Weekend Review 28.03.09

So The Great Blog Off has entered its voting week. According to my count, I have one vote. From my brother-in-law. Well, I'm depressed, so let's move on.

On Associated Content, one of my articles was featured! This is terrific news, as it has significantly altered how many views I have gotten on my articles. The last time I posted, I had made about a quarter, and now I have earned over double that, mostly from the one featured article. I guess the lesson here is that it is all about exposure. Not only do I have to write a lot of different articles, I have to ensure that they are of a high enough quality to be worthy of featuring. I also have to start finding and adding my own photos, because the one they chose to add there really, really sucks.

The saving $100 challenge could have come to a close this week, if you have followed all of my posts on the subject. I know that I've saved well over $100 a month using these tips, and you easily can too. I think that I will post an official ending to the $100 challenge sometime next week before month's end, just to wrap things up before I move on to another series next month.

Around the Web in Personal Finance

Get Rich Slowly had a great post about the mentality of oversaving. He talks about how as he moved from spender to saver, he may have crossed a line and gone too far. He discusses the small, but important difference between being frugal, and being cheap.

"But at some point I crossed the line from frugal to cheap. I’ve spent the past few months seeking balance: allowing myself permission to spend on a few indulgences while choosing to cut back in other areas."

He also concludes that oversaving does not lead to happiness, and that as long as our saving goals are being met, feel free to spend the rest wisely in order to enjoy living life.

For small business owners, especially those that are just starting up, check out The Simple Dollar's post on confidence. He begins a discussion on the phrase "fake it 'til you make it", referring to how one must exhue confidence in order to build confidence.

"In other words, fake it ’til you make it is a call to arms to act confident in your endeavors, because that confidence will eventually lead to success. It’s a good example of the power of positive thinking"

I think we all struggle with our skills and talents - even more so when we're trying to set a price on our abilities.

Clever Dude Finance posted an article on ways to save money on transportation at college. That reminded me of all the ways that I saved money while at college, like living in a one bedroom apartment with two other guys. Speaking of college, Pimp Your Finances has a post about crucial questions for twenty somethings. I've thought about a lot of the questions before, but definitely not all, and definitely not all at the same time.

So what did you learn this week? What did you like? What did you miss? Anything you'd like to see more of? Less? Sound off.

Grocery Roundup

I'm looking forward to breakfast on Saturday morning. For me, most breakfasts are eaten alone, in the dark, something quickly poured into a bowl or spread on toast. On Saturday, however, I'm planning on making some bagel egg sandwiches with some hash browns and perhaps a nice bit of fruit on the side. Looking into my fridge and freezer, however, informs me that some shopping needs to be done first.

I was planning on writing up how I save money when I go grocery shopping, but I feel as though that topic has been done to death by many writers far more experienced than I. So here are some of their thoughts on how to save money at the grocery store.

Yahoo! Green suggests forcing yourself to shop on a two week schedule, to ensure that you use up all food without it going to waste before you but more to replace it:

"Raise your hand and repeat after me: "I solemnly swear to consume the remaining portions (if any) of meals I failed to previously consume within 24 hours of my failure to consume them."

Seems a little too regimented for me, but hey, if it works for you... I actually think that my mother did this while I was growing up.

Get Rich Slowly rounds up his favorite ways of saving up to $100/month at the grocery store:

"Buy your produce on sale. Purchase produce that is on sale that week. This is often based on what type of produce is in season. This will not only help your pocketbook, but it will also help you explore new foods and experiment in the kitchen."

My roommate Jeff did this the other day, buying himself some "apple pears", or "perapples" if you will. He did not like them.

Bargaineering has 5 easy ways to cut your grocery bill. The one that would be the favorite of my fiance is:

"2. Use less meat.By weight, meat of any kind is the most expensive part of your meal. You should try to use less of it."

I have to admit, because my fiance is a vegetarian, I've started to eat less meat. I've actually never felt better in my life, physically. I have more energy and I never feel bloated like I do when I eat a lot of meat or pizza. Try having one day meat free every week, it makes a huge difference in your diet - and your budget.

To add to the list, I'll suggest that you buy staples in bulk when they're on sale. Awhile back I found our favorite pasta sauce for $2/can, when it normally is $3.5-4/can. So I bought as many as I could carry home, and I haven't regretted it yet.

Back in May I was spending about $300-350/month on groceries. Now I'm down to a much more reasonable figure, about half of that, which is where I would love for it to stay.

How about you? How do you save money on groceries? Why not try just one of the many examples, and see if you can't help yourself save $100 this month.

Potential savings: $17+ per month. Total savings this month: $100

About Me

As The Great Blog Off enters its final week, I just wanted to give you some insight into who I am, and how I got to be blogging about personal finance on the interwebs. Its not like I woke up one day thinking to myself, "gee, I wonder where I can find the best interest rate in a savings account?"

I believe it all started back in college. At the time, having no income forced me to live in such a way that I could save as much money as possible. I spent four years sharing a one bedroom apartment with at least two other guys, eating a lot of Kraft Dinner, and washing my laundry only when absolutely necessary. Post graduation, I moved to one of the most expensive places in British Columbia - North Vancouver. Along with a 3x increase in monthly rent (while still sharing a one bedroom apartment with a roommate), I also got the highest paying job of my life. I was soon living a much less frugal life, with regular pizza and beer nights, a high definition TV, and a trip to Hawaii. I was making more money in two weeks than I had made the entire year working part time at college.

