Category Archives: Blog

Where Does Our Money Go?

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Cash slips through the pockets of Americans each day, and by the end of the week memory fades. There’s no reason to think it’s any different for us Canadians. A survey found that 48% of Americans suffer from “mystery spending.” The VISA USA survey found that Americans lose track on average of $2,340 annually.

Nearly half of consumers say they can’t account for more than one-third of their cash (for the few people who still use “real” cash) spending an average of $120 in a typical week, but losing track of $45. According to the survey, 7% lose track of $100 or more each week. One in five people who admit to misplacing more than $25 in cash per week say their mystery spending is “out of control,” and 62% feel that “small cash purchases make it difficult to track spending.” Furthermore, 47% say that “mystery spending makes budgeting difficult.”

Those aged 34 and under – especially men – are the biggest mystery spenders losing track of an average of $3,078 per year. VISA obviously suggests that the cure for “mystery spending” is to put small transactions onto plastic.

The best laid plans can quickly go out the window starting this time of the year.

A study reported on our spending habits, and this one is a killer to our budget. At Christmas time half of all spending for others ends up being things we buy for ourselves. So for every $100 we average $50 bucks for ourselves! Be really aware of that, be honest with yourself, and just work your lists before you ever leave the house. That, along with a fixed amount of money per person – not the sky is the limit and NOT spending for yourself. Commit to not buying for yourself until Boxing day, or January – or better yet – not this season!

List everybody! If not on the list – it won’t be happening. If you want to take it to the full extent of the budget – write down the amount of money you’ll spend on each person – add them up then take the cash out of the bank. When you’re out of money – go home and stop spending. And don’t even think about leaving the house with your credit cards in your pocket. But it’s so cute and it’s on sale are NOT valid reasons for going over your budget.

If not, the financial hangover will last for months and months – it’s just not worth it.

Besides – gifts aren’t about the money – it’s the thought that counts. A well-thought out present that someone really values is way better than an expensive something they didn’t really want or need.

My Last Meal

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OK, that’s too dramatic: Last night I had my last meal with the last of the brand name items I used to buy.

My personality type (see my “real” career at www.vantageseminars.com) is one that’s the largest group in the country. We’re 35% of the population and we’re creatures of habit and really loyal to products and places we deal – to a point. Of the 10 most common grocery items I buy (excluding milk and eggs) this was the last brand name item. Classico pasta sauce went up over 30% in price over the past few months. Tell me again where inflation is down to 4%?

Change is hard for our personality types. We don’t “move” until the pain level is high enough. That kind of price increase was. It turns out – for this product like every other I’ve said good-bye to – there are no-name alternatives that are just as good or even better! But we’d never know if we don’t get ticked off enough to try!

Our upside is prices significantly lower. The downside for manufacturers and retailers is that our personality type doesn’t come back. But the savings are worth it.

It’s Expensive to Pretend to Be Rich

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In broad terms, the most common goal for most people is to save money and get out of debt. It costs a lot more money to pretend to be rich, than to actually become rich. There isn’t a difference between a $40 pair of jeans and one that costs $400. Except one thing. When you know what that is, and how important that difference is to you, I can predict your financial destiny.

Pretend wealth means the latest, greatest whatever. Whether it’s fashions or the newest gadget, cars, shoes, or sports gear. It also means these things need to be replaced every season, or with every new model. That gets very expensive. My iPhone 7 works fine – but there are millions of people who had two or three version of iPhone 14 and can’t wait for the 15 to come out.

That’s money spent that can’t be saved in just keeping up. No, you won’t take every dollar you save on skipping one season’s fashions and put it into investments. You’ll read that from some people, but it isn’t real life. But saving $200 to $400 a month builds wealth. It’s not flashy, nobody knows it, nobody can actually see it, but it’s real and it’ll grow and grow.

