Interesting, no? One minute I'm here, if a little busy with Life. The next, nothing. Two months plus of nothing.
And the answer is: I had a little crisis. I don't quite know how to describe it. Of confidence. Of identity. Of how I see myself. Of how others see me.
What brought this on? The silliest thing, something totally innocent. Praise.
I've known pretty much forever that I'm not great with criticism. Who knew a casual line of praise could totally undo me? Well, certainly not my blogging friend who emailed me a short note that included the following line:
"you are so good at staying committed to your goals".
I read it and a voice from deep inside said, "You don't deserve that praise." And I quietly fell apart. Couldn't post. Couldn't hide that truth. Couldn't speak it aloud. And, as time went by, things just got worse and worse.
I originally felt unworthy of praise because I'd just come through the whole financial devastation that is Passover. I'd charged a lot of food, matzo, wine, you name it on the credit card for Passover. I'd had to pay for Dog to go on his annual Pesach vacation. And I was starting to fall a little behind on certain things, while trying to pay off Dear Child's dental surgery. It seemed ludicrous to say that, because I was diverting $50 a pay period into my Tax Free Savings Account or $10 per week into my Baby Emergency Fund, I was staying committed to my goals. There were so many places where I was bleeding money.
In the interim, things have just gotten worse and worse (as I said). I bought the laminate flooring for Dear Child's room (and my Son-in-Law installed it!). More money, but money well spent. DC's room is finished except for baseboards. I also bought four new upper cupboards, IKEA ones, about the week before Passover (because I wanted pantry shelves on which to put my food). I spent about $500. If they were in and being used, I probably would also consider it money well spent. They're sitting in their boxes in my foyer. Apparently, if (at some point) I put them together my Son-in-Law will demo the existing (mostly broken and unusable) cupboards and hang the new ones.
I started having terrible tooth pain and ended up with a major root canal that now needs to be finished off with a crown. And my husband has just had pretty much the same thing. Net result, big increase in the credit card balance.
Sigh.
Despite paying off as much as possible pretty much every payday we owe way more than we did in March or April. I have a spreadsheet that tracks all the additional charges we've made to the card and when I've made each payment (in addition to the $90 per pay period that is our normal payment).
And I have continued to put money into both the Emergency Fund and the TFSA, as well as restarted deposits to my RRSP. It just seems like such a drop in the bucket compared to the other.
So, that's my story. I'm going to try to get back to writing here though, because (for all the embarrassment of having to admit all this) I find it valuable.
Showing posts with label money mistakes. Show all posts
Showing posts with label money mistakes. Show all posts
Friday, June 11, 2010
Sunday, December 7, 2008
Deja Vu All Over Again
No, this isn't a post about the Vancouver Canucks (who used to use that redundant phrase in their ads)!
The thing about making money mistakes is that they aren't horrible if you learn from them. You make a mistake, you fix it and now you know better. Sooner or later you make another mistake but it's a different one. You fix it and now you know something else that you shouldn't do.
The problem comes when you make the same mistake over and over. I'm an intelligent person. I'm quite well-read. I understand a lot of basic financial concepts. I'm even quite capable of expounding on them in this blog. So, why do I make the same mistakes repeatedly?
Previously I was paying the bills with whatever money was left after all the automatic payments and buying all our food and gas. That meant a lot of bills weren't getting paid in a timely way. This past month or so I've started paying the bills first and then buying food and gas. As I already pointed out, that's been tough. But it's more real. If we're short on food and payday is several days away we really feel it. It's not like not paying my cell bill for a month.
Putting gas and groceries after the bills is a good thing. It's designed to teach us to be more careful and to show us in a practical way that living beyond our means hurts. The problem is that there is a certain minimum amount we do have to spend on these items on an ongoing basis. It's not practical to just run out of gas 3 days before payday because I can't get Dear Child to and from school and myself to and from work in that case. (School would be about 2 hours walk each way, work is over an hour along basically the same route and if I could pay for transit I might as well be putting gas in the car because it would cost more for transit than for gas.) It's also not reasonable (or ethical) to totally run out of food with a small child in the house. So, I spent more money than I had in order to take care of these needs.
I realized at some point that I wasn't going to stretch until I got my next cheque and started trying to do something about it. First, I asked Hubby for money but he didn't have any. Then I transferred money from ING, from my already depleted emergency fund but that doesn't happen instantly. So, I kept checking and, sure enough, the other day the biggest outstanding cheque had come in and I'd exceeded my overdraft limit. My Eldest Daughter graciously offered to temporarily cover it but we had to wait until the end of the day to get her paycheque.
When we went to the bank and transferred money the cheque had already been bounced and I'd been charged $42.50. I talked to the bank about not returning the cheque but they told me it was too late and, besides, they'd already had this discussion with me before and they weren't interested. I pulled out the "I'll move all my investments out of here" threat and they basically said I shouldn't let the door hit me on the way out. Okay, they weren't quite that rude but the girl said she was "sorry [I] felt that way, goodbye". And she smirked.
So, I won't be transferring RRSPs from Sun Life to TD. Instead, I'm going to go sometime next week to check out a local credit union that offers totally free chequing. This was something I was interested in doing anyway because, between Hubby and myself, we're paying over $40 per month in bank service charges. That's just ridiculous. In fact, it's like bouncing a cheque every month!
As for my RRSPs, I'm not sure if I can actually move the GIC I just set up a couple of months ago. It may have to sit there for the full 2 year term, but I transfer $10 per week into a money market fund that earns almost no interest. It collects there until I have the minimum required for another GIC, at which time I get one, etc. That $10 per week can go somewhere else. I just have to figure out where. And I probably will wait to move that until the end of December, simply so I don't have to deal with getting more than one receipt for my income tax for this year.
Anyway I'm mad. I'm mad at myself. I'm mad that the money from ING didn't arrive in time, even though I know it doesn't happen like snapping your fingers. But most of all, I'm mad that the girl was rude to me. I don't think she believed me that I was going to move my money and that's why she was smirking at me. She figured I was just like the boy who cried wolf and that I'd stay and they could continue to charge me and charge me and charge me. But I'm going to move my account and when I move the RRSPs I'm going to make it clear that this is why I'm doing it.
