Tag Archives: budget

Are You Going Out For Lunch Today?

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If so, you’re not alone. According to a Visa survey released yesterday, 60% of us eat out once a week or more. The highest percentage is in Ontario while the Western Provinces tends to eat out the least.

Eating out is convenient, it’s faster than making lunch and – well, we can get kind of lazy. But convenience comes at a price. On average our eating-out meal is just under $9 a pop. Not that big a deal if it’s once or twice, and a lot more for a family of four. At $9 it adds up quickly, and even quicker for the 61% of people whose average is up to $13 at a time.

Who cares? That depends on the state of your finances. It’s certainly ironic that this survey was done by a credit card company. When we pay by credit card, no matter what it is, we spend an average of 12 to 18% more than paying cash. McDonalds has an almost 50% increase in per person sales on credit cards, and vending machines who take them increase their sales 178%.

For anyone who is in debt, these little $10 lunches here there, and all the time, are some of the biggest killers to getting out of debt. There isn’t one magic bullet to changing your finances around, it’s all the $10 and $20 buck stuff like a leaky faucet. If you’re broke or on a budget you shouldn’t see the inside of a restaurant, unless you work there – period. Eating out is 75% ambiance and 25% food costs! There’s nothing wrong with that, but broke people can’t afford it.

If you want to turn your finances around, you need to do a budget. You’ll need to put in writing at the beginning of the month what money you’re spending on what category. Once the budget is set, the only way to spend extra money is to take it out of another category. It’ll give you total control of your money, and you’d be amazed at what you’ll discover about your spending. I’ll guarantee that anyone who does a budget for two months will find at least a couple hundred dollars in savings!

When it comes to eating out – go for it. But it has to be in the food budget. When the food budget is done – you’re done! With the food category, the most effective way is to take the cash budgeted for food for the next two weeks and put it into an envelope. That cash, and only that cash, is used for food. It’ll be very powerful to see that money shrink and shrink – but you’ll actually see it. Paying some of it on credit card, using a debit card for lunch here and there, or buying the odd thing with cash means you’ll have no idea of what it all adds up to. But an envelope with the cash for the next two weeks is powerful and visual – and it works, and you’d be amazed at the money you’ll save.

Living on a cash food budget takes discipline. Plus, your broke friends at work will make fun of you when you don’t go out for lunch with them all the time – that’s why THEY are broke and will continue to be. Anyone who is trying to get ahead, also on a budget, or debt free, will be your biggest cheerleader. But there are more broke people than debt-free people, so get ready for them to pick on you.

One last thing we talked about three weeks ago: If you want to save some money in the kitchen, stick to a budget, and/or reduce waste, there are two new web sites that are kind of cool. Both are set up for you to enter the ingredients you have in the house and will ‘translate’ them into figuring out what you can make for dinner with what you have! The two sites are www.saymmm.com and www.supercook.com

Three Money Insights for Wednesday

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Another huge wave of phishing scams are showing up in your e-mails. These two are predominantly from E-bay and Amazon. The Amazon one works for the crooks because so many people have dealt with the company. The e-mail will state that your order has been cancelled and to click on the link. Tons of people do and are asked to enter their password. Once that’s entered, the crooks can go into the real Amazon within minutes and place orders for hundreds or thousands of dollars and have them shipped wherever they want. Amazon allows third-party shipping and retains your credit card information on your profile.

Don’t click on an e mail – almost never. Go to the real Amazon or E-bay on your browser. And you can also hover your mouse over the hyperlink the crooks want you to click where the bottom left side of your screen should show you the actual web site it is re-directing you to.

If you want to save some money in the kitchen, stick to a budget, and/or reduce waste, there are two new web sites that are kind of cool. Both are set up for you to enter the ingredients you have in the house and will ‘translate’ them into figuring out what you can make for dinner with what you have! The two sites are www.saymmm.com and www.supercook.com

What would you pay to have lunch with one of the richest and most successful investment people in the world, Warren Buffet? Lunch with Buffet was auction off last Friday at $3.5 million. It’s an annual auction in support of the Glide Foundation helping the homeless in San Francisco. I’m sure it’d be great investment insights but at a big price…

More Monthly Budget Tips

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More Monthly Budget Tips

Two weeks ago I offered a $100 bounty for some good ideas to help cut down the monthly bills. The best one, by a mile was from Dan. Rather than dissect them, I’ll let you read his entire note and choose if there’s something here for you:

Hello George,

I always appreciate your radio commentaries…here are my money saving tips:

Get rid of the clothes-dryer, don’t use air-conditioning, lower the thermostat and put on a sweater, turn off lights and heat in un-used areas, use power bar and power off gadgets, chargers and home theatre, etc. Keep the lights low…your not doing heart surgery so why light your empty kitchen like an O.R.!*

Install a programmable thermostat, use CFL or LED lights. Increase your internet package and cancel the TV to watch streaming programs.