You’ve heard and read the sentiment of pretty much resenting the “top 10 percent,” or that the top one percent keep getting richer. Well, it’s kind of unfair. Most of those people skipped the “gotta impress people” stage and started saving. Years later, their investments grew to hundreds of thousands of dollars. THAT is how they keep getting richer while the image-people keep spending and going broke.

Yes, the top 10% have it made. A $50,000 investment that took years to build will grow $5,000 or so every single year on auto-pilot. The image people spend that a year on credit card payments. It’s not a fair fight or comparison..

Someone on Facebook with me lives in a winter city. He started Facebook posts in September when he bought a super-expensive exotic sports car. Hundreds of likes and comments every month or so. I bet those people are really envious. Well, it turns out it’s a three-year lease at $1,300 a month. He’s still re-posting pictures of it every few months to keep getting the bang for the impressing-you buck…even the six months he can’t drive it.. For vast numbers of younger people it’s more and more escalated on Instagram.

In three years, this guy has to return the rented vehicle, or pay the lease buyout with another loan. He’s out $50,000 or so in payments…but has hundreds of FB likes and people who are super impressed…versus the $50,000 in investment…There’s a difference – a big difference.

Yes, Tipping Is Way Out Of Control

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Like most of us, I’ve been hearing the reports of “attempted tipping” in the weirdest places and the pushback that’s now started. But until yesterday, I hadn’t really experienced it in person until my oil change. The terminal prompt to pay for it was pre-loaded with a new page of tips and tip suggestions: 20% 25% or 30%. WHAT? You want me to tip for an oil change? It’s a good thing I saw a tiny “skip” button at the bottom so I didn’t actually say anything or lose my mind.

According to Bankrate, 30% of us now think tipping is out of control and two-thirds of respondents have a negative view of tipping. No wonder when it’s pre-programmed everywhere and in your face in the weirded and (in my opinion) totally inappropriate places.

Two years ago we talked about tipping your flight attendant for selling you an overpriced snack or drink, but that was just the beginning. I recently heard someone say it was pre-prompted at a self-serve kiosk at the airport and another person was prompted for it at their drycleaner.

As a result, according to Bankrate, we now tip less and a lower amount. But tons of people still do. I have never, and would never, use a food delivery service, but 50% of people tip. Even Starbucks says that half their customers do tip (I don’t understand I don’t understand…) when paying by credit or debit card.

Broke People Can’t Stimulate the Economy

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At the risk of stating the obvious: Broke people can’t help stimulate the economy. Just ask the U.S. what 2008 to 2011 was like. When both Canada and the U.S. have about 75% of the economic activity being consumer spending – when you and I cut down our spending, there’s trouble.

While we may avoid a recession, our consumer spending is going to slow down. Lots of people are still using COVID savings, but credit card debt is rising and every year millions of people are needing to get or renew a mortgage at rates of four to five percent higher and inflation has made almost everything a whole lot more expensive. That has to create a slowdown of some kind, in some ways, at some point in time. Less consumer spending leads to less retail sales, less manufacturing and less economic activity everywhere. The next wave is less hiring or layoffs, and the vicious cycle escalates.

But it’s not your job to stimulate the economy with borrowed money. That’s a financial suicidal pyramid scheme. At some point, you’re out of money, out of room on your credit card, and can barely pay the payments  you already have. But that’s what the government needs you to do in order to keep the economy growing. So, on the one hand they’re tightening up mortgage rules to cool down the market and warning that our debt to income ratio is over 160%. On the other hand, they really need us to keep spending so the economy picks up. Yup, it’s a vicious cycle with totally mixed messages: On the one hand they kept lowering interest rates to make borrowing easier and cheaper, on the other hand they hit the brakes with more mortgage restrictions to not overheat the housing market.

I talked to a lady last week that was really concerned that her husband’s hours would be cut back. They really need to keep earning their $70,000 family income or they’re in real trouble. In other words, they’re buried in debt from previously helping out the economy so much. Now they’re out of the spending business because they “need” every dollar of earnings to just keep their head above water. And that story applies to millions of Canadians. It was fun while it lasted – but they’re now in the middle of one giant hangover.

