End Feb 2013 Goal Review

Ah . . . Time to take a look at how goals are going.  Some are great, some are status quo, and some have me wanting to bang my head repeatedly against the wall (it would probably be more productive.)

Financial

- Set up RRSP investments with my return of value pension from the military and contribute $359 a month for the year, along with any tax refunds. CHECK [Well savings are happening as planned.  As for return of value I called to find out what the delay was.  Turns out they lost all my paper work and instead of calling me for the information again they decided to just leave my money sitting there.  But I’ve got the paperwork (again) and tomorrow I’m off to the bank to have it filled in.] 

- Pay off house in 5 years.  I should be able to accomplish this by doubling up every payment and paying a 10% lump sum every year.  CHECK [Made my double up for the month.  Also sat down to figure out concrete numbers.  I’m a bit short in the long run, but am looking at ideas to make up the difference.  If you want the details check out my posts The Mortgage Plan and Kill the mortgage ‘till it’s Dead]

Educational

-Start Masters of Science / Masters of Science in Nursing in the fall.  CHECK [Should know if I’ve been accepted in March.  On the bright side I’ve been busy trying to get scholarships.  Fingers crossed.] 

Social

-Join two new clubs in the local area.  KIND OF [I’ve paid my dues to the quilting club (and have been having lots of fun at meetings) but I skipped off Newcomers last month.] 

Other

-Have my novel accepted to be published.  I plan to have it ready by the end of the month (January), so I can start sending it out. CHECK [Ok it’s not been accepted but I’ve made some progress editing it.  Even better I’m planning on attending a seminar in March (run by a literary agent and the representative of a local publisher) on how to get your book published so I’m committed to having presentable by then.]

-Become a respite foster parent.  CHECK [All I need is one more reference and I’ll be ready to hand in my application, hopefully some time next week.  The medical portion is going to be fun to sort out but I’ve got 6 months to do it.]

-Take a big backpacking trip solo.  CHECK [Saving is going as planned and I haven’t touched my vacation days yet.] 

-Finish my current crafting projects.  KIND OF [I have been working on them, problem is I can never decide which one to work on.  The cross stitch is almost done but it’s only going to get hung on my wall so there’s no rush, the embroidery is a gift with a bit of a deadline, and the quilt is coming along quickly but it’s not close to finished and is only going to sit on an empty bed.  Hmm, now that it’s been typed out it’s clear I need to work on the embroidery.] 

Six goals have seen good progress and two have seen “kind of” progress so I’ll give my self 7 out of 8 or 87.5%.  Not bad.  Big things to concentrate on in March are 1. Get my book presentable 2. Get out to all my social events 3. Get good progress on the embroidery piece so I know it’ll be finished on time.  

Four Ideas for Free (or Cheap) Fun

People are generally surprised by how little I spend to entertain myself.  I must admit that it is partially due to my natural interests, but on the other hand it is easy to find something interesting to do if you start looking for it, so if you're looking for cheap fun maybe it's time to broaden your horizons.  What do I do for fun and how much does it cost? 

Reading

Probably my favorite activity in the world, thanks to a childhood filled with frequent trips to the local library.  I read so much that I rarely buy books (why’s that you ask?) the reality is if I bought every book that I wanted to read I wouldn’t have an inch of space left in my house; and as a result I would never be able to find the book I want.  A book has to be really special to earn a place on my book shelf, either by one of my three favorite authors or borrowed from the library a minimum of three times in two years.  All of my reading material pretty much comes from the library. 

Cost:  Property taxes, which I have to pay anyways. 

Sewing/Cross Stitch/Embroidery/Quilting . . .

I know that the set up costs for these can be steep, but most of my tools are hand me downs or presents.  The materials to continue the work can also be pricy so I have to watch what I’m spending.  That said the projects also last quite a while.  For example the cross stitch that I’m almost done I’ve been working on for 7 and a half years (or 90 months).  If I had bought it myself (it was a gift) it would have cost me about $40. 

Cost: About $0.44 a week ($40 / 90 months = $0.44) depending on the project. 

Writing

I write a lot.  Recently a lot of it has been for my blog (fun and helpful for others!)  I also dabble in poetry (in other words I scribble verses that some times rhyme, but hey as long as I’m amused and no one else is suffering.)  On top of all that I’m working seriously on writing a young adult novel (other stories are simmering in the back of my mind, my biggest challenge is working on one at a time.)

