My Money, My Choices - Level 5, 6, & 7 Done

In January of this year, I mentioned that we needed to get our wills and powers of attorney etc. updated now that we were moving to BC.  We also needed to name a guardian for Little Man.  We finally took care of the updating, and were able to move along in the My Money, My Choices program.

I know that Gail has retired from blogging, but the My Money, My Choices site is still a super helpful one full of lots of resources.  I'm still making my way through bit by bit.

Level six is all about insurance - life and personal disability.which I've written about at length.  Next is level seven which is a goal setting exercise.  We regular;y set and reach goals so we're moving on to level eight,

My Money, My Choices - Level Five Update

In updating my blog, I thought it was time to revisit our My Money, My Choices progress.  The last I left it we had just finished level four, and were working on five.  Level five has four activities.  The first three we've completed:

1, 2, 3... Make a Will, Designate a  Financial and Personal Care Power of Attorney.  Back in the summer of 2014 we found a lawyer and got these taken care of, but now that we have Little Man, we need to update our will.  That also will take care of activity four which is to appoint a guardian for any children.  So, I've got to dig up our will, and make an appointment with a new lawyer in BC and get these all updated.

Making a Will

We haven't finished Level 4 yet, because we're still taking our home inventory; but I didn't want to lose momentum (either in writing or in the My Money, My Choices process); so I'm going to start working through Level 5.

Activity 1, is to make a will.

Oi!  I knew this was coming, but I'm not sure I was ready for it just yet.

Activity 2 is to name a financial power of attorney, and Activity 3 is to name a personal care power of attorney.

I guess we need a laywer.

Taxes! Do Them!

It boggles my mind how many people don't keep their taxes up to date; especially when they have super standard; nothing to write home about taxes to complete.  We're talking a T4, maybe 2 and an RRSP or school deduction.  Seriously.  It's not hard.

It just so happens that the last two activities in Level 4 of My Money, My Choices to get this years tax return done and catch up on any previous years.  Jordan and I are all caught up; but I can't say it's always been that way.

When I met Jordan, we were 19 I think, and he had several years of taxes to do....like 4 or 5.  So, I sat down on his living room floor (tax software wasn't as popular then); and did them all.  I think payment was my choice of movie and he had to cook me dinner.  Though once he got his cheque in; he took me out.

I was floored that he hadn't done them, and really wasn't worried about it; this of course comes from your influences growing up.  Now, I can't say that Jordan gets excited as I do, but he's happy for me to get them done, and happy to get those tax returns every year.  I don't submit them by hand any more, typically I use TurboTax because I have three returns to do (mine, Jordans, and my grandmothers) and my mom and I often share the license for hers too, but I still usually do a practice run pen/paper style just to make sure everything lines up correctly.

Home Inventory

Do you know what you own?  Everything, every item - do you know what and where it is, how much it cost or what it would cost to replace it?

The pictures I'm sharing with you this week are from the house fire my family experienced in Christmas Eve, 2003.

Our house/garage fire was not nearly as devastating as it could have been, our family and our pets all got out safely. 

The next several months were spent living out of a rental trailer where my brother and I had to share a room and everyone had to be a lot more mindful of space, noise and mess.  I was home for the holidays from collage, and not working and as a naturally curious person (read snoop?) I spent time with my mom looking at the insurance paperwork and asking questions about what it is she had to do.

We were lucky and had replacement insurance, but in order to claim, we had to know what it is that we had - and that meant sometimes guessing or ball-parking because there were no photos, spreadsheets, or lists that we could refer to.  It was during that time that I swore I would take pictures of everything in my house, I would be prepared.

But do you know what, it's been 11 years and I still haven't done it.

But that changes now.  Over the next few weeks, Jordan and I will categorize EVERYTHING we have.  So that if we ever suffer such a loss, we'll be ready.

Also, my brother has recommended the Delicious Library app which allows you to not only enter things in manually, but also scan barcodes using your iPhone camera and, annnnd fancy graphs.  Who doesn't like a fancy graph.  BUT I don't use a MAC and it requires IOS; so, I did some hunting and found MyStuff2 - which has given me a very good first impression.  You can get started for free to test it out (up to 15 items) and then upgrade if you want to keep going.  It's got some pretty cool export features and the barcode scanner is amazing!

This is going to be a lot of work.

p.p.s.
This is Level 4, Activity 7 in My Money, My Choices.

Overdraft

Continuing on in our My Money, My Choices journey - we come to overdraft.  I've thankfully never lived in it, but have in the past dipped into a few times by accident.  The cashflow exercise we went through a month or so ago really helped getting this straight so that we weren't having bills automatically debit from the account before pay day.

