Spending Analysis – March 2014

I can’t lie, I knew March was going to be a spendy month before it was even half over. It wasn’t necessarily a bad spendy month on all fronts, but a spendy month it was.

 Mortgage and Taxes $1,258.86
Renovations $524.51
Groceries $331.04
Personal Care $287.71
Eating Out $201.91
Utilities $198.83
Clothing $168.00
Fuel $175.91
Insurance $162.16
Communication $99.06
Entertainment $75.00
Vehicle Care $40.00
Shopping $18.89
Pet Care $16.77
Wedding $7.30
 Fees $4.00
$3,569.95

$3,569.95, almost $1,000 more than I spent in February.

I’ll note again for those of you that are new here that I’m using this as an opportunity to track my spending, not my income or savings, which is why you don’t see a value for RRSP savings, emergency savings, investments, cash or otherwise in here. It’s not that they don’t exist, it’s just that they’re not documented here.

Mortgage and Taxes – Neutral

This one has a reasonably limited shelf life. Unless something crazy happens to the Edmonton housing market in the next little while, I don’t expect you’ll be seeing this one for very much longer.

Renovation – Happy

I’m happy that it’s getting finished, but I’ll also be happy when it’s actually done!

It’s easy to look back at it and go “how did we spend $500 on that??” because it was a lot of little stuff. New door locks and handles, installing weather stripping, some transitions, a faucet for the kitchen sink, replacement traps for the kitchen sink and some misc plumbing (valves, connections, extensions, etc…), door stops and closet trim, feet for the fridge, quarter round, more dap, wood filler, lots of light bulbs (I had no idea that many had burned out!), some of those toilet cleaning tablets for the tanks, you get the drill. The large tools have finally moved out of my kitchen! We’re at the point now that we basically just have to swap over the kitchen faucet and do the last little bit of painting and it will be ready to put on the market.

Groceries – Neutral

A sizable jump in the grocery department this month, but I also did all of the grocery shopping in March. It breaks down to $165.52 per person, including mostly organic produce and gluten free products. It’s not too bad until you consider that we were also eating out a fair bit on the weekends while we were at my place. I think I can do better than this. I usually do a big grocery shop around pay day and then pick up a couple things here and there as needed, so I’m going to try doing smaller, more frequent shopping trips instead.

I’m also going to be starting up my local produce delivery again, which is about $50 per delivery, so I’ll only need to go to the grocery store for things I can’t get through that. I’m crossing my fingers that it will cut down on the impulse shopping.

Personal Care – Happy

Despite the sizable dollar figure, I’m actually pretty content with this category. My winter skin care routine is pretty much figured out, but my summer one needs some work since I tend to break out the worst then. I picked up a handful of travel size bottles and various samples of skin care products so that I could try them at the beginning of the month. Sometimes it takes a week or two of using a new product before I start breaking out, but so far I’ve been really happy with the results. I have enough that I shouldn’t need to purchase full size bottles of most of them for a couple months. Later in the month I caught a promotion, spend $100 get a $30 gift card, so I picked up a full bottle of the serum I had been sampling out of a plastic tester ($$$), some clarifying shampoo and a stick of concealer, as well as grabbing a sample of sunscreen. So far I’ve been doing alright with the sunscreen, so I’m planning on using the gift card towards that this month.

On top of that, I also went and got my hair cut last month. On the plus side, I’m maintaining my goal of getting a haircut ever 3 months. On the downside, my hair dresser is going on maternity leave before my next haircut, leaving me in the position of needing to find a new hairdresser (damn it!)

Oh, and I bought my fiancé a bottle of Advil in here. I can’t use the stuff, but he does.

Eating Out – Neutral

One of the few things strong enough to wrestle me away from my precious Starbucks is Tim Hortons Roll up the Rim to Win. I spent $30 at Starbucks this month, the rest of my coffee went down $0.67 a cup, and I won 3 free coffees. Yay! As for the rest of it, I ate more lunches out with colleagues, and ordered pizza one night after work. There’s definitely some work to be done here.

Utilities – Neutral

It was a good thing I didn’t spend much time at my house last month. When I’m not home I turn the temperature down to 15 degrees (59 Fahrenheit), rather than its usual 18.5 degrees when I’m home (65 Fahrenheit). The cost of natural gas doubled last month. The Boy’s gas bill was a shock to the system (almost $200), so I was glad to get away only paying about $110. I’m going to talk to him about possibly turning his programmed temperature down to 19 degrees or so rather than 20-21. I think he might be receptive to it.