Cost:  Ummmmm, electricity for my computer . . . mostly I use scrap paper when I’m writing with pen or pencil so the cost is negligible.  The biggest expense for my writing so far will be a $44 conference that I’m planning on attending in March, but this will be the first time I attend a conference and they will probably be few and far between. 

Festivals/Plays

When I lived in the big city I could go to one a week for free if I wanted to.  It was great and definitely expanded my cultural horizons.  Add to that the free out door plays and concerts put on during the summer and I was out every weekend.  This is a bit season specific but lots of cities in the great white north do some sort of winter festival.  I can’t wait to start discovering what there is to do in my new town (it’s a tourist town so there should be a bit to do.) 

Cost: Free (unless you decide to splurge on sweets or toss a donation in when they hand around the hat.)  

What's in your garbage?

Ever since buying my home I am becoming acquainted with some of the less charming aspects of home ownership.  Gone are the days of trotting down the hall to the garbage chute and dropping the bag.  Now I actually have to remember to take it out the night before and figure out if it's a blue box or grey box week.  None-the-less I have been thinking a fair bit about what I'm putting out on the curb each week.

Every week each house gets to put out one bag of trash, one green bin and either the blue box (plastic and metal) or the grey box (paper and card board).  So most houses have three bins out in front of their house every Thursday.  But not me.

In the four months that I've lived here I've put out the garbage twice.  (Yes I put the garbage out whenever it is full and I use normal size bags.)  I realize it's difficult to compare myself to others without knowing how many people live in a house and what they've been up to for the past week.  Still as I wander down the street I look at the size of their garbage pile and wonder what's in there.

When you consider it, you probably paid for every thing in your garbage can.  From the broken toys to the food wrappers you are the one who paid for it.  You then get to throw it away.  The same is true for recycling.  Yes it's green good for the planet (pat yourself on the back the Lorax is proud of you) but who do you think paid for the empty soup tins you're recycling?  It's not the people who sold you the soup.

Then there's the green bin, ok you didn't pay for the yard waste (unless you've killed off a bunch of flowers you bought) and some kitchen food waste is normal (obviously you're not going to eat your peach pits) but what else is in there?  Did you accidentally turn some leftovers into a science experiment?  Or do you just not like to eat the tail ends of a loaf of bread.  How much is going out in the bin that could have been used.

I'm not going to tell you you should never throw anything away ever again.  I do think that it is important to know what you are throwing away and why.  What did it cost you?  Can you reuse it?  Could you have avoided buying it in the first place?  Is it going to be shortly replaced with something else?

Start really looking at and questioning what you're throwing out.  The planet will thank you and so will your wallet.

FP - Cleaners

When I first started looking for alternative cleaner it wasn't about reducing costs.  It wasn't even about saving the environment.  It was about personal health and comfort.  About a year ago the task of cleaning the bathroom, which is nobody's favourite chore, got even worse.  I found myself getting light headed as I cleaned the bathroom, and was having to step out of the room to catch my breath.  It got worse until eventually "cleaning the bathroom" meant spending half the time actually cleaning and half the time outside trying to catch my breath.  It's not overly surprising that I have this reaction to cleaners, I'm like my maternal grandmother lots of chemicals, especially those that have scents, cause me to have some pretty bad reactions.

The solution ended up being quite simple: vinegar.  Most of the surfaces in the bathroom can be washed with a 50/50 mix of vinegar and water.  For stubborn stains it's recommended that you add salt or baking soda to the mix to add abrasiveness.  Don't believe me?  Check out 1001 Uses for white distilled vinegar.

So what's the savings like?  Well to clean my washroom it takes 80 squirts of my squirt bottle.  Each squirt emits 1.5 ml of cleaning solution, so 120 ml of cleaning solution used per week.  A bottle of store bought cleaners costs $9.90 for 945 ml.

- Which is $0.01 per ml ($9.90 / 945 ml = 0.010)
- Or $1.20 per week ($0.01 * 120 ml = $1.20)
- Or $62.40 a year ($1.20 * 52 = $62.40)

In comparison at my local grocer I can get 4L of white vinegar for $2.00.