Six months after it began, it was all over - literally. I was unemployed, and quite broke. All the money that I made was now gone, to video games and a full freezer. Thankfully, I hadn't gotten myself into anymore debt, but suddenly student loans needed repaying, and a wedding was on the horizon.

My television was still getting its regular use, however, and my unemployment was spent watching far too much TLC. One show managed to catch my attention, and I started to watch it on a regular basis. It was called, "Til Debt Do Us Part", and it featured Gail Vaz-Oxlade telling couples who got themselves into a lot of debt how to save their money and their marriage. It intrigued me deeply, and I started getting more and more interested in my own finances. I knew that I was in student loan debt, but I was otherwise okay, as I wasn't racking up credit card or any sort of consumer debt. I wasn't spending more than I was making. However, at the end of every month I would have always spent all of my money, and I didn't know where it was going.

So after I got a new job and started working full time again, I started tracking my spending. Soon I found out that I was spending way more money on things that I shouldn 't be (mostly toys and food), and decided to cut it out. At the same time, I wasn't making as much money I used to be, but I was used to spending a lot more money. I was forced to live more frugally, so I started cutting things out, but I still felt financially stressed.

So I started reading lots of personal finance blogs, learning about how I can save more money. I started enacting some of the things that I was reading about, like setting up an emergency fund, calling my service providers and getting them to reduce my expenses, and automating all my finances. I have started to see a difference, perhaps not in my bank account, but in my attitude. I have found a joy in saving money, and I feel in control. I'm making less money than I was before, and when I get my paycheck I still get worried about all the bills and how I'm going to save for a wedding, but I feel as though I'm headed in the right direction.

I'm excited for the future, because I can see a day where I won't feel financial strain or stress. I can see a day where I can afford to live how I want to live, and feel financial freedom. That day is coming, and I hope that you can come with me as I learn by living.

How to Start An Emergency Fund

Do you want to feel free financially? Do you want to reduce stress on your life, feel more comfortable at the end of the month, or even start to sleep better? All you have to do is start an emergency fund.

What is an Emergency Fund?

An Emergency Fund is a savings account set aside for emergencies. Quite simply, it is a set amount of money that you will not touch unless you absolutely need to. Emergency, in this case, does not mean a sale at Winners, or a new CD that you absolutely must have. It is something more significant, like unexpected car maintenance, sudden unemployment, emergency dental work, etc. An emergency fund is money that you would otherwise have to borrow to deal with the inevitable unexpected expenses of life.

Why Do I Need an Emergency Fund?

Life, as we all know, is full of unexpected surprises. I entered into my last year of college with an old(er) PC that had been sitting around all summer. After we got moved in, I set up my computer, plugged it in, and turned it on. It worked for about 6 minutes, and then "poof". Black screen, smell of burning, no more PC. Whether it was the power supply or the motherboard, I will never know, but I do know that I was suddenly facing 8 months of papers without the ability to type.

A few months later I was driving my then girlfriend now fiance to the Horseshoe Bay Ferry in my sister's little Toyota. The engine decided to leave all of its oil somewhere in between the terminal and exit 4 on the No. 1 Hwy, and suddenly car repairs were a necessity.

Emergency funds allow us to not only pay for those expenses when they do come up, they allow us to relax beforehand, knowing that when they come, we will be okay. After I returned from a vacation in Hawaii, I was facing the rather immediate prospect of unemployment with a very small amount of money in the bank account. An emergency fund would have significantly reduced my stress over the six or seven weeks I went without work.

Isn't that What Credit Cards Are For?

No. Credit cards are necessary evils, but should never be relied upon. For one, anything you put onto your credit card can be charged interest. So if your emergency is costing you $200 and you can't pay it all back within the next 30 days, then you'll be paying $220 for your emergency instead of $200. Twenty bucks not so bad? What if the emergency is $2000, and you have to pay $2400 after interest charges? What if you can't pay it back at all?

In addition, credit card companies enjoy doing mean things to their customers. Like, cutting your credit limit - even below your balance, or canceling your card altogether while you're traveling. What a lot of people forget is that your credit limit is something that is arbitraily decided by your credit card company, and can be changed whenever and however they see fit. Your credit limit does not have a guarantee on it. The bottom line is that you cannot rely on credit to be there when you need it.

How Much Money Do I Need For An Emergency Fund?

If you read personal finance blogs, you'll read advice that ranges anywhere from $1000 to six or nine months worth of monthly expenses. Trent from The Simple Dollar wants an emergency fund that would cover 12 months of expenses. JD from Get Rich Slowly has an emergency fund of $5000, enough for three months of his mortgage payments, or two months of full expenses. The truth is that your emergency fund is a form of risk management, and its size is dependent on how much risk you are comfortable with. Apparently, for the majority of us, we are willing to take a huge amount of risk, because we don't have an emergency fund. I, for one, am not terribly comfortable with that risk, and am therefore starting to save an Emergency Fund bit by bit.

