Archive for February, 2011


Getting rid of the backup rug

Up until 2 weeks ago, I had a rug propped up against a corner in my living room.  I bought it 2 years ago when I lived in an apartment with hardwood floors.  I ended up vacating that apartment rather unexpectedly due to a fire, and aside from a brief appearance in my condo, I haven’t used the rug since then.

I kept it for a while because I liked the colours.  It had taken a long time for the bf and I to choose the rug in the first place.   Then I told myself that it was a waste to get rid of it, because surely I would live in a place with hardwood floors again one day.  It would be my backup against potential rug-less catastrophe! It didn’t fit in my downstairs storage locker, so it sat, unused, in a corner of my living room.

I had pictures to hang on the wall beside that corner. If I could hang the pictures up, I could also get rid of the box that they were in. But I told myself that I had to wait until the rug was out of the way.

I had a side table in my storage locker which would have been perfect in that corner. If I had the table, I would have more usable space in the living room, but instead, the table sat unused in my storage locker, because the rug was in the way.

Eventually, I realized that keeping the rug wasn’t netting me any benefit.  Instead, the unused rug was preventing me from enjoying and using other things that I owned. I didn’t have just one useless object, I had many!  As soon as I realized that, the rug was listed on Craigslist.

It’s always hard to get rid of things, but in this case, the benefit was immediate and exponential. Up went the pictures and in went the side table. Now, I have a useful, decorated corner instead of a giant rolled up rug!

What STUFF do you own that’s holding you back?  Maybe it’s an old “backup” TV you never use or an empty dresser you keep “for guests”.  It could be clothes you no longer wear or books you wouldn’t re-read.  Consider selling or giving away the things you don’t use or need in order to de-clutter your life and get more use out of your other possessions.

In terms of overall financial health, your net worth is a great indicator of overall success. To calculate your net worth, add up all of your assets (things that are worth money) and subtract your debts (loans, etc). Each month I share my net worth to help illustrate our financial health.

February is a good example of a normal month. I paid down debt. My investments grew moderately. I spent to my budget. As a result my net worth increased by approximately $1200. It would have been more, but unfortunately our Condo fees increased by 20%  retroactive to January 1st, so we owed a bit of money.

Benchmark Your Net Worth

It’s great to say that my net worth increased by $1200, but what does that mean exactly? Would this be a success if I took home $5000 in income last month? No! Looking at your net worth as a percentage of your income is a great way to benchmark your progress. In my case, an increase in my net worth of $1200 represents approximately 40% of my net income in a month. 40% is now my benchmark; I think I can do better and will set a goal of 50% over the long term.

Here’s a breakdown of my net worth for the month:

Assets:

Assets Previous Month Current Month Change (%)
Cash $6,311.61 $6,101.60 -3.3%
RRSP $5,865.96 $6,092.45 3.9%
TFSA $1,439.26 $1,553.03 7.9%
Condo $258,0000.00 $258,000.00 0.0%
Personal Assets $500.00
$500.00
0.0%
Total Assets $272,116.83

$272,247.08 0.1%

Liabilities

Liabilities Previous Month Current Month Change (%)
Credit Cards $1,075.45 $849.52 -21.0%
Family Loan $14,853.57 $14,853.57 0.0%
Student Loan $5,400.91 $4901.65 -9.3%
Mortgage $238,748.64 $238,356.97 -0.16%
Total Liabilities $260,078.57 $258,961.71 -0.43%

Total Net Worth: $13,285 (+10.4%)

It’s not much, but considering where I was last year, I can’t complain. Check out The Financial Blogger for a look at a net worth with some serious money!

