Archive for January, 2011


Fruits, veggies and costs, oh my!

I love buying fruits and vegetables because they are so cheap compared to the amount you get!  This may seem contrary to popular media reports which expound on the “high” cost of fresh produce, but it’s really a matter of where you shop and when you shop.  Certainly, while I was in Orlando last year, it was definitely true that fruits and vegetables were expensive… but only because my shopping options consisted of Walgreens and convenience stores!

At home in Vancouver however, I am able to choose from a wide range of stores.  By far, the cheapest options are the local produce markets.  Many of these are owned or directly affiliated with local farms.  As such, the produce is often sourced locally, inexpensive, and fresher.  If you prefer service and presentation, by all means, go to your local Safeway.  But if you don’t mind picking your fruit out of cardboard bin displays and dodging over-enthusiastic old Asian ladies (being ethnically Asian, I say this somewhat affectionately!) then I would encourage everyone to support their local market.

The market I often go to is located directly beside my transit stop – no extra travel time required!  I also like the Kins Farm Market chain of stores for their consistent quality, improvement in service, and low prices.  They’re also very active in the community, which is a big plus!

Here’s what I bought this week:

Zucchinni at 59 cents/lb = $0.41
Braeburn apples at 79 cents/lb = $1.25 for 3 large apples
Oranges at 49 cents/lb = $0.89 for 3
Roma tomatoes at 49 cents/lb = $0.45 for 2
Bean sprouts at 79 cents/lb = $0.30 for a large handful
Green pepper at 49 cents/lb = $0.30 for one large
Red pepper at $1.49 cents/lb = $0.45 for a small one

A grand total of $4.05, approximately.  Combined with leftover fruit, carrots (2 lbs for $1.50), lettuce ($0.89 a bunch) and onions ($1 for a small bag) I had at home from the previous week, this took care of all of my fruit and vegetable needs for the week.  Much less than $10 for quite a variety and selection of items!

Washing away the stains of carelessness

I absolutely hate it when I have to spend money for no reason.  Especially when it’s my fault!

I’ve been doing laundry on hot water for the past few weeks as the apartment building we’re living in had a bug scare a few months back.  We haven’t seen any ourselves recently, but I’m being cautious!  So I put my laundry in a few hours ago, popped in a few coins and wandered back upstairs.  I came back 40 minutes later to discover a beautiful white cami had turned gray along with several of my white socks!

The culprit?  Myself, for tossing in a new pair of black jeans which had never been washed and dried before.  ARGH.

Unfortunately, this was the result of doing something by habit, instead of doing something purposefully.  Being used to doing a load of mixed laundry on cold water, colour leakage has never been a problem for me.  But had I been purposeful and thinking about the task at hand, I would have been more wary about adding a new pair of dark jeans in with my mixed laundry and hot water.

Now, I will have to spend more time and money getting my white shirt back to being white.  *Sigh*  …

Having the most frugal grocery budget in the world isn’t going to help you any if you can’t put together at least a few healthy, tasty, and cheap eats! Every month, The Outlier Model features a cheap recipe idea, along with the cost breakdown.

I love McDonalds breakfast Egg McMuffins. How could you not? Egg, processed cheese, salty bacon, warm and crispy English muffin … drool. But at $2-something for the basic English muffin and almost $3 for the extras, it’s not a very good deal. But having an egg English muffin is a great way to start your day with protein and carbs. Here’s how you can make it at home.

Homemade egg McMuffins

What you need:

  • English muffins – $0.17 each ($2 for 6 when on sale. I often get it at $1 for 6 and put them in the freezer!)
  • Cheese – $0.17 per slice of Kraft Singles processed cheese (24 slices for $3.99 on sale)
  • Egg – $0.17 per egg (12 eggs for $2, every month and a half at Shoppers! Time your shopping!)
  • Oil – maybe a few cents?

Cut the English muffin in half and get it toasting. Meanwhile, heat up a bit of olive oil in a non-stick pan. Get it really hot. Crack the egg into the pan and fry until it reaches your level of doneness. I like it with the yolk still gooey! Put the cheese slice on top, then assemble your English muffin. Less than five minutes after you started… Done! Serve with a bit of cut fruit on the side.