Clothing – Happy

I’ve had a pair of Hunter rain boots on my birthday/Christmas wishlist for the last year and a half or so. I finally bought myself a pair at the beginning of the month in preparation for the annual massive snow melt induced sidewalk puddles… that didn’t happen this year *facepalm*

I’m still quite happy with the purchase though. They’re a jade green colour that I’m absolutely in love with, and I’m happy to have them in my wardrobe for when the puddles decide to recur.

Fuel – Unhappy

My fuel costs almost doubled over February, what’s not to love? I so called this one last month. Not only did my fuel consumption increase during the cold snap, the cost of gas increased. That and I fueled up on the last day of the month, so $40 worth of the gas I’m driving on this month I paid for last month. That happens from time to time, it just inflates the total a bit.

Insurance – Neutral

Still just a combination of house insurance and car insurance. Not much is going to happen here for a little while.

Communication - Neutral

Still just my cell phone bill. Apparently I made another a long distance call on it last month? I’m going to have to check into that.

Entertainment – Happy

The Boy’s father gave us tickets to the Home and Garden show in Edmonton, so I paid $15 for us to park there. It was fun, but next time we’re taking the LRT! Also, I signed up on a recreational dodge ball team with some people from work, so it cost $60 to register for that. That’ll go towards my weekly exercise total which is currently lagging….

Vehicle Care – Unhappy

Spring is finally here, and you know what that means? Rocks being thrown at your windshield! Yay! :(

I took a rock to the window earlier in the month so I paid to get the impact filled before it had a chance to crack further.

Shopping – Happy

I picked up a bouquet of pink roses to help girly up my fiancé’s rather masculine living room :D

Pet Care – Happy

The Boy has a pampered pooch. I bought him some pig ears. I’m so his favourite human.

Wedding – Happy

A Martha Stewart Weddings magazine. Wedding magazines have basically replaced the rest of my other magazines. Still haven’t booked anything yet. We’ve tried, but nothing yet. We may have to cut our guest list down.

Fees – Neutral

I’ll probably kick this account to the curb after I sell my house, but for the time being it’s my main account.

This is how my spending broke out this month:

March 2014 Spending

Lots of spending all around! One thing that happened in March is that I became acutely aware of how many times I was buying take out coffee. When I’m tracking my spending at Starbucks, I count the times I refill my card as transactions, not when I buy the individual cups of coffee. Buying coffee at Tim Hortons, I was counting individual transactions because I was paying in cash. Anywhere you see $1.80 on the calendar above, it means the only thing I bought that day was a cup of coffee. I have more thoughts on that, but I’m saving that for another post.

I’ve officially tracked my spending for ¼ of 2014! That’s further than I thought I’d make it to be honest. How did your spending go last month?

Recommended Reading: Put Your Whole Heart Into Your Debt Repayment

Cost of Living Comparison – Consumables – Edmonton, AB

When moving abroad and learning about another culture, you wouldn’t typically expect McDonalds to be one of your first memorable experiences. My initial flight abroad as an exchange student arrived a day before the majority of the other students. I wasn’t completely alone, since a student from Mexico and a student from Japan arrived right around the same time as I had, but we were still early. The facility we were staying at wasn’t yet prepared to accommodate us in the food department, so the counsellor who had picked us up at the airport bought Big Macs, fries and drinks from a McDonalds for us. We spent that first evening together, eating dinner and discussing the differences between the McDonalds meals in our respective countries. It was my first real exposure to the fact that something as seemingly standardized as a meal from McDonalds can be so different depending on where you live.

It’s something that I have to keep in mind when I’m reading other blogs. When I read about someone paying $300 for rent, or making well rounded meals for $1, it used to get frustrating when I mentally compared my own expenses to theirs. Especially when I was paying off debt. I had to learn how to use their posts as inspiration, not as a hard price marker to hit. As much as I would love to, my cost to make a salad is not going to be the same as the cost for someone in California. Especially not if the post was written back in, say, July 2007. Geography plays a role, and so does inflation.

I haven’t posted much in the way of recipes on this blog, but I’m hoping to do that more in the future. What I have been posting recently are my overall monthly expenses, including grocery totals. Anyone who has spent some time shopping in different areas knows that the prices for different staple items can fluctuate considerably, so it’s hard to compare grocery totals with other bloggers. We have no basis for comparison!

So why not fix that?