Updates: Feb 20-26

It’s snowing outside, the bf is gone till tomorrow, and it’s cold… damn cold.  At least for me.  I blame my tropical ancestors.  After visiting a friend and watching the hockey game, I trudged home in the snow and was dismayed to discover a container of cooked rice of unknown age in the fridge.  *shakes fist*

So it was that at 10pm on a Saturday, I made fried rice.  Take note – if the rice is not moldy, it is fry-able…  🙂

Blog-wise: Now that we’ve gotten a start on posts and whatnot, it’s time to extend some link love.  Here’s a few things I’ve been reading this week:

  • I really like this post on the value of the college degree from Trent at The Simple Dollar.  I definitely agree that the value I got from my undergrad program lay in the experience I gained and the people I met.  Sure, I needed the piece of paper to even consider applying for the job.  But I wouldn’t have had landed the job if not for my experiences outside of the classroom and the people I knew.
  • The bf and I almost always use vacation or apartment rentals when we travel for more than a few days.  We like how it’s more “authentic” and also provides us with amenities such as a kitchen.  Wealth Informatics reminds us to be careful to avoid scams when renting a vacation home.
  • Money Smarts Blog wrote about some useful websites for checking out your financial advisor.  I will definitely be referring to this when I get around to getting my financial situation reviewed.
  • MP Dunleavey guest posts on Get Rich Slowly and explains how the Dow and related stock market indexes came to be.  I’ve always wondered!

All for now -I’m going back to hiding from the cold.  Brr!

Indulge yourself

Budgets are tough.  It’s easy to want things and so much harder to say no.  Saying no to yourself does get easier over time, but it helps if you leave enough room in your budget for the occasional indulgence.  It’s like a diet.  Everyone knows that eating lots of fruits, vegetables and fiber will keep you healthy, but the occasional chocolate bar does no harm and may offer some benefit as well.  Similarly, treating yourself to a small spending indulgence or luxury once in a while keep you sane and keeps the process of saving enjoyable.

Don’t spend for the sake of spending, but pick something that will genuinely make you happy.  I have two main areas that I like to splurge on once in a while.

Hair, esthetics, and spas

Three to four times a year, I get my hair cut and coloured at my favourite salon with my favourite stylist.  It costs me over $200 including tax and tip.  Yikes!  Over the course of the year, that’s at least half a mortgage payment!  But there is little better than having your head massaged, your hair pampered, and coming out of the hair salon with picture perfect hair two hours later – at least for me!  Ditto for the occasional facial or laser treatment.

Frugal hacks: You can get AMAZING haircuts from top salons for free, or almost free, simply by volunteering to be a hair model for their apprentices.  These cuts usually include a head massage and styling.  When I don’t feel like I have the money to splurge on cuts and colours, this is what I do.  You can also get cheap massages and esthetic treatments from make-up and esthetic schools.

Coffee, tea or a beer

I don’t go to the coffee shop to get a daily fix, but I do like going there once a week or once every two weeks to enjoy a really good, well made latte or mocha.  I can’t make these at home.  Instead, going out for a latte with my friends lets me enjoy a decadent drink (one cup is more than I spend on food in a day!) while having quality social time with the people who are important to me.

Frugal hacks: First, many coffee places will give you free refills if you bring a mug or sign up for a membership.  Take advantage of it to stretch out a lazy afternoon at the coffee shop with friends.  Secondly – not so much a hack as a suggestion – It’s easy to spend too much, especially on alcohol, when out with friends.  Focus on conversation and interaction rather than mindlessly sipping a drink while watching the overhead TV and chances are, you’ll spend much less.

***

Those are the two things I indulge in the most and I never regret either of them!  Importantly, I don’t “steal” from my budget to indulge in these things.  Coffees always come out of my pre-allocated spending money and hair cuts come out of my flex money, supplemented by money from my side jobs.

What do you indulge in?

Meet my four jobs

I have four jobs. Thats right… four.  Perhaps surprisingly, I don’t work 80 hour weeks! Most of my jobs require very little effort and provide a much bigger return. Meet my four jobs:

My full time job

Currently I’m working as a software developer. This is the job that gets the basics done – One paycheck covers all of my bills plus some money for spending and saving and the other paycheck is used for retirement savings and upcoming tuition expenses.

I’m only going to have this job until May, at which point, I have to take my remaining classes. However, I have lined up a job which starts in May but is half-time, allowing me to take classes while I work. Since my living expenses are so low and since I will not have to save for tuition expenses any more, working half time will still pay for all my basics plus allow me to save a bit as well.

My part time job

I’m on the casual list at the hospital. 2-3 times a month, I’ll come in and work. I choose when I work and I don’t take more shifts than I feel like. And it pays $20/hour!  The main reason I keep this job is because of the flexibility and the high (for a part time job) pay.  If I ever need extra money, this is my go-to job.

