Category Archives: Saving money

How I plan for financial independence!

Ar you planning for Financial Independence? Here's how I am planning for it after a chat with my that about money and financial independenceDo you have an idea for how long you are willing to work before retiring? Are you willing to sell your time for money for most of your life?  Have you thought when you will reach financial independence? This topic came up last week when I was having a chat with my dad. I admitted to my old man that I enjoy my job but it is stressful and I deal with a lot of traffic during my commute. I can’t see myself doing this for another 40 years before being able to slow my life down enough to spend time with my family.

Because of my stressful career, I’m not able to focus on hobbies that I enjoy. These are mainly blogging and tinkering with small electronic projects. There just isn’t enough time to wind down, relax, spend time with my family, and enjoy my hobbies. My dad, now in his early fifties, completely agreed, saying that he doesn’t want to work for another fifteen years either. He’s actively trying to bank money to retire early so that he can quit his job might work better here and focus on the projects that he enjoys doing.

Are you planning to slow down before 65?

In my opinion, we live in a world that moves too fast. We work hard, constantly on the go, and so we should be retiring earlier than the member(s) of previous generations. Where I’m from, most of those people had industrial jobs. There were no emails or cell phones. They got up every morning, did their job, and went home. There was a limited amount of worrying about work. You punched the clock and checked your work issues at the door and went home to relax with your family. Those days are long gone. With modern technological advancements, your employer can and does contact you after you’ve left work for the day. Emails, text messages, phone calls. There are half a dozen ways for your boss to contact you and make you feel obligated to reply or answer immediately. I want and need that after work relaxation. I don’t want to talk to my boss during dinner. And you know what? I shouldn’t have to.

I work in IT tech. Everything that I do while at work has to be done quickly and I’m constantly having to update my skillset and even retrain myself on a monthly basis. I enjoy learning new things but eventually, I’m going to reach the age where I’m going to be overwhelmed to the point where I won’t be able to maintain my current speed of learning and training. On top of that, my pension plan frequently changes. As of the last negotiation, I need to work until 58 before retiring. It’s four more years than what I was supposed to work. I feel like the constant changes to my pension make for an unstable retirement plan. I want and need stability. This is why I’m investing. My goal is to invest to the point where a substantial part of my income is coming from dividends. I want to wake up in the morning and be there for my kid as opposed to worrying about packing a lunch, getting dressed, and dealing with an hour commute.

Here’s is my investment plan for financial independence!

I’m looking to put 50% in ZSP, 25% ZDV, 15% FIE and 10% ZRE. I’m looking to invest 10% of my money into a non-North American ETF but still doing some research. This will bring FIE and ZDV down by 5% each. This is for my core long-term investment plan.

Buying and selling stocks is addicting and a portion of my portfolio will continue to have stocks in it. Sure, it’s pretty much the same as buying a weekly lotto ticket, but I have intentionally allocated some cash into a “fun stock money” section of my portfolio. I personally do not recommend this idea and in my mind, most of it has been written off as a loss. Buying risky stocks is part of the fun of investing and I know that if I don’t allow myself at least a little bit of fun, I’ll never stick to my ETF plan.

Why buying ETF?

Also, since my ETF are free to buy, I can buy regularly without my profits being eaten by the fees. Personally, I feel safer in long term with them. These investments are my plan to generate monthly revenue. Working is exchanging your time for money and my investment will give me money without having to exchange my time for the same money. This is the best way I could see to slow down a bit and make my choice base on my wants and not my money needs.

In the end, my hope is that these investments will bring me to financial independence and I can start making decisions based on what I want to do with my life and how I want to live it. I can live off of $3000 a month after tax. Once I’m able to live the way I want, I would like to travel, focus on writing for my blog, and maybe even starting my own business.

Readers: Are you looking for a path to financial independence?

By the way, you know that you could get your own blog with Bluehost? For $3.95/month, you will have everything you need to start sharing your own experience on your own blog. If you need help to get started, you can look at my How to host your own blog post.

Warning: This post contains affiliate links

 

Some of my thoughts about budgeting!

Some of my thoughts about budgetingAre you budgeting ? Your budget is your eye on your finance. Budgeting help you to see where’s your money is coming from and where’s it’s going out. This should be your first step to see how your  personal finance are doing and the first step if you are trying to get back on the right track from spending too much. If you want to save more money it will help you to know where’s you are spending too much.

Budget like you want to do it

I think everyone should make a budget, but you should budget the way you like to do. There’s not only one way to do a budget. Some are budgeting for a month or year or some like me are budgeting only the money I have in my possession and wait until I receive more money to budget it. Find what method is the best for you. You can use a software, spreadsheet, web base budgeting tools, pen and paper. You can try multiple method and technique to find the one that you will stick with it for a long time no matter what others are saying. Personally, I am using YNAB and I love it, but the software is only for budgeting money you have so if it’s not your budget style don’t use it.