“Typical” changes from region to region, but I tried my best to create a spreadsheet of “typical” cost of living prices. All of the prices listed are conventional, not organic. The bread is regular white bread, not gluten free. I took the prices from a grocery store commonly found in residential areas, not a discount or high end grocery store. I used the non-sale prices, since not everyone always has sales or coupons that they can use, even though I do tend to try to buy things on sale. If one brand seemed to take up a large percentage of the shelf space, or had otherwise cornered the market, I assumed they had a large enough percentage of the population buying their product to be able to afford prime placement, so I took their prices. Rather than large, family sized quantities or small camping sized packages where economies of scale really come into play, I took the prices off the mid-sized packaging a couple might buy. I used the price per unit weight wherever applicable. If packages of meat or cheese were all slapped with a $10 sticker regardless of weight I didn’t use those prices, which is why there’s no chicken in the list. I’ve included sales tax in the prices where applicable.

Nothing was overly fancy, but it wasn’t the cheapest of the cheap either.

On the eating out front, I looked at two locations: Starbucks and McDonalds. Sure, Tim Hortons has a large market share here in Canada, but it’s useless for comparison in Europe or Australia because they don’t have locations there. Starbucks and McDonalds can be found in most countries around the world, so I’m using them for comparison purposes.

The gasoline (petrol) costs are what I am currently paying as of this week, and the utility prices were taken from my most recent bill (minus admin fees, etc… which make up more than half of the bill). Depending on where you live you’re either falling all over yourself because they’re so cheap, or choking on how high the prices are.

The first columns are the prices I saw at the store, as well as the quantity I was looking at. The next columns are prices per unit weight in both metric and imperial. I kind of took a stab in the dark at how prices are listed in the US, since I wasn’t sure where you use pounds vs ounces, and I don’t know how you’re charged for utilities.

Cost of Living

So I’m curious, how does this stack up against where you live? Do you pay more or less for different items? Anyone interested in building a comparison sheet for their province/state/country?

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Us vs. The Wedding Budget – Round #1

After spending the last two and a half months or so planning a wedding, I’ve come to two conclusions:

1) Getting married is cheap.

2) Having a wedding is expensive.

It may seem like I’m contradicting myself there, but I’m not.

The total cost of getting married:

  • marriage license
  • whatever costs are involved in getting you and your partner down to city hall to make it legal

The total cost of having a wedding:

  • marriage license – sorry, you’re not getting away from that one.
  • engagement photos – if you’re doing them
  • invitations (including, if applicable, save the date, invite, RSVP, envelopes, etc…)
  • postage
  • engagement/rehearsal dinner – if you’re doing them
  • dress and accessories
  • tux/suit and accessories
  • transportation
  • ceremony venue rental
  • officiant
  • chairs – if your venue doesn’t provide any
  • ceremony decorations – if you feel you need them
  • ceremony programs and signage – if you’re using them
  • flowers – if you’re using them
  • photographer
  • ceremony musician/SOCAN fees
  • reception venue rental
  • reception centerpieces and decorations – if you’ve decided to decorate
  • guest book – if you’re using one
  • reception menus, seating arrangements, etc… – if you’re using them
  • reception music/SOCAN fees
  • dinner
  • drinks
  • alcohol – if you’re providing it
  • plate/glass rental – not everyone has them or includes them in the cost
  • waitstaff/buffet staff
  • bartender
  • cake
  • cake stand
  • cake cutting/plating
  • favours
  • midnight lunch
  • taxes
  • gratuity
  • parental and wedding party gifts
  • honeymoon
  • thank you cards
  • more postage
  • etc…

Now, granted, not everything on this list is strictly a must have, but almost every wedding I’ve been too has had most if not all of these items. You can of course have a wedding with way WAY less than this (Check out Kerry’s inspiring wedding costs on Squawk Fox here and here!). Then again, some weddings have much more than this. Tea ceremonies, reception entertainers, cocktail hour appetizers, videographers, photo booths, dramatic entrances and exits, transportation for guests… all add to the overall cost of a wedding. Oh, and the number of wedding guests makes a difference. A BIG difference.

According to Huffington Post, the average Canadian wedding in 2013, including a honeymoon, was $32,358. Barring another major market crash, I’d expect that number to be higher by the time we get married in 2015.

When we first starting discussing budgets, The Boy and I decided that we were comfortable doing a wedding in the $15,000 – $20,000 range, not including the honeymoon. We both have friends who have had nice weddings in that price range in the Edmonton area, so we figured that would be a reasonable place to start. If we could get what we wanted for less than that, even better.

The wedding will be paid for, in full, before we leave for our honeymoon.

Contrary to the popular groom stereotype, my fiance has been very hands on in the planning process. This has been both a wonderful blessing and an experience that occasionally makes me want to pull my hair out by the handful.