It’s not related to my current field of computer science, which is why I will not use it to fund my cost of living while I am in classes. But since I can choose when I work, I will keep this job indefinitely.

I use this money to put extra payments towards my student loan, to save towards my next condo, and to save money for upcoming living expenses while I’m in school.

My contract job

I write for a scientific organization as a contract writer. Once a month, I write one blog for their website. It’s fun because I like to write, the topics are engaging, and it only takes me a few hours of concerted effort per article. It pays by the traditional per-word standard of freelance writing.

I use this money for luxuries – colouring my hair for example. I also put some of it aside for dividend investing and sometimes I’ll put some of it towards student loans as well.  I take a little bit out for spending.

My casual jobs

I write for a local music magazine website as a concert reviewer.  I don’t get paid, but I do get free concert tickets.  I haven’t had to buy concert tickets in ages.   For a bit of writing, usually half an hour to an hour, I get my entertainment for free and I get to express my opinion about music.  I often get more than one ticket as well, which makes for a free date night or a free outing with friends!   The value of the tickets range from $10 to $60 per ticket.

I also pick up mystery shopping jobs.   Often, these shops are for restaurants.  I get a set “allowance” and instructions on what type of foods I have to order.  For example, I might have to get one drink and one appetizer.  Whatever money I have left after paying for those items is my profit!  The value of the meals and drinks range from $20 to $70, and my profit usually ranges from a $5 to $20.  After my visit, I write a short report, which takes about one hour.  Again, for a bit of writing, I get more of my entertainment expenses covered for free.  Many of these visits even require you to have a dinner guest, which makes for another free date night!

It’s worth it!

The key thing to note is – most of those extra jobs serve a specific purpose. They are flexible, thus allowing me the opportunity to make more money when I need to. They provide me with entertainment for free, or opportunities to eat out for free. They allow me to write and to express my opinion. These are things I enjoy or value!

In the short term, my extra jobs let me minimize my spending requirements and save more for things like tuition and retirement. In the long term, my extra jobs are a buffer against an uncertain job market and unexpected life events.

The power of negotiating

At my job, we employ one person whose task is to get us the best deals on all of the conferences and meetings that we organize. Recently, he managed to secure a venue at almost half off the listed price – a reduction of approximately $50,000. This was a pretty big revelation for me, seeing how much power the consumer really has. When asked if anyone pays full price for such venues, he replied, “Some do! The key to getting something for less than the advertised price is to ask. What’s the worst thing that will happen? They’ll say no.” There are countless opportunities every day for you to start practicing your negotiation skills, so where can you start? You may be surprised at some of the places where I’ve found that negotiating works!

Online Classifieds

Sites like Craigslist offer a great starting point. Negotiating over emails is a great way to get your first deal; you have time to compose and think about your offer. The nice thing is, most posters don’t expect to get paid full price! I know that when I post an item, I automatically think that I’ll likely sell it for $5-10 less than I say in the ad.

Travel Agencies

Once again, posted ‘sales’ are usually not the best deal you can get when booking a holiday through an agent. Take the time to visit the office in person and ask for a better deal. Shop around with other agencies and sites and be ready to quote them. In competitive industries, getting your business is more important than making their profit margin.

The Grocery Store

Yep, you read that right. Recently, I visited the flower department of my local big box grocery store. I was looking for an orchid, to give to CF’s mother in celebration of New Year’s.  I found the best little orchid (half sized) priced at $16.99, which I would have been happy to pay. After discussing the price with CF within earshot of the sales rep, the rep offered to sell it to us for $9.99. Sold!

Negotiating can be a lot of fun. It made the top 30 financial things to try before you hit 30 over at TFB. Looking for some more tips on negotiating? Check out some of the links below:

How to Negotiate

Tips for travellers

Happy bargain hunting!

Ode to a chef’s knife

My six year old chef’s knife broke yesterday during the making of shepherd’s pie.  It was a good knife while it lasted – $11 from London Drugs, but had superb balance and strength, was easy to sharpen, and had no issues with rusting or staining.  *Tear*  I’d like to blame the bf and his questionable culinary skills, but after a thorough post-mortem (it had a half CENTIMETER tang, if that!) and autopsy (so those rivets weren’t actually riveting anything?) I was forced to conclude that my London Drugs chef knife probably held out longer than it should have.

