Sunday, 17 December 2017

Saving for Retirement

    





Retirement funds are usually left alone for  a long time, or that's the goal.   In fact, the ones registered with the government provide a substantial penalty if you withdraw your funds.   You may receive a tax savings when you deposit your money in a registered account but the government is prepared to delay receiving the taxation revenue until the day you withdraw them, maybe in your retirement years . . .  or maybe not.   The theory usually touted is that your income will be less at retirement and therefore your tax bracket will be lower.   The result?   You'll pay less income tax on the funds.

That's generally the way saving for retirement is sold.  Does it always work that way?   Some of  the funds you withdraw are immediately withheld from Canadian registered retirement funds;  how much depends on the amount withdrawn.  From $5001 to $15,000, twenty percent is withheld.   Anything over $15,000 withdrawn means that thirty percent funds will be withheld.   So, in other words, if you need $20,000 be prepared to withdraw considerably more.   The bank will likely also charge a few hundred to let you have the money.   You may think you should receive interest on the money being held by the government.  ( Why are they doing that anyway?   Are they afraid you won't be able to pay the taxes owing when April 30th comes around?)   Even though a year may elapse from the time you take out your own money from your retirement account until the day of reckoning when your taxes are due, you will not receive any interest on those funds.     (Americans have their own, different, penalties)

Even the venerable Mr. Money Moustache suggests that retiring couples whose children are grown can be  very  comfortable with $40,000 a year.   This amount isn't ideal because it is about $10,000 more than your pension so will require savings/investments that toss off that amount each year.   It will also place you in an income bracket that will limit the benefits that might otherwise accrue to you:   cheaper bus and ferry rates, medical premiums, user fees, etc.  But owning your home and vehicle (or doing without the vehicle) will reduce the annual income required by that amount easily.




I was gratified to read this article in The Financial Post echoing my advice about not saving too much.   Remember to have some fun and enjoy life.  "A large estate may come with a list of missed opportunities."



Sunday, 10 December 2017

Leftovers

    




Leftovers need an image makeover.  Re-branding complete with new letterheads, business cards and logo.  According to The Washington Post Americans have stopped eating leftovers.   Read more here

Maybe part of a new image would be to follow the advice in The Guardian here.   Or have a look at the suggestions at the Down to Earth blogspot and the suggestions to use food that remains uneaten after a meal to make a new meal.  Or take the advice of Frugalwoods,  'if I buy it, I have to eat it.'

Do you throw out food?   I don't go as far as putting onion skins and potatoes peels in a giant stock pot (not that it's a bad idea) but I'm opposed on principle to throwing out food.   Maybe it is a bit of the 'eat up, people are starving in China' mantra that many mothers historically dished out with the food but it does seem disrespectful to habitually waste food.   If not to the world community, then to your wallet.

There's no need for a complicated system or  container labelling.   Don't let things accumulate to that point.   Use leftover food within a day or two.   Eat it for lunch, use it in soup or stew, or if all else fails, put it in the freezer.   But then you'd have to label it so try to avoid that option.  


It's also a good idea to let your food supplies get low before you replenish your refrigerator.   I'm not talking about pantry staples;   those should be plentiful and regularly stocked up.   Those are items that require cooking and baking to turn them into edible items for the most part.  I'm thinking of goodies and the grab and go items,  especially preferred by teenagers who are quick to complain that there's nothing to eat.  They may not have an apple or carrot sticks as a first choice but if shown that a few minutes spent peeling and slicing and adding a squirt of dressing (or Nutella) on the side,  something they'll enjoy will be the result.  It might start a trend.   

It's worth a try!

    

Friday, 1 December 2017

Basic Ingredients







Once you start cooking at home a lot, even simple meals, you may discover that the same basic ingredients are used again and again.   Stock up on them when they are on sale and you (or the cook in the family) will be able to produce never-ending meals for the family's enjoyment.   The basic ingredients will vary from family to family but ideal ones are shelf stable.   Items that don't require refrigeration or freezing will survive a power outage.    But a freezer does come in handy to stock up your supply of perishables and if  the freezer is  left closed, it  should survive the majority of power outages which last less than a couple of days.

So what kind of things comprise your basic ingredients.   Here's my list:

Baking/Cooking supplies:

-flour
-sugar
-baking powder
-yeast
-spices, salt and pepper
-cornstarch
-dried bouillon cubes
-raisins, dried cranberries, coconut
-cornmeal
-oat flakes
-bran
-wheat germ



Meal ingredients:










-all kinds of pasta
-rice
-all kinds of beans and legumes
-barley
-canned fish and meat

Some of these items last longer than others.   Raisins and dried cranberries will dry out even further as the weeks pass.  They can be plumped up by soaking them in a liquid but try to rotate them so they are used within 3 months.   Some people make up a system with dates written on the jars/containers.    If I was going to have a large supply I would probably stock the jars so that I use from the front and move the supply forward.

