Follow me at FrugalistaFinance.com!

Hi friends,

I came to visit my old stomping ground only to realize that I still had a handful of followers. I just want to let everyone know that although I’ve been in hibernation, I’m back! I’ll be blogging (as myself) with my friend Jini at FrugalistaFinance.com. We aren’t 100% sure what direction it might take, but we can guarantee it will be a friendly cross between fun and informative personal finance. We have big ideas and we’re looking forward to bringing them to life in the new year.

As always, thanks for reading and I look forward to seeing you at my new home on the interwebs!

LittleFrugalista

I’m going to New York!

Okay, so it’s only for a long-ish weekend at the beginning of November but I’m still really excited. I haven’t left the country since…my last trip to NYC almost two years ago. This time it’s going to be a girls’ weekend for a friend’s birthday. My budget looks something like this:

Item Cost Status
Accommodation Free N/A
Flight $328 Paid
Spending money $300 Cash
Shopping $100 Credit
Gift $50 TBA

My trip is the Friday to Sunday night so my budget is pretty basic. Accommodations are free because the birthday girl lives in New York. Her boyfriend was kind enough to invite me and two other girls to come down and surprise her and even foot the flight cost if money was tight. I thought that was an incredibly kind offer but I certainly didn’t take him up on it. If I didn’t think I could afford to go, I wouldn’t go.🙂

My flight is through Air Canada and I thought it was slightly pricey, but based on my daily price monitoring, prices weren’t budging. I’m not going to check again because I may cry if prices have gone down! I have about $100 in US cash from a prior trip, so I’m going to pull my accumulated vacation pay from my part time job – about $120 – then just pull the rest from my account. My shopping budget is fairly low because I’ll likely only buy a few tops if I see them but otherwise I don’t think we have a ton of room for shopping in our itinerary.

Finally, gift simply refers to a birthday gift! I’m budgeting a bit more than I would usually spend because it will act as a birthday gift/thanks-for-housing-me gift. I’ve been thinking of picking up a sweater at the Gap as I know my friend loves fall clothing, but I haven’t found one I know she will like. I’ve resorted to emailing her and asking her to pick out a few she likes. Not quite a surprise, but better than getting her something she ends up hating!

Yikes, I’ve only just realized this is quite a bit for a weekend, but I know it will be totally worth it!

Life update: Lifestyle inflation has crept up on me

It has. Since I last posted, I’ve been settling into my new job quite nicely. I now work for a company that has great clients, quality work, and most importantly, an amazing workplace culture. In fact, for several years in a row, it was rated at the top of the list of best workplaces in Canada. Now I can tell you firsthand that it is that good!

Gushing aside, I finally feel grounded. I’m working hard at work (as opposed to sometimes feeling like a waste of space while interning) and I have some stability in my life. After a few years of instability, I do not take this for granted one bit. Another thing I love about stability is a stable income. And of course, two stable incomes is better than one! I continue to waitress and though it keeps me busy, I somehow still feel fine. I continue to push back the end date of my side gig because as much as having weekends is nice, so is maintaining a third of my overall income. Here is the exact breakdown:

I may not make a ton but having two incomes is sure as heck helping me fake it till I make it!

Lifestyle inflation?

Okay, I exaggerate a bit. I’ve simply gone from spending next to no money to spending…money. For instance, I bought a new phone. A smart one. And we all know that I’ve never had a smartphone. Now I have a Samsung Galaxy S3. Rogers gave me grief in order to get said phone and associated plan (post to follow), but now I have it and it’s a bit of an adjustment. I haven’t quite gotten into it but once I do, I’m afraid it will slowly take over my life. Luckily the bf had a Future Shop gift card that he kindly gave me in order to buy myself a case for it. Right now it lives in a sock!

I’ve also bought some new stuff:

Got these at Payless for work. Say what you will about Payless but I’ve found some great shoes there!

I LOVE these khakis from the Gap. And at $12 can I really go wrong? I’ve been wanting coloured pants for awhile so this was the perfect steal.

This is what happens when I haven’t shopped for about a year! I may want to pick up a few more items for work. Right now I’m in the process of creating an inventory of my current wardrobe, donating things I don’t wear, and seeing what I can work with. Here is my exploded closet:

That’s the update on me! How are you? What are you doing to enjoy the fall weather? Please share!

Blogger note: Has it seriously been over a month since I last posted? I’ve been having trouble coming up with posts so as an alternative, I’ve run away from blogging for awhile. I miss it dearly and I think it is vital that I keep myself in check and start posting regularly. How do you blogstars do it?