You are the only person that can decide how big your emergency fund can be. Many factors will contribute, including the stability of your income/employment, your monthly expenses, if you have any dependents relying on you, etc. The point of the emergency fund is to reduce your stresses, so save up enough so that you feel comfortable. The article that I first linked to by MSN Money recommends that you save up at least $500. The study referenced suggested that $500 in the bank will improve your life, both financially and mentally. I agree.

How to Start an Emergency Fund

If you've already opened a high interest online savings account, and if you have been following the advice to start saving some money, then you are already set up. All you have to do is create a sub account labeled "Emergency Fund" and start up an Automatic Savings Plan (ASP) to regularly deposit a small amount of money into the account. It doesn't need to be a lot, and it doesn't need to be a full $500 right away. I've been allocating $25 per paycheck to my Emergency Fund, which is currently around $200. It is money that I won't miss because it is gone before I even had the chance to count it, and it gives me an incredible sense of peace because I know that I have a few hundred dollars waiting for me, just in case.

So go ahead, set up your bank account to take a few bucks off each month. If you're worried about your finances, start small, with ten or fifteen dollars. I promise that you won't miss it.

Potential savings: $20+ per month. Total savings this month: $83

How to Reduce Fixed Expenses in Three Easy Steps

What is a good hourly wage to earn while you are not working? What's your time worth? Need to save some extra money quickly? Want something to put into your online savings account? Then perhaps you should invest a little time and a little effort over the next few days and you could earn yourself anywhere from $20 to $100/hour simply by saving money on your fixed expenses.

Expenses

When we talk about expenses, there are two basic categories. There are fixed expenses, and there are variable expenses. Fixed expenses are the bills that you pay on a monthly basis, bills like your cell phone, your TV, your internet, your electricity, your rent, etc. Variable expenses are expenses that change on a monthly basis due to different circumstances. That would be purchases like food, clothing, or entertainment. So when you are looking into saving money, you should consider cutting both variable and fixed expenses.

Personally, I like cutting fixed expenses, because it offers the highest reward for the least amount of time. You cut one monthly expense, and you can continue to reap the benefit every month thereafter.

How To Easily Reduce Fixed Expenses

There are two main ways to easily reduce fixed expenses. The first is to eliminate everything that you don't need. The question of what you need and don't need is a complicated one, and is something that you have to come to terms with yourself. The second method is relatively simple. You get in contact with the person that is providing you the service you require, and ask them to let you pay less.

This may sound ridiculous, and there are plenty of reasons why the company you are dealing with would never just give you back your money. However, about two weeks ago I called my TV and internet provider, and within 15 minutes I had reduced my bill by $40 a month for the next six months. That's a total savings of $240, for a few minutes of work. But wait! Before you call your provider, you are going to need to be prepared.

Step One: Determine Which Bill You Are Going to Reduce

There are plenty of possibilities here. Almost all of us have some sort of fixed expense that we could use reducing. We might be paying for a mortgage, for rent, for utilities, for phone service, for internet service, for television, for rentals or anything else. Now, narrow down your choices by prioritizing the bills by how much extra you think you are paying and by how easily they might be reduced (mortgage would need to be refinanced, so not so easy). Once you have an idea of which expense you are going to try to save money on, go ahead and get the last copy of your bill.

What I did was head on over to my cable provider's website (I get e-bills). I was actually able to look over the last year of my account with them. It listed all the different charges that I had through the company, as well as the different promotional discounts that I was also eligible for. I found out that I was paying $55/month for internet, and because of a promotion, $19/month for full cable television. The total was about $80/month after taxes.

Fig. 1 - Cable/TV bill post-negotiation

Step Two: Research Alternatives

After I saw how much I was paying for cable, I checked out all my options for internet and television. I looked at Telus's internet packages, and their television promotions. I also looked at Roger's website, but they don't offer what I'm looking for. Finally, I remembered to check out Shaw's bundle pricing, to see if they were offering anything to new subscribers that they weren't offering me. What I found out what that I was already paying a pretty low price, because of the TV promotion that I had signed up for back in the summer. If I kept the same features, I'd be paying at least $80 a month (same price I was already paying), and with Shaw, I would be paying $97 a month!

So am I resigned to continue paying my $80/month bill? No! There are yet other alternatives. Do I need the internet? Do I need television? I found out that I wasn't watching too much of the tele, so perhaps I could eliminate it altogether and save myself $20/month. Do I need the internet? Well, yes, but do I need to pay an extra $10/month for a slightly faster internet? No, I probably don't. So there's $30/month.

If you're looking to do the same, check all the competitors in your area. If you live in British Columbia, in Canada, then check out the following major providers. Be sure to check for local providers, as they tend to offer nice deals that only small providers can.

Internet:
Shaw Cable
Telus
Rogers
Bell

Television:
Shaw Cable
Telus
Bell
Star Choice

Cell Phone Service:
Rogers
Fido
Bell
Telus
Virgin Mobile
Koodo Mobile

There may be more options out there, but that list should get you started.

So you've determined which bill you are going to reduce, you've found your latest copy of your bill, you found out the best deal that you can get, and now you're ready to call your provider.

