and the amount has dipped and risen over the years but it was finally getting my full attention.

My friend and I even picked up extra jobs to earn some extra income to pay off our debts that much faster.  We would share our progress, we devoted a time each week to work on our finances (her and I each have spreadsheets where we input our numbers and check on it often to make sure we’re on track).

My friend uses and excel spreadsheet she created.  She has a separate tab for just her debt repayments and each time she makes a payment, the formulate she entered automatically calculates how much she has left to pay off, in how many pay days, in so many months accounting for the interest.  She finds that seeing she only has 8 months left (as an example) is encouraging and she looks forward to pay day to see where she can scrim some extra funds and put it towards that debt.

Me on the other hand I use a notebook and I write it out.  I like being able to flip it open at any moment without having to sit in front of a computer screen.  I find I remember my numbers and due dates better when I have written them out.  So when a friends says “let’s do movie and dinner this weekend” I know my numbers to know if I have any left over allowance to hang out with and how much dinner I can afford (sit down pasta or a quick burger depending on my allowance)

So through the years, having carried debt since I first started working my first part time job all the way until adult-hood, it just goes without saying that I am used to owing and my friend and I decided, how nice would it be to be used to saving!

And that is why I am so proud of myself to be debt free after so many years and hard work of tracking my debt and getting part time jobs to help pay it down.

However, since spending so much of my life paying off things, you sort of get used to it.  It’s ingrained in you really; you just get used to paying something off each pay day.  You just accept the fact that so much of your pay goes to this debt and that debt and then you grumble with what is leftover to play with to enjoy your own life.

So from going through this process for a long time, it’s difficult to think I don’t owe something.  I check and re-check my finances to make sure I didn’t forget a payment on something or that the debt, is in fact, actually paid off.  And it is, a small sigh of relief.  But there’s doubt.  It’s a calm, but an odd calm.

I will admit, I am still not used to not owing anything yet.  Which is why I keep checking my finances and triple check my numbers.  It’s a really bizarre realization when you look at how much money you are putting into your savings account instead of towards a debt repayment.  It’s exciting each pay but you’re almost always waiting for the other shoe to drop, like there is something coming that you hadn’t accounted for.

I have a running list of the items that come up once a year (that I typically forget about because it’s once a year – like my property taxes).  So nope, that’s all in order and nothing is coming up until next February in 2017.

The feeling will never go away, I imagine, and I am ok with that.  It just means I won’t be complacent and I will always be aware of my money and my savings and my spending as they all go hand in hand.

One of the downsides to being debt-free (there’s a downside? – sure is), aside from always wondering if you missed a payment, is the temptation.

The emails you receive each morning and throughout the day on sale items, upcoming deals, don’t miss out.  The ads you see in your morning paper.  The promotions you see at your favourite coffee/tea shop saying “buy one more for this discount” or in my case, the adorable outfit and colour pairings I just saw on a mannequin or on someone walking by that I just need to investigate where I can find something similar for my wardrobe.

My friend recently told me this past weekend when we were checking in with each other, she said she was going through her emails that she receives from her favourite stores and she is removing herself from their promotional emails.  She doesn’t want to see temptation each day and especially first thing in the morning to think about it all day.

We both pride ourselves on having a ‘seven day’ rule with regards to shopping for clothing.  If you can’t stop thinking about it for 7 days and you have researched for a similar and yet more affordable option, and you absolutely can’t live without it because it would completely change your life, then and only then, is it ok to purchase that item.

We used to go to the extent of finding out how many hours of work it took to pay for that one item to see if it was absolutely worth all those hours to have that one item in your closets.  More often than not, we wouldn’t buy anything and are lives are still functioning just as they were before even considering buying that one item.

Our new thought process is “life experiences”.  Her and I would rather put our money towards travelling or a new exhibit at a museum or a road trip to a fun little country town.

We each admitted that we both tell our friends how we are trying to collect ‘life experiences’ rather than things.  You see a light go off and their eyes light up like it’s a thought they never could put a label on.  Yes, Life Experiences!  genius.  and also very cost effective.