Servings: 1
Cost per serving: Less than 60 cents.

Nice to have: Slice of fresh tomato, “real” cheese, bacon or ham. This adds a bit more cost to the total meal but should still come in at less than $1 per serving.

Feeling adventurous? Use an unusual type of cheese instead of cheddar.

Growing up, I lived the rural lifestyle. I grew up believing that part of becoming an adult would involve owning my own car. To some extent this makes good sense in a rural setting when dealing with sporadic transit and long distances between amenities. However, for a growing urban population the necessity of owning a car is something that should seriously be questioned.

Car Ownership

After I graduated from university and landed my first well paying job, I was very excited that I had finally ‘made it’ and could start to make some of the purchases I had always dreamed of. After researching and saving up money for a few months, I purchased a 2002 Suzuki Esteem wagon. Over the year that I owned the car, $400 each month went towards the maintenance, insurance and gas. However, as my girlfriend and I started to question the many necessities in our life, I started to question the ‘need’ to have my own, dedicated car. I live in a city where transit is good and my neighborhood is ideally situated for walking to many amenities. The only time I felt that a car was really necessary (or at least a big help) was our bi-monthly grocery shops.

Car Sharing

So, how do I save money by not owning a car, yet have access to one whenever I need? The Car Sharing Co-ops! Car sharing is becoming increasingly popular in larger cities for its financial, logistical and environmental benefits to its members. Co-op members share the costs of buying and maintaining a vehicle through an initial membership fee and ongoing low rental rates. This in turn benefits the environment by decreasing the number of cars on the road. I belong to the Co-operative Auto Network, in Vancouver BC. , I pay a low $3/hr rate plus mileage ($0.40/km for the first 35km and down from there).This includes gas, insurance and roadside assistance in case I should ever have the misfortune of breaking down on a grocery run at no extra cost!

Note: There is a $20 application fee that is waived by a referral. Contact me for one if you’re thinking of joining!

Here are some other car sharing companies and co-ops you may want to check out.

Zipcar – Available across North America
Autoshare.com – Available in Toronto, Canada
CarSharing.net – A great resource detailing car sharing organizations near you!

The bottom line

My monthly bill to use a car approximately once or twice per week is under $200. Over the course of a year, I save a guaranteed $2400. When I use the car less, I save even more. For me, the tradeoff from car ownership to car sharing has definitely paid off; I now have twice the money to allocate toward things that are more important to me which makes a huge difference to my monthly finances.

The art of gift giving

I’m a strong believer in doing things purposefully. Gift-giving is one of those things! For me, gifts are always freely given. That means, if someone gives me a gift, it comes with no strings attached, no expectations, and no presumptions. Likewise, if I give a gift, I expect nothing in return. Most importantly, I give the gift because I want to.

That might seem like a strange thing to emphasize, but think on your daily life.  How often do you feel obligated to give gifts?  Probably more often than you would like.

The Office

The office is a prime culprit for unwanted gift giving and gift receiving. When I worked at my first post-university job, it was in a lab of 20-odd people. There was a constant stream of birthdays, engagements, babies, anniversaries.

For birthdays, everyone was expected to “donate” $20 a year to fund the purchase of cakes. I don’t even like cake! And usually, there was too much cake and we would leave a quarter of the cake or more out in the communal kitchen for anyone to eat. I never understood why we couldn’t at least pay less and have less cake left over…

For other occasions, people were expected to “give” $5 or $10 or even $20 towards the latest special occasion. Gift cards would be bought, toys for new babies, appliances for weddings. And of course, we’d pay for their next lunch!

Eventually, I realized that these were not gifts. If these were gifts, I would have gone out and purchased cake or presents for these people without being forced to! Instead, these were enforced, expected purchases that the working world had somehow embraced.

The family

My family is not very close to certain relations. However, when I was younger, we would still exchange gifts. My parents would agonize over the costs of the latest gadgets and reluctantly buy my cousins a new digital camera or phone. My aunt and uncle would give me jackets or bags that looked suspiciously out of place on a 12 year old. And for the rest of the year, we would not speak to each other.