Yes, I have to realize that I'm ultimately responsible for my finances. No, they don't necessarily have to reverse the charges for me. But they have a responsibility to be polite about it. If they can't be polite they don't deserve my business.
The thing about making money mistakes is that they aren't horrible if you learn from them. You make a mistake, you fix it and now you know better. Sooner or later you make another mistake but it's a different one. You fix it and now you know something else that you shouldn't do.
The problem comes when you make the same mistake over and over. I'm an intelligent person. I'm quite well-read. I understand a lot of basic financial concepts. I'm even quite capable of expounding on them in this blog. So, why do I make the same mistakes repeatedly?
Previously I was paying the bills with whatever money was left after all the automatic payments and buying all our food and gas. That meant a lot of bills weren't getting paid in a timely way. This past month or so I've started paying the bills first and then buying food and gas. As I already pointed out, that's been tough. But it's more real. If we're short on food and payday is several days away we really feel it. It's not like not paying my cell bill for a month.
Putting gas and groceries after the bills is a good thing. It's designed to teach us to be more careful and to show us in a practical way that living beyond our means hurts. The problem is that there is a certain minimum amount we do have to spend on these items on an ongoing basis. It's not practical to just run out of gas 3 days before payday because I can't get Dear Child to and from school and myself to and from work in that case. (School would be about 2 hours walk each way, work is over an hour along basically the same route and if I could pay for transit I might as well be putting gas in the car because it would cost more for transit than for gas.) It's also not reasonable (or ethical) to totally run out of food with a small child in the house. So, I spent more money than I had in order to take care of these needs.
I realized at some point that I wasn't going to stretch until I got my next cheque and started trying to do something about it. First, I asked Hubby for money but he didn't have any. Then I transferred money from ING, from my already depleted emergency fund but that doesn't happen instantly. So, I kept checking and, sure enough, the other day the biggest outstanding cheque had come in and I'd exceeded my overdraft limit. My Eldest Daughter graciously offered to temporarily cover it but we had to wait until the end of the day to get her paycheque.
When we went to the bank and transferred money the cheque had already been bounced and I'd been charged $42.50. I talked to the bank about not returning the cheque but they told me it was too late and, besides, they'd already had this discussion with me before and they weren't interested. I pulled out the "I'll move all my investments out of here" threat and they basically said I shouldn't let the door hit me on the way out. Okay, they weren't quite that rude but the girl said she was "sorry [I] felt that way, goodbye". And she smirked.
So, I won't be transferring RRSPs from Sun Life to TD. Instead, I'm going to go sometime next week to check out a local credit union that offers totally free chequing. This was something I was interested in doing anyway because, between Hubby and myself, we're paying over $40 per month in bank service charges. That's just ridiculous. In fact, it's like bouncing a cheque every month!
As for my RRSPs, I'm not sure if I can actually move the GIC I just set up a couple of months ago. It may have to sit there for the full 2 year term, but I transfer $10 per week into a money market fund that earns almost no interest. It collects there until I have the minimum required for another GIC, at which time I get one, etc. That $10 per week can go somewhere else. I just have to figure out where. And I probably will wait to move that until the end of December, simply so I don't have to deal with getting more than one receipt for my income tax for this year.
Anyway I'm mad. I'm mad at myself. I'm mad that the money from ING didn't arrive in time, even though I know it doesn't happen like snapping your fingers. But most of all, I'm mad that the girl was rude to me. I don't think she believed me that I was going to move my money and that's why she was smirking at me. She figured I was just like the boy who cried wolf and that I'd stay and they could continue to charge me and charge me and charge me. But I'm going to move my account and when I move the RRSPs I'm going to make it clear that this is why I'm doing it.
Yes, I have to realize that I'm ultimately responsible for my finances. No, they don't necessarily have to reverse the charges for me. But they have a responsibility to be polite about it. If they can't be polite they don't deserve my business.
Sunday, November 9, 2008
Sometimes People Just Don't Get It
I just read 7 Surefire Ways to Stay Poor by Liz Pulliam Weston and, with all due respect, Liz just doesn't get it.
She starts strong, talking about a friend who drives a clunker but pays a hefty car payment. When she asks about it, she finds out that the friend's previous car needed $2,000 in repairs (been there, done that) and she couldn't afford it. Because she had bad credit, a dealership set her up with a used car at an astronomical interest rate. The payments were just barely affordable. But the point is, they were affordable and there was no way she could pay $2,000 up front. Her friend did what she had to do.
Liz is right. It's not a great solution. And it may cause further problems for her friend if paying this big car payment means she can't take care of routine maintenance or put money away in an emergency fund or pay down her credit cards (which were maxed).
But, if you're poor, you do what you have to do. If you think she shouldn't have taken the car loan then come up with a better solution that is actually feasible, given your friend's circumstances.
I've dealt with this situation twice. The first time (before I remarried) I sold the car for scrap and started taking the bus to work. Then we had a bus strike. Two wonderful co-workers drove way out of their way to pick me up in the mornings during the strike and I walked home (an hour walk) at night. This time, my hubby got an advance on commissions and increased his credit limit. But, if we couldn't have done those things or gotten a loan (either from the bank or a family member) we too would have had to trade the car for a used one.
I'm unimpressed by much of the rest of her, well, I can't even call it advice. For example, Liz notes that one of the ways the poor stay poor is by overspending on the big items (rent, mortgage, car payment) rather than on the little ones (too many visits to Starbucks). Her advice, such as it is? Just don't spend more than 30% on shelter or 10% on a car.
If you're poor or if you suddenly become poor (by job loss or divorce) that may be difficult to impossible to do. Moving isn't cheap, even if you do it yourself with a friend's truck. There are still deposits and all sorts of connection fees (gas, electric, phone) to pay. You may not be able to sell your own place or break your lease. You may not be able to move out of an expensive city because of custody agreements for your kids.
Yes, there may be some ways to economize while you wait for a buyer or the anniversary date on your lease. If you have any extra rooms you could try to rent them out to students. If you aren't upside down on your car you could try to sell it privately and then buy a decent used one. If the situation is new to you, there are probably a lot of little expenses you could cut out. But if you've been poor for any length of time you've probably done all that and hearing all the same suggestions over and over is liable to get on your last nerve.