For teenagers, the number one favourite activity is going to the mall. Teenagers help the economy. They’ll spend $10 or maybe even fifty bucks. But when they’re out of money – they’re out of money. They don’t have access to credit cards. While teenagers are a big part of economic activity, it’s all with real money and not borrowed funds.

That’s why tons of teenagers are richer than their parents. Sure, the parents have a lot more money each payday. But within 48 hours, that’s all spent and gone…and then some… on credit cards or lines of credit. Teenagers don’t have that curse or opportunity.

I’m all in favour of helping the economy – right after you help yourself and get to be debt free. Then you’re contributing to the economy with real money!

Would You Like Me to Just Send You $1000 a Month?

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Whenever I get emails from people asking for feedback or help with a financial mess, I’m more than glad to help. No, I don’t charge for it. I believe God gave me a purpose and passion and it’s called paying it forward.

But at some point, most people are really not interested in doing much (or any) heavy lifting. And I can’t fight harder for them than they’re prepared to fight for themselves. That was confirmed again by the last BMO Savings Survey. 30% of people want to save more but do not want to change their spending habits. Sorry: You can’t get there from here – it can’t happen.

The emails have a pretty consistent theme: Someone is spending more than they’re earning and they’re in pretty deep debt. I’m not in the middle of their mess, so it’s easier to see the fixes that’ll turn things around. Here are some of them that will sound so obvious, but they’re anything but when you’re in the middle of it:

No, you can’t send your two kids to private school when your income is $45,000. You can’t afford it. It doesn’t make you a bad parent, it makes you a great and responsible parent who can do 5th grade math.

You have a cell bill of $140 a month. That’s insane. It wasn’t that long ago you managed to live without a cell. Now anything but a full unlimited plan is  a necessity that you can’t do without? Mine is $39 with data.

Sell your car and get out from under the $1,100 car payments. They’re killing you. Drive a $3,000 used, reliable car that you buy for cash until your debts are paid. When you can afford it, you can turn right around and get an idiotic $1,100 car payment again if the debt-free thing doesn’t work for you. But you won’t do with, giving me two or three totally bogus reasons…actually…excuses why you love that $1,100 payment more than you’d love saving the same $13,200 a year.

You say you need to keep $4,000 in your savings account at half a percent while paying 22% on your credit card. Keep $1,000 as a starter emergency account; pay the rest on your credit cards today!

You don’t know the interest rate on your credit card and only know that you’re paying minimum payments of around $200 a month while charging about $800 or more. So you’re going further in the hole each month and tell me you have to have your credit card. Yes, you do. Because you’re so far in debt, that’s your only way to buy groceries and gas right now.

That’s just some of the very common ones. So what exactly do you want help with? You won’t downgrade your car, your cell phone, switch to an 11% credit card instead of 22%, or stop your credit card addiction. News flash: I’m out of ideas to help you. The only other thing left is for me to send you $1,000 a month. Is that why you got in touch with me? That’s not being rude, it’s caring enough to be honest, and seeing the reality of your income and expenses. Numbers don’t lie.

You don’t have a money problem as much as a spending, thinking, planning and discipline problem. You want your toys, gadgets, and vehicle more than you want financial freedom and becoming really wealthy.

Costco Under Attack – But Why?

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Media stories, lead by the toxic wasteland of social media, have hammered Costco for the last month or so – for no valid reason.

Costco is, and always has been, a membership-required store. Anyone without a membership can go with someone who has one and shop. But no membership – no shopping. Seems pretty simple. However, when Costco implemented some self checkout machines, the non-members shopping there rose drastically. After all, there isn’t a cashier checking the picture on the membership. So Costco has implemented some random check at the self-serve lanes and that’s what set off social media. When that happened, TV, radio and others weren’t far behind – for no reason other than to amplify the stupidity of social media.