At $11 six years ago, my knife had a use-cost of just under $2 per year.  I used it every day.  In comparison, I have a knife set I bought for $5 from a bargain shop.  I haven’t used the chef knife from that set in AGES. In fact, I rarely use any of those knives at all because soon after I bought them, they became rickety and unbalanced.  Even though the entire set was cheaper than my one knife, my use-cost for that set is probably closer to the full $5 I paid for it.

Today I will be going to get a new knife.  I can’t really justify getting a fancy $200 knife – I’d have to use it every day for 100 years to get the same value out of it as my old knife! – but I will be looking for something slightly sturdier.

I’m big on doing “the little things right” – pulling the shower curtain closed so it can dry properly, closing lids of containers after I use them, turning off the lights when I’m not in a room… and more!  My mind is often organized as one giant checklist that I like to periodically refer to.  That’s the way I am.  I am forever thinking about the little details.  But not everyone is wired that way.  Many people simple don’t connect leaving a room with turning off the lights.  It’s just something that doesn’t enter their minds as they go about their daily life and that makes it hard to change.  As someone who likes the “little things” done, sometimes the best way to encourage people to change is to create a new normal.

When I started at my current job, the sugar jar was always left open.  I am not sure why.  To me, an open communal jar of sugar evokes images of all sorts of nasty things falling into the jar, getting mixed in with my sugar, and ahhhhhh… But I’m anal like that!  There are good reasons to keep the sugar jar closed though: (1) the sink is right beside it, and you wouldn’t want water from dirty dishes getting washed to splash into the sugar (2) there’s often baking set out in the kitchen, so there are usually crumbs on the counter which could attract bugs – an open jar of sugar is prime bug food!  So how to change the situation?

At other work places I’ve been to, people will often leave notes.  “Clean up after yourselves!”  “Remove food from fridge after one week!”

But it’s been shown that notes and signs decrease in impact after each viewing.  Plus, it’s kind of passive aggressive…

Instead, I decided to close the sugar jar each time I was in the kitchen, even if I was not using the sugar.  By closing the sugar jar whenever I saw it, I ensured that when other people came to use the sugar jar, they would find it closed.  So if they wanted to use it, they had to open it.  After a week or two, I noticed that the sugar jar started being closed when I passed by the kitchen.  After three months, I never found the sugar jar left opened.

What happened?

I don’t have a scientific explanation.  I would speculate that by setting a new standard for what was “normal” – in this case, the state of the sugar jar as closed rather than open – people became more reluctant to leave it in an abnormal state.  By forcing them to open the jar, it also drew attention to the closed state of jar when they found it.  Afterward, perhaps they felt guilty or perhaps they were just instinctively reacting to the environment.  Either way, it works!

How to butcher a whole chicken

If you are strictly being economical when eating chicken, it is usually cheapest to stick with drumsticks or thighs, which can almost always be bought on sale at $1.50/lb or less. Usually, I get chicken drumsticks at $0.49-$0.79/lb. But it’s easy to get “bored” of eating drumsticks and understandable to want a variety of white and dark meat. Buying whole chickens can be an economical way to get a variety of cuts of chicken. Knowing how to butcher a whole chicken lets you use the bird economically and efficiently, without feeling like you have to roast or bake the entire chicken at once.

I bought this bird for $7, which is pricier than I normally would buy it, though anything between $5 and $7 for a whole chicken is a decent price.

Step 1: Preparing the workspace

Prepare ziploc bags, plastic wrap, containers, spare veggie bags or whatever you want to use to hold the chicken pieces. Make sure you have a sharp chef’s knife and a good sized cutting board available. Have a small “garbage” bag ready for tossing in bits of fat and trim.

Step 2: Preparing the chicken

Wash the chicken and pat dry. Lay the bird breast-side up on a cutting board.

Step 3: Removing drums and thighs

Using your non-cutting hand, extend the leg. With your other hand, cut through the skin between the thigh and the body. This will allow you to fully extend the leg from the body. Then, with the leg fully extended, cut through the joint between the drumstick and the thigh. If you find the cartilage between these two parts, the knife should slide through easily.