Cancel the cable TV and watch online TV and downloaded movies. Get a bundle price on internet and phone. Regularly check all your plans for cable, internet, phone and cell for newer cheaper plans. Consider a pay as you go cell plan, and text instead of talking. Don’t have satellite radio or anything with monthly fees if you can live without it. When shopping, bring a calculator…and don’t be fooled by Yellow tags implying a sale price…it’s probably not true. Cancel all subscriptions to magazines, and newspapers…read everything online and save a tree.

If you drink and entertain, make your own beer and wine. Don’t go out for drinks and dinner, buy all the fancy groceries you want, but stay at home.

Drive an older economy car and don’t pay for collision insurance, and don’t wash it every week. Don’t pay for services you can do for yourself…housecleaning, lawn cutting, oil changes, etc. If you have 2 cars….consider selling 1, and try transit, cycling, or walking. Sell the boat you never use….sell everything you haven’t used in 1 year, especially electronics – their value is steadily dropping. (old cell phones, cameras, and computers)

Don’t pay for a storage locker for household items….if you can live without it …WHY PAY TO STORE IT!

Buy a tax software program and do your own taxes, (this way you will save money and know something about taxes). Buy whatever coffee maker you want…and some travel mugs…let the drive-thru be a “road trip” treat. Keep non-perishable snacks in the car…granola bars, juice boxes, etc…cheaper and healthier than burgers and fries.

Get a “no fee” debit card and don’t carry cash so you can see where all the money went!!!! Dan S.

P.S. I have ¾ of an economics degree…so I am kind of obsessed with this stuff…

Show Me the Money (Savings)

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The It’s Your Money book section on budgeting has a lot of insights and ways you can take an extra $100 extra and pay off $25,000 in debts in less than four years. But there’s also a challenge for you: During the next week, make it a game to find out where you can cut down your current bills. Don’t assume anything, make some calls, stop and think, look at something a little different, ask some friends, and see if you can’t find at least $100 to cut each month.

I bet you can do it without ever affecting your lifestyle. But here we are, feeling overwhelmed by our debts with no clue how to make a big dent in them, and wondering “what’s the use” trying to reduce our monthly expenses. That mindset is an absolute financial killer, and the first thing that has to change is the attitude that there’s no point and no use. There is – and pays off BIG – really big!

Here’s the example of what I did last year:
Cut off a bank overdraft: $20 a month in fees and interest
Switched bank accounts for lower service charge package: $10
Changed phone carriers from Telus to Shaw: $25
Changed my fax line to smart-ring: $30
Changed long distance plans: $15
Cancelled two magazine subscriptions I didn’t have time to read anyway: $10
Switched to Esso Speedpass for an extra 1.5c off per litre: $8

That’s just seven of the dozen things which I found in two days, for a saving of around $290 a month. Over a year, that’s $3,500. Now add the tax to that – because we have to earn gross income in order to have this $3,500 left – that’s $5,000 worth of income saved!

What are yours? Is it a programmable thermostat that’ll cut your utility bill 15%? Is it a saving of $100 a month just in one less dinner out? Maybe a cell phone plan change, or perhaps dropping down one level on your cable TV package?

So tell me the last time you got a $5,000 raise? Still wonder what’s the point? And why do it? Because every bill you cut down, every dime of interest you save, every dollar that’s NOT going out the door to make someone else rich is exactly like getting a raise – only a lot quicker and easier to accomplish! You can increase your earnings or cut your money going out – both work – this one is just easier and faster to do.

Make it a game and not a pain and you’d be amazed at what you’re leaking out the door that you haven’t questioned in years! You have to start somewhere and you have to start sometime, and taking a hard look at your current bills is one of the best places to start.