If not for the expectation that we would exchange presents, due primarily to the fact that we were family and lived within a 10 minute drive of each other, we never would have bothered. My mom didn’t like my aunt and thought my cousins were rude. In turn, my cousins regarded us as the poor relations that they suddenly and unfortunately had to put up with.

I think everyone was relieved when us kids grew too old for constant presents. But why wait that long at all? If you’re giving presents to people you don’t even like… why bother? It’s no longer a gift. It’s just a charade.

Gifts Are Freely Given

Anything else – envelopes passed around the office, the box of chocolates you keep in the closet “in case” people stop by with an unexpected Christmas gift, the oddly coloured sweaters you give to cousins you never see… These are not gifts. Let them go!

Even worse, for some people, receiving a gift brings about the expectation that they must give a gift in return. I say – if any one gives you a present, it should have been given freely, without expectation. If it wasn’t, it is not your concern. Accept graciously, and move on.

And when it is time to give a gift, do it graciously as well. When I left my first job as a cashier at a dollar store, I gave one of the girls a copy of John Milton’s Paradise Lost. Why? Because she had a keen interest in the subject matter and because I would miss her! I never received anything in return, nor did I expect to.

So let’s take back the art of gift giving. Give because you want to, because it makes you happy! Receive presents graciously and without fear of expectation. Gifts are freely given.

Cheap eats! Fried rice

Having the most frugal grocery budget in the world isn’t going to help you any if you can’t put together at least a few healthy, tasty, and cheap eats! Every month, The Outlier Model features a cheap recipe idea, along with the cost breakdown.

Fried rice is a great quick and easy meal which can use up a lot of leftover veggies and meat!  Try adding unusual ingredients like asparagus or pineapple for something different.

Fried rice

What you need:

  • 2 cups* cooked rice – 0.75, assuming rice bought in bulk at ~$28 for 10lbs
  • 3 eggs – $0.50, assuming  one dozen eggs for $2
  • 1 cup frozen veggies, or leftover chopped veggies – $0.75
  • scrap leftover meat (eg. turkey, roast chicken)  – $0.75
  • soy sauce or soy seasoning sauce – $0.25 (or use leftover soy packets from takeout!)
  • garlic powder – $0.25)

Heat up some oil on a pan.  Crack in the eggs and break them up.  Add rice and stir until well coated and eggs are starting to cooked.  Add meat and veggies .  Stir fry until everything is warm and well mixed.   Turn off heat.  Add soy sauce and garlic powder to taste.

Servings: 4-5

Cost per serving: About 75 cents!  My real cost is probably less, but I “rounded up” many costs, such as the cost of garlic powder.

Nice to have: Fresh chopped green onions on top, mushrooms, shrimp

Feeling adventurous: Add curry powder for a curry fried rice

*this is using the little cup that comes with your rice cooker, not actually a “cup”

Real estate update 2011

The First Condo

We bought our first condo at the age of 25, in March 2010 and at the time, it was assessed at 210k. At the time, we paid 250k for it, 10k less than the asking price. We got our latest assessments this week and it’s now valued at 258k! Sweet!  I know it’s only money on paper, but it’s pretty satisfying to see the numbers go up.

Our mortgage stands at 239k with a variable interest rate of 3%.  We make monthly payments which are higher than the minimum and made one extra lump sum payment last month.

The Rental Property

Part of my early retirement plans hinges on income generated from rental properties. I plan on one day owning 2-3 properties which generate a net monthly profit.  It’s part of my larger plan of real estate, stock, and dividend investment.  We plan on buying our next property in another 2-3 years.

For that part of the plan, we are putting away money each month towards a downpayment fund. This money is currently sitting in an ING savings account. We’re at about $2400 right now.

