Recently we moved to Charlottetown and with that comes a myriad of new expenses. Food is obviously one of the more important ones and as anyone that has moved before knows, that first few weeks of groceries can get pretty expensive.
With that in mind, I made up a shopping list of items we would need for our first foray back into the supermarket scene. Once I had the list, I decided to go through it at each of the two main supermarkets, The Atlantic Superstore and Sobeys to see which place had the cheaper product. This was done prior to actually going out to purchase items so there is an extra travel cost associated with doing this. As well, it takes a long time if you have a big list. I spend about an hour at each place finding items as well as calculating their unit cost.
I found that around 75% of the items on my list were cheaper at Superstore, while the remainder was less pricey at Sobeys. There seemed to be a general trend that the items that we needed which required freezing or refrigeration such as frozen veggies, extra lean ground beef, and margarine, were cheaper at Sobeys. Staple items such as canned goods, fresh produce, and toiletries could be found at lower cost at Superstore.
Naysayers to this method may state that their time is too valuable to be doing this every time you go shopping. Well to save a trip the following week, we went to Superstore first, priced our new list there and the following day went to Sobeys, priced items and purchased them at the same time if they were cheaper. However, this run we noticed that no items on our list were cheaper at Sobeys, so back to Superstore for us.
As well, despite taking time and effort to determine the location of cheaper goods, that time is only overhead for the first few months at most. Once you've done that and collected a good database of information about the prices of items you regularly buy, then a simple comparison of grocery list vs. spreadsheet can tell you where to go. So over the long run, you will save money and time.
Some additional points should be mentioned. In addition to the basic cost of goods, both stores have flyers every week that should be looked at and factored in to where you will shop. Both stores also have reward plans for shopping: Superstore has PC points and Sobeys has Air Miles. Both points can be redeemed for merchandise other than groceries, though with Air Miles the selection is much broader. If these plans would influence where you shop, make sure you pick the one that makes the most sense for you.
In closing, I'm still on the fence about doing price checks again as it does take a fair bit of time and I haven't convinced myself that the potential savings are worth it. As well I can say one thing for sure: If you are shopping at Superstore, you are probably already saving money. I say probably because the amount of items that are more expensive is so low, that the savings you generate from other items outweigh their extra cost or at least break even.
Monday, June 18, 2007
Monday, June 4, 2007
A Good Feeling
Last week I performed an action that felt very rewarding. This was the first time I did said action and it's everything everyone says it is. What action is it, faithful readers? That of paying yourself first.
If you've noticed the growing list of financial advice books on the sidebar, you know that I have been acquiring knowledge at a reasonably brisk pace. The common theme throughout many of the books is the importance of paying yourself first. This is also known as The Golden Rule. In short, look at your gross income on your paycheck and take 10% of it and set it aside in a savings account or in some sort of investment. Doing it automatically would be an even better idea as it takes the thinking and sitting-down-to-do-it-ness out of it. The idea sounds simple (and it is) but rarely do people put it in action. It is a key step in setting yourself up for financial freedom/independence in the future.
What I have done prior to last week was pay all our (fiance and me) bills, not spend very much, and what was left at the end of the month was dumped into our PC 4% savings account. This did work out pretty well because our monthly expenses are rather low. We have no rent, no groceries, and no utilities because we are living with my parents. A fine system with which to save money. Many people have the mentality that they will save what ever is left over from paying the bills, but often time there is none left. Little things come up that eat away at your income and erode your potential savings.
So even though our savings were growing every month, I was still paying everyone else first, as if they are more important than us. They aren't. Pam and myself are the two most important people in our lives and as such, we should come first. Thus, last week I looked at our paystubs, figured out 10% of our gross income and transferred the amount into the savings account. No thought was given to car insurance. I couldn't care less about a cell phone bill. I was putting money away for the first time that would help ensure that we will be able to retire early. And it felt good. Try it yourself and I think you will agree.