The great thing though, about banking with Tangerine is their Whoops! Protection...which is their version of overdraft protection.  Everyone, automatically gets 30-day protection to a maximum of $250 - FREE for 30 days.  So, if your account is accidentally withdrawn because of a miscalculation on the dates, you won't be charged for it or suffer a NSF fee.

Now, it is only free to a point.  You'll be charged $2.50 if it takes you longer to pay it back after the 30 days, and every 30 days after that if you fail to get your account balance back into the black.

Gail suggests that the easiest way to ensure you never dip into overdraft is by creating your own OD protection - something that Jordan and I have done for a long time.  Our's is about $1,000 - there's never less than that in the account.

My Money, My Choices - Level 4, Activity 3 and 4

Activity 3 is one I can really sink my teeth into, in this one, we have to check our credit history reports.  Activity 4 is to correct any errors.  I requested them for both Jordan and I on April 14th from both Equifax and Transunion and the Equifax ones arrived last week.

Managing your credit is your responsibility, and checking in on the two bureaus is part of that job to make sure that everything is right....waiting until you need credit, until your buying a home, refinancing, getting a credit card - whatever - is NOT the time to do this...because repairing mistakes can take time to fix.

I'm very pleased to share that everything is in good order!  The Kia and the Amex show up on Jordan's report and the Escape, LOC, Joint C/C, Cell Phones and my Visa show up on my report.  The mortgage however; is missing.

I called them, and apparently they only report to TransUnion - so we'll wait another week or so until that report shows up and check.

They do have some wrong contact information for us, and they haven't updated Jordan's job - so we'll get that sorted out and check this off as complete.

My Money, My Choices - Level 4, Activity 1 & 2

Level 4 is all about credit...which is a tool and important to learn how to use well.  When credit, turns to debt it becomes a tool that weighs us down and prevents us from achieving financial independence.

Activity 1 is to get a credit card...well that's an easy one to check of as complete.  I have a personal VISA in my name only that I use when travelling for work to keep those expenses separate and Jordan and I have a joint AMEX (with him as primary) and a joint Mastercard (with me as primary).  It's really important for our own credit identities to ensure that each of us is the primary on at least one; that way when the credit card companies report to the credit reporting agencies - we're both building a good credit history.

Activity 2 is to consistently use credit - I'm comfortable tracking that activity as complete as well because we use our cards and pay them off consistently.

MMMC - Level 3 Done!

My Money, My Choices - Level 3, Activity 11 & 12

Jordan and I don't have children so we can skip these activities - they are setting up and automating RESPs.  You can bet your bottom though, that once we do, it will be the first thing we do for our kids once we have them.

With these last two activities skipped, we graduate Level 3!

Do you have a TSFA?

My Money, My Choices - Level 3, Activity 9 & 10

From the blog posts, and articles that you still see regularly around the merits of TSFA's versus RRSP - it's no wonder people are still confused about what they are for, and if they should have one.

Level 3 activity 9 and 10 are to open a TSFA and automate contributions to it.  It's the easiest (only?) way in Canada to save money (up to $5,000/year) and not pay taxes on the gains earned on the money.  For a lot of people who are lower income, it makes sense to save for retirement this way; Jordan and however need to use RRSPs for retirement to capitalize on deferring the taxes payable until we're in lower tax brackets in retirement.

We use my TSFA to save for eventually a baby.  We currently have $3,300ish and the goal is $10,000 to help offset maternity/parental leave no income. We save $100 every month to the fund, to grow it slowly but surely.  I see this account as I see our retirement accounts - it cannot be touched unless it's for the very specific reasons we've laid out (I'm so much more flexible with our Emergency/Curveball accounts which is perhaps why we've never achieved a particularly high goal for the Efund).

What do you use your TSFA for?

My Money, My Choices - Level 3, Activity 7 & 8

A curveball account...now this is something that Jordan and I have never had...though perhaps it is and we've just been calling it our Emergency Fund.  Gail believes that everyone should have a curveball account to help deal with those unexpected expenses that you don't wan to throw your budget off track....maybe this is where those vaccination vet bills should have been paid for instead of from the emergency fund.

This is an account that doesn't need regular contributions, but does need a place to start.  It can be $200-$1,000 or more.  Activity 7 is to create the account and Activity 8 is to fill it.

Do you guys have a curveball account?  Do you think it's necessary...or do you budget so well that you don't need it?

I feel like as long as Jordan and I are continuing to save towards our emergency fund - it doesn't really need to be a separate account...another thing to manage...but it probably couldn't hurt to try.  I moved $500 from our emergency fund, into the curveball account to hopefully curb the use of our Efund for...curves.