Buying in bulk will usually save you money, sometimes a considerable amount.   But always check the prices.   I have a half dozen of the largest glass jars for items like flour, sugar, rice, pasta and rolled oats.    Keep an eye on your supply and watch supermarket prices to stock up when the price is the lowest or close to it.    But don't find yourself in the position of having to throw things out that have gone bad.   If you are in your kitchen/pantry preparing meals regularly you can easily keep track of what you have.   If something is lingering on, make a point to use it up.

If you still have doubts about the value of cooking and eating at home, continue as you are but keep track of your restaurant, take-out and prepared and prepackaged food expenditures.   You will be sufficiently shocked at the total to reconsider.



Next week's post will be delayed a few days.


Sunday, 26 November 2017

How many clothes do you need (or want)?





You probably know that people have never owned as many clothes as they do now.   Excepting Marie Antoinette, of course, reputed to have never worn the same dress twice even though dozens of French nuns had laboured for months over the beading and embroidery on each dress.    Although with fast fashion we may be approaching a level of disposability.    Before the invention of the sewing machine in the 1830's, clothing was made locally, either by the individual homemaker or a local seamstress.   These items were made to last a long time and made over and mended.   A woman's dress might after many years resurface as a little boy's shirt, after the worn parts were cut away.   Even a hundred years later, in the 1930's many clothing items were still made at home.   Sizing hadn't been standardized (doesn't seem like it is yet) so made to measure worked better.  Clothing was better quality and made to last.

Do you like the present situation?  Even if a nice wardrobe or lots of clothes is on your list of dreams, perhaps reconsider your approach to clothing.   Even cheap clothing still costs something and while individual items may not cost much, taken in total, a bulging closet cost plenty to acquire.  Yet many still feel they have nothing to wear.   Do you find yourself reaching for the same items over and over. You know, the ones that fit well, make you look slimmer, don't have traces of spots on the front that won't wash out.   The ones you've received compliments on.   

Elizabeth L. Cline, the author of Overdressed; The Shocking High Cost of Cheap Fashion, has recommendations on her site for choosing a few good quality items that you will want to wear a multitude of times.    We've become so used to variety that it may be difficult to think small.   You could also do a trial run with Project 333 and wear just 33 carefully chosen items for 3 months.

More suggestions to follow.

Sunday, 19 November 2017

SAYING NO

  



That little word can be hard to get out.   We like to think of ourselves as agreeable people, easy to get along with.   Saying 'yes' seems to be part of that.   'Yes' is a perfectly good word and you should make it part of your vocabulary.   When new ideas and opportunities present themselves, don't say no automatically.   Maybe you'll like river rafting, camping or sushi.

But conversely don't be afraid to say no.   Say it politely but say it definitely.   I had a recent occasion in my local bulk barn store where I had the opportunity to exercise my right to say no.   I should keep a list of unit prices for the items I purchase regularly.   It's on my to-do list (sort of).  When I buy chocolate chips in a package I could easily make a note of what they cost per 100 grams. The reason to do this?   So that I can tell if buying the item in bulk is a better deal.   Unfortunately, it's not automatic.

On one recent shopping experience my chosen items were going through the checker.   I use small jam size mason jars, getting them weighed first so that their weight is taken off my cost of the item.   Sliced almonds went through and a price of almost $10 was rung in.   I was mildly shocked and without hesitation said 'Stop!'  I think I scared the new trainee as his fingers jumped off the cash register.   I continued in a calmer zone and told him politely that I wasn't expecting the almonds to cost that amount and I didn't want them.   Now, being new, he didn't know what to do.   I guess I should have been embarrassed as they had to come out of my mason jar that I had ladled them into.   They didn't really have the tools for the job.

I had a polite conversation with the more experienced clerk who didn't seem/didn't act fazed by my request.   I told her I wasn't expecting the almonds to cost almost $10 for a small jar.    I made some comment about the cost of a bag of sliced almonds at the supermarket and how it wasn't that expensive but I tried to let her/the store off the hook by saying that I should have checked the weight myself.

Somehow I suspect a younger me would have felt too embarrassed to speak up.   Have you ever felt that way?   I guess it's a little like having to put back items when your bill is more than the cash you have with you.   There was a day when supermarkets didn't take plastic cards.   For me, I can afford the $10 but it goes against my principles.   That would be my principle of not feeling ripped off.  