If you've noticed the growing list of financial advice books on the sidebar, you know that I have been acquiring knowledge at a reasonably brisk pace. The common theme throughout many of the books is the importance of paying yourself first. This is also known as The Golden Rule. In short, look at your gross income on your paycheck and take 10% of it and set it aside in a savings account or in some sort of investment. Doing it automatically would be an even better idea as it takes the thinking and sitting-down-to-do-it-ness out of it. The idea sounds simple (and it is) but rarely do people put it in action. It is a key step in setting yourself up for financial freedom/independence in the future.
What I have done prior to last week was pay all our (fiance and me) bills, not spend very much, and what was left at the end of the month was dumped into our PC 4% savings account. This did work out pretty well because our monthly expenses are rather low. We have no rent, no groceries, and no utilities because we are living with my parents. A fine system with which to save money. Many people have the mentality that they will save what ever is left over from paying the bills, but often time there is none left. Little things come up that eat away at your income and erode your potential savings.
So even though our savings were growing every month, I was still paying everyone else first, as if they are more important than us. They aren't. Pam and myself are the two most important people in our lives and as such, we should come first. Thus, last week I looked at our paystubs, figured out 10% of our gross income and transferred the amount into the savings account. No thought was given to car insurance. I couldn't care less about a cell phone bill. I was putting money away for the first time that would help ensure that we will be able to retire early. And it felt good. Try it yourself and I think you will agree.
Monday, May 21, 2007
66 Goals in 1001 Days
This post ties in with the importance of goal setting and though it doesn't necessarily tie to personal finance, I think these exercises are good for personal development. This can help with finances in the long run.
I think it would give me a great sense of accomplishment to follow along the lines of some other sites such as The Simple Dollar and make the following list of goals I would like to achieve in the next 1001 days (2.75 years). The stipulations of the list are as follows from Triplux:
The Mission:
Complete 101 preset tasks in a period of 1001 days. [I've worked on this for a week and came up with 60 or so that is what I am using. It will still give me a sense of accomplishment and I can add more goals later on.]
The Criteria:
Tasks must be specific (ie. no ambiguity in the wording) with a result that is either measurable or clearly defined. Tasks must also be realistic and stretching (ie. represent some amount of work on my part).
Why 1001 Days?
Many people have created lists in the past - frequently simple goals such as new year's resolutions. The key to beating procrastination is to set a deadline that is realistic. 1001 Days (about 2.75 years) is a better period of time than a year, because it allows you several seasons to complete the tasks, which is better for organizing and timing some tasks such as overseas trips or outdoor activities.
Some common goal setting tips:
1. Be decisive. Know exactly what you want, why you want it, and how you plan to achieve it.
2. Stay Focussed. Any goal requires sustained focus from beginning to end. Constantly evaluate your progress.
3. Welcome Failure. Frequently, very little is learned from a venture that did not experience failure in some form. Failure presents the opportunity to learn and makes the success more worthy.
4. Write down your goals. It clarifies your thinking and reinforces your commitment.
5. Keep your goals in sight. Review them frequently, and ensure that they are always at the forefront of your thinking.
And thus, my list* (in no particular order) that I hope to have done by February 15, 2010:
1. Read the complete archive of The Simple Dollar Website DONE
2. Obtain my Bachelor of Education Degree DONE
3. Sort through my comic books and see which ones can get the boot DONE
4. Read the complete works of William Shakespeare
5. Locate an apartment in Charlottetown DONE
I think it would give me a great sense of accomplishment to follow along the lines of some other sites such as The Simple Dollar and make the following list of goals I would like to achieve in the next 1001 days (2.75 years). The stipulations of the list are as follows from Triplux:
The Mission:
Complete 101 preset tasks in a period of 1001 days. [I've worked on this for a week and came up with 60 or so that is what I am using. It will still give me a sense of accomplishment and I can add more goals later on.]
The Criteria:
Tasks must be specific (ie. no ambiguity in the wording) with a result that is either measurable or clearly defined. Tasks must also be realistic and stretching (ie. represent some amount of work on my part).
Why 1001 Days?
Many people have created lists in the past - frequently simple goals such as new year's resolutions. The key to beating procrastination is to set a deadline that is realistic. 1001 Days (about 2.75 years) is a better period of time than a year, because it allows you several seasons to complete the tasks, which is better for organizing and timing some tasks such as overseas trips or outdoor activities.