When she talks about credit cards she says to just stop using credit if you can't pay your bill in full. Then pay far more than the minimum until you wipe out the debt. What about when you're a few days from payday and there's no milk or bread in the house, and no gas in the car you must drive in order to keep your job? Do you say "Mustn't use the credit cards?" or do you just charge the minimum amount that will feed your kids and get you to work until payday?
How do you pay more than the minimum payment when you can't even afford the minimum?
Liz talks about the danger of considering only the monthly payment in determining affordability and warns against using payday lenders or rent-to-own places. Now, payday lenders are a huge, huge problem. I hate that they can charge something like 300% interest and would like to see them legislated out of existence. But I know someone who uses them to cash her BC Benefit and UCCB cheques. I think they charge something like $3 per cheque but this person uses them because she doesn't have a drivers licence or any other acceptable photo ID and therefore can't open a bank account.
And, many years ago, I went the rent-to-own route for a VCR so I could play videos for my kids. It wasn't too much monthly and we got a ton of use out of it. Yes, I did pay almost 3 times what the VCR would have cost to buy outright but I was a single parent with 3 small kids and no credit rating. In fact, it actually helped me to establish a credit rating. But don't buy a 42" flat screen on a rent-to-own plan or a big dining room set!
Now, I'm not saying that Liz doesn't make some good points. If you're broke, tracking your money is vital. You shouldn't get yourself in over your head on anything, whether it's too much house, an expensive car, rooms full of furniture (don't pay until 2010), or whatever. Don't confuse wants with needs. Don't cash out your retirement fund when you leave a company.
She just needs to realize that some of her suggestions were unrealistic for a poor person to implement.
She starts strong, talking about a friend who drives a clunker but pays a hefty car payment. When she asks about it, she finds out that the friend's previous car needed $2,000 in repairs (been there, done that) and she couldn't afford it. Because she had bad credit, a dealership set her up with a used car at an astronomical interest rate. The payments were just barely affordable. But the point is, they were affordable and there was no way she could pay $2,000 up front. Her friend did what she had to do.
Liz is right. It's not a great solution. And it may cause further problems for her friend if paying this big car payment means she can't take care of routine maintenance or put money away in an emergency fund or pay down her credit cards (which were maxed).
But, if you're poor, you do what you have to do. If you think she shouldn't have taken the car loan then come up with a better solution that is actually feasible, given your friend's circumstances.
I've dealt with this situation twice. The first time (before I remarried) I sold the car for scrap and started taking the bus to work. Then we had a bus strike. Two wonderful co-workers drove way out of their way to pick me up in the mornings during the strike and I walked home (an hour walk) at night. This time, my hubby got an advance on commissions and increased his credit limit. But, if we couldn't have done those things or gotten a loan (either from the bank or a family member) we too would have had to trade the car for a used one.
I'm unimpressed by much of the rest of her, well, I can't even call it advice. For example, Liz notes that one of the ways the poor stay poor is by overspending on the big items (rent, mortgage, car payment) rather than on the little ones (too many visits to Starbucks). Her advice, such as it is? Just don't spend more than 30% on shelter or 10% on a car.
If you're poor or if you suddenly become poor (by job loss or divorce) that may be difficult to impossible to do. Moving isn't cheap, even if you do it yourself with a friend's truck. There are still deposits and all sorts of connection fees (gas, electric, phone) to pay. You may not be able to sell your own place or break your lease. You may not be able to move out of an expensive city because of custody agreements for your kids.
Yes, there may be some ways to economize while you wait for a buyer or the anniversary date on your lease. If you have any extra rooms you could try to rent them out to students. If you aren't upside down on your car you could try to sell it privately and then buy a decent used one. If the situation is new to you, there are probably a lot of little expenses you could cut out. But if you've been poor for any length of time you've probably done all that and hearing all the same suggestions over and over is liable to get on your last nerve.
When she talks about credit cards she says to just stop using credit if you can't pay your bill in full. Then pay far more than the minimum until you wipe out the debt. What about when you're a few days from payday and there's no milk or bread in the house, and no gas in the car you must drive in order to keep your job? Do you say "Mustn't use the credit cards?" or do you just charge the minimum amount that will feed your kids and get you to work until payday?
How do you pay more than the minimum payment when you can't even afford the minimum?
Liz talks about the danger of considering only the monthly payment in determining affordability and warns against using payday lenders or rent-to-own places. Now, payday lenders are a huge, huge problem. I hate that they can charge something like 300% interest and would like to see them legislated out of existence. But I know someone who uses them to cash her BC Benefit and UCCB cheques. I think they charge something like $3 per cheque but this person uses them because she doesn't have a drivers licence or any other acceptable photo ID and therefore can't open a bank account.
And, many years ago, I went the rent-to-own route for a VCR so I could play videos for my kids. It wasn't too much monthly and we got a ton of use out of it. Yes, I did pay almost 3 times what the VCR would have cost to buy outright but I was a single parent with 3 small kids and no credit rating. In fact, it actually helped me to establish a credit rating. But don't buy a 42" flat screen on a rent-to-own plan or a big dining room set!
Now, I'm not saying that Liz doesn't make some good points. If you're broke, tracking your money is vital. You shouldn't get yourself in over your head on anything, whether it's too much house, an expensive car, rooms full of furniture (don't pay until 2010), or whatever. Don't confuse wants with needs. Don't cash out your retirement fund when you leave a company.
She just needs to realize that some of her suggestions were unrealistic for a poor person to implement.
Monday, November 3, 2008
Spring Ahead, Fall Back
This is pretty weird. I thought I posted this last night, but it was just sitting as a draft. Let's try this again. And now it posts but at the time I originally tried to post it (i.e. just after midnight Sunday, so very early Monday morning, even though now it's after midnight again and is now technically Tuesday). Okay, fine. It's actually appropriate how time-challenged this post is. [cue X Files or Twilight Zone music]
Early Sunday morning we turned the clocks back and got an extra hour of sleep. Apparently, that extra hour may be good for your health (always assuming you didn't just stay up later than normal).