I remember more than once in leaner days ordering something less expensive when out for a meal with friends/colleagues.   Some thoughtless/calculating person who just happened to have ordered the equivalent of steak and lobster comes up with the idea of splitting the tab, 'to save the hassle for the server.'   It still annoys me that I went along with it, not wanting to feel embarrassed.   It coloured my relationship with the glutton though.   It would have been better if I had just said, "No, I prefer to pay my own bill separately."

Sunday, 12 November 2017

DON'T SAVE (too much) FOR RETIREMENT

This post is geared for Canadians as the American system for retirees differs, mainly because of the cost of healthcare.



Guiness Book of World Records - Oldest Paraglider

This scary article in Wisebread is typical of the advice out there which strives to encourage more and yet more saving for retirement.   People just aren't doing it enough the writer says.  Dire predictions ensue.  What if you live to be one hundred?  This article in The Globe and Mail discusses managing 'longevity risk.'   I guess for financial managers it's bad to live too long.  


Take a moment to consider your situation carefully.   Should you save, save and more save for your golden years?   Deprive yourself throughout your twenties, thirties, forties, fifties until at last you reach the magic age and you can start to really spend and enjoy yourself.   That's the theory, anyway.  Check out this article in Bloomberg.

I like to take a contrarian view, sometimes, or at least consider an opposing point of view.   Who exactly is singing this siren song or more likely threatening misery and deprivation if you do not sock away your version of a fortune.   Usually, it seems to me, the call comes from financial institutions who want you to invest or save with them.   The government wants you to save for your old age, lest you end up costing them money.   The more you save, the less they will need to make up the shortfall.

Unless you want to leave a legacy for your children or perhaps something for them to bicker about when you are gone, consider dying broke.   It is difficult to arrange to have your funds expire just as you do but I am going to propose that after age eighty you will not be spending large amounts of money for your amusement.   I base this upon admittedly unscientific observations of relatives and acquaintances. The spending and shopping urge is greatly diminished.  You're not buying furniture and knick knacks;  you're trying to give them away.  Following fashion trends seems of little interest;   comfort rules supreme.   Travelling is problematic.   Travel health insurance costs more than the vacation.    Dietary restrictions and mobility issues affect many after the three score and ten.   If you can't get out easily, you can't spend.  Try to arrange it so you own your own modest accommodation outright as well as your vehicle at retirement, if you don't plan to rely on public transport. 

According to the Wisebread article:  As of July 2017, the average Social Security retirement benefit was just $1,325 USD  per month.    In Canada, if you have made the maximum contribution during your working life the amount will be close to $1700 CAD.    Taking into account the exchange rate the amount is similar.  A couple should be able to be comfortable on Old Age Security and Canada Pension for each of them if those expenses (housing and transportation) are taken care of.   Defer your property taxes.


Some  activities can best occur when you are young or at least youngish.   Backpacking to foreign lands where you don't speak the language and don't know your way around is an adventure to the young;  a terror to the old.   I speak in generalities but that's the way it seems to me.  Learning to ski, scuba dive, rock climb, fly a plane, not to mention  two week hikes along the Appalachian Trail are the purview of the under 50's for the most part.   Don't deny yourself the opportunity to do those things if you have the agility and stamina, not to mention nerve, to partake.   You won't want to do it when you're eighty.  I know there are exceptions but there's a reason those people are featured on the evening news.

Eighty calls for more sedate pleasures, closer to home and generally less expensive. You may be the exception but know yourself. You don't want to end up with a bundle of money as well as a bundle of regrets for what you might of done but now can't.   


   

  


Sunday, 5 November 2017

Why Keep Shopping?

 




This article in the Huffington Post makes it all so so trivial.  Why do we keep shopping?   Why do we buy things we don't really need?  Are we really that shallow?  

Buying to impress people  -   If spending some money (which just about anyone can do) impresses certain people, it doesn't really say much.   It doesn't reflect in any way on me.


Buying out of habit  -    It's possible to get other habits.   After all, it's only because we've done them over and over that they become habits.   And repetition can get boring, can't it?

Advertising made you do it   -   Doesn't it make you feel a little foolish to be so gullible?  Technology (think Netflix, fast forward,  ad blocking) makes it possible to avoid a lot of advertising.   Avert your eyes

Buying it retail is the least creative option  -    You're better than that, aren't you?   I get a kick out of re-purposing something or adding new life to something that was going to be discarded.

Shopping cheers you up  -   We all like 'nice' things, however we define that.   Give yourself a small budget and enjoy the hunt through alternative venues (eBay, thrift stores, bartering) and find something that gives you some long term pleasure every time you look at it.  






Maybe the best alternative?   Find something else to do!