Some common goal setting tips:
1. Be decisive. Know exactly what you want, why you want it, and how you plan to achieve it.
2. Stay Focussed. Any goal requires sustained focus from beginning to end. Constantly evaluate your progress.
3. Welcome Failure. Frequently, very little is learned from a venture that did not experience failure in some form. Failure presents the opportunity to learn and makes the success more worthy.
4. Write down your goals. It clarifies your thinking and reinforces your commitment.
5. Keep your goals in sight. Review them frequently, and ensure that they are always at the forefront of your thinking.
And thus, my list* (in no particular order) that I hope to have done by February 15, 2010:
1. Read the complete archive of The Simple Dollar Website DONE
2. Obtain my Bachelor of Education Degree DONE
3. Sort through my comic books and see which ones can get the boot DONE
4. Read the complete works of William Shakespeare
5. Locate an apartment in Charlottetown DONE
We found a nice 2 bedroom apartment in Charlottetown on Falconwood Drive near that messed up intersection of St. Peter's Road and Belvedere Avenue by the Esso. We move in on June 1.
6. Make my own windex
7. Have $18,000 in savings
8. Measure my body fat percentage in some scientific fashion
9. Become lighter by on average 0.5 pounds a week
10. Get Married
11. Open an RRSP
12. Invest in a mutual fund
13. Buy stock in a single company
14. Liquidate unwatched DVDs DONE
15. Purchase a Paderno pot set DONE
16. Beat Halo 2
17. Beat Jet Set Radio Future
18. Get rid of my old computer DONE
19. Liquidate old books DONE
20. Make 5 homemade gifts for people for various events (birthdays, Christmas, etc...) (5/5) DONE
21. Go on 10 relaxing drives around the island with my fiance (0/10)
22. Get in touch with Jon Ben DONE
23. Walk the equivalent of Summerside to Toronto not including every day walking (0/1700 km)
24. Watch Season 1 of The Shield
25. Read the Complete Cerebus series (4/16 TPBs)
26. Talk to Sam about his history with money DONE
27. Plant and grow my own tomatoes
28. Visit Neil in Halifax DONE, but in Winnipeg
29. Vacation in Vancouver DONE in August 09
30. Play 5 games of Ultimate Frisbee (2/5)
31. Cook 12 romantic dinners for my fiance and I (0/12)
32. Become an Ebay seller
33. Open an online trader account
34. Get flowers for my fiance "just because" 5 times (1/5)
35. Paint another 2 paintings in the Bob Ross style (0/2)
36. Do 100 push-ups without taking a break (personal best: 0/100)
37. Spend 10 complete days with my fiance (0/10)
38. Help my fiance's parents clean out a room in their house
39. Write an e-mail to the Guardian about why I won't be voting in the upcoming provincial election DONE
40. Offer to babysit 3 times for my friends so they can go out (0/3)
41. Call Mastercard to see if I can get lower or no annual fees without changing cards
42. Write a letter/e-mail to the guardian explaining my thoughts on the Nitrate groundwater issue and why debating about it in the upcoming election instead of just fixing it is stupid DONE
43. Write an e-mail explaining to Diamond Publishing why Comic Foundry should be included in their catalog
44. Plant a tree
45. Attend a farmer's market and if I like what I see 30 more times (0/30)
46. Determine my personal CO2 emissions (estimate) DONE
47. Reduce those emissions by 20%
48. Convince 5 people to switch to PC Financial for their banking (0/5)
49. Go through unwanted clothing and donate it to the salvation army DONE
50. Reinforce my computer desk with a 2x4 to get the bow out of it DONE
51. Reinforce my makeshift TV stand so it doesn't get a bow in it DONE
52. Read 52 in one sitting to see if it makes much sense
53. Make 10 jars of homemade pasta sauce and give it as gifts (0/10)
54. Finish the few pieces of the puzzle for the paper based on my masters project DONE
55. Do 150 sit-ups without taking a break (personal best 0/150)
56. Wash and wax our car 4 times (0/4)
57. Clean and vacuum the car interior 4 times (0/4)
58. Check the car's air filter and replace/clean if needed 4 times (every 6 months) (0/4)
59. Calculate our net worth DONE
60. Attempt to make my own laundry detergent as per the Simple Dollar DONE
61. Have the only animal I eat be fish/seafood for 4 consecutive months
62. Have my only beverage as water for 8 consecutive months
63. Try being a vegetarian for 5 consecutive months (no animal flesh - eggs/milk/cheese OK) DONE
64. Organize our filing container DONE
65. Pay off completely the debt I expect to incur over the next 2 years from my Bachelor of Education degree
66. Sit down and work the numbers to see if my Mosaik Mastercard is worth paying $100/year for it DONE
*Bear in mind that this list was pieced together over a week or so, so some of the items are complete as of posting.
