I want a car

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I want a car.

The urge comes almost daily when I’m faced with a daunting one-hour bus and subway ride to and from work. The urge is particularly heightened when I’m forced to wedge myself onto a packed bus, hold 50 pounds of groceries or a hockey bag and stick in one hand, and hang on to the pole for dear life while the bus driver stops and starts with reckless abandon.

It’s not a fun time. I’m sure many of you can empathize.

Is transit an option for you?

Since the beginning of time, a car has always symbolized freedom. Car commercials all show people cruising on winding, wide open roads, blasting through the outback, or carting kayaks to campgrounds. It looks glorious.

That’s not the scene I get whenever I pass by any major highway in Toronto, though. Those same SUVs and sportcars from the commercials look almost claustrophobic amidst all the gridlock. It’s during those moments that I gain a bit of perspective. While I certainly miss the travel comforts of having my own space, I do enjoy the fact that I can get on transit and sleep, read, or completely zone out for a while. It’s one of the fringe benefits.

So what’s the main benefit? Saving some serious money, obviously. BIG money.

The Toronto Transit Committee (TTC) released some crazy statistics recently that made me really rethink any desire to buy a car in the foreseeable future.

  1. The price of gas: Costs have gone up nearly 20% for each of the last three years
  2. Car costs: Owning and operating a car in Toronto costs approximately $8,900-$12,000 a year
  3. Parking: Urgh, this is the killer. The Toronto average is upwards of $4,000 per year!

That doesn’t even factor in the cost of the car itself! Scary, huh?

So what do I pay?

Well, I put up with longer commutes, encounter poor hygiene and occasionally endure some frustratingly lengthy wait times, but I have unlimited travel and a federal tax credit for just $1,386. Economically (and environmentally, I might add), the decision is a no-brainer.

There will certainly come a day when I’ll become one of those gridlock-ers, but not yet. Not while I’m still saving from scratch.

How do you save on transit? Is carpooling an option for you?

Out of sight, out of mind

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The art is not in making money, but in keeping it” – Proverb

Payday is one of my favourite days. Period. It’s when that glorious chunk of change auto-deposits into my chequing account, and just sits there ready to be spent. It’s a fantastic feeling.

Are you auto-saving some of your cash after cruising past payday?

But what do you do next? Do you succumb to temptation and spring for a new iPad or a one-way ticket to Honduras? Or do you begin distributing it to your various savings accounts and credit cards?

I do neither. I have it automated. 

Virtually every bank offers this option. I sincerely believe in the ‘out of sight, out of mind’, pay-yourself-first philosophy, but, more than that, I just don’t trust myself. I have consistently under-saved or overspent simply because I gave myself the option on payday to choose where my money would go.

Now I’m by no means saying that you should live a miserable existence and pinch pennies to get by. We need to allow ourselves to have fun and spend money. My issue is that I was grossly overspending – and not necessarily deriving an equal amount of pleasure from it. Which is why, shortly after I became debt free, I resolved to set some goals and start automating my savings.

  • As you know, I’m working towards my MBA. To keep on target, I have a savings account, goal tracker and $250-a-paycheque going into an auto-savings plan.
  • With friends out of work, I’m also throwing $250 every payday into my TFSA Emergency Fund. Just in case.
  • For the fun stuff like vacation, I have $75 coming off each paycheque into a Vacation Fund.

And that’s not including the 10% (and 7% employer match) coming off each paycheque and going into an RSP. Simple, huh? The leftover funds are spent cleaning up my VISA bill, enjoying some meals out, and padding my aptly-named ‘Miscellaneous’ Savings Account.

The best part is I don’t even feel it! Learning to live with less is as easy as 1-2-automate.

How to get healthy and make money off your girlfriend

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Yes, it is possible. And it’s actually quite simple.

Daunting, isn't it?

My girlfriend and I are in the fourth week of a Fitness Challenge which requires that we each meet our individual goals in order to avoid paying the other a monetary penalty. So far, things have gone better than I ever expected. I’m up $40 bucks, and have been gym-ing or playing sports at least five times per week. As you may expect, there are a few things you need to do at the onset (as this can be challenging proposition to make to a significant other). Fortunately for you, I’ve compiled a nice, simple list for you to follow.

  1. First, preface it as a fitness challenge for yourself: Emphasize that you’re eager to get into shape, and that you need a partner to keep you honest.
  2. Determine a fair and achievable goal for the number of times you’d have to go the gym in the course of a week: This depends on your schedule, but I set the ambitious target of five times per week for myself. My girlfriend (who leads an insanely busy life) chose to shoot for four times a week. I tend to hit the weights and play hockey and soccer once a week each. She’s a walking advertisement for GoodLife’s fitness classes – especially BodyPump.
  3. Set the parameters of the workout: We decided that each in-gym workout needed to be a minimum of 30-40 minutes in length. We also conceded that playing sports for 50+ minutes counted as one full workout.
  4. Determine the punishment for falling short: Sadly, I sometimes need extra motivation to go. We set a hefty punishment of $20 for each infraction. If, for example, I were to only work out three times in the course of a week, then I would owe her $40. It adds up pretty quickly!
  5. Stick to it: It’s a lot of fun! You’re each getting into shape and even occasionally making money off each other. Either way you slice it, you’re a winner.