But I tend to think of the useful phrase "spring ahead, fall back" as more than a way to remember which way to turn the clock. It pretty much describes my progress in financial matters.
I make some progress and then I crash and burn. Sometimes it's pretty clearly my own fault. I had a bill. I didn't pay it when I should have. I spent the money I could have used to pay the bill on something frivolous, like groceries or gas. The bill suddenly becomes important. I somehow pull together the money to pay it. If that happened once, it wouldn't be a big deal but it's not just once. I pretty much just rinse and repeat.
Other times, something comes at me out of left field, like the water pump and related car repair bills. I didn't do anything to make it malfunction. We even take the car in pretty regularly for the maintenance stuff like oil changes. But it happens and it needs to be taken care of immediately. Much drama. But again, the money appears from somewhere and disaster is averted.
What do I do then? I say Thank You to the Boss because, ultimately, He's responsible for getting the money to me. But I need to do more. I need to work harder on these things, so that they have less and less impact over time and so that eventually the first category won't happen. Unexpected issues will always continue to crop up however, so I also need to keep plugging away on an emergency fund.
Even if I have to dip into it every few months an emergency fund is important. Maybe "especially" if I have to keep dipping into it. When you don't have an emergency fund and something happens, you're in big trouble.
But the most frustrating part for me personally about the situation of taking "3 steps forward, 2 steps back" is that I keep feeeling like I'm in the middle of Groundhog Day or that X Files episode where the day keeps repeating endlessly.
I know I need to do something differently but everything I try comes out pretty much the same. When will I get it "right" so the replays will stop?
Early Sunday morning we turned the clocks back and got an extra hour of sleep. Apparently, that extra hour may be good for your health (always assuming you didn't just stay up later than normal).
But I tend to think of the useful phrase "spring ahead, fall back" as more than a way to remember which way to turn the clock. It pretty much describes my progress in financial matters.
I make some progress and then I crash and burn. Sometimes it's pretty clearly my own fault. I had a bill. I didn't pay it when I should have. I spent the money I could have used to pay the bill on something frivolous, like groceries or gas. The bill suddenly becomes important. I somehow pull together the money to pay it. If that happened once, it wouldn't be a big deal but it's not just once. I pretty much just rinse and repeat.
Other times, something comes at me out of left field, like the water pump and related car repair bills. I didn't do anything to make it malfunction. We even take the car in pretty regularly for the maintenance stuff like oil changes. But it happens and it needs to be taken care of immediately. Much drama. But again, the money appears from somewhere and disaster is averted.
What do I do then? I say Thank You to the Boss because, ultimately, He's responsible for getting the money to me. But I need to do more. I need to work harder on these things, so that they have less and less impact over time and so that eventually the first category won't happen. Unexpected issues will always continue to crop up however, so I also need to keep plugging away on an emergency fund.
Even if I have to dip into it every few months an emergency fund is important. Maybe "especially" if I have to keep dipping into it. When you don't have an emergency fund and something happens, you're in big trouble.
But the most frustrating part for me personally about the situation of taking "3 steps forward, 2 steps back" is that I keep feeeling like I'm in the middle of Groundhog Day or that X Files episode where the day keeps repeating endlessly.
I know I need to do something differently but everything I try comes out pretty much the same. When will I get it "right" so the replays will stop?
Sunday, October 26, 2008
A Busy Week & Some November Goals
School starts again tomorrow (for Dear Child) and I'm also going to be working full-time for the week, while my co-worker is off. My third payday of the month will be Wednesday and I plan to do a little catching up on paying bills. Then my payday 2 weeks after that will be an extra-large one, so I'll do a little more catching up.
I really want to get things back under control after our expensive car repair. Things have all been piling up for a while and now I finally feel that I can get us back on track. As I mentioned the other day, gas prices have been coming down somewhat and that, combined with not going to our rural home between now and Hanukkah (late December), will mean some reduction in our spending.
One of the ways things have been piling up is that we've been using our credit cards (we each have one major card, plus Home Depot and IKEA) far too much and for some troubling items. When the economic climate is tight and you find you're charging gas and groceries that should be a wake-up call. Last month I charged $230.95 in groceries (for the various holidays, including our family Rosh Hashana dinner) and $155.60 in gas for a trip to the house, which includes filling the tank on the way back (leaving 3/4 of a tank to drive on for the following week). We have no more holidays until December and no long car trips until then, so I don't expect to need to charge anything over the next while.
That's good, because putting half of the car repair on my hubby's card was very upsetting. My financial goals for November are:
1. Not to charge anything during the month.
2. To pay off IKEA.
3. To start paying down my MasterCard.
I really want to get things back under control after our expensive car repair. Things have all been piling up for a while and now I finally feel that I can get us back on track. As I mentioned the other day, gas prices have been coming down somewhat and that, combined with not going to our rural home between now and Hanukkah (late December), will mean some reduction in our spending.
One of the ways things have been piling up is that we've been using our credit cards (we each have one major card, plus Home Depot and IKEA) far too much and for some troubling items. When the economic climate is tight and you find you're charging gas and groceries that should be a wake-up call. Last month I charged $230.95 in groceries (for the various holidays, including our family Rosh Hashana dinner) and $155.60 in gas for a trip to the house, which includes filling the tank on the way back (leaving 3/4 of a tank to drive on for the following week). We have no more holidays until December and no long car trips until then, so I don't expect to need to charge anything over the next while.
That's good, because putting half of the car repair on my hubby's card was very upsetting. My financial goals for November are:
1. Not to charge anything during the month.
2. To pay off IKEA.
3. To start paying down my MasterCard.
Thursday, October 2, 2008
Car Problems Cost Big Money
I mentioned the other day that I was having a problem with the car. What happened is that I drove to the deli, to Safeway, to the liquor store (all within half a dozen blocks of each other and about 10 minutes from home) and started to drive home when I heard a bubbling noise. I looked at the dashboard and the temperature gauge was just about to redline! Hello!? I drive to our rural home through 2 mountain passes and the car never even tries to overheat. How can it be overheating doing the drive I do pretty well every day (all this was just a few blocks from work)?