64. Organize our filing container DONE
65. Pay off completely the debt I expect to incur over the next 2 years from my Bachelor of Education degree
66. Sit down and work the numbers to see if my Mosaik Mastercard is worth paying $100/year for it DONE
*Bear in mind that this list was pieced together over a week or so, so some of the items are complete as of posting.
I will post updates to what I have accomplished every three months as a way to track my progress.
Monday, May 7, 2007
Mmmmmmmmoney
So I have begun to reach my goal of mastering Microsoft Money 2006 Edition in order to track our purchases and finances. It is a very cool program and it is pretty easy to get the basics set up. I currently have all our bank accounts entered and there's a nice little pie chart that shows the distribution of expenses. You can set an expense or asset with the use of categories. For example, there is a category for Hobbies/Leisure and I have two sub-categories under this right now: one for Comics and the other for Sewing (for Pam, not me). Another is Automobile with the sub-categories gasoline, maintenance, payments, etc... Categories are a very nice and necessary feature. More on categories later. Here's an example of a typical pie chart that I found.
However, I have encountered an issue which is solved here, but I have yet to implement it. Any time that money is taken out of an account, Money treats it as an expense. This is fine normally except with the situations of transfers between accounts and credit card payments. For example, if I transfer $1200 from my savings to my chequing account, it thinks I spent $1200 and wants me to categorize it, even though the money hasn't really gone anywhere. The same idea happens with credit card payments. Ideally you would like the credit card as an account and everything you put on it (DVDs, comics, and of course junior bacon cheeseburgers) to be tracked as an expense. The issue lies when you pay the credit card from your bank account. Again money is leaving your account so Money wants to know why. You could put it in the Credit Card Payment category. Do you see the problem with that approach? Money tracks the $10 you spent at Wendy's on the CC, but also considers the $10 for the CC payment as an expense so it looks like you actually spent $20.
Apparently there is an easy fix to this with special categories that cover transfers. Thus bank transfers between accounts and transfers of monies onto a credit card are not counted as either income or expenses. I had tried this during my first run with Money but I must have did something wrong as it messed up my balances within the program to a ridiculous degree. So I deleted all my accounts, including the credit card one I had there originally and started fresh. I have yet to put the credit card back on as I wanted to figure out the transfer problem first. As well, when I redid all my bank accounts there were many more default categories than I had initially. I have zero clue as to why this is.
In short, I am still learning the ins and outs of this program and it should be fun to figure out what useful information I can extract from our spending habits. If you're interested in using a software program to track your monetary endeavours that has more bells and whistles than a simple spreadsheet, think about Microsoft Money. A free alternative called GnuCash can be found here.
Monday, April 30, 2007
Sidney Crosby Would be Proud
Since it's playoff season in the NHL, I thought it appropriate to post about my viewpoints on goal setting and list several goals that have been rattling around in my gray matter for a while. I feel that the important thing in a goal-setting exercise is to set both realistic and positive goals. For instance, saying that you want 2 million dollars in your bank account within 2 years, though possible, is more than likely a pipe dream. Setting that kind of goal is not a constructive endeavor because you are unlikely to achieve it. However, that's not to say that setting the bar high is a bad thing. You just need to set it high enough that it is just out of reach, but still within your grasp (I stole that rhetoric from a Montague Senior High agenda if you can believe it).