My Money, My Choices - Level 3, Activity 5 & 6

In this activity we set up our retirement savings..and automate them (activity 6) I think it's really apt on the tail of yesterday's post about my grandmother in retirement and the post we did about a week ago or so on Level 3, Activity 1 (calculating our personal savings rate).

I'm still comfortable with where my savings are at, but I do think we need to bump Jordan's.  We've decided to go ahead and increase his contributions by $100/month as that will take him in to the 12% savings rate range instead of the 9% range.  For now, we made the bump to his regular RRSP instead of his streetwise account - we wan to keep on eye on how things play out now that ING Direct is Tangerine.

Not including the 10% I save for my pension (5% me, 5% my company) and the shares I purchase ($100/month) - this brings Jordan's savings up to $400/month and mine stay at $100/month.  We've been adding $100/month to our emergency fund, and are also still saving $200/month to our baby fund (that's in my TSFA).

My Money, My Choices - Level 3, Activity 4

The fourth activity in level 3 is getting set up on a company pension plan if you're not already on one - thankfully I am but unfortunately, Jordan's company doesn't have one.

Mine is a defined contribution (not defined benefit), both I, and my employer contribute 5% of my gross salary including any overtime or bonus'.  About a year and a half ago (my four year anniversary), my pension vested which means that no matter where my career takes me - the money in that account is all mine and cannot be clawed back by my employer.

I'm not particularly good (read knowledgeable) at investing, but I thought I would share what my pension is invested in (I can make changes to this anytime, but try to only look at it once or twice a year) and what my rate of return is for the different funds.

This is through Sunlife and I can choose any plan/fund that they have.

What do you think of my asset mix? Would you do anything different?

My Money, My Choices - Level 3, Activity 3

A couple days ago, I wrote about creating the Emergency Fund, today is about automating it.  This one is really simple - just set up an automatic savings programme.  With a goal of $25,000 it's going to take us a loooonng time - but we'll never get there, if we don't get going.

For those of you that were with us a few months back when Jordan took his new job, we didn't have the cash flow to keep our emergency fund automated - now that his job is changing to a higher guarantee we can look at this again..

...but how much should we automate, and how much do we keep flexible for our debt snowflakes?

I'm going to start with 100/month and see how that feels.  How much do you put towards your emergency fund every month?

Check out the My Money, My Choices program by clicking here.

My Money, My Choices - Level 3, Activity 2

This activity is to set up an Emergency Fund...which Jordan and I have...but is it being used properly?  This is what Gail says an emergency fund is for:

Needing new tires is not an emergency. Nor is a new roof, that replacement hockey stick or a vacation. An emergency is a loss of income due to illness, layoff, or death. Stash the equivalent of six months’ worth of essential expenses for an emergency. Without an emergency fund, you’ll blow through your savings; you may even have to liquidate investments at a most inopportune time.

Jordan and I have definitely used our Emergency Fund for things that weren't included in this list...but not for home improvement, or a hockey stick.  We did use it when we had a tire punctured b/c we weren't planning on purchasing them yet, and we have used it for travel expenses for family emergencies (family in hospital)...do you think those things count?

Gail says we should have six month's worth of essential expenses...so what's essential?  I cut everything that I could (internet, cable ect.) that didn't have a cancellation fee (cell phones) and found out what my minimum payment would be on the mortgage and we're left with $4,347.  This includes shopping our monthly spending down to $800 - no more eating out, entertainment or alcohol...just gas and groceries.

So...is what we have gonna cut it?  Not so much...but this activity was just about creating the fund, not about reaching the goal so I'll check this one as complete.



Check out the My Money, My Choices program by clicking here.

My Money, My Choices - Level 3, Activity 1

This activity takes us through calculating our personal savings rate.  Gail tells us that there is basically two different types of savings.

1. Long Term - Retirement
2. Planned Spending - Emergencies, Kids School Funds, Vacation

The personal savings rate, is the rate we're saving for number one...for retirement.

 Here is the break down for Jordan and I - combined our savings rate is 14.83% which is great for being late 20s/ early 30s - but there's a pretty big disparity between Jordan and myself.

Now...women live longer.  That's a fact.  So I'm comfortable that we're saving more for me; and we'll probably move the shares to Jordan's name when I retire from my company and they need to be put in a tax/shelter of some kind; however - I'm not sure that 10.5% is appropriate.

A part of the decision for the RRSP contributions were based on our expectation that Jordan's salary would have some significant variability, and it was what we could afford based on his baes ($30K); but now that his salary guarantee won't be going down, we can look at this again.  If we increase Jordan's retirement savings, by just $100/month - that brings him up to 12.50% and our combined total to 16.21%...not to shabby.

What do you think?

