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Personal Finance Basics: Spend Less Than You Make

Alan Schram — Wed, 25 Jan 2012 10:00:21 +0000

Was one of your new years resolutions to get your finances in order? Are there a few things about the whole situation that you’re just not sure about? Personal finance doesn’t have to be that hard. There’s a couple basic rules that you can follow that will instantly change your whole financial situation. The first, and most important one of those guidelines is to spend less than you make. In fact, this rule is so basic that it doesn’t matter how much money you make, or what your debt situation is like – everyone needs to spend less than they make. It may sound stupidly obvious, and it may seem like you can just move on from this point because you obviously need to spend less than you make in order to improve your financial situation, but it is also how you go about spending less and knowing that you’re spending less that is just as important. So how does one go about doing that? What’s the first step?

Change Nothing – Track Everything

The very first thing you want to do about your financial situation is to not change a thing. Just go about your regular business, spending money when and where you normally would. If you are absolutely desperate, of course, I’m not suggesting going even further into debt. In fact, the absolute best way would be to track backwards if possible, but most people spend cash and don’t keep receipts so it is hard, if not impossible, to figure out where exactly your money went – and that is precisely what we want to do. We want to track where your money is going for two reasons. One, by simply tracking and adding up how much money you are spending, it often results in less money spent. A lot of people don’t realize just how much it can cost to get out two or three times a week, and have better priorities for that money. The only way to change where that money goes is by knowing where it went. So for the next two or three months, track everything. Write it down on a piece of paper, keep track of it on your computer, put all the receipts into a basket, using a webapp like Mint, whatever you need to do. At the end of every month, tally it all up into categories.

Determine Your Income

Figuring out your income can be a lot easier. Some people get a steady paycheque every two weeks, others income can vary from cheque to cheque. Look back through your bank account history, figure out how much you make over each month, and determine the average of the last 6 months. That’s your new goal. That’s the number that you have to meet each and every month, going forward. So now start comparing your income and your expenditures. Do you spend more or less than what you normally make? If you’re spending more, then look back over your categories and find one that you can drop. Does that bring you below your average income? If yes, then stop for now and maintain that spending point for a month or two. If no, then keep going, unless your spending is less than what you made that month.

Start Making Progress

So that’s it. Now that you’re spending less than what you’re making, you can start making a positive impact on your finances. What do you do with the extra cash flow? Well, that’s up to you. Some great options would be to start paying off debt, to start building an emergency fund, or to put money aside for the future. It really is as simple as that.

Personal Finance Basics: Spend Less Than You Make originally appeared on Canadian Finance Blog on January 25, 2012.

Are Group Deal Vouchers All They’re Cracked Up To Be?

Tom Drake — Mon, 23 Jan 2012 10:00:00 +0000

We do everything socially these days. The Internet has made it easier to share your life with others – and that includes your shopping habits. The rise of sites like Groupon and LivingSocial make it possible for you to enjoy great deals along with all of your friends.

But are these group deal vouchers all they’re cracked up to be?

Why are You Buying the Vouchers?

One of the first things you have to ask yourself is why you are buying any given voucher. When you see that your Facebook friend has just bought a voucher for 75% off on shoes, it looks like a great deal. But would you have bought those shoes anyway?

Examine your motives for using group deal vouchers. In a lot of cases, you’re just buying because the deal looks good – not because you actually need what you’re buying. In such cases, you aren’t truly saving money at all. Spending is spending, no matter the “bargain” you are getting. One of the biggest drawbacks to group deal vouchers is the fact that you are spending extra money that you had no intention of using on frivolities.

Do You Know the Terms?

Due to consumer outcries, there are some cases in which you can sell your unused vouchers back, but you need to make sure you understand the terms of the voucher. In some cases, the expiration date requires that you use your voucher quickly. Or, if the expiration date is too far in the future, you might forget to use the voucher altogether. Indeed, a large percentage of group deal vouchers expire unused. This compounds the issue of wasted money. Not only did you spend the money, but you also didn’t even receive the benefit from using your voucher.

Another concern is that the voucher might come with some other limitations. You might be required to make a minimum purchase, or some items might be excluded. You could easily purchase a group deal voucher for a specific store, only to find that the item you had planned on buying is excluded from the deal. Before you complete your purchase, you should read the fine print to ensure that you know exactly what to expect, how to redeem the voucher, and when it expires.

Using Deal Vouchers More Effectively

If you plan to use deal vouchers to save money, you need to have a plan. First of all, only purchase items that you would have bought anyway. Even if the voucher is a great deal, avoid spending the money for it unless it is part of your overall spending plan. Limit your deal voucher purchases so that you are truly saving money, and not just spending money for the sake of getting a “deal.”

Next, double-check the terms and conditions. In the case of deal vouchers that can be sold back, you have a little more protection. If you can’t return the deal, though, be extra careful. Make sure that you will be able to use it within the allotted time period, and make sure you understand requirements and exclusions.

Finally, be aware that your activity might be posted on a social network. If you have connected your daily deal account to a Facebook or Twitter account, you might be sharing your purchase information with the public. If you like to keep your purchases private, be aware of what you need to do in order to keep your daily deals under wraps.

