Turning Pennies Into Pounds

Little things add up. $20 here, $10 there, $5 at another place. Next thing you know you’ve gone through a few hundred dollars and you can’t even remember where they went. The good news is by making small, conscious choices you can put those “yuppie food stamps” (also known as $20 bills) back in your wallet.

There are some places where we can save money and still get everything we want and sometimes more with a little bit of planning. For one, we all eat on a somewhat regular basis. The biggest mosquito for people living in urban centers is eating out. $5 for a coffee and a bagel in the morning, $8 for lunch at a fast food joint, and $25 grabbing take out on the way home from work and it adds up super fast.

Having food at home is a way to put thousands of dollars back into your wallet. One of the things I like to do is cook extra when I do go to the effort of making dinner at home so that I have left-overs to make into lunches and TV dinners. I have also found that a crock pot is a wonderful time, money, and waist line saving appliance. I can throw something in first thing in the morning and have a fantastic dinner ready for me at the end of the day. Another discovery I made many, many years ago is that it takes pretty much no extra time or effort to cook an extra dish to throw into the freezer for another time when I’m too busy to cook. Lasagna, casseroles, and great soups are gold in a freezer.

Grocery shopping is also another wonderful way to save yourself some money and possibly get yourself some nice perks. First off get to know your grocery store well, you are going to be spending a fair bit of time there over your lifetime. Get to know the layout, get to know the prices, and get to know the sales days. I for one am a Safeway shopper. It’s close to my house, I’m a Club Card member, I collect Airmiles, and I know the prices so I know when things are on sale. Like with a lot of the grocery chains they have their discount day, the first Tuesday of every month. You can have 10% off your bill or 10x the base Airmiles. I try to do my big monthly shopping trip on the first Tuesday of the month and take full advantage of 10% off my bill. When you are spending $250 – $300 saving $25 – $30 is a nice chunk of change.

With the perks of collecting the Airmiles I use them for my entertainment. I go out to movies and get the popcorn and drinks included for a few Airmiles which I can collect in one properly planned shopping trip. I have used my Airmiles for passes to West Edmonton Mall World Waterpark and Galaxyland, for passes to the Royal Tyrell Museum in Drumheller, Gift cards to great restaurants like The Keg and Boston Pizza, and for a variety of other things my family likes to do. I still get what I need, groceries, while saving money, and I also get what I want, free attractions and evenings out.

So as you can see with a little bit of thought and planning you can have a better life and a fatter wallet. What can you start doing today to get more out of your life and put more back into your financial future?

“My problem lies in reconciling my gross habits with my net income.”
Errol Flynn

Facing divorce. . .Should I sell the house now?

 If you believe that we are facing a “real estate bubble” ,  the decision of what to do with your home   is  challenging.. sell now and wait to buy if/when prices go down?

 What does that mean to you if you’re someone facing divorce today?  Should you consider selling quickly to take advantage of the market now?  Some people believe they should sell now and split the money and each buy something  on you own before prices climb even further.  

Many couples  have to make  tough decisions  about their home sometimes before they have a final separation agreement in place.

Many people are carrying large debt loads and are shocked to see how much they in fact have left over  after paying off all their debts.  In calculating the cost of a new home, you must take into account such things as legal fees, moving costs, utility set up fees,  condo fees, etc

The big expense that buyers overlook, however,  is land transfer tax.  And if you  considering buying in the GTA, there is an additional land transfer tax assessed.  Most realtors and mortgage brokers websites have a land transfer tax calculator. If you can’t  locate one easily, let me know and I’ll do the  calculation for you.

For most couples, the marital home is your  largest asset. You may want to look at all your options and get  financial advice before moving on!

Building Mountains Out of Mole Hills

Summer vacation is almost over and hopefully the weather stays pleasant for a while longer. With the coming of the ‘second’ new year most people start thinking about getting back into the normal swing of things and making a fresh start on achieving their goals. If I could show you a simple, painless, and even fun way to save for your next pleasurable purchase such as a big screen TV, vacation, or toy would you be interested?

There are only two steps required to saving more money than you thought possible. The first is to put yourself on a cash diet for all your incidentals like coffee, eating out, gas, and any other small purchases. At the beginning of the week, go to the ‘instabroke’ machine and take out your weekly allotment of cash. After that leave your plastic, debit and credit cards, in your wallet, or better yet, leave them at home. You can’t use them if they aren’t easily accessible.

Second, pay for everything using only bills. At the end of the day put all your change into a jar you have labeled with a picture of your future purchase. If your dream is to go to Hawaii, get a 52 inch TV, get a new mountain bike, or anything else that puts your heart all a flutter, put a picture on the jar and let the spare change add up. Twoonies, Loonies, Quarters, Dimes, Nickels, and even Pennies add up very quickly when we aren’t paying attention.

In a very short period of time you will find this very simple, painless act of saving fun and enjoyable. For added motivation you might want to create a chart (example: a thermometer) that shows your financial progress towards your goal. It is amazing how excited you can get just seeing yourself getting closer to your reward.

Start today and see how quickly you can go from squirreling spare change away to enjoying the fruits of efforts.

“If saving money is wrong, I don’t want to be right.”
William Shatner

When You are the One Paying Support

According to a recent study done by Prudential Insurance in the U.S. of  the 1,140 women and 604 men surveyed,  it was reported that 22% of women ( married or with a partner)made more money than their husband or partner.