Step Three: The Phone Call

Before you pick up the phone and dial the number, take a deep breath and remind yourself of a few important principles. First, you are not entitled to a deal, you are asking for one. Act and speak humbly. Two, the person you are talking to is a human being, so treat them as one. They are just doing their job, and if they deny your request, feel free to be persistent, but do not be pushy or arrogant. You can always hang up and try again with another call center representative.

Now, call the number. Your first intention is to get in contact with someone who can get you a deal. Either use the phone tree to direct yourself to "downgrade service", "cancel service" or to a "retention" representative, or just mention that you'd like to eliminate or cancel your service to the first person you speak with. This is because the regular reps will not have the power to change your service, cancel it, or give you a discount. The employees working for retention can.

When you get the right person on the phone, state clearly what you're looking for. I said that I couldn't afford to keep the services that I had, so I was looking to eliminate the television service from my account. I also mentioned that I could get Telus internet for cheaper than Shaw. At this point, the rep got a little upset, and started explaining why Shaw was so much better than Telus. I just calmly explained that cheaper is cheaper, and that I needed to save some money. I also admitted that I did not want to switch services, as I had been with Shaw for awhile and did not want to go through the hassle of switching. So I asked if they could do anything for me to keep my business.

The rep went on hold for a minute, and came back with an offer to keep my TV bill $30 lower than it ought to be for six more months, and to give me an upgrade to a higher speed internet (which I was paying $10/month for) for free. So $40/month savings, total. I gladly accepted, thanked the rep, and called it a day.

15 minutes research, 15 minute phone call, $40/month for 6 months = $240.
"hourly rate" = $480/hour

Think you can do better? Sound off.

More Information

How to Reduce Your Credit Card Interest Rates
How One Guy Reduced His Television Bill By 15%
Television Alternatives
How to Optimize Your Cellphone Bill

Potential savings: $20+ per month. Total savings this month: $63

The Biggest Barrier to Financial Freedom is Ourselves

If personal finance was easy, everyone would be a millionaire.

Financial freedom, as I'm learning, is a relatively easy process. All you have to do is spend less than you earn, save as much as you can, and then make that saved money work for you. All the rest, how to get out of debt, how you keep track of your money, what kind of car you drive, are details that might slightly affect how fast you achieve financial peace. There's no huge secret, and there's no magical formula. Spend less than you earn. Save as much as you can. Make that money work for you. Three simple things, and yet each of those is so incredibly hard.

Why? We're fighting ourselves. We know we have to spend less money than we earn, but we're given credit cards, and told that we need to build a credit history. We know we should save as much as we can, but then on what shall we watch TLC? We know we have to make our saved money work for us, but hey, I worked hard for that money, I deserve to go on a vacation.

The reality is, we have nobody but ourselves to blame for our financial situation. When I was in high school, I hated going to school. I eagerly anticipated leaving high school behind and going to college. It didn't matter to me how much money college cost, I was going to college, and I was going the year that I graduated from high school. While I was in college, I continued to not care how much each semester cost. Once I started, I figured I might as well go to the end, even though each semester was about six thousand dollars. So after four years of college, I ended up with seventeen thousand dollars of student loan debt, and no plan on how I was going to pay that back.

Sure I can blame the fact that I made the decision to go to college when I was 17 and didn't know what I was doing, or how much college really costs. I could point out that I had never even held a job for longer than four months at that point, and that I had never had to pay rent before. I was financially ignorant, but ignorance does not pay back my loans.

Now that I'm slightly older and slightly wiser, I find myself continuing to make less than wise decisions. While I do feel as though I have a better understanding of my finances, and a clearer goal of where I want to go with my money, I still make decisions based on the short term, and rarely think too far into the future. I buy dinner out because I don't want to cook, not thinking that twenty dollars could go towards debt repayment. I buy a game for my PlayStation because it looks like fun and I want to entertain myself, not realizing that it could have been fifteen dollars towards our wedding fund. I'll buy a beer or two without considering that the next day I have to work with a bank account ten dollars smaller than it was the night before.

My solution? I trick myself into saving by putting automatic withdrawals on my bank account for payday, leaving me with less money to work with in the first place. My ability to justify lattes and pizza is greater than my desire to save for my retirement.

Becoming financially free is not going to be easy. If it was easy, it wouldn't be worth doing.

The Credit Crisis Explained

So, apparently the economy is in a "recession".

Now, I know enough about what is going on in the United States there to understand that it does not really affect me. In fact, it someways, is quite good for my personal situation. However, a lot of people seem to not understand what is going on, and that ignorance has led to fear. So, in order to help you understand what exactly happened, please watch this video.


The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

How Does/Will This Affect Me?

As the video explains, the credit crisis in the states has resulted in two primary consequences. First, housing prices has dropped. This does not really mean anything to us up here in Canada, because our housing market is quite separated from the United States. Economically we are closely tied, so the value of homes may drop as well, but not nearly to the same extent. Only a few people are losing their homes (as far as I am aware), and most people who owned their house were planning on staying in it anyways. The dip in the housing market will only affect those who were already planning on purchasing or selling real estate within the next year or so. After that, things should be back to normal.