I turned off the air conditioning and turned on the heater and kept driving home, while keeping an eagle eye on the temperature. (This pulls heat from the engine away from the core and into the interior of the car, reducing the load on the cooling system.) I made it without boiling over but I was pretty freaked out. We didn't use the car over Rosh Hashana of course, but I was determined that it had to go in today.
The news is not good. There are 2 leaks (water pump and thermostat), it needs new timing, alternator and a/c belts and there's a loose tie rod end. That's the stuff we're actually having done now because it's either a safety issue or the car won't keep working without it. There's another job we're going to hold off on for now because all that I already mentioned, plus an oil change and winter check up is going to cost in excess of $1,600! It'll be ready on Monday, so that's how long we have to pull the money together.
Bottom line. We don't have it and we don't have enough room on our credit cards to charge it all. This is a real wake up call. I knew the cards had been creeping up (mostly for things like food, gas, DC's school clothes and rain gear for my hubby so he could cycle to work in the rain) but it hadn't really clicked as to how serious it was getting. It's one thing to say that you need gas but payday isn't for a few days, so you charge the gas and tell yourself you'll make a payment on the card that covers that fillup when you get paid, but what happens when payday rolls around and there are 4 or 5 other things more "urgent" than paying back that $30 to $100? Right. You know what they say about good intentions.
We have a couple of options that don't involve hitting up family for money or selling our possessions. One, my hubby can get an advance on commissions that will be coming to him at the end of October or, two, he could request an increase in his card limit (an option I'm not crazy about but he does have a lower limit than I do). I have some money in ING, but it's pretty well all already accounted for. I'll use the money in our emergency fund either towards the car or towards paying the plumber for fixing the leak at our rural home (we finally got the bill last time we were there and it was just under $300).
But, beyond paying for the repairs and the rental car the dealership arranged, what do I need to do? I have to get back into entering everything in Excel. I need to see exactly where a bunch of the money is going because we should be roughly breaking even on a month to month basis and it doesn't look like we are. Once I do that, we have to really sit down and talk about where the leaks are and how to handle them. Then we have to start working hard to get the debt back down. At the very least, we have to be vigilant about not increasing it.
But we can't stop spending money either. I'm not going to get caught being penny wise and pound foolish. We need to get a programmable thermostat and to have the furnace at our rural place serviced before winter because we aren't going to be there much once the snow starts in the mountains and I don't want to have the pipes freeze or some such nonsense just because we didn't spend a couple of hundred dollars on preventative maintenance. Also, last year we spent about $600 to $700 in fuel oil to heat the place over the winter and we should be able to save about 2/3 or more of that if we spend $100 on the programmable thermostat. So, yes, we're going to have to spend some money in the short term but it will save us money over the next 6 months or so.
I turned off the air conditioning and turned on the heater and kept driving home, while keeping an eagle eye on the temperature. (This pulls heat from the engine away from the core and into the interior of the car, reducing the load on the cooling system.) I made it without boiling over but I was pretty freaked out. We didn't use the car over Rosh Hashana of course, but I was determined that it had to go in today.
The news is not good. There are 2 leaks (water pump and thermostat), it needs new timing, alternator and a/c belts and there's a loose tie rod end. That's the stuff we're actually having done now because it's either a safety issue or the car won't keep working without it. There's another job we're going to hold off on for now because all that I already mentioned, plus an oil change and winter check up is going to cost in excess of $1,600! It'll be ready on Monday, so that's how long we have to pull the money together.
Bottom line. We don't have it and we don't have enough room on our credit cards to charge it all. This is a real wake up call. I knew the cards had been creeping up (mostly for things like food, gas, DC's school clothes and rain gear for my hubby so he could cycle to work in the rain) but it hadn't really clicked as to how serious it was getting. It's one thing to say that you need gas but payday isn't for a few days, so you charge the gas and tell yourself you'll make a payment on the card that covers that fillup when you get paid, but what happens when payday rolls around and there are 4 or 5 other things more "urgent" than paying back that $30 to $100? Right. You know what they say about good intentions.
We have a couple of options that don't involve hitting up family for money or selling our possessions. One, my hubby can get an advance on commissions that will be coming to him at the end of October or, two, he could request an increase in his card limit (an option I'm not crazy about but he does have a lower limit than I do). I have some money in ING, but it's pretty well all already accounted for. I'll use the money in our emergency fund either towards the car or towards paying the plumber for fixing the leak at our rural home (we finally got the bill last time we were there and it was just under $300).
But, beyond paying for the repairs and the rental car the dealership arranged, what do I need to do? I have to get back into entering everything in Excel. I need to see exactly where a bunch of the money is going because we should be roughly breaking even on a month to month basis and it doesn't look like we are. Once I do that, we have to really sit down and talk about where the leaks are and how to handle them. Then we have to start working hard to get the debt back down. At the very least, we have to be vigilant about not increasing it.
But we can't stop spending money either. I'm not going to get caught being penny wise and pound foolish. We need to get a programmable thermostat and to have the furnace at our rural place serviced before winter because we aren't going to be there much once the snow starts in the mountains and I don't want to have the pipes freeze or some such nonsense just because we didn't spend a couple of hundred dollars on preventative maintenance. Also, last year we spent about $600 to $700 in fuel oil to heat the place over the winter and we should be able to save about 2/3 or more of that if we spend $100 on the programmable thermostat. So, yes, we're going to have to spend some money in the short term but it will save us money over the next 6 months or so.
Tuesday, July 22, 2008
Taking Care of Business
I finally took care of some business with my bank that's been driving me crazy this past month. I have a small amount of overdraft protection (that costs $3 or $3.50 per month) and this month I've exceeded it twice.
I get paid every second Wednesday but I have a lot of things that come out of my account on fixed dates (the majority of which are clustered near the beginning and end of the month). So, as my pay dates cycle around on the calendar they gradually fall more and more out of sync with the pre-authorized dates. This is why I have overdraft protection and it usually works fine. So, what happened?
Partly I overspent a tiny bit while we were at the house, plus we spent a lot on gas. I thought everything that normally comes out at the beginning of the month had come out, but one thing that comes from the States didn't make it before the 4th of July, so it came out on the 7th. Then, after it came out ING took the $12 I transfer to my Emergency Fund every week. I didn't get paid until the 9th. Both the US debit and ING were sent back NSF on the 8th. And, to top it off, the NSF fees just went up, so I got dinged $42.50 for each one!
