You know what they say, ‘what gets measured gets managed’. I started this blog last August when I got fed up with failing to meet the savings goals I had in mind, and decided to take a closer look and, well, get my shit together.
It started with spending, and I remain largely focused on that. I realize that I am earning a lot. It may not be as much as Ramit followers think they need to earn in order to live lavishly guilt-free with no consideration for anything but their…guilt…but I do consider myself to be very fortunate by virtually all measures. I suppose if I could find a way to start earning hundreds of thousands per year or more, perhaps my savings of an extra $30 here and there would be less relevant, as Ramit claims, but that wouldn’t consider the value of the habits and perspectives we’re developing by exercising our frugality muscles regularly, whether we’re financially independent or not. Remember, it’s not just about you, it’s about the planet and the rest of the people on it.
When it comes to consuming, just because you can doesn’t mean that you should.
Something Good – my budget keeps getting tighter
After a fair amount of time since first getting real about my budget, I’ve been a little complacent. This is what my budget looked like back then:
Apart from my spending money budgeting goal of $700, all my other expenses – bills more or less – cost a total of about $580.33 (CAD)/month.
I knew I was paying too much for bank fees, but at the same time I only had so much time in the cities as I transit between work in the middle of nowhere and life in Mexico, and waiting in line at the bank to save $10/month hardly seemed worth it when I have had the chance so far. But, I recently hopped online – what a novel concept – and made a couple of calls and made the changes, reducing my total banking fees from $28.85/month to $14.90/month, with further room for improvement soon.
I also managed to cut my mobile phone expenses by about 40% by getting rid of my contract with Telus*. I researched plans in Mexico and not only are they great price, but they can also be used in Canada for up to 30 days, which suits me quite well. I had been paying $100/month to use my Canadian cell phone an average of 2-3 times per month. This was the least expensive plan available, which is just as ridiculous as it sounds. I will use a ‘Pay and Talk’ approach with my Canadian phone now and take advantage of some of the Mexican data that is available overseas as well.
Also, since then, I stopped subscribing to Audible audio books and just started purchasing books when I want them and can fit them in the budget, saving me at least $10 per month at the current rate of audiobook consumption. I also eliminated my $39.95 Life Insurance Policy with Sunlife Financial, which with zero to little debt and no dependents, I just simply didn’t need any more**. This may be worth a separate blog post one day.
Furthermore, I managed to reduce the size, and thus price, of my medium-sized storage locker (now a small-sized storage locker), saving me another $50/month and I have estimated about half of the budget I was using for storing my truck near the airport in Cabo when I go to work, as I am now catching rides or taking the shuttle more often and leaving my truck parked at home. A little bit less convenient, but a significant savings.
Here is what my budget looks like now:
This means that my bills before ‘spending money’ are now about $379.30. (Canadian Dollars) vs. $580.33 per month last year. Over the next 30 years, that savings of $201.03 per month represents an additional $245,057 63 years of age!!!*** This post just got a whole lot more interesting, didn’t it?
I am planning to keep a minimum of $3000 in my remaining Chequing account by the new year, which means my fees will be free, eliminating another $10.95 from my monthly budget. I will close another account I will no longer need as well, saving another $3.95. My total monthly banking fees will be $4.00 per month in 2019 and beyond. I should also be able to get rid of my storage unit altogether by then, a further savings of $83.48 per month.
At that point, my bills will be down to around $280.92/month. Over 30 years, this means an additional $364,983 of savings vs. my monthly budget from a year ago! Now, of course things will change and I will likely have a larger budget in the future and I may not be able to contribute all these savings to investments steadily for 30 years. But the lesson here is that even small changes make a big difference over time. So wherever you’re at, just get started, stay consistent, and let time do its thing.
Learned that with a minimum balance one can also earn Free Banking!? You have to maintain that balance by the end of the day for every day of the month.
Something Bad – I am going to Costa Rica this weekend
Horrible news, right!? Well, of course I am excited beyond words to visit for the first time, and it looks like I am going to get very lucky at a particularly special surf spot in the far south of the country that I have had on my wish list for a long time.
The thing is, that this will break my budget for August, even though I am planning to do it on a fairly sparse budget anyway. In fact, I am currently on pace to overshoot my goal of $18,000 CAD for the year by $1,306, which is less than the cost of my Costa Rica trip.
Oh, I also overshot for July as well. By just over $300.
Not bad. Far from great.
Something Learned – Hotels are the worst
I am a huge fan of Air BnB. I rent my house out on the platform and essentially cover my basic costs of living this way. However, when I travel back and forth from work, I have generally still fallen into the trap of staying in overpriced, underserviced hotels.
The Accent Inns in Vancouver near the YVR airport is one such case. To be fair, I have always had great stays there, but the whole thing has just become too much. During the winter, I generally pay $155 all-in, including a small discount I get with my company (the reason I chose this hotel and routine in the first place). And, $155 seems like a lot, but I can live with it under the circumstances. However, early in the summer I noticed their rates had changed, and I was now paying about $222. That was pushing it. But then they increased their rates even more! The last couple of times I stayed there – mid-summer – I paid $277 for a nice but average family 3-star hotel that happened to be undergoing major renovations of the entire lobby area and was using a temporary lobby.
So, I have decided enough is enough. I have found some alternatives in the area and Air BnB just continues to make and save me money. Here’s a few ways I will benefit from using Air BnB in the next few months:
- August, 2018 (+$130)– Just for being a Superhost on their platform, Air BnB offered me $100 USD to use towards a trip of my own in the upcoming year. I will be utilizing it during my Costa Rica trip the next few weeks.
- August, 2018 (+$7 plus good sleep and new connections) – I also stay in a hotel in Whitehorse that is just horrible. Nothing about it is good except that it is half the price of the other Airport hotel option in the area. They also do all sorts of shady things like try to apply extra charges that weren’t warranted, etc. So I have found an Air BnB in the area that is only a little bit cheaper but is almost definitely much more comfortable and will be much more pleasant to visit.
- September, 2018 ($132) – This will be the first time I am staying in Vancouver at an Air BnB instead of a hotel. It is still not super cheap, but $132 cheaper than the Accent Inns or other nearby airport options.
- October, 2018 ($114) – This will be the next trip, at a different but also very nice-looking Air BnB. It’s worth noting that if I really wanted to save there are options such as a Private Room in a house or similar that are even less expensive and likely completely adequate. I like to have have a bit of privacy after a few weeks of surfing my brains out or working, followed by a full day of travel. Call me a princess if you will.
So in case you lost track, that’s $383 plus some intangibles like new people in the next 6 weeks saved just by re-thinking my strategy a little bit and stepping outside of my comfort zone for a moment.
So, there it is! July 2018. And I thought my June post was late!
*This required me to pay off the balance of my phone, $100 – the cost of one month’s bill.
**I do have a $7.95 Disability and Injury Insurance policy, and also have Long Term Disability coverage through my work at the moment.
***Yes, adjusted for inflation and assuming an annual return rate of 7%.