The good news is that for those of us that are renting, the rental market (at least in North Vancouver) has dropped significantly over the last 8-12 months, meaning that I can now afford more home for less money!

The second consequence from the credit crisis is one of the more publicized areas of effect. The stock market has taken a bit of a tumble. You may have heard of this "Dow" figure dropping. The Dow is merely an indication of how well the stock market is doing, and currently, it is not doing so well. A lot of people have invested money into the stock market because historically it earns a high interest rate. Unfortunately, because of the dip in the market, some people have lost around 40% of their portfolio. For example, a person would have bought 1000 shares of Stock A over the past five years. Each month, they would get a statement saying what their 1000 shares were worth. This number would slowly increase, telling them that if they wanted to, they could then sell those shares for a profit, the point of investing.

At the moment, those same investors still have 1000 shares of Stock A, but that stock is worth much less than it used to be. This is a cause for concern only if that person were planning on selling that stock right at this moment. Otherwise, if you look at the stock market historically, this recession, this dip in the market, is temporary, and the worth of that stock will eventually return to what it was worth a year ago, and continue to rise.

So for me, the credit crisis means nothing but opportunity. I do not own a home, nor do I have any investments. The majority of the people that I spend time with are in similar situations. If anything, this credit crisis is the birth of possibility. Housing and rental prices are down, a perfect time for me to move (which I was planning on doing anyways). Stock prices are down, meaning that I can get the same commodity at a much cheaper price. If I believe that the stock market will rise over the next five to ten years (and historically, it always has), then now would be a perfect time to start investing.

I just wish that I had some money to invest, because now would be a great time to get involved in the market. Does the credit crisis worry you? Did you lose any investments? Are you worried for the future? Sound off.

How To Track Your Spending With a Spending Record

How intimate are you with your spending? One of the first things that I did when I started getting interested in my personal finances was to develop a spending record. It took on a number of variations at first, starting as a few scribbled notes on a piece of paper, or a list in a text document. Eventually, it turned into a multi-paged spreadsheet, and someday I am sure it will evolve yet again. All of the different versions boiled down to the same basic principle - where was I spending my money?

I think a lot of us think we know where our money goes. We might not write it down or record it, but we don't need to. We know approximately how much money is in the bank, and we know about how much we've bought. If we think hard, we might even be able to label prices with purchases. For example, a Subway sandwich costs three and a half dollars, and when we went to see the movie last week we spent $20. However, I think the reality of our spending is completely different from what we think it is.

For example, when I started recording where I was spending my money, I was shocked to see how much money I was spending at the grocery store. I knew I was eating a lot of food, and that I especially enjoyed ice cream and snacks, but I had no idea I was spending $300-350 a month on groceries. I thought I was spending $150, maybe $200, but certainly not twice that. It is downright shocking to add up how much money I was spending on certain categories. Not all the surprises were bad. I thought I was buying a lot of beer, but it averaged to about $20 a month, not including if I purchased something while I was out for dinner.

Tracking my money was the first step towards financial responsibility. Before I was keeping track of my spending I thought I was being responsible, because I wasn't spending more money than I made, at least most of the time. Financial ignorance, however, is often irresponsible, and there are no excuses for it.

Now, keeping track of spending doesn't have to be a difficult thing. You might think that you'll have to start getting receipts for everything, or writing down all your purchases as you make them throughout the month. While this does work, and is highly recommended for some people, I think that we are of a generation that will not put up with that hassle. Instead, I use the benefit of technology to assist me. I make almost all of my purchases using a debit or a credit card. I very, very rarely pay cash. This allows me to go back over my bank and credit card statements, and everything that I've purchased is listed for me. I just copy the numbers down onto my spread sheet and into the appropriate category. The spreadsheet even does all the adding for me, so that the totals are easily viewable. This works for me because I very rarely use cash. If you do use a lot of cash, it is not traceable after the fact, so you might have to start collecting those receipts. This whole process only takes me about 20 minutes every month. Sometimes I'll wait a couple of months and then go back over them all at once.


For me, I managed to bring down my average grocery bill to $190/month over the last three months. That's a savings of about $110/month. I think that just the recognition of the overall monthly cost of silly snacks or food that went bad made me a little more hesitant in Safeway and at Costco. It's a quick and easy way to save money, and at the same time, you're informing yourself of your spending habits so you can plan for them in the future.

What about you? Where are you spending more money than you thought you were? Where are you spending less? Any place you think you can reduce costs without much effort? Put that savings into your high interest online savings account!

Potential savings: $30+ per month. Total savings this month: $43

Want a copy of that spreadsheet for your own, personal use? Comment below, or on the wall of The Great Blog Off and ask for one.

A Priority Shakedown

I often have the chance to go into schools while I'm reading meters. A couple weeks ago I was in a high school where Caucasian was the clear minority. On Tuesday I upset some preschool kids as they had to move their desks so I could access a closet. Today I was in an elementary school, and while I was waiting for the engineer to let me into their electrical room, I read some of the work the students had posted on the hallway walls.