Are Group Deal Vouchers All They’re Cracked Up To Be? originally appeared on Canadian Finance Blog on January 23, 2012.

Upgrade Instead of Replace to Save Some Money

Alan Schram — Wed, 18 Jan 2012 10:00:15 +0000

We live in a world of disposable goods. Plastic water bottles, paper towels, IKEA furniture. We’ve been taught to purchase things, expect a short lifespan, and then throw them in the trash when we are done with them. Even if you ignore the environmental and moral aspects, there’s a huge financial aspect to embracing disposable goods. Plastic water bottles may only cost fifty cents each, and a reusable glass container may cost 10 or more dollars. You can, however, simply wash the glass container and use it for the rest of your life. Those plastic water bottles will add up, fifty cents at a time. Paper towels, also, don’t cost much individually, but a wash cloth can be cleaned and reused. Again, a larger initial cost but resulting in a long term benefit. IKEA furniture is cheap at first, but if you move around at all, you’ll find that the durability of the good is less than ideal.

So what’s the solution? Always purchase the most expensive goods? No, probably not. Purchasing the best value you can afford is always a good ideal, but you probably have some other purchases that at the point of no return. What to do with them? In some cases, it would be good to replace the item in question, as over the long term, it will be better than trying to patch an item that’s just no longer worth it. In other cases, you can often get by with keeping the product, and perhaps just complimenting or upgrading it.

Generally speaking, if the cost of the upgrade is more than the cost of a new product, it makes sense to purchase the new product. If the cost of the upgrade is less than the cost of the new version, then it can make sense to simply upgrade or compliment your existing item, assuming that the upgrade gives the product a longer life expectancy. Let’s look at a few examples.

Tune Up and Repair Vehicles

Automobiles are an item that is very expensive, so most of the time, a simple upgrade can be all you need to keep your car on the road. For example, if you’re feeling like your car just isn’t good enough anymore, instead of looking at new models, see if there’s something you can do to make your existing car better. Not enough storage space? You can add a roof rack. Not “fast” or “peppy” enough anymore? Take it in for a tuneup! Not right for your climate? Invest in winter tires/summer slicks and you’ll feel a world of difference on the road. There’s almost always a less expensive option than purchasing a new vehicle. The tricky part with cars and trucks is when it comes to repairs. When is it worth it to repair the vehicle, and when should you just bite the bullet and get a new car? It’s always tough to say, but the general rule is that when the cost of the repairs exceeds the worth of the vehicle, there’s no point in repairing it. Save your money for an eventual new purchase.

Upgrade Computer Parts

The cost of a computer is constantly dropping. Again, you should be able to simply upgrade your computer before you have to replace it. Is it less than 3 years old? Then it’s worth repairing/replacing. A computer can feel like new again after a format of the hard drive. It requires a little work, but it costs nothing if you do it yourself and can give your computer another year or two. If it still feels sluggish, the cheapest upgrade is adding more RAM. RAM is very inexpensive these days, so it should be <$100 to upgrade your computers RAM. Hard drive prices are insanely high right now, but Solid State Drives (SSDs) haven’t risen as much in price. Consider upgrading your computer with an SSD to get a noticeable speed performance in booting and application loading times. If it’s a desktop computer, make sure that it is clean on the inside. Dust buildup can greatly reduce performance, so get some compressed air and clean it out. If, however, the computer is simply outdated, then the price of a new computer should be low enough that it will be worth replacing entirely.

House Renovations

Sometimes you simply outgrow your home. Are you living in a two bedroom basement suite with six children? It’s time to get a new home. Do you already own your home but it just feels too small? Consider seeing if there’s a renovation that you can do that would greatly improve your living situation without having to sell and purchase a new home. Have an office that’s rarely used? Convert it into another bedroom. Have some extra land next to the house? Consider the cost of building another wing onto the house. Just sick of where’s you’re living? Think about re-doing the floors, painting the bedroom, or any other small upgrade in order to make your place feel new.

When is it worth a new purchase, and when it is worth upgrading?

Upgrade Instead of Replace to Save Some Money originally appeared on Canadian Finance Blog on January 18, 2012.

How Do Penny Auction Sites Work?

Tom Drake — Mon, 16 Jan 2012 10:00:47 +0000

You can get a MacBook Pro for $70! With penny auction sites, prices start at a single cent, and you can possibly buy expensive electronics for low, low prices. At least that’s what the adverts tell you. Unfortunately, the reality of these penny auction sites is that they are making loads of money for the site owners – and you have a slim chance of actually getting a good deal.

Pay Per Bid

It’s important to understand that penny auction sites aren’t making money on selling items dirt cheap. They’re making money on individual bids. When you participate in a penny auction, you pay per bid. In most cases, bids cost between 30 cents and 60 cents apiece. You buy a certain amount of bids to begin. So, you might be able to buy 100 bids at 45 cents apiece. That’s $45.