Another example of unrealistic goals cropped up yesterday when I was speaking with Doug Keefe about a "finance" book I had read entitled "Rich Dad, Poor Dad: What the Rich Teach Their Kids, that the Poor and Middle Class Do Not" (post about this will follow). This book emphasizes investing in assets which can generate something called passive income. In short, this is income that comes from a source where you have not earned it by doing a job. Another way to look at it is that an initial investment of some amount generates cash flow; your money makes money without input from you. Anyways, I thought about this and I decided I wanted enough in the way of assets to generate ~$200/month within 2-3 years. Apparently that is a little ambitious and so, would be an example of an unrealistic goal.
Some realistic (I hope!) goals I've been thinking of are the following:
1. Start an RRSP in some form within 3 months (add other options to it later maybe; ie. what it includes, be it mutual funds, stocks, GICs etc...)
2. Learn how to use the Microsoft Money program that came with my computer to track my finances and spending. Time frame: 6 months at most.
3. Become a home owner within 5 years.
4. I will aim for an investment portfolio that gives me a 10% rate of return. Obviously this is not guaranteed so I will be satisfied with 8%. Any less and the portfolio will be shuffled. I would like this set up within the next 3-4 years if possible (this may or may not be realistic).
It is not enough to state the goals though. What about the actions I am going to take to make them a reality. I think that can be tougher when you are in my situation of just starting out in personal finance control. For instance, I can say that I will read all I can about RRSPs for Goal #1, but somehow it doesn't seem specific enough to give me a clear path. With regards to this and Goal #4, I think some sort of professional advice is likely in order.
Goal #2 should be the most straightforward as programs such as this, while sometimes overwhelming, often have good tutorials and help menus to get things started.
Goal #3, home ownership, while the most income intensive (debatable?) of my goals actually has the most concrete step in achieving it. I know next to nothing about home ownership (the little I do know coming from my friends Mark [has a house] and Doug [knows an eff-load about them] as well as from The Wealthy Barber) so a good opportunity to learn some useful information has arisen. PC Financial is hosting a seminar at the Charlottetown Atlantic Superstore for first-time home buyers on Thursday May 24 from 7-9 pm. Topics include: finding the right mortgage for you, fixed and variable rate mortgages, tips on paying off debt quicker, the pre-approval process, etc... It should be an informative 2 hours and I am looking forward to it.
That does it for realistic goals, but what about positive ones? Well, it's all in the clear wording of your goal as well as some sort of reinforcement such as a time frame with which you wish (say that 5 times fast) to accomplish said goal. For example: say you make $2000 per month and 25% of that, $500 gets spent irresponsibly on random crap you don't need. You decide to take responsible action and make the goal "I am going to cut my spending by 50%. Apparently that person has a less likely chance of accomplishing that goal because of the wording. By including the word "cut" the goal has a negative context and subconsciously the brain will think that doing this thing will be bad. The same goes for smoking. When people say that they will quit, our brains have been conditioned to think that quitting is a bad thing. Thus it becomes harder to achieve the desired goal.
Instead, the smoker should set a positive goal with some sort of reinforcement. Rather than saying "I will quit smoking", the person can change the wording to "I will become a non-smoker within 4 months." By using the word "become" the goal becomes a positive one and apparently, the person is much more likely to actually stop smoking. As well, the addition of the deadline puts internal pressure on the person to make a serious effort. This should work well for people that increase productivity when under time constraints (like me).
Back to the financial example. Instead of "cutting" spending by 50%, the person could say: "I want to increase my monthly savings by $250 (50% of the $500 he was spending) and will have that process in place within 2 months. Again a positive outlook with a deadline.
With practice, I hope to regularly set these types of goals as the foundation for my financial success.
Another example of unrealistic goals cropped up yesterday when I was speaking with Doug Keefe about a "finance" book I had read entitled "Rich Dad, Poor Dad: What the Rich Teach Their Kids, that the Poor and Middle Class Do Not" (post about this will follow). This book emphasizes investing in assets which can generate something called passive income. In short, this is income that comes from a source where you have not earned it by doing a job. Another way to look at it is that an initial investment of some amount generates cash flow; your money makes money without input from you. Anyways, I thought about this and I decided I wanted enough in the way of assets to generate ~$200/month within 2-3 years. Apparently that is a little ambitious and so, would be an example of an unrealistic goal.