And it continues…

So that’s how things stand! We’re pretty pleased with our current progress and optimistic for the future.  🙂

Making a food budget

One of the most challenging parts of setting a budget for myself was figuring out my food budget.  In fact, this was one of my first tasks!  Your food costs – what you eat, where you shop, even how often you shop – can really make or break your budget.  For example, buy an orange everyday at the corner store or 7-11 costs $1-$1.50.  In contrast, I bought three oranges yesterday at the market for $1!  But before you can figure that out, you need to figure out the details of your food habits.

How much did I eat?!

At the time, I had no idea how much money I spent on food.  I knew that if I shopped at Superstore, it would be cheaper than if I shopped at Safeway;  I knew that I didn’t need much milk but I needed to account for rice; etc.  It was all very vague, and it didn’t help me figure out how much money I actually spent.

I decided to write down everything I would need in a month, along with the approximate prices, to get a better idea of my potential food budget.  Here, I hit a wall again – How do I estimate a monthly food budget, when I don’t buy everything in monthly cycles?  When I was first making this budget, I lived alone.  I could hardly finish a tray of ground beef in a month, much less a whole bag of rice!  So, I decided to make a three month food table, and divide my larger food costs over three months to figure out how much I would need spend on average in order to have all the necessities.

Here’s what it looked like in the end:

Month 1 Month 2 Month 3
Meats 

(= $15/month)

Beef – assorted cuts ($11) 

(10-12 servings)

2 chickens ($15 for a 2-pack) 

(10 x 2 servings)

Pork, fish, other meats ($11) 

(average, 10-15 servings)

Eggs ($4) Eggs ($4)
Fruit and veggies 

(= $25/month)

Assorted $25 (at ~$6 per week) Assorted $25 (at ~$6 per week) Assorted $25 (at ~$6 per week)
Dairy 

(= $17/month)

Milk ($2) Milk ($2) Milk ($2)
Cheese ($5) 

(450g)

Cheese ($5) 

(450g)

Cheese ($5) 

(450g)

Yogurt ($10) 

(12-15 servings)

Yogurt ($10) 

(12-15 servings)

Yogurt ($10) 

(12-15 servings)

Grain 

(= variable costs)

Bread ($3) Bread ($3) Bread ($3)
Rice ($30) 

(40lb sack, good for 3 months)

Cereal ($5) Pasta ($10)
Other 

(= variable costs)

$10 miscellaneous – spices, sauces, herbs, etc. $35 miscellaneous – canned or dry goods $20 miscellaneous – necessities: flour, oil, baking powder, corn starch, etc.
Total: $100 $100 $100

A few key things to note:

  • I don’t consume a lot of milk, bread or cereal.  I’m Asian!  But, you could easily cut out the $30 sack of rice and re-allocate towards milk, breads and cereals.
  • You’re not going to have an even distribution of all the necessities to start.  The key is to build up over time such that you run out of items in regular, predictable cycles.  Preferably cycles which coincide with store sales!
  • This budget relies a lot of buying in bulk, cutting up your own meat, and making use of your freezer, which I discuss in another post.

So there you have it – my basic food budget for when I lived on my own.  Prices fluctuate depending on sales and such, of course.  I can tell you right away that most of the prices I listed were higher than what I pay regularly.  The important thing to note is that you don’t have to survive on rice and beans.  But you do have to learn how to buy, store and cook food.

Cable TV and internet are two of those annoying bills that somehow seemed to have crept into the “necessities” category for many households.  While I don’t consider TV and internet essential, my finances are such that I can afford them.  But, there’s no need to pay full price!  Here’s how you can get cable TV and internet for less.

How much TV?

First, how much cable TV do you need?  I don’t watch a lot of TV, but both the boyfriend and I enjoy watching live sports.  He also follows a few network TV sitcoms.  For us, the basic cable package provides both of these features.  While I do occasionally watch TV series which are broadcast only on specialty channels, I usually end up downloading episodes for ease of viewing.

If you don’t watch a lot of TV and you don’t follow live sports, why the hell do you have cable?!  You could get rid of your TV entirely. Or less drastically, you could get yourself a pair of modern rabbit ears and grab a couple of free channels off the air for idle channel surfing. Many OTA signals are now digital! Download any TV shows that you care to follow.

How much internet?