It gets better. I got shorted on my paycheque. It was missing 3 days that I took as vacation because my vacation pay was already paid out for the year, 3.5 hours I'd worked (on days I'm technically scheduled to work fewer hours) and 4 hours for Canada Day. The 3.5 hours weren't really a problem. The accountant said she'd pay them on my next cheque but she hadn't paid me for the statutory holiday because I had taken the 30th of June as a vacation day and she said I didn't qualify for it unless I worked both the day before and the day after the stat. This is what happens when your head office is in a different province from the one you work in. I emailed her the link to the BC Employment Standards Act that clearly states an employee qualifies if he or she has been employed for at least 30 days and has worked at least 15 out of the 30 days prior to the statutory holiday.
So, after deductions and after I put the cheque in the bank I was back in the black to the tune of $66. That's $66 to last for 2 entire weeks when I pay for all the food, more than half the gas, have pre-authorized stuff coming out, etc. Hubby transferred $75 to me and I could have, should have transferred $150 from my ING Vacation Pay fund ($50 for each vacation day I took). But I didn't. I'm still not so comfortable with moving stuff from here to there and back again, so I just never got around to doing it.
I spent barely any money these past 2 weeks. The absolute minimum on food and gas. My big splurge was the $5.66 I spent last week for a hard cover book. The pre-authorized stuff came out, my life insurance and ING. Would you believe I missed it by that much? By $6 to be exact.
So, I went to the bank this morning before work and had a little meeting with them. I basically said, "This is what I want or I walk and take my RRSPs with me". When the dust cleared I was assured the payment to ING would not go back, there would be no $42.50 fee (although there will probably be a $5 one), they took the earlier ING NSF fee off and increased my overdraft by $100. I also deposited the $56 benefit cheque to reduce the overdraft.
What have I learned from this? First of all, this wouldn't have happened if I had kept a closer watch on the bank account. I've been trying to get back into the routine of entering all the money we spend but I've been having a tough time doing it. I have to try harder. Second, I wouldn't have had any problem whatsoever if we weren't living paycheque to paycheque!
We don't have a big enough buffer and I'm not comfortable enough moving money between my main bank and ING. It's ironic, but if I hadn't moved the vacation pay I got a few weeks ago out of my bank and into ING I wouldn't have been in overdraft at all, let alone exceeded it. But I'm trying to learn new skills so, just like a kid with the training wheels removed, I'm having a few falls. I have to keep trying. I have to keep adding to my Emergency Fund (yes, I know it will take only slightly less than forever at $12/week, but that's what I can do) and I have to start doing set-aside accounts (escrow, Freedom, whatever you want to call it) in order to have money ready for irregular expenses.
After I did all of that I called Fortis BC to ask if I had another electric bill due for our rural house. Yes, there's a payment of just under $69 scheduled to come out on the 25th. So, tomorrow I need to go to a Credit Union and deposit money into my account in the Okanagan. And, while I was on the phone with them I signed up to receive my future bills via email. That way it won't matter whether we've been to the house or not. I'll still know how much I owe and when it's due!
I get paid every second Wednesday but I have a lot of things that come out of my account on fixed dates (the majority of which are clustered near the beginning and end of the month). So, as my pay dates cycle around on the calendar they gradually fall more and more out of sync with the pre-authorized dates. This is why I have overdraft protection and it usually works fine. So, what happened?
Partly I overspent a tiny bit while we were at the house, plus we spent a lot on gas. I thought everything that normally comes out at the beginning of the month had come out, but one thing that comes from the States didn't make it before the 4th of July, so it came out on the 7th. Then, after it came out ING took the $12 I transfer to my Emergency Fund every week. I didn't get paid until the 9th. Both the US debit and ING were sent back NSF on the 8th. And, to top it off, the NSF fees just went up, so I got dinged $42.50 for each one!
It gets better. I got shorted on my paycheque. It was missing 3 days that I took as vacation because my vacation pay was already paid out for the year, 3.5 hours I'd worked (on days I'm technically scheduled to work fewer hours) and 4 hours for Canada Day. The 3.5 hours weren't really a problem. The accountant said she'd pay them on my next cheque but she hadn't paid me for the statutory holiday because I had taken the 30th of June as a vacation day and she said I didn't qualify for it unless I worked both the day before and the day after the stat. This is what happens when your head office is in a different province from the one you work in. I emailed her the link to the BC Employment Standards Act that clearly states an employee qualifies if he or she has been employed for at least 30 days and has worked at least 15 out of the 30 days prior to the statutory holiday.
So, after deductions and after I put the cheque in the bank I was back in the black to the tune of $66. That's $66 to last for 2 entire weeks when I pay for all the food, more than half the gas, have pre-authorized stuff coming out, etc. Hubby transferred $75 to me and I could have, should have transferred $150 from my ING Vacation Pay fund ($50 for each vacation day I took). But I didn't. I'm still not so comfortable with moving stuff from here to there and back again, so I just never got around to doing it.
I spent barely any money these past 2 weeks. The absolute minimum on food and gas. My big splurge was the $5.66 I spent last week for a hard cover book. The pre-authorized stuff came out, my life insurance and ING. Would you believe I missed it by that much? By $6 to be exact.
So, I went to the bank this morning before work and had a little meeting with them. I basically said, "This is what I want or I walk and take my RRSPs with me". When the dust cleared I was assured the payment to ING would not go back, there would be no $42.50 fee (although there will probably be a $5 one), they took the earlier ING NSF fee off and increased my overdraft by $100. I also deposited the $56 benefit cheque to reduce the overdraft.
What have I learned from this? First of all, this wouldn't have happened if I had kept a closer watch on the bank account. I've been trying to get back into the routine of entering all the money we spend but I've been having a tough time doing it. I have to try harder. Second, I wouldn't have had any problem whatsoever if we weren't living paycheque to paycheque!
