Not To Be Trusted With Knives

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More About Money

Piggy savings bank by alancleaver_2000.And speaking of cashola, I went and saw my RRSP person yesterday.  As per my new budget, I’ve increased my RRSP contributions by $75 every two weeks.  I also discovered that I could convert my Vancity VISA1) reward points to actual money that goes into my RRSP – so I got a cool $112 for free.  I heart free money.

As well, I decided to convert my Tax-Free Savings Account to a mutual fund so that it will at least (hopefully) make a bit of money.  Interest rates on savings accounts suck the big one, and since the “tax-free” part of TFSAs is that you don’t pay tax on any money you make from the investment, I figure I should actually make some money on the thing.  I was using my TFSA as my “emergency fund,” which you wouldn’t really want to tie up into a mutual fund (as you could end up having to draw on it when the markets are down and thus lose money), but now that I’ve built up some cash in my regular savings account that can be my “emergency fund,” I can think of the TFSA as more of a long-term investment.  I talked to my sister on the phone for quite a while last night so she could explain to me how she invests in stocks.  I still have a lot of learning to do before I’d be confident enough to do that, so I figure mutual funds for my TFSA is a good baby step in that direction.

Tomorrow, I’m calling the bank to increase how much I pay on my student loans by $150 a month.  All of this makes me happy.

And speaking of money, Nancy Zimmerman is posting money tips on her Money Coach blog every day this month.  You should check them out!

Image Credit: Posted by Alan Cleaver on Flickr.

  1. for the record, I have no relationship with Vancity or Vancity VISA other than that I’m a customer. I hear disclosure on blogs is all the rage these days. : []

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Expenses 2009, Budget 2010

I spent much of Saturday updating my finances in wesabe. I wanted to see where I’d spent my money and, ultimately, where I could save more. I’m notoriously cheap a pretty good saver – basically, I continue to live like a starving student1 despite having a big girl job and I pick up teaching gigs and contracts to supplement my income. I figure since I’m used to living on the cheap, why not continue that and save the difference/use it to pay off those damned student loans? But I know that I could save even more than I am if I actually look at where my money goes and then set up a budget2.

This is a pie chart3 that shows my top five spending categories for 2009:

Wesabe only shows the top five categories on the main graph; the “other tags” section includes all sorts of things including:

  • cell phone and Internet
  • clothing
  • recreation (e.g., hockey, running race registration fees)
  • gifts

Things of note from my 2009 expenses:

  • I’m well within the “you should spend less than 30% of your income on housing recommendation.”  In fact, my rent4 comprised only  11% of my total spending, and I didn’t spend all the money I made.  It works out to ~9% of my gross salary from my main job and ~7.5% of my gross income from all sources in ’09.
  • I spent almost the same amount on food as I do on rent.  This probably explains where the additional 15 lbs I’m carrying around came from.  About half my food expenses are from eating out.  This is waaaay too much.  I need to make friends with my local produce store again!
  • Electronics being so high in 2009 is an anomaly. I bought both my MacBookPro and my iPhone in ’09 and these aren’t expenses I anticipate having every year.
  • Transportation being so high is a bit of an anomaly as well, since it counts the down payment I put on my car this year.
  • I spent a lot more on clothing than I thought I did.  I shop almost exclusively at thrift stores5, so I get my clothing for a fraction of what they cost at real stores.  Yet I managed to spend $1,000 on clothing in 2009!  Granted, $350 of that was on shoes and $200 of that was for running shoes.  But still.  I think “clothing” is one category where I can cut down for 2010.  I’ve decided that I won’t buy any news shoes this year, except possibly running shoes if needed6.

So, basically, my two problem areas are clothing and dining out.  Cutting down on both of these will allow me to put slightly more money into my RRSP7 and increase my student loan payments each month.  And thus I might pay off my student loans before I turn 100 years old!

  1. e.g., cheap basement suite, almost  all clothing comes from thrift stores, most movie passes are free from contests, books come from the library []
  2. props to my friends Kim and Rebecca for sharing their budget Excel files with me! []
  3. I heart pie charts! []
  4. which includes my utilities []
  5. occasionally, if I’m feeling rich, I buy stuff at Winners! []
  6. and they will be needed if I do as much running as I’m planning to do this year []
  7. which I do automatically every two weeks []

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I’ve Never Had A Budget

I have a confession to make. I’ve never, ever had a budget in my entire life.  I consider myself pretty good with money1 and I’ve never in my life been in consumer debt2 and I can count the number of times I haven’t paid off my credit card bill in full at the end of a month on one hand3.  I guess part of the reason I’ve never had a budget is because I spent so many years as a student on a very minimal amount of money, so I developed a knack for spending very, very little money at all times.  Basically my financial plan consists of:

  • automatic payments for my student loan & car loan
  • automatic contributions to my RRSP and 40th birthday savings account
  • pay my bills when they arrive
  • stick a chunk of money into a Tax-Free Savings Account every year4
  • buy everything on the cheap5

However, I think I’d really like to have a more of a, well, more of a planned plan.  I’d like to pay off my student loans a little faster and save a little more in my RRSP.  So I’ve decided that I really should crunch my numbers and see how much more I can put on my student loans each month and how much more I can invest in my RRSP.  My friend Kim has given me a spreadsheet she uses to plan and track her monthly budget and Sarah has given me a spreadsheet for tracking net worth6.  I also use Wesabe to track my spending, but haven’t yet had the time to sit down and look at the numbers7. So that’s my next little project8 – I’ll let you know how it goes.

  1. My mom is a banker and she and my dad taught my sister and me the importance of saving money and suchlike from the time we were very little. []
  2. unless you count my car, although I have the money to pay off that loan outright if I needed to – I just didn’t want to wipe out my *entire* savings to get the car []
  3. 1 – One Christmas when I was in undergrad, I was out of my first term student loan money and the paycheque from my job as a tutor bounced, but I didn’t want to worry my family and I knew I would get my next installment of student loans in January, so I put Christmas presents on my credit card and had to just pay the minimum amount for a month while I waited for that next student loan installment and for the tutoring company to get me my paycheque.  2 – Twice I’ve lost track of the date and forgot to pay my credit card bill by the due date []
  4. TFSAs are a new thing that started last year and so far I’m using it as place to hold my emergency savings. For the past two years, ING Direct has allowed you to put $5000 in an account in October that will become a TFSA on January 1 and they pay you double interest for Oct-Dec.  So I’ve done that the past two years – I think I make an extra $10 or something by doing it []
  5. I buy 90% of my clothes at thrift stores – you can get really nice stuff at thrift stores around here! []
  6. I heart spreadsheets []
  7. plus, it’s not quite up-to-date []
  8. as soon as I finishing marking papers for the class I’m teaching this term []