And that’s not all.

We also set up a simultaneous healthy eating challenge. We have to eat in at least five days of the week. And yes, that includes bringing lunches to work. It’s not easy, and the $10 infraction penalty doesn’t make it any easier. Say you break down and hit up McD’s on lunch one day. That $8 meal just cost you $18. Ouch, right?

You may think we’re nuts, but as tentative as I was about trying it, it’s been a huge success. We’re both getting into shape, eating well, and saving some serious cash. It’s win-win for everyone.

How have you blended savings and healthy living with your significant other?

‘Tis the Season

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Well the signs are all around us – literally, in some cases. Every paper is lined with ‘how-to’ articles. Every bank is mailing out packages and pamphlets. I’m actually surprised that there aren’t people going door-to-door! There’s just no way to escape the fact that it’s officially RRSP season.

For those that have been living under a rock for the past few weeks, February 29th is the official deadline for all RRSP contributions. Be there or be square is the prevailing message. There’s no grace period or second chances. If you miss it, well, you better focus on next year.

Sadly, that may be where I fall.

Having just recently gotten out of debt, I’ve been slowly compiling my shekels for an Emergency Fund, first and foremost. I’ve had close friends recently out of work, and have realized just how vital it is to have something to fall back on (just in case). I’m using a Tax-Free Savings Account (TFSA) to house this money, and have routinely been contributing around $300-$500 a month. The TFSA is fantastic, in that it pays decent interest, doesn’t get taxed upon withdrawal, and allows for up to $5,000 a year in contribution room. Seeing how I haven’t really used this savings option since it kicked off in 2009, I can contribute up to $20,000 at this point! Not bad at all.

With that being said, I just don’t have a chunk of money right now to flip into an RRSP. As I mentioned in a previous post, I have been throwing 7% of each paycheque into a Group RRSP (which is matched by my employer), but that’s about it. I’m pleased with my progress to date, but ‘Compound Interest’ is just so attractive that I want to start immediately, and I can’t help feeling like this is a missed opportunity.

The silver lining, I guess, is that I can focus on contributing throughout this year, and really get my financial feet under me before I start allotting significant pools of money into long-term savings’ vehicles. If I’m consistent, I have no doubt that I’ll be in good shape by 2013.

What are your thoughts on RRSPs? What factors should be considered before contributing?

Memories > Stuff

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Days like today seem tailor-made to give the economy a superficial boost through the mass production and selling of sappy cards, heart-shaped necklaces, neon-pink candies and copious amounts of chocolate. Valentine’s Day is truly one of the few ‘holidays’ that forces people to do what they should have been doing the whole year – showing their significant other just how much they mean to them. Not that that’s necessarily a bad thing. Sometimes some of us need that wake-up call!

I don’t really have a big issue with it, primarily because I deliberately choose not to go overboard. My girlfriend and I each have a series of 2012 savings goals, so we’d much rather save for good times down the road than expensive gifts right now. Memories > Stuff, right?

That’s easier said than done, though. It’s tempting to swipe your credit card until your balance is just as red as the wrapping paper decorating those diamond earrings you bought. Very tempting. But not enough.

This Valentine’s Day, we’ll be taking the high road. Who needs chocolate? Flowers and a nice dinner sound pretty sweet to me.

Saving with purpose

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I’ve never been one to go through the motions for seemingly little reward. People who jog for fun, for example, completely baffle me. I’ve been on this rant many times before, but jogging just seems exceptionally dull. Personally, I would much rather run “with purpose” – with a finite, prescribed goal in mind. If, for example, a hockey net was set up every 100 feet and I had a string of goalies to try and score on, well, sign me up. That just sounds awesome.

The same goes for saving. I think it’s great if people put away money as an Emergency Fund for themselves – that’s essential. I love when I hear about people (especially people in their 20s) who are keen on throwing extra money into an RSP for their way-in-the-future retirement – that’s just smart. What I don’t (and can’t) do is save with no absolutely goal in mind. Targets help me stay on track, and I already have a major one in mind for 2012.

Strategic goal-setting should help avoid the crush of student debt

My Goal

This year, I’m going to write the GMAT in anticipation of completing my MBA (Masters of Business Administration). I’m going to write the 4-hour exam on March 17th, and have obviously been studying for it for some time now. Not only has it been a major time commitment, but it’s obviously a MASSIVE savings commitment as well. To give you some context, an MBA at Rotman School of Management (University of Toronto) goes for over $70,000. A graduate degree from Schulich School of Business (York University) is well over $50,000. Ouch, right? Keep in mind that this does not begin to include books, food, rent or the massive opportunity cost of being out of work for two whole years. The sheer enormity of the cost has me seriously considering doing it elsewhere – Quebec being the leading option.