With St. Patrick's day coming up, the kids had all drawn four leaf clovers on a big sheet of paper. In the middle, they were clearly instructed to fill in the sentence, "I'm lucky because..." I read about a dozen of these one sentence insights into the human soul, and it was easy to recognize a clear pattern as there were only two responses. I am lucky because I am in relationship with a person, or I am lucky because I have this cool toy. Now, they weren't exactly in those words. They were more like, "I am lucky because I have a PS3/Nintendo DS/lots of Wii games", or "I am lucky because Nicky is my friend/I have a cool teacher/I have a nice family". Of those dozen responses, only one was different. They were lucky because they had a sweet teddy bear.

It shocked me, because at such an early age kids are already prioritizing what is most important to them. When they think of their life, and what makes them lucky, it is either a person or a thing. It makes me wonder what I prioritize in my life, whether that's my PlayStation 3, my fiance, or my teddy bear. What makes me lucky? Sure, I am lucky to have a video game console, a nice TV, and a bottle of scotch. But even if I didn't have those things, I would still be lucky because I have a number of good friends, and my girlfriend said yes when I asked her to marry me.

So if people and relationships are my priority (and I think that it should be), then how does my money reflect that? As I mentioned in my last post, I think we would agree that it would be great if our lives were a little less complicated, and a little less stressful. So how do I go about making my financial life work for me, towards my priorities? If my priority is a financially stress free life, with a focus on my relationships, how do I make my money work for me? How does my spending reflect my priorities?

I want to be clear though. The purchase and acquisition of things is not wrong, it is not bad, it is not sinful. Buying a television or a new pair of really nice jeans is something that should be enjoyed, and treasured, and cherished. For me, however, that joy should not supplant relationships, and it should not put me in a financially precarious situation. Each of us is going to have to figure out that balance in our own lives.

So what about you? What are your priorities? How does your lifestyle and spending habits reflect that? Want something to change? What makes you feel lucky?

Have you opened an online savings account yet? Don't think you need one? On Monday I'll show you how I put $30 in my account for just a few minutes of work.

What Kind of Money Do You Want?

My job allows me to see lots of different houses. I see old houses, overgrown with weeds, fallen trees, and the scrap metal from a couple of generations. I see freshly built duplexes, ancient apartments, and mansions that fill an entire city block. As I read meters, I always steal glances into the windows and lives of the houses I walk by. Some windows are boarded off, others have curtains closed. Some display the marble floors and nine square foot paintings that are professionally hung in the hallway. Others show me a library of books, and some smell like tomato soup, or curry. As I see the houses, I imagine myself living there. Which one would I want to own? Do I want the one that needs a gardener (or two) to maintain the lawn, or do I want the one that is close to being torn down?

It's the same question I have with money. What kind of money do I want? Do I want a limitless bank account, or am I okay with living paycheck to paycheck? Do I want finances that need constant attention? Do I want something that's ready to be torn down?

All I want from my money is the ability to live the life that I want without stress or strain. I see money as a means to an ends. I do not see the point in hoarding money, but I do see the benefit of saving for emergencies. I do not feel the need to buy the newest, or most expensive vehicle, but it would be nice to have a way to get around town. So what does my ideal look like?

Live the Life I Want

I'm lucky in the sense that I don't want an extravagant life. I don't want multiple vehicles, or a mansion. For now, I am content with taking the bus and renting. I do want to be able to eat as much as I want, of the food that I want. That doesn't mean I'm eating out every night, but once a week or so would be nice. I would also like to be able to come home and be entertained, whether that means watching television, playing a video game, or going out for an evening. Financially, I want to be debt free, with some money in the bank for emergencies and for the future.

Without Stress or Strain

I think that a significant amount of financial difficulty comes from either spending more money than one makes (and going into debt), or spending every single penny that is earned. It isn't fun to be constantly worried about whether or not I am going to be able to afford going out for dinner or if I should buy new jeans or not. Without stress means that I'm not worrying over every little purchase, and without strain means that there's a gap between my income and my expenses. I want to be able to spend my money on the things that are important to me without feeling guilty or panicked. If I want a new video game, if I feel as though it would be worth $60, then I should be able to purchase it without regret or remorse. That does not mean that I should be getting a new video game every week, and if I am feeling that desire, then I probably have larger issues. However, if I feel as though it is a justified expense, and I have room for it in my budget, then I should be free to spend my money on it.

I think most people have a similar desire. They want to be feel free financially. I think a lot of us 20 somethings feel very trapped by our finances. We grew up with our parents trying to teach us to be financially responsible, or not talking about money at all. They'd either give us a small allowance and then take some back right away, trying to teach us that it was savings, or taxes or some other such rubbish. Or perhaps they would just drop large chunks of cash in your direction, hoping to tide you over for awhile, hoping that you'd figure it out on your own. Our schools forced us to do math in a class that was not math class, figuring that by making us to work with taxes or budgets we'd be fine once we left high school and got real jobs. It didn't work, and it made managing money feel like work. So no wonder we're so lost financially.