Armed with our initial guest count of approximately 140, we started looking for venues. Edmonton, it turns out, has a large variety of nice venues that hold less than 100 people and a large selection of nice venues that hold 250+ people, but not a whole lot in between. Inexpensive venues (and some expensive venues) require you to rent dishes, chairs, etc… A lot of venues specify who you can use for catering. Some venues specify which store you have to buy your alcohol from. Some of the venues impose minimum food and drink revenues on top of their rental cost ($18,000+ anyone?). Some venues require you pay them a percentage of the catering bill on top of the hall rental, even if they’re not supplying the catering.

If that wasn’t enough, here’s some numbers that are currently blowing our minds:

$3.50 – the price of a non-alcoholic drink at a wedding venue (W…T…F…)

$7.50 – the cost most places are charging for alcoholic drinks nowadays.

$7.50 – the average corkage cost per wedding guest you pay if you want to supply your own liquor. (Doesn’t always include glasses, and after you buy alcohol it works out to about the same as just paying them the bar tab)

$13.00 – the cost, per chair, per day, to rent those chiavari chairs you see in all those wedding venue advertisements. That would be almost $2000 just in chairs for a wedding of our size!

18% – The average gratuity venues are applying to your entire bill, which is to be paid in full several days before the wedding even occurs.

$100 – estimated cost one florist gave me for a bridal bouquet of baby’s breath. It’s a filler flower people!!

Suffice it to say, I understand now why destination weddings have become so popular.

I know The Boy was dealing with some serious sticker shock when he first started looking at wedding costs, and to be honest I can’t say I blame him. I’m more familiar with wedding costs than he is, and even I’m struggling with the astronomical, if not downright asinine, prices that venues are demanding. According to one wedding forum I found, one of the venues we looked at cost $300 to rent back in 2008.

The price in 2014? $2,500. Plus 10% of the catering bill.

The inflation that the wedding industry is going through on an annual basis is unprecedented. Please keep that in mind the next time you feel the urge to chastise someone and point out how your wedding cost $2,000 back in the 80′s. I’ve seen a lot of people catching flack when they share their wedding costs, and that sort of comparison isn’t even remotely helpful. If the annual inflation of that venue was applied to your wedding, your $2,000 wedding in 1980 would have cost over $331 million today.

That’s not a joke, that’s actually what it worked out to.

Compounding at its finest.

I digress.

Anyway, suffice it to say, we haven’t booked a venue yet (which is why you haven’t heard anything about wedding costs before now). It’s stressing me out a bit, but it is what it is. The Boy is working his negotiating magic on a couple venues at the moment, so we’ll see if anything comes of it in the next couple weeks.

*fingers crossed*

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Join the 2% Club

Okay. Now that the banks are done shoving RRSPs down our throats for another year, let’s talk honestly about retirement savings. Namely, let’s talk about the fact that you don’t need to scramble once a year to scrape together a large enough dollar figure that you hope the advisor isn’t going to laugh at you or give you pithy looks for. Because, you know, those are fun.

I know not all bankers do that to people, but having been on the receiving end of that myself before I know it does happen.

As it stands I have about $30,000 in retirement savings. I’d consider it to be a somewhat reasonable retirement account for someone in their late 20’s, but don’t beat yourself up by any means if you haven’t even opened an account yet. We’ll get there.

If you ignored raises, market returns, income tax returns and all of that other fun stuff, a 20 year old person making $30,000 a year, saving a 10% a year, would have $30,000 saved by the time they were in their late 20’s.

Don’t have 10% a year to save? That’s fine. Try 1%. Or 2%.

Three and a half years ago my retirement savings was sitting pretty close to $0. I had drained the account a year prior to fund the down payment on my home. I was also drowning in debt with a maxed out credit card, line of credit, and budget crushing payment on what could only be described as a lemon of a car. Fun times. My employer at the time sent out a letter to everyone that it was about to reintroduce a retirement matching program that had been cancelled at the beginning of the recession. They would match contributions 50 cents on the dollar, up to a maximum 1% of your salary.

Having previously worked for a company that gave you 4% automatically and matched you dollar for dollar up to 6%, this was underwhelming. That being said, I didn’t want to pass up on free money either. My budget was already seriously pinched, but I signed up for it anyway. I put in 2%. It was around $15 a week, and it HURT.

I was laid off about 6 months later, but during that time those little contributions amounted to several hundred dollars.