Why don’t you have money?

A study by TransUnion found that non-mortgage debt levels are at an eight-year high in Canada to the tune of $26, 221 in the second quarter.

Anecdote #1: Obligatory waitressing story

I recently had a table that was a young couple about my age. They were slightly odd and when the bill came and the total was about $47, the young man asked if he could put $43 on his card and the young woman would cover the rest plus tip. I found it incredibly strange that one of them wasn’t picking up the whopping $47 and I found it even stranger that he chose to pay 91.4% of the bill. I found it even STRANGER that his card declined.

…I found it even stranger still that he asked to put $40 on his card and that that amount went through. Awesome, you have $40 credit to your name and you are kind enough to treat your girlfriend to 91.4% of a meal. Such a charmer you are!

Why you don’t have money: You eat out at restaurants on money that isn’t yours. So much so that you’ve got $40 of credit left.

Delicious, but not free.

Anecdote #2: Friends with kids

I have a friend who has two kids and about $25,000 of debt. She doesn’t seem to be in a huge rush to work and I can understand it. After all, daycare costs are incredibly high and could very possibly amount to the wages of an entry-level position. She is currently off traveling and eating lobsters or something.

Why you don’t have money: You travel when you should be paying off debt.

Paradise, but not free.

Anecdote #3: A certain ‘friend’ of mine

My ‘friend’ decided she was entitled to tons of vacations after graduating from university, regardless of the fact that she hadn’t secured full time employment and had a mound of debt. My ‘friend’ looked for work for eight months after graduating and racked up a pile of credit card debt to add to the pile of student loan debt. She was convinced her dream job was just around the corner so she didn’t bother working part time while looking.

Confessions of a former-debtee

If you didn’t guess, my ‘friend’ = me. I’m not perfect either (as much as I like to think so!). I’ve been there and I’ve done that and I’ve lived to blog the story. I’ve been through the muddy trenches of debt and somehow pulled myself through. So although this post was meant to yell at everyone in debt, I get it. I get it but it isn’t right. Why do we feel like we deserve things that we haven’t earned through hard work and saving? Why do we continue to spend money as if we’re working when we’re out of work?

I think my anecdotes illustrate the answer perfectly: we think we deserve things whether we earn them or not. We want nice trips, nice meals, nice clothes, and just about everything else we can’t afford. We don’t want to wait until we have the money; we want it now.

…Of course we aren’t the only ones at fault. Banks and other lenders are moneymaking entities. Over the past few years, some banks have gotten better at educating people about money, but at the end of the day they aren’t in it for you. If they were, they wouldn’t be handing out mortgages to those that clearly can’t afford them or doling out credit cards with several thousand dollar limits to those with little to no income.

That being said, you can’t blame the big bad bank. Educate yourself. Here are some examples of websites that advocate financial literacy:

Practical money skills

Financial Consumer Agency of Canada

Gail Vaz-Oxlade

Get Smart About Money

Last but not least, consult the personal finance community! They’re a nice bunch and there is absolutely no shortage of great people and posts related to financial literacy. I’ve included some of my favourites over in my blog roll to the right.

I can tell everyone firsthand that getting out of debt isn’t fun. You’ll have to go on a travel ban. You probably can’t buy a new dress for that wedding coming up. You’ll definitely have to skip out on that weekend road trip. I’ve done it all. But I can tell you that it isn’t permanent.

And in the end, it’s absolutely worth it.

Friday hodgepodge

I love the internet and the hodgepodge I find around it. Friday hodgepodge will document my favourite links from the blogosphere, news, and random hilarity.

My favourite blog posts this week:

Finance Fox – You’re not a writer and you probably will likely never be one…unless…

Fabulously Broke – The money gap in relationships: Where one partner earns more than the other

Live Strong – Strengthen your self control

News you should know:

Bank of Nova Scotia will be buying ING! What does this mean for INGers?

Speaking of which, Canadian banks are doing quite well. Dividends, anyone?

South of the border, President Obama takes your questions. Bizarre but kind of cool.

Things that are hilarious to me and potentially offensive to you:

How to suck at your religion

Beauty and the BEAT (Found this a few weeks ago but too good not to share! You’re welcome.)

Jersey Shore is over?!

Have a great weekend!

LF

Switching bank accounts: onwards and upwards!