Budget are flexible

A budget is modifiable. Unlike a lot of persons think, a budget should always be modified to represent what you are doing. You’ve got more money ? You’ve got an unexpected expense ? Don’t panic and modify your budget to make it represent what you need to do with your money. In that way, you will have a true budget that represent your real situation and you will continue to budget since you will not feel under pressure from seeing a budget that’s not your reality.

You should budget your debt repayment first and your saving so in that way your debt get paid without being late and you pay yourself first as describe in this old post. This will save you some interest and late fee and your saving will growth before you have spent that money for fun or something you don’t need.

Analyze your old budget

Every couple months you should look back at your old budget and see if you can cut somewhere to save more. The budget will help you to see if you are spending too much on dining out or on some activity. This is your choice where you save money. If you find the amount reasonable and you couldn’t live without doing the activity just keep it and look somewhere else to cut. This way you will keep having fun and keep using the budget without saying that it dictate your life too much.

Budgeting can be overwhelming

If you find budgeting is overwhelming, you can stop doing it for a little time and start back latter. I did that when my kid was born and I was feeling that I didn’t have time to budget my things, but I’ve found myself spending way too much on things that I didn’t need and stop I’ve stopped investing. Now, I came back to budgeting my money and I know that I will continue to do it since I saw what I did wrong when I didn’t budget like overspending.

Readers: are you budgeting ? If yes, what is your method to do it ? If not, why ?

Net Worth Jan 2017 Update : $16,856.53 (+$3,635.14 +27.49%)

Assets Nov-16 Jan-17 Monthly Change
Checking $185.62 $1,124.48 505.80%
Saving $943.55 $8.35 -99.12%
TSFA Investment $503.28 $590.00 17.23%
RRSP Investment $0.00 $0.00 0.00%
House $215,000.00 $215,000.00 0.00%
Car $15,000.00 $15,000.00 0.00%
Liability
Mortgage $203,839.93 $202,819.97 -0.50%
Car loan at 0% $12,328.66 $11,671.36 -5.33%
Credit Card $2,242.47 $374.97 -83.28%
NET WORTH $13,221.39 $16,856.53 27.49%

One of my goal for 2017 is to do monthly update of my net worth so let’s start with this one.

My net worth is going up again but next month it look like it will go down a little bit. Some big expense are coming like buying the small business Turbotax, which is around 100$ and paying my municipal tax, which are 600$ and the car license, which are around 200$. On the plus side my wife will make a little bit more next month since she found one new client (kid). We’ve made the choice that she will stay home for our baby since we think it’s the best for him, but this choice will bring home less money than before.

In January, I paid my credit card before the end of the month since I had the money and to start back budgeting. I found that was easier to start with 0$ on my credit card.

In January, our expense were  4059.62$ and our income were 5177.67$. Which make a surplus of 1118.05$. I had a boost in my income since my job pay my 10 sick day in the beginning of the year. Also, I invested in some washable diaper for my kid to save on the long term. This will be a subject of a post when I will finish crunching some number.

It look like I don’t have any saving at all, but since I’m using Tangerine for my account, I got all my money out of my saving account to my check account and I’m waiting until they have a new promotion with new deposit.

Readers : How was your January month ?

Net Worth Nov 2016 Update : $13,221.39 (-$370.04 -2.72%)

Assets Jul-16 Nov-16 Monthly Change
Checking $1,033.58 $185.62 -82.04%
Saving $653.58 $943.55 44.37%
TSFA Investment $1,280.99 $503.28 -60.71%
RRSP Investment $0.00 $0.00 0.00%
House $215,000.00 $215,000.00 0.00%
Car $17,000.00 $15,000.00 -11.76%
Liability      
Mortgage $205,866.04 $203,839.93 -0.98%
Car loan at 0% $13,643.26 $12,328.66 -9.64%
Credit Card $1,867.42 $2,242.47 20.08%
NETWORTH $13,591.43 $13,221.39 -2.72%

First I will have to say that I am sorry for being away from the blog in the last couple months. Life with a baby and all our project were a little bit overwhelming.

I invested a lot of time in a side buisiness website that doesn’t seems to start selling. I can do a nice profit on the stock I’m selling but it’s maybe a too small niche.

For my net worth, as you can see I’ve lost money in the last couple months. My wife was at 50% of her salary since it’s the end of her parental leave and we had to invest some money on the house.

This is a quick update on my net worth and I will try to keep you updated more often. Next update gonna be my portfolio.

Wasting your money on drinking and eating out

BeerAfter reading Blonde on budget post on this subject, I’ve got the idea to share my story on my personal experience on wasting my money on drinking. While I was younger, every weekend I was going out to eat and drink with friends. These weekend cost me between 150 to 300$ each.  All this money was going to pay for beer and something to eat. I was living at my parents’ house and I was freshly out of school and working full time. I was putting money on a saving account to pay my car loan and I was spending all on these weekend and computers.