The job I landed next had a slightly more generous package. They put 3% into a pension automatically, and they would match you 50 cents on the dollar for up to an additional 1.5% of your salary. I put in 3% for the full 1.5% company match. All total I had 7.5% of my income going into retirement savings, before I even saw my pay stub.

At the same time, the grace period on the money I had previously taken out came due, and I was now required by the government to put $1000 a year into my retirement account, or else it would be counted as income and I would be taxed on it. This was while I was still paying my debt off! Starting in October that year, I put an extra $100 a pay period into my retirement account to start repaying what I had taken out.

I maintained this for some time before deciding that I needed to step up to the plate this year and increase my contributions. I increased my automatic contributions at work to 10% as of January this year. After receiving notice I had gotten a raise, I bumped it up again. My automated contributions are up to 15%. I plan on bumping it up again later this year to 18%.

Ignoring the larger percentages for a minute, I’d like to focus on this: I did not save $30,000 by saving 18% of my income. I saved $30,000 in 3.5 years by saving a single digit percentage of my income.

3%.

7.5%.

I fluttered close to 10% towards the end, but I wasn’t saving that much throughout. Even without an employer match, my account would still be well into 5 digit territory today. That’s huge!

It started with saving 2% of my income.

If the financial personalities on TV, online, wherever are scaring you into thinking you’re going to be destitute if you don’t immediately start saving at least 10% a year, ignore them!

Save $20 every pay cheque. Save 1%. Save your loose change. Save whatever you can manage, and do it throughout the year.

When you get used to saving that much, bump it up a little. Add $10. Bump it up to 2%. It doesn’t matter how you do it, as long as you actually do it.

Pop quiz! Which is better: saving $20 a week, or coming up with a $1000 lump sum once a year?

Answer: $20 a week is equal to $1040 at the end of the year, which is better than a $1000 lump sum.

You’re not going to be broke at the end of the day if you can’t save tens of thousands of dollars every year, you’re going to end up broke if you don’t save at all. Bite the bullet and start saving a little bit. When it starts to feel comfortable, try to save a little more.

I’d suggest starting with 2%.

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Spending Analysis – February 2014

Two months out of twelve! So far so good :)

Thinking back on it, I think I was a little too hard on myself last month. Yes, I spent just about $3,000, but my fixed costs also account for a good chunk of that. When I calculated my pared back number for my emergency fund, I calculated that I would need $2,500 a month. I had a fairly active month, and I was only $500 above my emergency fund number. I think it was just a case of actually seeing everything totaled up giving me a shock. I shouldn’t really give myself a hard time for living and having fun within my means.

That being said, I still had a good time this month, and I spent even less than that!

Mortgage and Taxes  $  1,258.86
Groceries  $     220.70
Utilities  $     213.09
Eating Out  $     167.95
Insurance  $     162.16
Clothing  $     147.43
Alcohol  $     109.24
Communication  $        99.06
Fuel  $        92.43
Vehicle Care  $        60.89
Gifts  $        50.15
Personal Care  $        37.79
Prescription  $        31.12
Fees  $          4.00
   $  2,654.87

$2,654.87. I can live with that.

I’ll note again that I’m using this as an opportunity to track my spending, not my income or savings, which is why you don’t see a value for RRSP savings, emergency savings, investments, cash or otherwise in here.

Mortgage and Taxes – Neutral

This is exactly what it sounds like, my mortgage and property taxes. There’s nothing really interesting to see here.

Groceries – Happy

This is a bit higher than last month, but I also did more of the shopping again. I do tend to favour the brands that are on sale when I’m shopping, but at the same time I also purchase organic produce when it’s available, regardless of the price. Yes, it stings a little paying $6 for a container of raspberries when the conventional ones are on sale for $3, but I’m okay with that for the time being.

So, yeah, $220 paid for groceries for 2 people including organic produce and mostly gluten free products (The Boy eats regular bread). It’s really not that bad when you think about it.

Utilities – Neutral

A small decrease in my utility bills due to me doing…. nothing? It’s just the fluctuation of utility rates and external temperatures at play here. Providing rates don’t do anything too crazy this will go down as we approach summer.

Eating Out – Happy

I’m pretty content with this. $65 went to Starbucks, and another $65 went towards dinner and drinks at a pub for The Boy and I. That accounts for all but $37 worth of my eating out this month. I did a much better job of packing lunches for work.

Insurance – Neutral

Combination of house insurance and car insurance. Not much is going to happen here for a little while.