We feel trapped, and at a loss. We feel as though debt is inevitable, that everybody is in debt from the minute they're born until they day they day. You grow up in debt to your parents, before being shipped off to a $10k/year college where you spend four years figuring out that you don't want to be involved in your major for the rest of your life. You take your $25k of debt and marry it to someone else's, putting yourself $50k in the hole. Then you get a car ($60k), some furniture ($65k), and start drinking because you just realized you have more debt than the two of you make in 18 months ($70k). Your interest payments take a quarter of each paycheck away, so you say, "screw it" and get yourself a mortgage so that at least your debt is acquiring property ($370k). You work hard for the next thirty years of your life, just in time to put your kids into college, retire without a savings plan, and die.

And every single day, there's a slightly heavier weight on your shoulders, as you slowly watch your money bleed away.

I don't want to feel trapped by my money. I want to feel free. Free to spend where I want to spend, without guilt, remorse, or fear. I think I can accomplish that, and I think you can too. I think that together, perhaps our generation can be the one that says "no more" to credit card payments and stupid debt. Maybe we can be debt free and living the life we want to live without stress or strain. Is that the kind of money you want?

Why Save Money?

It's 10:00 on a Tuesday night, and I'm exhausted. I just got back from a grocery trip to Superstore, and I am trying to write a blog post. The past few days have been incredibly tiring for me. Work was really rough today, and I feel like my body is fighting some sort of sickness. Yet here I am, slaving away on a tip that I want to share with my readers about how they can save themselves some money. I'm writing, and I'm reading over what I'm writing, and suddenly I ask myself, "Do my readers even want to save money?"

There's something about our society that fascinates me. We live in a consumeristic haven of prepackaged lust, where everything is about purchasing power, quality of life, and the bottom line. We strut about with our fancy cars, fancy houses, and fancy purses, proud as a peacock over our pretty purchases. This, we declare, is the reason why we work so hard, so that we can spend our money on lavish purchases. Our self worth is defined by how much money we are able to spend on ourselves.

Yet, you put those same people in the room with a sale sign, or better yet, label something "free", and you can watch the previously content proud cats pounce upon goods and services as if their shiny shiny coats depended on it. We all want to save a buck, we all want to get a good deal, no matter how thick our wallets are. I mean, we'd all like to be able to shrug off $50,000 jewlery, but I think that most of us, somewhere within us, wish that we had a little more money. Maybe not so that we can show off how rich we are, but so that we have a sense of security or safety, or so that we are enabled to live the life that we want to live without stress or strain.

So do you want to save some money? Is saving money worth it? Do you see saving money as something that is difficult, or restrictive, like something that your parents enforced upon you while you were younger? What is your ideal financial picture look like? What feelings does having some money in the bank evoke? What about if you didn't have any money?

Have you ever heard about compound interest, and how if you can invest $1000/year in your 20s, you'll be better off than the guy that saves $1000/year in his thirties, fourties and fifties? Did you know that all that financial advice comes from people in their thirties, fourties, and fifties, that never managed to save $1000/year and now they're regretting it? I don't want to be that guy. I want to be the guy that somehow managed to scrap together a hundred bucks every month and managed to stick it away somewhere so I can say, "Hey, I made a smart decision, and one day I'll benefit from it", rather than say, "Yeah, I could retire, but hey, it was so shiny, I couldn't resist!"

So yeah, I want to save some money. I think that if I can pull together a few bucks now, I'll be saving myself a lot more in the future. I'm thinking that if I work a little harder now, I can work a little easier later. What about you?

How to Set Up an Online Savings Account

By the end of this post you'll have the chance to earn yourself $13. If you read my last personal finance post, I promised you that you could save $100 by the end of the month. All you have to do is read my blog and follow some simple and easy ways to save money. The first step in the process is to create a place to save the money. This is where an online savings account comes in.

What is an Online Savings Account?

Unlike what a lot of us are familiar with, an Online Savings Account is a bank without a local branch that you are able to walk into. It is also not the online version of your local bank, like your credit union's website. Instead, it is a bank that you do business with entirely by mail, phone, or preferably, the internet.

Why an Online Savings Account?

There are three major reasons why you should set up an online savings account.

1. Higher interest rates. Growing up, my credit union's savings account was banking me a whopping 0.1%. That means that every year, they gave me one tenth of a percentage of my money back. At that rate, I was losing money to inflation. However, my online saving's account is giving me 2.3% 2% (curse the economy), which is a fair bit less than the 3.5% that I originally had when I signed up, but apparently there's a recession going on. So put your money somewhere that it is going to work for you, not against you.

2. Separation of church and state (or at least savings and spending). Online banking's greatest weakness is also it's greatest strength. The online account will not give you a debit card, you cannot write cheques for the account, and you can't pay your credit card bill with it. In addition, transferring money to or from the account will take a business day or two. That's a good thing. The point of a savings account is money that you won't spend immediately. Forcing yourself to think over a purchase for 48 hours will ensure that if you are withdrawing the money from the account, it's for a good reason.

3. Automatic transfers. You can set up your online account to withdraw money from your normal bank account on a regular basis. Automating savings is the most important step you can take towards saving money. I guarantee that if you don't have money in your bank account, you will be far less likely to spend it. Keep reading and I'll show you how to set it up.

How to Open an Online Savings Account

While Americans have a few more options, the best bet for Canadians (as far as I am aware) is to head on over to ING Direct. I have an account with them, and I've been very happy with it. Just click on the "sign me up" tab and choose to open an "investment savings account". Fill out the information and you're practically done. The most difficult part of this process is linking the online account to a real bank account. This is how you'll be doing most of your banking online, by transferring money from your regular main account to and from your online savings account. A few minutes of work now will be worth it later though, I promise.