Should we increase Jordan's savings by $100, is that enough?

Check out the My Money, My Choices program by clicking here.

My Money, My Choices - Level 2 Complete

Now that we've got the spending tracking going well, and posting those updates to our spending journal (I'll do monthly posts for those summarizing), I've marked Level 2 Complete!  This step doesn't actually ever end, we keep tracking and posting our spending for a long time, but I think it's also important to keep going in the My Money, My Choices program so we don't lose momentum.

Check out the My Money, My Choices program by clicking here.

Weekly Spending Journal: MMMC - Level 2, Activity 2

Last week, I whined about my spending journal.  Yup, whined!

A big thank you to Morgaine and Money, NZ Muse, & ND Chic who weighed in with some suggestions on how to tackle this a different way.  I've decided to go with  ND's suggestion and visited My 1/2 Dozen Daily.  She did a Spending Journal App review a while back and made a recommendation for Spending Tracker.

It's only been a week, but I'm already a huge fan!  The app she suggested, which happens to be free in the Apple Store is pretty fantastic.  You can get the pro-version for $2.99 which let's you link to Dropbox and export your transactions to excel.  I haven't done it yet, but I definitely want to use that feature.

I'm going to start posting weekly updates on how we're doing staying within our $600/2 weeks on Fridays...starting today!

Here's how the first week went using our new tool.  The first image was taken yesterday, and the second I took this morning - so you can see how it automatically updates based on some of the settings I chose (carry-over).

 

Items that are normally categorized as groceries such as dog food, cold medicine, and toothpaste are now appropriately tracked. 

One of the great parts about this app - other than it's super easy, not a notebook and has some cool features is that I can take a screen shot and text it to Jordan!  That makes sharing details of our spending with him super simple.  He actually said it was the easiest to understand from any other method we have tried. 

We have $236.61 to last us another week.  I would say wish us luck, but perhaps wish us discipline would be more appropriate.

I Hate my Spending Journal

Gah!

I hate the spending journal, hate it!  Gail says you can't move forward in the process until you nail this - it takes discipline... I still hate it.

I hate remembering to ask for receipts, and then trying not to lose them.  I hate that my notebook gets lost.

Enough of that...I need a bit of advice.

For those of you that use a spending journal, how do you build it into your daily habit?  Right now, ours is sitting on the kitchen island, with a pen next to it.  I try to remember, but when I walk in the door the first thing I'm doing is taking care of the dogs, loading/unloading the dishwasher, and setting up our lunches for the following day along with getting dinner started. The other part I'm struggling with is getting Jordan on board with using it too.  He's really good at asking for receipts, but then he just hands them to me to deal with.

Okay - so I haven't actually asked him to do it himself, and normally the money management piece is all mine.  So I should do that.  Hah! Maybe he'll just read it here.

The other real question I have, is how to do you manage the journal when you're making a purchase from planned spending savings accounts.  We bought some camping gear b/c we had saved some money for it, but it's not part of or normal day-to-day spending cash flow.  Do I make and additional and then a subtraction?  Same applies for using our vehicle/emergency fund.  We had a few hiccups this past week and I'm not sure how to add and delete the same funds effectively.  It seems silly.

We're not giving up, don't worry!  Just need to start again.  My march spending update is going to be mostly from a reconciliation of our day-to-day chequing account and credit cards - but that will be supplemented by the receipts we did keep.

My Money, My Choices - Level 2, Activity 2

Activity: Track Spending in a Spending Journal

This is the activity that I haven't been looking forward to...but the one that I think will finally see Jordan and I getting on track with our $600/bi-weekly allotment for all discretionary (is that the right word?) spending.  It's the amount that is automatically transferred into our day-to-day chequing account that we are meant to use for:

• Gas
• Groceries
• Entertainment
• Pets
• Clothes/Shoes/Hair
• Eating Out
• Alcohol
• Medical

What I have been doing for the last several years is tracking our spending by reconciling our debit and credit card transactions...and while that tells us if we hit the mark, it doesn't keep us on track during the month.  What ends up happening is that I categorize an entire shopping trip to Costco as groceries but we might have purchased dog food, and a couple of t-shirts while we were there too.

I think this activity is also really going to help me get my head around Anonymous' comment from a few days back about how much Jordan and I spend (combined) on groceries, eating out, and alcohol.  The eating out and alcohol are accurate - but perhaps sometimes they should be categorized as gifts if the bottle of wine is for a house warming.

First things first, we need a book.

As I am writing this post, it's March 13, 2014 - though i'm scheduling this for later on in the month.  So this picture is when I've started...but I hope in the next few weeks - I've got something more substantial to show you.

Check out the My Money, My Choices program by clicking here.