Clothing – Happy

As per my New Year’s goals, I’m going through and replacing a bunch of my undergarments this year. With that in mind, $51 of this category went towards buying new underwear. $86 went towards buying a new pair of work pants and a few t-shirts, and $10 went towards a new cell phone cover because my existing cover was breaking. Technically a cell phone cover doesn’t count as clothing, but I’m considering it an accessory. It’s interactive. It has LEGO like pieces on the back that I can fidget with. It’s kind of awesome.

Alcohol – Neutral

Not a category I expect you’ll see on here often. We’ve been doing a lot of rearranging this month trying to make space to move the last of my things in. Not only has The Boy been getting rid of a lot of stuff, he took his beer fridge out of his man cave (the basement) and moved it into the garage so that we’d have more space. I surprised him and stocked it with beer for when he’s working on his projects out there.

Communication – Neutral

Still just my cell phone bill. Apparently I made a long distance call on it last month? I’m going to have to check into that.

Fuel – Happy

I’m happy with this number, but I can also guarantee you it will be higher next month. Gas has already gone up a good 20 cents a liter from its low in February, and The Boy has been starting my car for me while I’m getting ready for work because it’s been so cold out this past week.

Vehicle Care – Neutral

Got an oil change on my car at the beginning of the month. Nothing fancy. My salt bucket car is in serious need of a wash though.

Gifts – Happy

Valentine’s Day card and a baby shower gift :)

Personal Care – Happy

I bought a MAC paint pot in Bare Study (a frosted nude colour), and a box of hair dye that I plan on getting around to using tonight. I’m beginning to look old again! Lol.

One thing that doesn’t show up in here is the fact that I went for 2 massages this month to try and work some of the knots out of my back. I found a massage therapist near The Boy’s house that direct bills to my work insurance, so I haven’t had to pay for anything yet. So far it’s saved me a good $120!

Prescriptions – Neutral

I’m thoroughly fed up with my skin getting congested and breaking out, so I bit the bullet and picked up a tube of acne treatment. Hopefully I can get it back under control again. I wish this sucker on my chin would just go away already.

Fees – Neutral

I’m one of the (partially) clueless many who pays bank fees. I’ll probably kick this account to the curb after I sell my house, but for the time being it’s my main account.

This is how my spending broke out this month:

February Spending

The only real pattern here is that I spend pretty consistently on Mondays and Fridays. A lot of the Monday ones are bill payments I scheduled on the weekend that came out on the first business day. As for the Fridays, you could basically call them my Saturdays. I had 3 day weekends every week during the month of February, because I was working 4-10 hour days instead of 5-8 hour days. Friday is basically my errand day when that happens.

Two months down, ten more to go! How did your spending go last month?

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(Al)location, (Al)location, (Al)location

I’ve been mulling over my investment accounts the last few weeks. As it stands, my investments are scattered across a handful of accounts, all holding a random-ish basket of investments. They’re not doing poorly. I mean really, how can a person do poorly if they’re just tracking indexes during a bull market? Market goes up, investments go up. Boom.

That being said, since they’re so heavily scattered, I have no idea how heavily weighted I am in different asset classes. Am I heavily over weighted in Canadian assets? (most likely) Do I have enough money in low risk investments? (probably not) For that matter, how are they being taxed?

That last question got me. I could rearrange my investments in the different accounts so they all mirror each other, but is that going to make it so that I pay less tax in the long run? Probably not. So, I started reading up on it.

Long story short:

All of my various investments are being taxed differently, and some are in the wrong accounts.

Short story slightly longer:

At this point, my time would be better spent figuring out how to put more money in the accounts than worrying about their tax efficiency. I’m going to adjust which assets I hold in different accounts, but I’m not going to beat myself up over the fact that it won’t be perfect for the time being.

So that’s that. I’m going to keep a few things in mind when I look at my asset allocation, but I’m not going to worry about that side of things too much at the moment. Right now, I need to worry about getting more money into the accounts, and making sure they have the right proportions.

As it stands, I have 4 accounts with investments in them: 2 RRSPs, 1 RPP and 1 TFSA. I have a meeting with someone this week to see about merging the RRSPs into one account. All going well, I’ll be down to one of each in the next couple weeks.

RRSP #1

100%

Mixed Bag
RRSP #2

57%

Canadian Equity
 

10%

US Equity
 

33%

Bond
RPP

56%

Canadian Equity
 

11%

US Equity
 

22%

International Equity
 

11%

Bond
TFSA

20%

Canadian Equity
 

21%

US Equity
 

40%

International Equity
 

19%

Bond
Total

45%

Canadian Equity
 

10%

US Equity
 

14%

International Equity
 

16%

Bond
 

16%

Mixed Bag

When I say mixed bag, what I mean is that the money is in those managed funds that you pick based on your investment style (Cautious, Moderate, Aggressive, etc…). Not good.

