Don't Eat Cat Food in Your Old Age

Tracking mah money

There I was, studying away, plowing through Chapter 3 when suddenly wham! Life happened. You know those situations, when you get some news and you put your regular life on hold for a bit to deal with something big. We’ll return to regularly scheduled programming (studying) soon, but meanwhile, writer & editor Kaarina Stiff asked me how I track my money.

Are you ready to hear my magic secret? I use – drumroll please – a notebook!

Every month I sit down with my online banking accounts on my computer and do a check-in. It takes less than 30 minutes. When I hit a milestone I draw huge exclamation marks and stars; yes, just like a teenaged girl’s diary. I use funky colours and whatever else it takes to make it more fun and less of a chore.

Knowing what’s coming in and going out is important, afterall. How can you make any other financial decisions if you don’t know what you’re dealing with?

On my Financials page, I list my amounts in three categories: short-term (cash), medium-term (stocks, bonds, TFSA) and long-term holdings (RRSPs). Then I add them all up for my assets. I also add up my mortgage and any debt I have that month on my line of credit or credit card – that’s my liabilities. I minus my liabilities from my assets and voila! That’s my net worth. (Plus my condo – real estate rah rah rah!)

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On my Spending page, I split it out into fixed expenses (mortgage, condo fees, utilities, insurance, etc.) and variable expenses (groceries, restaurants/entertainment, gas and other). I add them up to see how much money is going out every month.

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When I first started I forgot to include gas. I also accidentally included my monthly savings under expenses, then couldn’t figure out how I was overspending every month while my net worth kept increasing. Oops.

If you’re more technically inclined than I am (which ain’t hard), there’s software programs like Quicken. The starter edition is $40 (and if you work for yourself remember to expense it!). It connects to your online accounts and puts your spending into categories.

However you do it, what matters is that you know what’s happening with your money. If that calls for a fuzzy cow pink pen, so be it.

Hitting the regulations wall

I hit the wall in Chapter 3: the Canadian Regulatory Environment. Twenty-eight pages of tedium, plus online exercises. I’m telling myself, you gotta get through this to get to the fun stuff in Chapter 4: Economic Principles. (Yes, by comparison, it is the fun stuff. At least we’ll get back to talking about money.)

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Chapter 1: The Capital Market managed to make money seem like a force for good. Of course it can be, but it’s really just a thing. The people behind it are what matter.

Chapter 2: The Canadian Securities Industry was a little easier, despite multiple definitions of underwriting. (Anyone else think of underwire bras? No? Just me then.)

Ok, one more push to finish. I’m trying to convince myself this is sexy stuff. Arbitration sounds fancy. Examples of unethical practices should be juicy. Trying really hard not to think of Paul Giamatti in his Billions bondage gear. I may need to watch Richard Gere in Pretty Woman instead.

Highlights of what I’ve learned so far:

Capital is just money that’s available so you can do stuff with it, like invest.
Having more capital (money) means people can invest, businesses can increase productivity and governments can get more stuff done. So capital is good.
Lots of foreign countries invest in Canada because we’re seen as safe and secure. (Peace, order and good government baby!)
There are seven different stock exchanges in Canada, not just the TSX.
The big six banks run >90% of the country’s banking assets but there are oodles more banks (yes, oodles. Hey you’re not the one being quizzed. Believe me, I’m saving you.).
There are entirely too many definitions of underwriting.

Pearl Jam and garbanzo beans

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Pearl Jam’s Eddie Vedder

Figuring out your money starts with tracking how it comes in and goes out, and sometimes you may realize you often buy the same stuff you don’t really need but really like. The book Your Money or Your Life by Joe Dominguez and Vicki Robin calls them gazingus pins but I can never remember the term so I call them garbanzo beans.

Everyone has them. I’ve realized I don’t really need another black turtleneck or gray hoodie, so I’m down to books and music. The library has saved me thousands of dollars over the years. Saving in other areas frees up enough cash to allow me to indulge my music passion with a concert fund.

I set aside a certain amount of money every year to cover the cost of concert tickets. That way my monthly budget isn’t completely derailed and I don’t have to scramble to take advantage of shows when they come to town.

Pearl Jam played the Canadian Tire Centre on Sunday. They are my friend Joanne’s favourite band in the world and we bought tickets back in January. Unfortunately, despite getting into the site within five minutes of the tickets going on sale and alternating between three different browsers to get the best available, we got nosebleed seats.

Sure we could’ve paid twice as much to a scalper to get floor seats, but Joanne said she probably wouldn’t have enjoyed the concert, knowing how much we paid. This way she still heard them live, plus we had money left over for other priorities (merchandise and wine) without a side of guilt or worry.

Money – or should I say, financial freedom – isn’t this mysterious force that’s out there somewhere. It’s in our choices. If you have more money, you have more options and that’s why it’s important. Sometimes we can find more money by making different choices. I’m fortunate that I can create enough disposable income to afford a concert fund. Having the freedom to indulge in your passions is important in life.

That drawer of concert t-shirts isn’t going to fill itself, you know. Rock on.