All of that aside, I feel strongly that it’s a goal worth pursuing. It’ll open up doors to new opportunities and jobs down the road, and it’ll help me build invaluable connections and relationships with like-minded professionals. The true test (aside from passing the GMAT) will be to save enough to ensure I don’t return to the impoverished days of my undergrad. Friends have mentioned that I should wait to see if my current or prospective employer will cover the cost (which would be awesome), but I’m eager to start saving regardless. If I were to start this year or next, I fully expect to take out a student loan to cover the tuition costs. If I can continue to sock away $150-$250 per paycheque, I think I should be in good shape to cover the rest.

Do you have any tips for me? Any 2012 savings goals of your own?

A confession

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OK, I have to come clean. Since paying off my student loans in October, I must admit that I’ve become a little obsessed with saving. Seriously obsessed.

Don’t get too worried. I’ve by no means become a miser, but I (for the first time in my life) am tracking where my money is going. I have set up a TFSA, and a couple of goal-specific savings accounts (‘MBA’ and ‘Vacation’), and have even automated some transactions to take money from my chequing account every payday and deposit it directly into my savings accounts. I’ve also taken advantage of my employer’s RSP-matching program – they match up to 7% of each paycheque! Not bad, right?

I knew being debt-free would feel good, but I had no idea how satisfying it is watching your savings grow. Now only if it would hurry up in time for a downpayment…

Surviving the Season

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It’s that time of year again; the season of feel-good commercialism at its best. Corporations pad executive bonuses by covering everything in tinsel, ribbon and red and green garland, and hard-working parents are forced to dip into savings to ensure their kids have the latest version of Grand Theft Auto. OK, maybe that’s a little bit dramatic … but this time of year sure is devastating on the wallet!

Mall madness: The terror of the season

For me, December brings a collection of Holiday parties, two different snowboard trips, some major family birthdays (including that of the significant other) and, of course, Christmas to top it all off. As fun as all that is, that requires a lot of $$$! Make no wonder people burn out in January.

In light of excessive cash outflow over the years, I’ve been able to curtail the damage fairly well of late by implementing some basic saving principles (and a heavy dose of logic):

  • Limit the gifts – You don’t need to buy a gift for every friend. They’re likely just as cash-strapped as you are. Have the “no gifts this year, OK?” conversation – neither of you will regret it.
  • Quality over quantity – You don’t need to buy exorbitant gifts for family and close friends. Sharing ‘stocking stuffers’ with your significant other is a great way to share thoughtful, event-focused gifts that won’t get thrown away or discarded.
  • Know your limits – The old me would say “yes” to everything, regardless of cost or time. The result left me burnt-out and account-depleted at a time when I should be charging back up and enjoying the Holidays. Saying “no” can feel great sometimes.
  • Prepare in advance – You may think it’s a little late for that (being early December and all), but automating your savings in advance is a great way to prepare for the financial crunch. I’ve had a vacation budget going for the past few weeks, and it’s amazing how quickly it adds up.
  • Home sweet home – In my mind, the best and most memorable times are when you spend an evening with close friends and family playing games, sharing stories or stuffing your faces with great food. After all, isn’t that the best part of the Holidays?

There’s no way around it – December’s going to be more expensive than your average month. That said, there are ways to soak in the joy of the season without constantly having one eye on your chequing account.

What are some of the ways you save without sacrificing?

Winner winner chicken dinner

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If you’re into personal finance blogs as much as I am, then you’re probably familiar with Always Save Money – the creative output of Rubina Ahmed-Haq, a financial journalist and the business contributor on CBC’s Steven and Chris show. Focusing primarily on spending smart, strategic saving and debt management, she has built a reputation for easy-to-follow tips for those eager to turn their personal finances around.

During a weekly pan of some of my favourite blogs, I came across a contest she was running on how to save and still maintain a social life. Seems paradoxical, right? Admittedly, it is rather difficult to have a good time with friends without spending a chunk of change. In fact, I think it’s actually essential (and healthy) to do just that every once in a while. How happy would we be if we never took a vacation or went out for a nice meal?

But not always.

I posted that I have personally brought back the good times of a ‘night in’ with friends. Playing poker, watching the game or simply breaking out a board game are all ways to have low-key (and low cost) evenings that are still a tonne of fun.

And guess what – I won! Rubina wrote me up and is in the process of mailing me my own copy of Jonathan Chevreau’s Findependence Day. I’m looking forward to giving it a read and will be sure to post a review.

I guess saving really does pay!

How would you save and socialize?