As mentioned in a previous post, I recently decided to switch over to PC Financial. The reason for this switch was mainly the increases in my banking fees as of late. Of course I understand that I’m paying for service and convenience, but as an avid online-banker, I am perfectly happy doing all of my banking online. In fact, going into the bank to close my account was probably the first time I’d set foot inside a branch in years. As such, I’m happy to move over to CIBC’s little sister PC.

The process

Give yourself about one month to get everything switched over. In my case, the process included:

  • Opening up a PC account and adding bill payees
  • Switching over my direct deposits from my part-time job
  • Waiting for my contract job to finish (I didn’t want the additional work of switching over my direct deposit when I only had 1-2 pay periods left)
  • Canceling my automatic transfers into my ING savings account

Most of these tasks are simple, but switching over direct deposits can take some time. This is why I decided to switch over while between jobs. This way it was one less direct deposit transfer to worry about.  Last week, once I confirmed that my deposits were in fact being received into my new account, I went in and canceled my CIBC account. It was quick and painless!

My line of credit

Irrational blogger confession: I have a CIBC line of credit with an interest rate of 6%. I love my LOC. Back when I had no money, I put about $3,000 on it for a car repair. I’ve been slowly chipping away at it to the tune of a few hundred dollars a month, leaving about $1,300. I always think it’s pretty silly when people leave debt while they have enough money to pay it off, and this is exactly what I’ve been doing. I definitely see why people do it now! It’s psychological and it makes you feel like you have more money than you do. Although the interest on such a small sum is miniscule, it definitely makes no sense to pay any interest at all.

After apprehensively paying out my LOC and closing my chequing account, I am happy to say I’ve slashed about $20 per month in banking/interest fees! Small changes people, small changes.

What’s next?

Confusingly, I now hold too many accounts including:

  • PC Chequings
  • PC Savings
  • ING Savings (one individual, one joint with bf)
  • CIBC Line of credit

I am not entirely sure what one rather small individual is supposed to do with five bank accounts so I’m going to have to get organized! As some of you may know, ING is facing some upheaval resulting in a potential large bank buyout. Not sure what this will mean for current INGers? Potential fees I say!

I know some bloggers like to keep many accounts for different purposes but I would personally prefer to keep one savings account and earmark for different purposes. I will probably try to stay within the PC family to keep things simple and cancel my individual ING savings account. I will also be keeping my LOC for emergencies. Not many of you know it, but I am not a huge proponent of an emergency fund!

Have you ever switched bank accounts? 

The evolving North American dream

I imagine that by now most Canadians know about the new mortgage rules that went into effect last month. Am I right? There is a strong possibility that I am wrong.

Below is a great summary by the CBC of what the changes mean in dollars and cents.

Source: CBC.ca

Essentially a reduction in amortization period from 30 years to 25 years means that your monthly mortgage payments will increase but that you will be paying significantly less interest in the long run. In addition, you must put down 20% (increased from 15%) of your home’s value.

 What does this mean to us?

Now that I’ve paid off my debt, I’ve been zeroing in on some new financial goals. I’ve come to the conclusion that within the next few years, I’d like to own a home. Although these new changes will make it more challenging to do so, I think they are certainly a step in the right direction. Lax mortgage rules caused much of the economic chaos that has run rampant within the past few years. Tight mortgage rules will force us to think twice before committing to home ownership. Too many of us buy too many homes that too few of us can really afford.

Rent vs. buy?

Just kidding, there is way too much material online pertaining to this debate. Do what makes you happy.

The American/Canadian dream?

To many North Americans, owning a home is the ‘American’ or ‘Canadian’ dream, but there’s nothing dream-like about being house poor. Perhaps the new dream should be to enjoy life, save as much as you can, and buy a house when you’re ready to put a sizeable payment down and can afford a higher monthly payment with a shorter amortization period. Or perhaps the new dream should be to rent if you don’t want to commit to buying. I recently met someone that owned a condo, sold it, and now rents an apartment in a great part of town. She is happy with her choice and loves the freedom.

The dream can be whatever you want it to be as long as you know your limits, spend within your means, and create achievable goals. What are your immediate goals pertaining to home ownership? Are you content renting?

LF

Blog note: In an effort to reduce the number of posts about blogging, I’ve decided to include blog notes within posts to update you guys. In case anyone has noticed, I have indeed been gone for the past few weeks. I’ve recently started a new job and it has required a bit of adjusting. I’m hoping to slip into some sort of routine soon enough so bear with me! Another reason for my absence is that yet again, I wasn’t sure what direction I wanted to take the blog. I think I’ve decided and as a result, you may see some changes visually and content-wise.