As expected though, most of my money is invested in Canadian equities, with considerably less held in bonds or other more stable investments. Given that I have a long investment horizon and I don’t mind a little more volatility in favour of better returns, it’s not the worst thing in the world. I do need to take it into consideration though.

After reading up on how investments are taxed, I switched gears to suggested asset allocations. The easiest way to do it by far would be by using a broad world equity fund and a broad bond fund and calling it a day, but I didn’t want to simplify it quite to that extent.

I ended up reading up on something called the Complete Couch Potato Portfolio. It’s an asset allocation that should perform reasonably well during market ups and downs over the long term:

20%

Canadian Equity

15%

US Equity

15%

International Equity

10%

REIT

10%

RRB

30%

Canadian Bonds

The only part I wasn’t big on is that 40% of the money is allocated to bond funds. For a lot of people who are just starting their retirement planning in their 40’s and 50’s it makes perfect sense, but I’m just knocking on the door of 30 here. That and I want to be able to scratch the stock picking itch if I’m being perfectly honest.

So, I modified the structure a little bit.

20%

Canadian Equity

15%

US Equity

15%

International Equity

10%

REIT

10%

RRB

20%

Canadian Bonds

10%

Cash/Stocks

In in the short term I’m going to leave 10% as cash. This serves a few purposes:

1)   It serves as my emergency fund in the short term.

2)   If the market goes through a large correction I can pick up some funds “on sale”.

3)   When I learn more about stocks I’ll have some money I can invest without touching any of the index funds.

I figured it made sense.

What do you guys think? Is anyone else using the Complete Couch Potato Portfolio? If not, how are you guys splitting up your investments? Is anyone else looking at their portfolios during the “RRSP Season”? When do you typically look over your accounts?

Recommended Reading: Asset location: Everything in it’s place

I Like Free Stuff!

So, I’m one of the (partial) throwbacks from days gone by when people did their tax returns on paper, mailed them in, and then patiently waited for a cheque in the mail.  Namely, I fill out the paper form, punch the numbers into the appropriate tax software, file online and then patiently wait for my cheque to arrive.

Why do I do my tax return on paper when I’m just going to punch it into online software anyway? Well, I want to understand what’s happening with my money. Knowledge is a good way of dispelling rumours, such as “If I get a raise the government is going to take more of my money, so I’ll make less.” *face palm* I’m a hands on person, and doing the paper form helps me understand what is happening to my money. That and it’s easier to keep in a file folder than a .tax file.

Why do I wait for a cheque rather than direct deposit? Well, frankly I’ve been too lazy to send in the direct deposit paperwork, but more on that later.

You can imagine my joy in discovering that, along with the usual paper tax preparation booklets, Canada Post had a stand with free H&R Block tax software on it! There were also 30% off coupons for people who have their taxes done for them, but I’m more of the DIY type.

IMG_1711

Awesome right?

Okay, I understand that not everyone is going to be excited about this. Last year I got a free filing code through my bank, though this year I haven’t seen any of them offer it yet. I had resigned myself to having to pay for the program, and now I don’t have to!

That being said, I am going to have to switch my returns over to direct deposit. Turns out the Public Works and Government Services Canada is phasing out cheques in favour of direct deposit by April 1, 2016. I understand why they’re doing it, I mean, just think about what a cheque has to go to in order to get to you!

26360_infographic_journey of a cheque-page-001-1

Kinda nuts. Just like it’s kinda nuts that I forget about sending in the direct deposit info until tax time every year (when it’s too late for the current year), briefly think about it, and then promptly forget about it after receiving my cheque.

If you’re in the same boat as me and you’re still receiving your return via cheque, it’s a fairly easy process to switch it over. Just follow these steps:

26360_PWGSC_DD_Enrolment_infographic_EN_HR-page-001

And done.

Got everything switched over, but have blogger tax questions? Head on over to Save. Spend. Splurge and check out some of her recent posts. She answers a lot of blog related tax questions for Canadians.

Have you switched over to direct deposit, or are you a dinosaur like me? Has anyone started their taxes yet?

Recommended Reading: Why You Can’t Get Ahead…Ever

Spending Analysis – January 2014

Well, I said I was going to track my spending this year, and so far so good.

Well, that is if you can call this good:

January 3

$2,991.85 worth of spending. Ouch.

I’m not sure what the best method of analysis is on this front just yet, so I’m going all out on this first month and using a couple different methods of looking at it. By all means, if you know of a method I’m not using in here, chime in and let me know!