- Which means that vinegar costs $0.0005 per ml (4000 ml / $2.00 = $0.0005)
- Since I use a 50/50 solution the vinegar solution will cost $0.00025 per ml ($0.0005 / 2 = $0.00025)
- Or $0.03 per week.  ($0.00025 * 120 ml = $0.03)
- Or $1.56 a year ($0.03 * 52 = $1.52)

The Benefits

- First and foremost my health is not affected, and I can clean the bathroom in half the time I used to.
- It saves me $60.88 every year (which I can do a lot with, I could go see 12 movies, buy 6 book, go see my parents and extra time, or hey stick it into my RRSP and watch it grow!)
- It saves the planet.  I mean come on, have you ever read the back of cleaner bottles?  "Do not get in eyes.  Do not get on skin or clothing.  If swallowed call a poison control centre."  Do I really want this stuff going down my drain and into the water supply.  I mean I wouldn't want to get vinegar in my eyes either but the David Suzuki Foundation endorses it so it should be pretty safe.
- It makes things smell great.  Simply switch over to apple cider vinegar (only slightly more expensive) and your bathroom will have a faint but sweet smell that I personally love.

Would you switch to vinegar for cleaning?

Bank Fees - My mortal enemy

I hate bank fees.  Like really hate them.  In fact I have managed to avoid them my entire life by being very cautious with my bank accounts.  In fact until this week I could joyfully announce that I had never paid a bank fee.  No sir, not me!

Unfortunately I broke that winning streak by having to pay a $3.25 bank fee in order to take money from an ATM.  What's $3.25 in the grand scheme of things you may ask?  While since I only took out $40 that's like paying 8% interest to use my own money.  Lets just say I'm not eager to repeat the experience.  On the other hand I have always told my students that it's only a mistake if you haven't learned anything from it.  So lets do a little lessons learned shall we?

Situation:
I had recently emptied my wallet of cash and hadn't filled it up again.  Mostly because I had already used up my miscellaneous money for the month, which is usually where my wallet money comes from. So I decided to leave my wallet empty until I needed cash for something.  Unfortunately I did not foresee needing to put a $10 deposit on my work ID badge, and guess what?  They only take cash.

Now I could have gone to a bank machine that belonged to my bank (which I normally do.)  Problem was that the closest one that I knew about was going to be a 15 min walk each way in the bitter cold.  Thanks to a busy work schedule my bad knee was already aching.  Walking and the cold would make it worse (especially if I was going to be out there for half an hour) and the pain would have been pretty bad.  Too bad to justify avoiding bank fees.

So I paid the fee and have been somewhat annoyed ever since.  Such is life.

Lessons Learned:
Unforeseen expenses are, well, unforeseen.  I need to make carrying cash a priority in my budget so that I don't end up spending money on fees.  Part of the reason that I didn't fill up my wallet was that a lot of financial experts discourage carrying cash around as it will sometimes slip away unaccounted for. That said I have never had a problem with spending money without tracking it.  So there is no reason for me to take this advice and avoid cash.

How do you avoid bank fees?  Do you have trouble keeping cash in your wallet?

Wasting food . . . instead of my health

Some people are born picky eaters, me I was born a picky drinker.  There is very little that I like to drink.  I love milk, and I love real juice (like apple cider or orange juice not the sugary water they sell that has never seen a fruit).  I don’t drink pop, coffee, tea or alcohol because I simply don’t like the taste.  I’ll drink water occasionally if it’s cold and I’m thirsty. 

This particularity has led to, on occasion, some difficulty.  The first time I ran into problems with liquid consumption (I’d say drinking but that has a slightly different connotation) was when I was 19 and doing my basic training with the military.  I started to wake up in the middle of the night with awful cramps in my legs and feet.  At first I thought it was tiered muscles, but I soon came to the realization that I was dehydrated, almost dangerously so. 

I managed to fix this and, being a nurse, took the lesson to heart.  There is more then one young cadet who can attest to the fact that anyone who showed up to a clinic, staffed by me, dehydrated was going to be educated quickly and thoroughly, and they left knowing that I had better not see them at the clinic for dehydrated a second time. 

What’s this got to do with food waste?  A couple of weeks ago I decided to use up the frozen apple juice that I inherited from my sister when we moved out of the apartment we shared (she was going out of country so didn’t take any of the food stuff).  Three cans of it had been sitting there for months and I decided that there was no point in getting more juice while I still had them.  So I made a pitcher of apple juice with the intention of not making any more juice until it was gone. 

Problem was that when faced with the choice of drinking apple juice or nothing I chose nothing, and I chose it all the time.  Two weeks past and I’d only drunk one or two cups, then I got a wakeup call, literally.  I woke up in the middle of the night with familiar and vicious cramps in my calves. 

I’ve treated people with sever dehydration.  I know how bad it can get and I know how dangerous it can be, a lot more serious then dumping a dollar’s worth of juice down the drain.  Yes, I willfully wasted food this week, but in the big picture it was a small price to pay.  