We don't have a big enough buffer and I'm not comfortable enough moving money between my main bank and ING. It's ironic, but if I hadn't moved the vacation pay I got a few weeks ago out of my bank and into ING I wouldn't have been in overdraft at all, let alone exceeded it. But I'm trying to learn new skills so, just like a kid with the training wheels removed, I'm having a few falls. I have to keep trying. I have to keep adding to my Emergency Fund (yes, I know it will take only slightly less than forever at $12/week, but that's what I can do) and I have to start doing set-aside accounts (escrow, Freedom, whatever you want to call it) in order to have money ready for irregular expenses.
After I did all of that I called Fortis BC to ask if I had another electric bill due for our rural house. Yes, there's a payment of just under $69 scheduled to come out on the 25th. So, tomorrow I need to go to a Credit Union and deposit money into my account in the Okanagan. And, while I was on the phone with them I signed up to receive my future bills via email. That way it won't matter whether we've been to the house or not. I'll still know how much I owe and when it's due!
Friday, July 11, 2008
I Know You're There, Don't be Shy!
It's gratifying to see that more and more people are coming and reading my little blog. In addition to all the Canadians and Americans, I've had recent visits from Korea, Israel, the UK, the Phillipines and Australia!
My only question is: are you all shy? I love comments and I've gotten some, but not that many. They tell me I made a connection (whether you agree or disagree with what I've written). I'd even welcome suggestions for posts you'd like to see. Really, I think the interaction is half the fun so don't be afraid to comment.
Anyway, today I'm really wondering if I've lost my mind. I forgot to go to Superstore last night to buy my Bolthouse protein drink so I had no breakfast this morning. My DC woke up crying with leg cramps before I left so I got out the door late and one of the 2 buses I take wouldn't stop because it was too full.
So I didn't go to Safeway on the way to work (which would have meant a 5 to 10 minute walk from the store to the office). Instead, I bought a muffin and decaf when I got to work. I had also meant to bring a cream cheese and jelly sandwich to work but didn't make it what with having to give DC Advil. So I also had to buy lunch. The muffin and coffee were $3.75 and the pizza and salad cost $7.20. So that's an extra $10.95 I spent today.
Then I went to the store and bought salad and bus tickets on the way home. Unfortunately, I forgot creamer and the protein drink! So I finally remembered and had to send Hubby at the last minute before Shabbat to get them (from Safeway). That cost me an extra $1.10 over what the drink would have cost at Superstore! So, being forgetful cost me $12.05 today.
But being forgetful didn't stop there. I forgot I'd bought something for tonight and automatically started making the same dinner we had last Friday night (because I had everything for it on hand). But Hubby doesn't like having the same thing week in and week out, so I put it all back in the freezer to have next week. The only thing is, I put the mayo, dill and parmesan on the fish already! I hope it works (I've heard mayo doesn't freeze well).
Anyway, I'm off to light candles, so Shabbat Shalom!
My only question is: are you all shy? I love comments and I've gotten some, but not that many. They tell me I made a connection (whether you agree or disagree with what I've written). I'd even welcome suggestions for posts you'd like to see. Really, I think the interaction is half the fun so don't be afraid to comment.
Anyway, today I'm really wondering if I've lost my mind. I forgot to go to Superstore last night to buy my Bolthouse protein drink so I had no breakfast this morning. My DC woke up crying with leg cramps before I left so I got out the door late and one of the 2 buses I take wouldn't stop because it was too full.
So I didn't go to Safeway on the way to work (which would have meant a 5 to 10 minute walk from the store to the office). Instead, I bought a muffin and decaf when I got to work. I had also meant to bring a cream cheese and jelly sandwich to work but didn't make it what with having to give DC Advil. So I also had to buy lunch. The muffin and coffee were $3.75 and the pizza and salad cost $7.20. So that's an extra $10.95 I spent today.
Then I went to the store and bought salad and bus tickets on the way home. Unfortunately, I forgot creamer and the protein drink! So I finally remembered and had to send Hubby at the last minute before Shabbat to get them (from Safeway). That cost me an extra $1.10 over what the drink would have cost at Superstore! So, being forgetful cost me $12.05 today.
But being forgetful didn't stop there. I forgot I'd bought something for tonight and automatically started making the same dinner we had last Friday night (because I had everything for it on hand). But Hubby doesn't like having the same thing week in and week out, so I put it all back in the freezer to have next week. The only thing is, I put the mayo, dill and parmesan on the fish already! I hope it works (I've heard mayo doesn't freeze well).
Anyway, I'm off to light candles, so Shabbat Shalom!
Tuesday, June 3, 2008
10 Miscellaneous Money Mistakes Part 2
Yesterday I shared 5 financial mistakes I've made over the years. Today, here are 5 more.
6. I've sunk a lot of money into depreciating assets.
I've purchased cars that cost my entire annual salary and then spent 4 or 5 years paying them off. I've spent $2,500 to $3,500 on a couple of computer systems. I allowed Dell to set up my new laptop (the one I was going to pay cash for) on their financing with pre-authorized monthly withdrawals that barely reduce the principal owing each month by $10 or so. (Their explanation for doing the financing plan was that their kiosks aren't set up to accept Interac.) And I didn't pay it off when I had the cash in hand!
7. I often don't pay in a timely manner, even when the money is in the bank.
This one is related to the last one. I also forget to pay things like my cell bill or the bottled water. Because I know I have this tendency, I put everything that has a fixed monthly amount on pre-authorized withdrawals. But I won't do it with bills that vary from month to month and I always have good intentions of paying the bills when they're due but my follow-through is not so good. This means I also incur extra charges, such as more interest, late fees, etc.
8. I let my daughter talk me into buying a $500 gym membership.
She was going to a great gym, just for women, we could go together and I paid for 18 months up front. Then they bought their new house and she quit the gym because they had to cut back on their expenses. I haven't been back since. I'm really busy and I don't have that motivation I had when we were going together. But I feel guilty. I'm wasting the money, the clock is running on the membership, and I'm not getting in shape!
9. I don't always file my taxes on time.
Since I normally get a small refund it's not a big deal, right? I mean, in Canada there's no requirement to file a tax return if you don't owe money (unless CRA asks you to do it, of course). But the problem is that you don't get the child benefit or BC benefit unless you file (the universal child care payment is automatic if you have a child 5 or under whether you filed or not). We earn enough that I don't get the maximum, but that's still $50 to $75 per month that I haven't been receiving because I hadn't filed. That's $600 to $900 per year! I need to give my head a shake. Anyway, I'm caught up now and am anticipating the nice retroactive payment that will turn up around July.