Perspective from Fort McMurray fire

This week I intended to write about starting the Canadian Securities Course, but I’ve been distracted by the disaster happening in Fort McMurray. If you don’t know, it’s a town in Alberta, Canada, that has been completely evacuated because of forest fires.

About 88,000 people have had to leave their homes and belongings behind. Many houses and businesses have been destroyed, although the full extent of the damage is not yet known. A state of emergency has been called and the federal government will match donations made to the Red Cross.

In the tragedy there are stories of goodwill, such as the Syrian refugees who recently came to Canada and now want to help Fort McMurray evacuees. And this story about a bride-to-be whose wedding gown burned but who found a new one when the call went out and people came forward. All over Canada there are stories of people coming together to help.

It will take years for the residents to recover, emotionally and financially. For most Canadians their home is their main investment and largest asset. What do you do when it disappears? What do you do when your source of income, either your own business or place of employment, also disappears? How do you provide for yourself and your loved ones?

Unfortunately, tens of thousands of people in Alberta will find out. Fortunately, stuff is just stuff and can be replaced. What really matters is the people in your life. They’re going to need each other, and the rest of us, to get through this.

You can donate to the Red Cross here: www.redcross.ca

Learning about money stuff – Canadian Securities Course

When the global economy collapsed in 2009 (and the world’s biggest capitalist society needed government bailouts – wow!) we all discovered we really didn’t know much about how or why. We recognized that our financial literacy is lacking. As a current Facebook meme says, I’m sure glad I learned about parallelograms in school instead of taxes…

Money is a funny thing. I like learning about it and talking about it. It comes from growing up without it. Over the years I’ve collected a little library of books on the topic, I subscribe to a magazine about it (MoneySense), I even have a monthly meeting with a group of women to discuss it. But even with all this, I know there’s still so much I don’t know.

Sure I know how to budget and save and invest – to a certain extent. I know there’s a whole other world out there and, despite having some math fears (seriously, I have recurring nightmares about high school math class), I took a big step.

I signed up for the Canadian Securities Course (CSC), the foundation you need to work in the financial industry here. The plan is to take the course over its suggested 135 to 200 hours of study, and to write about what I’m learning along the way. I’m hoping it’ll help me find new clients to write and edit for in the financial industry. At the very least I’ll learn more about how to make the most of my money so that one day, I won’t have to work so hard for it.

Will I be spending my summer Sunday afternoons on my balcony in studying bliss? Or will I have to replace my new financial calculator multiple times from throwing it in frustration?

Let’s find out. Let’s improve our financial literacy and do some book learnin’ about this money stuff. Most importantly, let’s find out how to avoid eating cat food in our old age.

New life for $2

Thirty years ago today my mom and I left my dad for the last time. I had some clothes stuffed into my school bag, she had some stuffed into two plastic bags. We had bus fare and an extra quarter to call the women’s shelter for directions. That means we started a whole new life for $2.

My mom had no education, no money, no options. Sometimes seeing what not to do gives you the best lessons. Thanks Mom.

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The TTC transfer that got us to the women’s shelter that day has been in a photo album for 30 years.

Prince and the true currency

Dearly beloved
We are gathered here today
To get through this thing called life

Electric word life
It means forever and that’s a mighty long time
But I’m here to tell you
There’s something else
The after world…

Prince died today,at the age of 57. His music has been part of my life since I was a kid. When Doves Cry is still one of the sexiest songs I’ve ever heard, and I even got married in 1999 so I could party like it was (1999).

What is a money/finance blogger doing writing about a musician? Here’s the thing. Money is important, but time is the true currency. None of us knows how much we have left, so we have to make every minute count.

If you don’t have money, or at least knowledge about your money, you don’t have the luxury of choosing what to do with your time. You have to give it away to get what you need (food, shelter, etc.).

I had the pleasure of seeing Prince in concert in 2011. He certainly was dedicated to his music. May we all be so lucky as to have the chance to pursue our passion instead of chasing money to pay the bills.

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Credit is like Spandex

Yesterday was tax day for me and I have mixed feelings. Usually I’m happy about paying taxes. I know, I know, I’m weird — but I’ve benefited from what my taxes pay for and I’m grateful. It’s also a great indication of how much money I’ve made.

Thanks to installment payments and lower income, I didn’t have to pay much for 2015. I’m trying to remember how stressed I was in 2014 when I was working seven days a week and a Big Personal Event happened that left me scrambling to find the time. Sure I made a lot more money, but it left me thinking about the whole work/life balance thing.

Oh, I’m self-employed, by the way. A lot of people think you have more free time when you work for yourself (as though you’re retired), but most self-employed people I know actually have less, because you’re working all the time.

I went to the bank to make the tax payments (I’m rather fond of the big PAID stamp they have) and while I was there I spoke to an advisor. I mentioned my next big project is saving up for an investment/income property. He told me that with my equity and good credit I wouldn’t need to save up, I could finance the whole thing through the bank. All I have to do is go in when I’m ready and they’ll pre-approve me.

Fully financing a second mortgage through a bank? Too Big to Fail started flashing through my brain. Credit is good, when used appropriately. But sometimes credit is like Spandex.

Just because you can get it, doesn’t mean you should use it.