Retirement Planning

I will admit that I find planning for retirement to be quite a challenge at the moment.  Unfortunately it’s not the technical stuff that stumps me.  I can explain the difference between RRSPs and TFSAs, the role of inflation, and how to make an investing plan.  

The problem that I have is rather fundamental.  Most well written retirement planning books that I have read start out with a simple question; what is your retirement going to look like?  You take what you want to be doing during retirement, and assign a dollar value to it.  Then you figure out where you are in your savings and make a plan to get from where you are to where you want to be.  Simple right?

The problem is I don’t know what my retirement will look like.  I don’t know if I’ll have a spouse or kids, or where I’ll live.  I’m not even certain at what age I want to retire.  I can come up with where I am but even the working years don’t have a plan.  I don’t know if I’ll work for the same company for my career, I don’t know if I’ll end up with a pension.  I don’t even know at what rate my pay will increase. 

That said I am a big believer in saving early on, so I’m saving for retirement anyways.  I set aside about $350 a month for retirement savings.  That is 10% of my take home pay, which is generally the recommendation from experts (such as the author of “The Wealthy Barber” and Gail Vaz-Oxlade).  While I could save more, for the next 5 years I am concentrating on making my mortgage disappear. 

In the meantime $350 a month is being added to the $22,000 that I am to receive instead of a pension for my military service.  If I continue to save at my current rate and assume 7% return on investments; then at 55 I will have $708,000 in retirement savings, and $1,484,000 if I wait until I’m 65.  (Actually probably a bit more because my 10% contribution will increase as my pay increases and I plan to reinvest any tax benefits.) 

That said I fully expect my plan to be revised as my life changes.  The first point of revision will be in 5 years time when my mortgage is paid off.  At that point I can adjust my plan and step up savings if I want since losing my mortgage payments will free up $1,500 a month. 

Have you got a retirement plan worked out?  

Kill the Mortgage ‘till it’s Dead

So as we saw yesterday I’m a bit short on my plan to have my mortgage gone in 5 years.  In fact I’m short to the tune of about $38,946.90. How to deal with this short fall?  There are a number of different options let take a look. 

A) Revise my goals and continue to pay $1,545.62 a month towards my mortgage.  That will have me paid off in roughly two more years (depending on what my new interest rate is.)  

B) Use a portion of my retirement savings to pay off the balance when it comes to renew my mortgage.  This is a real option, especially if interest rates are high.  I would consider this an interest free loan from myself and pay it back to my retirement savings as quickly as possible. 

C) Start looking for ways to make up the difference.  All of my numbers yesterday assumed that I won’t see a pay-raise in the next 5 years; I am kind of hoping that that is not the case.  If I see a 4% increase each year (for cost of living) I’ll see $140 a month more from Nov 2013 – Nov 2014, then $150, then $155, then $160.  If half of my pay-raises goes towards housing that would be an extra $3,630 over a four year period. 

Add to that I haven’t accounted for the Found Money that I hope to put against my mortgage.  From Nov to Jan this year I saw over $500 in found money, if I put $150 of found money a month against mortgage that is $8,550 by Nov 8^th 2017. 

That brings us down to a deficit of $26,766.90 (a bit less actually because I will be paying less interest and more of my payments will go towards principal, but those calculations get absurdly complicated.)  One way to bring this down would be to fund my masters with scholarship money, thus freeing up to $20,000 of the money that I have earmarked for my continued education.  Otherwise I will need to look for a way to bring in an additional $560 a month over four years.  There are a lot of ways this could happen and I have started to explore avenues (I swear my book is the next Harry Potter, now I just need a publisher to realize that.)  

All said paying off my mortgage in 5 years is not going to be easy.  I was never under the impression that it would be.  I'm still planning on making it a priority (most people who know me will vouch for my stubbornness, I have on occasion decided to will things into happening.)  Fully paying off my mortgage will give me an incredible amount of freedom to pursue other goals and dreams while not having to worry about keeping a roof over my head.  

I hope you follow along for the next 5 years!  

The Mortgage Plan

So the master plan is to have my mortgage gone by November 8^th 2017.  I chose that date because that is the day that my 5 year term expires.  I have a pretty good interest rate at the moment, 3.09%, which will likely go up once my term expires.  Why the big rush?  Well to start with I don’t like paying interest.  Add to that the desire to own my entire home not just a portion of it to the freedom it would give me not to have mortgage payments and you probably see the attraction too.  So can it be done?  Lets take a look. 