10. I don't know how to say "NO".
Not to my hubby. Not to my kids. Not to non-profits within my religious community. I'm good with telemarketers, at least.
So, there you have it. Ten financial errors that continue to hold me back. But the picture isn't all black. Tomorrow I'm planning to post some of the good moves I've made!
6. I've sunk a lot of money into depreciating assets.
I've purchased cars that cost my entire annual salary and then spent 4 or 5 years paying them off. I've spent $2,500 to $3,500 on a couple of computer systems. I allowed Dell to set up my new laptop (the one I was going to pay cash for) on their financing with pre-authorized monthly withdrawals that barely reduce the principal owing each month by $10 or so. (Their explanation for doing the financing plan was that their kiosks aren't set up to accept Interac.) And I didn't pay it off when I had the cash in hand!
7. I often don't pay in a timely manner, even when the money is in the bank.
This one is related to the last one. I also forget to pay things like my cell bill or the bottled water. Because I know I have this tendency, I put everything that has a fixed monthly amount on pre-authorized withdrawals. But I won't do it with bills that vary from month to month and I always have good intentions of paying the bills when they're due but my follow-through is not so good. This means I also incur extra charges, such as more interest, late fees, etc.
8. I let my daughter talk me into buying a $500 gym membership.
She was going to a great gym, just for women, we could go together and I paid for 18 months up front. Then they bought their new house and she quit the gym because they had to cut back on their expenses. I haven't been back since. I'm really busy and I don't have that motivation I had when we were going together. But I feel guilty. I'm wasting the money, the clock is running on the membership, and I'm not getting in shape!
9. I don't always file my taxes on time.
Since I normally get a small refund it's not a big deal, right? I mean, in Canada there's no requirement to file a tax return if you don't owe money (unless CRA asks you to do it, of course). But the problem is that you don't get the child benefit or BC benefit unless you file (the universal child care payment is automatic if you have a child 5 or under whether you filed or not). We earn enough that I don't get the maximum, but that's still $50 to $75 per month that I haven't been receiving because I hadn't filed. That's $600 to $900 per year! I need to give my head a shake. Anyway, I'm caught up now and am anticipating the nice retroactive payment that will turn up around July.
10. I don't know how to say "NO".
Not to my hubby. Not to my kids. Not to non-profits within my religious community. I'm good with telemarketers, at least.
So, there you have it. Ten financial errors that continue to hold me back. But the picture isn't all black. Tomorrow I'm planning to post some of the good moves I've made!
Monday, June 2, 2008
10 Miscellaneous Money Mistakes I've Made Part 1
I've made lots of mistakes in the past and I continue to make mistakes to this very day. That's hard to write. I'm very detail-oriented. I crave perfection. I'm intelligent. So, how can I keep making dumb financial mistakes? I think a lot of it comes down to fear. If things aren't going so well, I'm an ostrich. I don't want to have the tough conversations, whether with creditors or family. I don't want to have to admit that I don't have it all under control 24/7. I don't want to be the meany.
So, let's look at some of the mistakes I've made along the way. I'll do the first 5 now and follow up with the rest later.
So, let's look at some of the mistakes I've made along the way. I'll do the first 5 now and follow up with the rest later.
1. I stayed tied to the parental purse strings for too long.
I was an only child and it was easy to stay too dependent on parental assistance both when I was single and during my first marriage (and then again when I was a single parent). I actually think it was at its worst while I was married. I had moved several hundred miles from home, hated the new city and its climate and spent a lot of time on the phone, talking to my folks at very expensive long distance rates (this was the late '70's and early '80's, when long distance cost $ 0.25/minute or more). We rented a new house that turned out to be practically uninsulated in a city where winter temperatures varied from freezing to -40 degrees. I think the one winter we were in that house our heating bill averaged $400/month. The phone bill was about another $250, the rent was $450 and we were making between $800 and $1,400 per month, if I recall correctly. Did I mention that my first husband liked to eat out? A lot. We ate out on average once a day! My parents were forever paying some bill or other for us.
2. I didn't start saving for retirement until I was in my mid-30's.
Two words. Compound interest. I missed out on so much compounding time. If I had started saving with my first job out of high school I would have been saving money and earning interest for about another 18 or 19 years! Now, it's true that I took 7 or 8 years off in the middle of that time when I was having kids but the money I already had in there would have continued to grow. Instead, I started late and have never caught up.
3. I bought my kids so many toys they could barely find the floor.
There were lots of collections. He Man, My Little Pony, Star Wars, Transformers, pretty much everything Fisher-Price put out for about a decade. Getting all those things made my kids happy in the moment, but left them wanting more in the long term. It was a huge financial drain and I have very little of it left now. A lot of it got ruined or lost in various moves. I never recouped the money I spent initially by selling toys the kids had outgrown. I remember once filling a big box with He Man figures and vehicles and taking them to the after school day care my kids attended. Why didn't I take them to a kid's consignment store?
4. Repaying my RRSP the money I took out to use as a down payment on my condo at the slowest rate allowed.
I definitely don't regret taking out about $7,200 from my RRSP for the down payment on my first place. But Canada Revenue Agency only requires that you repay 1/15 of the money you took out each year. So, when I had to start repaying, I set up a $10/week automated transfer from my bank account into an RRSP. I have to admit, there are times I've been glad it's only $10/week but if I'd even just doubled it I would have finished paying it back over 2 years ago and I'd be back to getting a deduction for my RRSP deposits.
5. Not keeping track of my spending for long periods of time.
I've always known how to budget. My mother kept track of all our family's spending and I remember knowing how to do it from the time I was in high school. In fact, there were times when I kept very careful records. But there were more years when I didn't and that was a huge mistake. When I don't write it down it's very easy to delude myself into believing that I spent less than I actually did. A shocking amount of money just disappears into a black hole and if I were tracking it I'd probably be inspired to do something more useful with it (like invest it)!
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