The money spent on computers was around 1500$ years and after using some of the stupid thing I bought like a gaming wheel at 350$, I sold them on kijiji. But the 150 to 300$ wasted on these weekend is lost forever.

What I wish I did back then ?

I wish I had put more money in a saving account or invested it. I don’t say I should not  did that, but I could have spent around 75$ for these weekend instead of 300$. With 75$ I could have enough fun while drinking a beer or two without getting drunk.  That would have made me 225$ by week in saving or 11700$ by year. I did that for about 3 years, so I wasted around 35100$. This money wasting was around 8 years ago.  Today with a 7% return per years, I would have around 60308$. This would have made a great down payment for my house or a great portfolio.

I wish I had taken this in consideration before wasting all this money, but I can’t go back there so the only thing I can do is share my experience on that subject.

Readers : We all made error while we were younger, what was yours ?

Pay yourself first

You want to growth your saving fast ? You need to pay yourself first before paying others !Here’s my little experience on why you should pay yourself first. Couples months ago I thought I was paying myself first, but instead, I was budgeting everything at first and kept what left to add to my saving or investment account.

This is the wrong way to do it. With this method, I was over budgeting in a lot of fun category like dining out and was not limiting myself to only what I needed. After couples month, I finished with nothing left to save and I though that would be impossible to cut anything.

Pay yourself first

After seeing that, I started paying myself first and budgeting everything else with what I was left with. This way I lowered my dining out category and my fun money category. These categories became so big that I thought I had the minimum in it, but I had like three times what I really needed. This is one of the reasons why you should pay yourself first and budget after. If you budget before, you only keep growing your spending category and you will be left with nothing to save after couple. It’s easier to budget once the saving is done.

Start slowly

To start paying myself first, I started with a 10$ saving by week and now I am saving between 50$ to 100$ by week. I started with a small amount to be able to do it since I thought I couldn’t cut anything more. And every couple week, I put more than what I’ve put couple weeks ago and lowered my spending slowly. Going slow made myself be comfortable with the fact that I lower my spending and I didn’t really see the difference with the week before. In this way, I didn’t stop to save after a couples weeks like all my past years.

These are my trick I used to save more. Readers, are you paying yourself first?

Some way to save money

Since the last 2 years I’ve started to search some way to save money while buying the regular stuff I need. I found some site to save money and some apps to save even more.  These apps saved me more than 300$ in one years in cash-back. Some are paying in check and others in paypal or gift card.

First of all here the website I use to save money:

  • greatcanadianrebates : This is the one I use the must while shopping online on Amazon, Ebay, Walmart and more. I am saving some % on these website while I purchase stuff I need like electronics, baby things, gift and more.
  • Ebates Canada : This one works the same way as greatcanadianrebates but have some different % back. So Before buying something I look these 2 sites and I use the one that give back more.

Here’s the apps I use on my android phone to save money :

  • Checkout 51 : With this app you take a picture of your receipt and choose what you bought on what Checkout 51 offer. With this app, I saved 91$ in one year. You can redeem a check at 20$ or more.
  • Zweet : This work the same way as Checkout 51 but the cash back is lower. In a year I made 18$. It’s not a lot but it take a minute to do it and you can redeem the same receipt on the two apps.

Are you using some apps or website that make you save money ?

P.S.: Keep in mind that some of these links are referral link that get me some cash back. I will never recommend something that I don’t use so it’s your choice if you want to use my referral link or not.

Net Worth February Update : 9,099.36

Assets Feb-16
Checking $538.00
Saving $2,233.00
TSFA Investment $815.00
RRSP Investment $0.00
House $215,000.00
Car $17,000.00
Liability  
Mortgage $208,372.00
Car loan at 0% $15,615.00
Credit Card $2,499.64
NET WORTH $9,099.36

This is my first net worth post. The mortgage and the house is owned by me and my wife. The others entry are only my number and do not count my wife.

The TSFA and RRSP are at Questrade and are invested in some ETF. I am trying to follow the couch potato method.

All my credit card are paid in full every month so I don’t get charge any interest. Also this was not the best month to start looking for my net worth since I was in paternity leave for almost 2 month and only starting to get my job pay in march.

Every month, I will post my net worth to see if it going up or down. At this amount, it should go up every month. My goal are to put more investment and start contributing to my RRSP account.

Also, I will try the website Networkshare to get a graphic of my net worth for the next month.

 

Readers : How are you tracking your net worth ?

House

Last month was one of my busier month of my life. We’ve finaly bought a house.

Since we didn’t had the 20% of down payment but only 5%, we had too pay the mortgage insurance from the cmhc. This came with a 9% tax, which the credit union didn’t mention until we received the paper to pay it.

So we have lost most of our 11k of down payment with the insurance fee. A lot of other fee came in like the inspection, the moving, the fee to broke the renting contract.

But in the final we are happy to become owner of our place and that we can go away from these crazy neighbour.