I’ll note that I’m using this as an opportunity to track my spending, not my income or savings, which is why you don’t see a value for RRSP savings, emergency savings, investments, cash or otherwise in here.

Mortgage and Taxes – Neutral

This is exactly what it sounds like. My mortgage and property taxes. This is pretty stagnant unless I have a three pay period month, in which case this is 50% larger.

Eating Out – Unhappy

Aaaaaaaaand this is why my pants are getting tight. We ate out a lot last month. Some of it was congratulatory, some of it was sheer laziness. The largest single purchase in this category (about 30%) was from when I picked up the brunch tab for four of us at the Hotel MacDonald. Another 30% or so was from breakfast/lunch/dinner/snack purchases while we were skiing in Lake Louise/Banff last month. The rest of it was nothing short of laziness (a.k.a. not packing a lunch), which resulted in eating out more.

The really scary part is that this is just my eating out expendatures. It doesn’t include anything my fiance bought :s

*changes into stretchy pants*

Utilities – Neutral

Natural gas, electricity, water, sewer, garbage pickup, etc… These bills fluctuate a fair bit depending on the time of year, and winter is the most expensive. I use more gas because it’s colder out, and more electricity because the sun goes down earlier. Nothing really spectacular to see here.

Vacation – Happy

It was The Boy’s 30th birthday last month, so we spent the weekend skiing in Lake Louise. I covered the hotel and he covered the lift passes. We don’t get out like this very often, and it was worth every penny.

Groceries – Happy

If it wasn’t for the ridiculous eating out category, I really wouldn’t have a problem with this number. We have a lot of pantry and freezer food to work through, which helped. I did most of the grocery shopping for the two of us last month, and so far this month The Boy has done the grocery spending, so I don’t know what this will look like in February.

Insurance – Neutral

Combination of house insurance and car insurance. I have some life insurance through work, but I’ll probably reassess it after I get married.

Gifts – Happy

The Boy’s 30th birthday present, and something for our 3rd anniversary. I don’t regret any of them.

Fuel – Happy

This is actually lower than I was expecting, given the amount of back and forth driving I did last month. I’ll be curious to see if this swings much over the months, or if it will stay around this mark.

Communication - Neutral

Cell phone bill. I’ve looked at some of the smaller carriers, but I don’t feel comfortable using them since their coverage is mostly around the major city centers and I visit places that are somewhat remote. I’m not on a contract, so I have a feeling we’ll be looking into a family plan through my fiance’s cell phone carrier eventually, as he’s negotiated a much better rate for himself.

Personal Care – Neutral

*Services, not Products*

I finally got around to seeing the dentist. Still cavity free!

:D

Sadly this is one of the areas of Canadian medicine that isn’t covered 100%, so this is what I owed after my insurance looked after the bulk of it.

Shopping – Happy

Rubbermaid bins for the moving process, and a couple books from Chapters. The bins have been a god send so far!

Wedding – Happy

Bridal fair entry ($25), magazines, and some craft supplies.

Professional Development – Neutral

I went to a seminar that relates to my work. I had to pay the $35 entry upfront, but work will be reimbursing me for it. The $5 I had to pay for parking there on the other hand isn’t reimbursable.

Fees – Neutral

I’m one of the (partially) clueless many who pays bank fees. I’ll probably kick this account to the curb after I sell my house, but for the time being its my main account.

That’s the quick and dirty of what I spent this month, but let’s look at when I actually spent it:

January 4

It doesn’t appear that I have a distinct overall spending pattern just yet. I know I used to spend heavily on the weekends and less during the week, but that doesn’t appear to be the case anymore. Now I just appear to spend. Yikes.

January 1

I do have heavy spikes in spending every two weeks, which correlates to when I get paid. Given that my housing cost is such a large part of my spending, these biweekly spikes are somewhat unavoidable for the time being.

January 2

Before anyone gets concerned about the fact that my mortgage, taxes and utilities take up nearly 50% of this pie, I’ll reiterate that this is just my spending we’re looking at, not my entire income. This pie does not take into account retirement, investing, savings, or cash I have hanging out in my wallet (and yes, they do make a difference).

I’m more concerned that ~17% of my spending went into my stomach.

I’m predicting that vacation, shopping and wedding will be the most variable categories this year.

So, that’s that. What do you guys think? Is there a format you guys prefer seeing it in? How did your spending go last month? Did anyone else have any runaway categories?

Recommended Reading: February 2014 Budget and Goals <– shame on whoever is judging her.