My friend and I have a love for photography and coffee so really, any weekend road trip to the farmers market or to a farm to pick fresh peaches is perfect for us; grab our cameras and head out.  Snap amazing pictures with gorgeous colours and lined in great compositions.  Simple.  Easy.  Cheap.  Other than gas, no money was spent unless on delicious coffee 🙂

All in all, our priorities changed.  We wanted more.  More from life and not stuff.  Stuff means dusting and who wants to spend their weekends indoors…dusting!

J.

 

Budgeting IS Cool!

Well, I thank you for sticking around to read how budgeting is cool.  I’m pretty sure I lost a few of you guys on that title but it really is, cool I mean, to budget.  Sexy even.  Yes, I went that far.

Ok, if I haven’t lost you yet on my enthusiasm for budgeting, then let’s get to it.

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image courtesy of canadaloansearch.com

 

First, with a solid plan in place to allocate your income, budgeting allows you to see where your excess funds are.  By knowing what money you have left after all your bills and expenses are paid, you have a better understanding of how much money you can put towards debt repayment, increase your RRSP contribution or your TFSA contribution, you can put it towards travel, renovations that you’ve been waiting to have completed, and so on and so forth.

Through budgeting, knowing where your money, let me emphasize that, YOUR money is going, keeps you in control of it and you get a better understanding of what you want to use your money for.

You know how hard you worked for it, the sacrifices you made (long commutes, overtime) so why not budget, take control and know where your dollars are going and hopefully more is going towards the things you want to do versus debt repayment.

Secondly, budgeting is a great way to see where you can cut your costs.  I do a budget every month (as non-fixed expenses change from month to month) to gauge where my income is going.  How much to fixed expenses, how much to variable expenses and how much towards food, transportation, savings and then seeing what is left over.

I write out my budget, yes, I’m old school and like to write it out in a notebook to have quick access to it whenever and to make edits and changes as the days/weeks go on.  That way I can also see month after month the difference in my expenses and leftover from my pay each month.  From doing this, I was able to see how much I was paying for cable when I rarely watched it, if only for the news which I can read/stream online.  So I cut out my cable and saved a bunch which is now going towards my savings.

Now I’m saving more of my money and not giving it away.

Through writing it out, I was also able to see where I was wasting my money.  I had a storage locker off-site for random household things like my Christmas tree and all the decorations that go with it, random pieces of furniture that I wasn’t using.  I decided to sell all those items and get rid of the storage locker.  I don’t miss those items and really, if I’m storing them and not using them, do I really need them?  So why waste money holding on to them.  Again, I am saving money each month which I have put towards my savings again.

By simply evaluating my situation through budgeting, I am able to see that I would rather see my savings grow, keep more of my money, stay in control of where my money goes than give it away.  I want to be addicted to saving and not spending.

Trust me, this is hard for me.  I used to be a huge impulse buyer, finding all sorts of reasons to need that pair of shoes (I don’t have them in blue…hehehe) but when I see the shoes sitting there, collecting dust, I realize they weren’t a good investment.

Thirdly, you should be budgeting for upcoming expenses such as travel, car repairs, renovations, weddings (gifts, outfit, etc).  When you see how much money you have left over after all your fixed and variable expenses are paid, you see how much, on a monthly basis, you are able to put away for a travel say in a year and half.   You have looked at prices for a bathroom renovation in 2018.  It will cost $8,000, divide that amount by the number of months until the you want to have the renovations started.  That will give you a monthly amount that you need to aside to afford the renovations.

Example:
$8,000 bathroom renovation in 16 months.  $8,000 divided by 16 = $500 a month (or $250 twice a month)

That doesn’t sound unreasonable to stash away $250 each paycheque.  Then you are more aware of the cost and are more encouraged to save knowing how much it will be, how long you’ve saved for it.  It makes you appreciate the upcoming renovations that much more and look forward to it with more anticipation because you’ve put time and thought into waiting for it and planning for it.

Plan To Save To Spend

Plan out what it is you want to do (research costs, months that work better for the weather and for work schedules).

Save the budgeted amount each month (or per pay day) to keep you on track of your expenses.

Spend the amount you have been saving and none of it will be on credit, it will be paid in full with no credit card payments afterwards.