If you have an idea, let Phil or me know. I’ll put up $100 for a great idea we can share. If I don’t get an actual good one, the money will go to a Kelowna charity. So one way or another, I will pay it out. Care enough to share it. I’m at yourmoneybook.com and Phil’s e mail is on the radio station web site.

Some Financial Christmas Presents For Yourself

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Ah, the week before Christmas. That means a lot of people should just about be at the stage where any logic, budgeting, or living within our means, goes out the window. It’s normally right about now that lots of us go nuts with our spending. Don’t do it – slow down, go to the bank and get some cash. Paying with $20 bills has a real money feeling, instead of just swiping away with plastic! And your wallet will thank you for it in January.

Presents are not what Christmas is all about, at least for us adults. If you think back, some of the most memorable gifts weren’t the expensive ones. Better yet, can you remember exactly what you got for gifts last year? And it’s certainly not a contest to see who can be the most irresponsible and spend the largest amount of money.

Gift cards: Remember what we talked about last month. Be careful. You’re parting with cash and getting an I.O.U. That merchant has to be in business when the person goes to use the I.O.U. It’s perfectly fine to give cash. There’s no expiry date, no fees, and no limitations. Just put a note in there that your financial advisor (that’d be me you can blame) suggested you care enough not to send a risky gift card.

We talked a couple of times this past year about internet security and hackers getting into people’s bank accounts and on-line transactions. Are you, or do you know, a high net-worth individual that does on-line banking or accesses their brokerage accounts? If so, one of the best presents is a small notebook computer that ONLY gets used for on-line banking. That way, there’s no chance for anyone to hack into it, as it doesn’t get used for anything else on the internet!

Did you know that the Salvation Army just announced that their annual Kettle Drive is now credit card ready? You can just swipe and donate. I’m pretty ambivalent about that. I love people donating to charities and helping others, but I’m not sure it needs to be on 20% credit cards.

Getting Financially Fit For 2009 (Part I)

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Happy New Year, but it’s pretty depressing that us Canadians just hit the trillion dollar mark in consumer debt and it keeps growing.

New Years resolutions don’t work most of the time which is why fitness clubs are a ghost town in February while everyone is still stuck with an annual membership fee. Most of us just don’t have a “hallelujah moment” the first few days of New Years which has much of a lifespan.

The good news: It’s a new year! It’s a chance to start over, to resolve to do better, to do more, or in the case of your payments and all that interest – to do a lot less.

The bad news? You’re already broke! How’d that happen? Well, we spend more than 120% of our disposable income, half of us have no savings and almost 70% of us don’t even make RRSP contributions. Why? Because every dollar we earn goes to make a long list of lenders really really rich and there’s simply nothing left at the end of the month. Never mind that the average person figures it’ll take two months to pay off their Christmas debts when surveys keep showing it’s actually more like six months.

How do we make it through January with the Christmas and other bills heading our way?
When you’re in a hole – stop digging. In other words, spend less or earn more. Both will have a huge impact in changing your financial situation really quickly.

Annual bills kill your budget, but they’re not a surprise. We know they’re coming – but we haven’t got the money to pay them. Open a savings account that’s not hooked on your ATM card. Then add up what you’ll need for next years’ Christmas bills, your property tax and car or home insurance. Divide it by 12 and put that monthly amount away.

Set yourself a credit limit. Pick a dollar figure below which you’ll pay by debit card or cash. Maybe $20 or $30 bucks – that’s it. Anything below that, you’ll pay with real money instead of running up debts. It’ll become a great habit and will cut down your credit card balance in huge ways.

Pay off one bill. Minimum payments buy you another month – nothing more. It’s treading water. Credit cards and debt are not your friend. They’re financial dream killers and suck money out of your pocket and add a ton of stress to your life and your relationship. Take your smallest bill and put every dollar you can towards it while paying minimum payments on everything else. When it’s gone, take the next smallest and focus only on it. This step-up plan will get you debt free in less than half the time. It’s an entire section of the It’s Your Money book and will become a huge tools for you.

Close your overdraft. I know – it’s like being hooked on drugs. It’s so convenient and always there and you can’t live without it any more. Well, that’s what the banks were counting on. Just a $1,000 overdraft will cost you between $200 and $300 in interest and fees. It’s a one-time pain to cancel the overdraft, but it’s worth it.