You'll have to get a cheque from your local bank account, make it out to yourself, and mail it to ING Direct. Once they receive it, and the cheque is processed, then your account is open, verified, and ready to go. Want to earn that extra $13? Make the cheque at least $100, include the Orange Key "17504111S1" and when your cheque clears you and I will both get an extra $13 deposited into our online savings accounts. Opening an online account won't take you more than an hour and you'll get $13 for moving $100 from your regular account to your new one. Free money. Please note that this is not the $100 I said you could save. This is, however, the first $13.

How to Set Up an Online Savings Account

Once your account is opened you have the option of setting up an automatic savings plan. This is where your online account will automatically pull a set amount of money from your main chequing account on a regular basis. For example, if you're saving for a new computer, or a car, you could have your savings account pull $100 at the end of every month into your savings account. After a few months you'll have enough to transfer the money back to your chequing account for your new purchase.

What I've done is set up my account so that every other friday, on payday, I have my employer directly deposit my paycheck into my bank account. On that same day, ING Direct pulls a set amount of money right back out of that account for my wedding savings. It's as if I never even had the money. That is the brilliance of the automation. I cannot spend money that I never had. Trying to hold onto a couple hundred or thousand dollars in my chequing account is too tempting for me, there's too much to spend it on. By automating my finances, I've removed temptation from savings. It's not whether or not I want to save money this paycheck, it's already saved.

So if you want to save $100 by the end of this month, set up an online savings account today. It'll take about an hour and you'll earn an (almost) instant $13. Start small by setting up your automatic savings plan to withdraw $10 twice a month from your account, and by the end of the month you'll have $33 waiting for you. It isn't much, but we all have to start somewhere. I started with $15 a month while I was a student, and by the time I realized it I had a couple hundred dollars in there.

*Disclaimer. I am not endorsed or paid in any way by ING Direct, I've just used their service, have appreciated it, and wanted to share it with my readers. Yes, I will get $13 if you use my orange key, but so will you.

What's Your Time Worth?

Lately I've been trying to put a price on my time. It's not that I'm charging my fiance a couple bucks an hour to spend time with me, or that I'm racking up huge debt with my television, it's that I've been attempting to wire my brain to think differently about time and money. There's the classic saying that "time is money". Well, great. But how much time, and for how much money?

Most of us are familiar with an hourly wage. We go to work for a certain number of hours, and get paid a certain dollar amount for each of those hours that we work. The price that we are paid is dependent on the job that we are required to do. For example, a highly skilled specialist would be paid a greater salary than a common labour position that did not require previous experience. In addition, a job that requires more effort would result in a higher wage than a career that simply necessitated showing up. But what happens at the end of the day, when we clock our final hours and return home? How much is that time outside of your employment worth to you?

I ask because I find myself having very conflicting ideas about time and money. On one hand, when I was unemployed and looking at minimum wage jobs, I scoffed at the amount of money that I would earn. I think of my time as being worth more than 8 dollars an hour. On the other hand, something within me is constantly striving for the best deal possible. That means that I feel the need to call six different locations looking for the best price on a DVD. All in all, I might save about $1.50. That work might have taken me about an hour. Yet for some reason that seems more "worth it" to me. Over the past few months as I've read different personal finance blogs, I've noticed some strange frugality tips out there for saving money. I could save money by learning how to brew my own beer, make my own laundry detergent, or wash and reuse my ziploc bags. Yet honestly, I just don't think that is worth my time. I would rather spend two dollars on new ziploc bags than go through the hassle of cleaning them.

I believe that there are two major dynamics going on here. The first is the availability of these finite resources. If a person has a lot of time on their hands, but little money, they may be more willing to spend time saving and earning what money they can. If a person has a lot of money, but little time, they don't mind paying more money, or paying other people to do the things they don't want to do. Neither of these are right or wrong, they are simply the facts of life. Each of us must decide what we have, and we would like to have, and reconcile the two.

The second major dynamic, and the point of this post, is the attitude that we have towards our money and our time. Again, there are many possibilities here. Some see time as a limited and precious resource; something to be treasured without regard for other materialistic annoyances. Therefore, they are more than willing to give up financial security or safety, as long as it doesn't continue to waste their time. Others see money as something that we must be responsible with, and therefore must not waste a penny more than we ought. I believe that the only wrong answer here would be ignorance. We ought to realize and accept where and how we are spending our time and our money. If we are not okay with where our money is going, or how we are spending our time, then of what point is life if you are upset with your own fundamentals?

What is your time worth? Is reading a few blog posts each week worth $100? As you wrestle with your own inner decision, take a few minutes to think about what you've spent your time and your money on over the last week. Are you happy with that? Do you wish your time was worth more? If you continue to read this blog, and do the things that I suggest you to do, I can promise you that I can save you around a hundred dollars by the end of this month. Some of them will take a bit more time, and a bit more effort, but by the end of the month, I will help you put $100 into a savings account for you. Now how about that. Is that worth it?

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