Some realistic (I hope!) goals I've been thinking of are the following:
1. Start an RRSP in some form within 3 months (add other options to it later maybe; ie. what it includes, be it mutual funds, stocks, GICs etc...)
2. Learn how to use the Microsoft Money program that came with my computer to track my finances and spending. Time frame: 6 months at most.
3. Become a home owner within 5 years.
4. I will aim for an investment portfolio that gives me a 10% rate of return. Obviously this is not guaranteed so I will be satisfied with 8%. Any less and the portfolio will be shuffled. I would like this set up within the next 3-4 years if possible (this may or may not be realistic).
It is not enough to state the goals though. What about the actions I am going to take to make them a reality. I think that can be tougher when you are in my situation of just starting out in personal finance control. For instance, I can say that I will read all I can about RRSPs for Goal #1, but somehow it doesn't seem specific enough to give me a clear path. With regards to this and Goal #4, I think some sort of professional advice is likely in order.
Goal #2 should be the most straightforward as programs such as this, while sometimes overwhelming, often have good tutorials and help menus to get things started.
Goal #3, home ownership, while the most income intensive (debatable?) of my goals actually has the most concrete step in achieving it. I know next to nothing about home ownership (the little I do know coming from my friends Mark [has a house] and Doug [knows an eff-load about them] as well as from The Wealthy Barber) so a good opportunity to learn some useful information has arisen. PC Financial is hosting a seminar at the Charlottetown Atlantic Superstore for first-time home buyers on Thursday May 24 from 7-9 pm. Topics include: finding the right mortgage for you, fixed and variable rate mortgages, tips on paying off debt quicker, the pre-approval process, etc... It should be an informative 2 hours and I am looking forward to it.
That does it for realistic goals, but what about positive ones? Well, it's all in the clear wording of your goal as well as some sort of reinforcement such as a time frame with which you wish (say that 5 times fast) to accomplish said goal. For example: say you make $2000 per month and 25% of that, $500 gets spent irresponsibly on random crap you don't need. You decide to take responsible action and make the goal "I am going to cut my spending by 50%. Apparently that person has a less likely chance of accomplishing that goal because of the wording. By including the word "cut" the goal has a negative context and subconsciously the brain will think that doing this thing will be bad. The same goes for smoking. When people say that they will quit, our brains have been conditioned to think that quitting is a bad thing. Thus it becomes harder to achieve the desired goal.
Instead, the smoker should set a positive goal with some sort of reinforcement. Rather than saying "I will quit smoking", the person can change the wording to "I will become a non-smoker within 4 months." By using the word "become" the goal becomes a positive one and apparently, the person is much more likely to actually stop smoking. As well, the addition of the deadline puts internal pressure on the person to make a serious effort. This should work well for people that increase productivity when under time constraints (like me).
Back to the financial example. Instead of "cutting" spending by 50%, the person could say: "I want to increase my monthly savings by $250 (50% of the $500 he was spending) and will have that process in place within 2 months. Again a positive outlook with a deadline.
With practice, I hope to regularly set these types of goals as the foundation for my financial success.
Monday, April 16, 2007
A New Blog Cometh
Welcome to A Financial Flogging. The purpose of this blog is threefold.
Purpose the First: to commit my ideas to an easily manageable format
Purpose the Second: to track my progress when it comes to learning about financial matters, to observe any long term trends when it comes to positive returns, and to set and achieve goals
Purpose the Third: to hopefully generate some discussion in the comments that can help me on my way to learning more and learning more faster/smarter
As well, this will be the first step in taking responsibility for my personal finances (second if you count opening a 4% savings account with PC Financial; you can read some reasons why to switch here) which is an important task for everyone in this day and age.
Purpose the First: to commit my ideas to an easily manageable format
Purpose the Second: to track my progress when it comes to learning about financial matters, to observe any long term trends when it comes to positive returns, and to set and achieve goals
Purpose the Third: to hopefully generate some discussion in the comments that can help me on my way to learning more and learning more faster/smarter
As well, this will be the first step in taking responsibility for my personal finances (second if you count opening a 4% savings account with PC Financial; you can read some reasons why to switch here) which is an important task for everyone in this day and age.
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