Secondly, how much internet do you need?  Internet providers in BC offer different tiers of service depending on the speeds you’re looking for.  The boyfriend and I do an average amount of downloading, plus we surf the web and occasionally play online MMORPGs.  We’re quite happy to stick with the “regular” speed internet.  Perhaps if you do a lot of downloading, you’d want a higher tier… or you could schedule your downloads for the night time while you are asleep and speed doesn’t matter!

Again, if you don’t go on the internet regularly… why the hell do you have internet at home?!  If you only use the internet to surf the web and check email once a day, you don’t need to have internet at home.  Just show up to work 15 or 20 minutes early and use your work computer.  I did this for 2 months after a move, and I’m a computer science major!  I use computers A LOT, so if I can live without internet at home, so can you.  Other ideas: Stop by the local library and make the most of your free membership to use their free internet.  Take your laptop to wifi hotspots (coffee shops, universities, etc.) and browse for free.  Options abound!

How to get the best prices?

Finally… prices.  How do you get the best price for cable and internet?

I have ALWAYS found that merely calling up the cable company does not get you the best price.  Frequently, third-party contractors who solicit customers on behalf of cable companies will offer better deals and promotions.  These contractors are often found at kiosks in malls or at special events.  This is where I signed up for cable and internet most recently.  For $19.99, I get basic digital cable and high speed internet for 6 months.  My digital box is free!  When my 6 months is over, I will cancel and then either my boyfriend or my roommate will sign up for the same deal for another 6 months.

If a deal isn’t available, I can cancel my service and go to the competition.  With the competitor, I will probably be able to get another good introductory deal for 6 months.  I may even get bonuses for leaving my current provider!  Conversely, my current provider might offer bonuses for me to stay.  Either way, a win-win situation.

And if you are not concerned with having regular internet and TV service, as is often the case for me, simply cut your service.  Within a few weeks, your cable company will call you up with a “special offer”.  I know a couple who has done this indefinitely and they’ve only ever paid $10 a month for cable.  For a few weeks or months out of the year, they do not have cable.  But in return, they’re saving tons of money!

Cable TV and internet don’t have to be a weighty bill every month.  Know your own needs and know how to play the system.

The Outlier Model

In Wikipedia1, an outlier is described as:

“An outlying observation, or outlier, is one that appears to deviate markedly from other members of the sample in which it occurs.”

What does that mean for personal finance?  For living simply?  For life?

For me, it describes much of what I hope to accomplish.  It means that by doing things differently than the “average” North American consumer, I hope to end up in a different place than the “average” person.

The average Canadian looks something like this:

So judging by those numbers, the average Canadian will work the majority of their lives, save very little, and retire rather late, with perhaps 15 years left of questionable health to enjoy their hard work.  With those numbers, why would anyone want to be average?

Instead, I want to choose to be different.

  • I will not be tied down to a 9-5 job.  Instead, I will be dynamic and maximize my income and skill set.
  • I will not work to buy Stuff. Instead, I will build assets that will pay me.
  • I will not work until I am too old to enjoy life.  Instead, I will make work unnecessary.

How I am going to accomplish this?

  • Save the majority of my income.  Right not, this is tougher because I’m going to school, but going to school…
  • Increases my skill set.  When I finish, I will have a higher paying skill set than my first undergrad.  This is let me…
  • Earn more income.  Not that money is everything, but it helps while I…
  • Reduce my expenses.  Right now, I only need about $800 to meet all my expenses in a month.  But I think I can do better.  The less I need, the more I can …
  • Invest! I put money away in RRSPs and savings which I use to…
  • Buy more assets.  The bf and I own a condo which we rent at a profit.  I intend on owning more.  This year, I am buying dividends which will spawn more dividends.  In the end, all these things will...
  • Pay me money.  With more money, low expenses, and an increasing asset base, I will not have to work.  I will be self sustaining.

And that is the ultimate goal.  The fun part will be getting there!

[Author’s note: This post should have probably been my first post on this blog!  But it wasn’t, so here it is now.]

***

1 Grubbs, F. E.: 1969, Procedures for detecting outlying observations in samples. Technometrics 11, 1–21.