So, at the risk of stating the obvious, I’ll explain it again…to people who aren’t actually going to read this – or care about logic: I paid for a Costco membership – as did millions of others. THAT is what lets me shop there. No, you can’t take someone else’s and shop there. You can’t take someone’s pink card and think it’ll cover the insurance on your car. You can’t use someone’s membership and show up at a private golf course, or a friend’s drivers license and somehow think you’re good to drive with that. You may not believe this, but people pay for things in order to have, access or use them.

Go get a membership if you really want to shop at Costco. It’s not expensive or hard to obtain. Until then, let me see if you’re going to complain about any of the other examples (and hundreds more) I’ve listed or shut up about the stupidity of your social media campaign.

Definition Of Financial Success?

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A couple is in bed with the husband closing up his laptop: I just paid the mortgage, the car loan and the electrical bill! Look at the balance in the checking account (he says proudly): 74 cents!!

Love it. Sadly, I wrote down the quote but not the movie I was watching. While the writers thought it was funny it made me think of how many people can’t actually accomplish that without an overdraft or some of their bills going on a credit card…

Airline Ticket Vouchers Question

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In the time of Covid when the world was off its axis and not rotating, airlines issued millions upon millions of dollars in voucher credits to tens of thousands of travelers.

Yes, a lot of us complained that we should have been refunded, but the airlines fought that like crazy. After all, a credit means you have to fly their airline at some point or forfeit the credit. Yes, politicians talked about it a lot and promised (or did) hold “hearings.” That’s the cod word for: We understand a lot of you are mad and this makes it look like we’re going to do something. We’re not really going to be able to – but it’ll get you to think we’re on it…

These IOUs come with a voucher number and, with most airlines, a PIN number to be able to use them. One of mine was from Air Canada. My bad in that I had forgotten the voucher email for the $244 was separate from an email with the PIN number. Thus, I printed the voucher, checked the amount and then (and now) deleted the junk emails from them. Well, it turns out that I deleted the separate PIN number email.

On October 20th, 2022 I started my part-time work contacting Air Canada to get the PIN replaced. This week (8 1/2 months later) I finally received a replacement.

Almost NINE months of written attempts (to have all the backup documents)! It makes me wonder how many thousands of people with the missing voucher and/or PIN, or an incorrect amount from dozens of airlines don’t spend the (about 30) hours to get their credit in a usable format.

And THAT is why airlines fought like crazy to avoid actual refunds on our credit cards….

Manufacturers Want Your Dashboard Back!

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In the next two years, every vehicle manufacturer is going to find one (or two) ways to get back their dashboard display.

The displays have gone from simple to complex computers in the last ten years or so. These days, they’re Bluetooth, backup cameras, all kinds of displays, radio, syncing and much more. At the same time, more electric vehicles mean less income for car dealers since these vehicles don’t need oil changes and the likes.

This is the way all manufacturers have to increase their revenues – a lot! It’s not just going to be an additional charge because that’s one-time revenue source. It’ll be a monthly subscription that will be revenue streams for life. Great for them – horrible for vehicle owners and buyers.

Different manufacturers will get there in different ways: Some will charge to have the display functioning at all. One is working on having the Bluetooth function only work with an active subscription while another is going to have it triggered to keep the air conditioning working. That one is particularly nasty – but will, of course, be really effective.

Years ago, many included Sirius radio for a six or 12-month trial. However, the renewal for pay subscriptions were extremely small. This time, they will control the process and it’ll all be their revenue. It’ll be under the guise of “updates” to keep things functioning. No, you really don’t need an “update” to keep your Bluetooth interface working or your AC to run. But that’s their story and they’re sticking to it.

Oh, and if you’re a fan of AM radio, there’s a good chance that’ll stop being included in your stereo a year or two from now. It’s already “missing” in a lot of electric vehicle models.