This economic statistic is certainly a factor why women increasingly are paying support. However, in our society, women seem surprised to have to pay support even if they earn more. As the financial gender gap continues to narrow, an increasing number of women involved in a divorce must confront the possibility of paying support to their spouse. (AKA, “Manimony”).

I have assisted many divorcing women who face the prospect of paying support. Women who have worked hard building careers, taking care of children, dealing with aging parents, feel that they have contributed more than their fair share while married.

This also means that women are increasingly responsible for their finances and investment decisions. This is an area where women have less confident in their knowledge of finances. This adds addition pressure and concerns for women who have to  deal with ongoing payments along with  managing their current lifestyle and worrying about retirement.

Are you someone who makes more money than your spouse? If you found yourself in this situation, how did you deal with this issue?

Grey Divorce Challenges

According to the most recent statistics available from  Statistics Canada (2008) , there were 852 divorces where both partners were 65 and older.  Based on my experience and the clients I see, this trend is growing.  When divorcing after a long term marriage or at an age where retirement is closing in, such  ‘grey divorces” pose unique challenges.

If one spouse stayed at home while the other worked or has retired, it is difficult to face the financial realities of dividing assets and debts as well as  splitting retirement income. Many people assume that after divorce, they expect to keep same standard of living through the division of assets and spousal support. The ex-spouse receiving support may have to eventually  earn his or her  own income. Finding employment can be very difficult in the current economy, especially for those over age 50.

After years  of marriage, divorce  at this stage of life can be a  financial as well as am emotional  shock. Couples facing divorce  at older ages are more likely to suffer from medical problems,  and complicated family issues. These issues require careful attention, management and support. Working through a settlement outside the courts, through mediation or collaborative divorce  allows “grey divorcing” couples the  opportunity to look at their futures and create a settlement that can meet their original retirement plans.

Since most of the settlement issues are financial, working  with financial professionals  who specialize in divorce is critical.  They can help identify all assets, debts and income from the marriage.  They can help develop realistic post divorce budgets. They can help couples, working together with their  lawyers/mediators,  make a plan to match the divorce outcome to  their desired lifestyle after divorce and into retirement.

The High Cost of Clutter

I hate clutter. It drives me nuts. In fact I have been accused on more than one occasion of being an anal retentive neat freak, but I’m okay with that. Even with my natural tendencies to keep things clean, simple, and organized it still blows my mind the amount of “stuff” I have around my house.

Every week I try to make a point of cleaning out some small area of my home to rid myself of the junk that accumulates and seems to breed in the dark. Junk drawers, closets, cupboards, the storage room, the garage, the crawl space, shelves, the “stuff” is everywhere. One of the big questions I ask myself, my husband, and my daughter when we are sorting what stays and what goes (some to the garbage, some to donate or give away) is “Would we move this to a new house?”

Clutter comes at a very high cost. Number one it sucks the life out of us. When we are faced with clutter at home, at work, in our vehicles it drains our energy. We don’t want to be there. So we find ways to escape. We procrastinate, we go out and spend money we don’t need to, just so we don’t have to face the mess, we are nowhere near as productive as we could be. This robs us of our peace of mind and our ability to move forward at work and in our lives.

Number two how much money have we spent accumulating this clutter? I like to think of myself as a fairly frugal person, and I definitely do not consider shopping to be a hobby, but it still blows my mind at how much money I have spent (usually in small chunks) to buy the junk that is now driving me batty.

Number three when we have too much stuff it costs us money to maintain it, insure it, move it, clean it, and even store it. If it doesn’t bring you joy, add beauty to your life, you don’t use it on a regular basis, it doesn’t work and you aren’t going to fix it, WHY do you have it?

So I challenge you to pick a corner, a drawer, a cupboard, a box anything and start sorting. Ask yourself the question “would I move this to a new home or replace it if it was lost in a fire?” If the answer is no, then get rid of it. Have a garage sale, donate it to a charity, or pass it on to someone that will love, use, and appreciate it. Trust me it will reward you in more ways than you can imagine.

“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.”
Will Smith

Ask the RIGHT Questions

Everyone seems focused on getting the right answers. I have to say that this is backwards. In order to get an answer, first you must ask a question. In order to get the RIGHT answers you first have to ask the RIGHT questions.

The answers that most people are looking for cover things such as paying for a child’s college education, paying off debt, and saving for retirement. The questions that most people ask are on a macro / large scale level, when they should be on micro / low scale level.

The big questions of: “how can I get a better return on my investments?”, “how can I get a better rate on my credit card?”, and “how much do I need to have saved for my retirement?” are great questions, they need to follow the small questions.

Small questions of “where is my money going?”, “do I really want to spend money on this?”, and “what are all these charges on my bills?” are the ones that lay the foundation for financial security.

In order to get control of your dollars, you need to know what is going on with your pennies. Taking a few extra moments to go through your statements and bills usually finds money that you were unknowingly bleeding. Asking the question of “do I really want this?” before you spend any money drastically cuts down on impulse purchases. Being fully aware of your goals on a daily basis helps you make decisions that get you closer to realizing them rather than closer to debt and poverty.

So take a moment to start asking yourself the RIGHT questions and you will get all the right answers.

“A wise man can learn more from a foolish question than a fool can learn from a wise answer.”
Bruce Lee