Outstanding balance Feb 17^th 2013 - $149,085.90

Original monthly payment - $646.62

Current required payments (thanks to the allowed 10% increase) - $711.28

Actual monthly payment (current payment can be doubled up each month without penalty) - $1,422.56

Current savings towards extra payments - $5,744.67

March 2013 – Nov 2013
Budgeted for Mortgage	$646.62	$5,819.58
10% Debt Repayment	$359.00	$3,231.00
Long Term Disability	$860.00	$7,740.00
Other	(Veterans Disability Payment + Current Savings)	$25,744.67
Monthly payments	$1,422.56	$12,803.04
10% Lump Sum		$15,200.00
Difference		+ $14,532.21

Outstanding balance Nov 8^th 2013 - $124,386.33

Required payments (thanks to the allowed 10% increase) - $782.40

Actual monthly payment (required payment can be doubled up each month without penalty) - $1,564.80

Savings towards extra payments - $14,532.21

Nov 2013 – Nov 2014
Budgeted for Mortgage	$646.62	$7,759.44
10% Debt Repayment	$359.00	$4,308.00
Long Term Disability	$860.00	$10,320.00
Other Savings *Unused car payment $	$14,532.21 $200/mnth	$16,932.21
Monthly payments	$1,564.80	$18,777.60
10% Lump Sum		$15,200.00
Difference		+ $5,342.05

*I hope to continue without a car as long as practical and affordable.  By Nov 2013 I should be able to divert $200/mnth from my transportation budget as I will have $10,000 put aside to buy a car. 

Outstanding balance Nov 8^th 2014 - $93,966.72

Required payments (thanks to the allowed 10% increase) - $860.64

Actual monthly payment (required payment can be doubled up each month without penalty) - $1,721.28

Savings towards extra payments - $5,342.05

Nov 2014 – Nov 2015
Budgeted for Mortgage	$646.62	$7,759.44
10% Debt Repayment	$359.00	$4,308.00
Other Savings Unused car payment $ *Unused Emergency $ *Unused Travel $	$5,342.05 $200/mnth $190/mnth $150/mnth	$11,822.05
Monthly payments	$1,721.28	$20,655.36
10% Lump Sum		$15,200.00
Difference		- $11,965.87

* By Nov 2014 my emergency fund should be fully funded allowing me to divert $190/mnth from life to my mortgage.  With travel I’m planning two big trips in the next 2 years after which most of my travel budget can go to my mortgage

Outstanding balance Nov 8^th 2015 - $72,656.47 (this is the first year I will not be able to make the full 10% lump sum payment)

Required payments (thanks to the allowed 10% increase) - $902.70

Actual monthly payment (required payment can be doubled up each month without penalty) - $1,805.40

Savings towards extra payments - None

Nov 2015 – Nov 2016
Budgeted for Mortgage	$646.62	$7,759.44
10% Debt Repayment	$359.00	$4,308.00
Other Savings Unused car payment $ Unused Emergency $ Unused Travel $	$0 $200/mnth $190/mnth $150/mnth	$6,480.00 I will only have $1,545.62 to put against the mortgage monthly
Monthly payments	$1,805.40	$21,664.80
10% Lump Sum		$15,200.00
Difference		- $18,317.36

Outstanding balance Nov 8^th 2016 - $56,060.08 (this is the first year I will not be able to make the full monthly payments and the 10% lump sum payment)

Required payments (thanks to the allowed 10% increase) - $992.97

Actual monthly payment (required payment can be doubled up each month without penalty) - $1,985.94

Savings towards extra payments - None

Nov 2016 – Nov 2017
Budgeted for Mortgage	$646.62	$7,759.44
10% Debt Repayment	$359.00	$4,308.00
Other Savings Unused car payment $ Unused Emergency $ Unused Travel $	$0 $200/mnth $190/mnth $150/mnth	$6,480.00 I will only have $1,545.62 to put against the mortgage monthly
Monthly payments	$1,985.94	$23,831.28
10% Lump Sum		$15,200.00 *$1,909.99
Difference		- $20,483.84

*If I succeed in making all my extra payment options the last year I would only need to make a 10% lump sum payment of $1,909.99

Outstanding balance Nov 8^th 2017 - $38,946.90

Hmm.  $38,946.90 left over, what a pesky number.  We’ll talk about what I intend to do with that tomorrow.