To remove the thighs, you have two options depending on what hardware you have available.

With only a chef’s knife: Pull the thigh away from the body and turn the bird so that the back is facing upwards. Bend the thigh towards the back until you hear the joint pop out. At this point, you can cut around the joint with the blade flush to the ribs to remove the thigh.

With a butcher knife: Pull the thigh away from the body but do not separate the joint. Instead, with the breast side still facing upwards, cut through the back of the bird using the butcher knife to remove the thigh.

Step 3: Removing the wings

Pull on the on the wing to extend it away from the body. The “shoulder” joint of the wing is actually withing the breast muscle. To cut through it, you will also need to cut through some of the breast. This is normal. Simply make an incision through the breast close to the joint and cut straight through. Then, the drummette and the wing can be detached from each other by cutting through the joining cartilage.

Step 4: Removing the breasts

Turn the chicken back around such that the breast side is facing up. Find the midline of the bird and place the knife flush against it. Using the sternum and ribcage as a guide, make shallow “slicing” motions to separate the breast from the bone.

Step 5: Packing up

Almost finished… But don’t throw away the carcass! Trim off the excess skin and fat, pop it into a plastic bag – the ones from the market for fruits and veggies works well – and stuff it in the freezer. It can be used for making chicken stock. I like to package the rest of the meat as drums and thighs, wings, and breasts, separately.

Everything goes into the freezer, and you’re done!

Recently, I took a weekend ski vacation to our nearby mountain – Whistler. As you know, the trip turned out to be a complete success, however it certainly did not go according to plan. My experiences in the lead up to the trip really got me thinking about the difficulties of planning a trip with your friends, particularly where money is involved. It seems to me that everyone could benefit by establishing some common courtesy rules when planning a group vacation. We ended up losing three friends in the process and I don’t wish that on anyone.

The Background

Since the trip to Whistler was a birthday present, the gf decided it would be great if we could bring up a few of our friends and make a weekend out of it. So, we invited a few friends and went about planning the trip. The friends that we chose were great to hang out with, but have a very different philosophy than I do when it comes to money. In the end, the process made us so uncomfortable that we decided to go it alone and plan our own trip. We haven’t spoken since.

Situations like these are completely unnecessary and avoidable and I want to make sure everyone has the tools to prevent this from happening to you! Reflecting back on the experience, I believe that the following rules should be applied when money is involved between friends and offer the following examples of how it went wrong for me.

Agree on key parameters

Defining what you want the trip to look like is key. Will this be a trip where 10 people pile into one hotel room, or will you book a private condo with enough beds for everyone? Some friends will like the idea of cramming into one room and splurging on entertainment instead of sleeping quarters.  Other friends may prefer the luxury of a hotel room or want specific luxuries, such as a hot tub.

What went wrong: We did not agree on these key issues up front. Our friends ended up taking the lead on booking accommodations and booked an expensive private rental, with hot tub and private bedrooms for everyone rather than the much less expensive, but admittedly more crowded, Living Social hotel deal that we found.

Designate a lead planner

There is nothing more confusing than having five different people trying to make one decision. Identifying a leader early in the process will help avoid confusion and provide for a clear flow of information.

What went wrong: The gf began planning the trip, but then left the accommodation planning to our friends. Our friends did not live by the first rule!

Don’t ask to be repaid before the trip

Just as you designate a lead planner, often it is easier to have one person pay all the major expenses and then be reimbursed later. This lets all of the expenses be divided up fairly, assuming you have already implemented the first rule. Do not expect to be reimbursed immediately, especially if there are a lot of people coming!  It’s just not realistic.

What went wrong: Our friend offered to put the charges on their credit card, and then expected to be reimbursed immediately because they claimed their credit card bill was due a week. If you carry a balance on your credit card and will need to be paid right away, it’s best not to put more expenses on your card.

Treat your friends like friends

The most important rule when planning anything with friends is to make sure you treat them like friends! In order to apply the rules above, there needs to be a base level of trust and maturity between all parties. In our experience with this trip, we found out that our friends were not really that great of friends at all.

Please share your stories below if you have additional rules or stories about planning trips.