What do you guys think now about budgeting?  Sexy right?  Practical?  Makes sense (haha pun intended)  Do you currently use a budget?  Is it written out like me or is it an excel spreadsheet you update as you go?  How have you found budgeting to be; useful?

Don’t think of it as budgeting if the word taste like vinegar, think of it as a ‘spending plan’ as that’s what it is, essentially; planning how you spend your money.

Chat soon!

J.

 

 

 

Hello, it’s me; you’re local Library

I’m going to share with you one of my little secrets; I use the public library!

Eww, what?  Shocking, I know but it’s true.library_infinite

But check it out (haha get it, pun intended), here are a few reasons, and especially in this present day economy, even here in Canada, why I frequently use my public library.

  1. Nowadays you can log in on line (create an account and voila, so simple) and browse so quickly for books/ebooks, digital magazines, music and movies.  Quick and convenient and it’s all free!
  2. They offer events at any library.  Simply browse through the events you are interested in, select which library you prefer or is closest to you and see what future events are coming.  Register for any you are interested in.  I have attended local bookclubs, networking and business events hosted at my main library.  All free.
  3. Lots of selection to choose from.  The user pages are so customizable these days it’s like a Facebook home page.  I receive suggestions on books to read based on past books.  I can review books, I can save books I’m interested in for later on a virtual shelf to place a hold on later.  Same applies to movies and music as well.
  4. They also offer in-house computers (in case yours breaks down or catches a virus – I speak from experience).  It’s handy to know I can just walk in and jump on a computer.  They have a few of them so you’re always guaranteed one right away.
  5. Universal membership.  I love that I can request a book and pick it up at any location.  I usually pick the one nearest to my home but if I’m at work and know I can’t make it, I pick the library near my workplace and pick it up on my lunch hour.  So convenient and no hassles.

Do you use your library?  Are you aware of all the great resources they offer, whether it’d be in-house or online?

I’d love to hear about your experiences

J.

 

Knowing your Credit Score/Report

Recently a friend and I were curious as to what our Credit Score was.  Neither one of us

What-Is-A-Good-Credit-Score

image courtesy of gajizmo.com

knew but had been told by mortgage lenders that we were ‘in good standings’

The two companies within Canada that offer your Credit Score/Report are TransUnion and Equifax.

We both choose Equifax, for no reason but it just happened that was the link we used first and liked how easy it was/is to navigate.  It also lays out the costs prior to signing up, which we both liked.

TransUnion, you have to create a profile first, then you can select the product you want; ie Credit Score only, Credit Report only or both to know the cost.

With Equifax, we were able to see how much it would be, what the reports would entail for the price associated.  My friend and I both liked this aspect as we are avid budgeters and like to know how much something is before buying it.

Another upside to our preference with Equifax is that it’s a one-time fee to know both your Credit Score and your Credit Report.  With TransUnion, it’s a monthly fee that allows you to log in and check on it whenever you want throughout the year.

To request your Credit Report, it’s free.  This outlines all the financial requests you’ve made in the past 7 years (ie car loans, lines of credit, cell phones, mortgages, credit cards)

It outlines when you opened it, what balance is still remaining (if any) and when the last date of usage was.  This last part is key, as 7 years after the last date of usage, does it then come off your Credit Report.

As an example, I paid off my Student Loan in 2011, it is still on my Credit Report, which I was not aware of.  So I know now that I need to wait until 2017 to have it removed from my record.

Now your Credit Score is:

a three digit number calculated from your data-rich credit report and is one factor used by lenders to determine your credit worthiness for a mortgage, loan or credit card. Your score can affect whether or not you are approved as well as what interest rate you are charged.

Once you have selected the product that is right for you, have a read through it.  I found it interesting to know that my credit score was in a nice high range.  It summarized that I would have no issues getting additional credit should I request it and it also offers suggestions on how to improve my score.

My friend and I are happy with our reports and are happy we did it to know, at last, what our numbers were after all our years of hard work, paying off debt, making large lump sum payments, getting the lowest interest rates possible on our credit cards.

It’s a virtual pat on the back for our efforts.

Have you requested your Credit Score/Report lately?  If not, what is stopping you?  If so, are you happy with the results?

Your turn, I would love to hear your feedback

J.