Each time you bid, your bid count is reduced. And, thanks to the way penny auctions are run, it is pretty easy to breeze through 100 bids – without winning anything. Each auction is set up to take a certain amount of time. However, in some cases new bids can add a few more seconds to the auction. That means that it’s impossible to know exactly when an auction will finish (no waiting until the final seconds to swoop in an win like you can do on eBay).

With thousands of bidders, and no way to determine when the auction will actually end, the chances of you actually winning something are pretty low. But you still pay for every single bid you place. And that’s where the site owners make their money. It’s not unusual for thousands of bids to be placed by hundreds of people before an auction ends. So, if a $1,800 MacBook Pro garners 5,000 45-cent bids, that’s $2,250. It doesn’t matter that the laptop sold for $70. The auctioneers already made a profit.

Buying at “Retail” Price

Of course, if you lose the auction (and there’s a good chance you will lose), most auction sites offer you the chance to purchase the item at “retail,” minus the cost of your bids. So, if you bid 50 times and lost out on the $1,800 MacBook pro, you will have $22.50 applied to your purchase. Plus, you will have to pay shipping. In many cases, there is a markup for items bought on auction sites. You might be better off just shopping around for a better deal in town, or at a more traditional online retailer.

Addicting Nature of Online Auctions

Online auctions can be addicting as well. It’s a lot of fun to place bids, and see if you can score a great deal. Even if you don’t win, the thrill of the process can be addicting – along with the hope that this time you’ll win. It is very similar to gambling in a lot of ways.

If you aren’t careful, it’s easy to click away your bids, and then need to buy more. You can spend hundreds – and even thousands – of dollars without winning anything. And, if you finally do win something, your great deal is likely to be completely negated by the large amounts of money you have already spent.

How Do Penny Auction Sites Work? originally appeared on Canadian Finance Blog on January 16, 2012.

Addictive Purchases

Alan Schram — Wed, 28 Dec 2011 10:00:29 +0000

Shopping can be addictive. Everyone knows that there’s shopaholics out there. There’s the larger than life, cartoon style shoppers, who spend all day spending money and never thinking about their actual purchases, or the woman who has 30 too many pairs of shoes, or the guy who buys a new car every 6 months. There’s a rush when you make purchases, and some people get addicted to the feeling. What most people don’t realize, however, is that almost all of us are a little bit addicted to shopping.

It’s not in a big way, it’s in the little things, the things that you may not even notice. When you start to spend money, it lubricates your wallet. Suddenly it’s easier to make a purchase when you’re already spending money.

Check Out Stands

Take the check out stand, for example. Any classic grocery store will have a candy shelf, or magazine shelf, right next to the checkout. That way, you’re forced to take a look at a bunch of small, easy purchases right as you’re about to pull out the wallet. It is so easy to think, “Well, I’m already paying $80, what’s one more dollar for a pack of gum”, or “Hm, that magazine article about Lindsay Lohan is interesting, and I don’t have time to read it here”. I’m not a compulsive shopper, but I have bought a couple candy bars here and there when I see a good deal or have a particular craving. The check out stand method is not just at grocery stores though. Auto part stores, clothing stores, gas stations, any place that has a checkout stand has small, cheap purchases that can quickly add to your total. They are not there for your convenience, they are there because it’s easiest to pay for when you’re already there to buy something else.

Add Ons

Add ons are a salesman’s best friend. Take car shopping, for example. You’re already set to purchase a car, you’re about to sign the final papers, when all of a sudden, there’s a few extra options that you can add to your car package. Floormats, racing pedals, luggage racks, the list goes on. Compared to the cost of the car, they’re not a lot of money, but they are where the salesman can make a lot of profit. Purchasing a phone? Oh, you’ll probably need a case, some ringtones, an iTunes gift card and a test messaging plan. Want to sign up for internet? Don’t forget higher data caps, anti virus programs, or additional webspace. Need a bike? Do you have a helmet, gloves, water bottle and a reflective light? Add ons are there not just because they “make sense” to add to the purchase, they’re there because it’s easy to add to the purchase when you’re already buying in.

Micro Transactions

Micro Transactions are where each payment, in and of itself, is small. Add them up, however, and it can be a large cost. The problem with micro transactions is that it gets you used to buying things. The Steam Sales, which I have written about, are horrible for this. Yes, you can get a lot of really good games for a very low price. But each day, you might only get a game or two, for about $5. It’s not a lot of money, but it gets you used to making the purchase, it gets you used to giving Steam your credit card information, and it gets you used to spending a little money every day. It’s dangerous to live like that. Long distance phone calls, free to play video games, on-demand movies and TV shows, the list goes on. There’s so many ways your money can be taken from you a dollar at a time. The danger is not in the initial loss of money, though, it’s in getting addicted to making purchases.

Are you addicted to shopping and just not know it? How do you prevent yourself from getting used to shopping?

Use Your Credit Card To Protect Your Purchases

Addictive Purchases originally appeared on Canadian Finance Blog on December 28, 2011.

Christmas Is Cancelled

Nelson Smith — Thu, 15 Dec 2011 10:00:00 +0000

DING! DING! DING! Christmas bells are ringing!

What a wonderful time of year. Christmas lights illuminate the night sky. Trees have been bought and are decorated with care. The smell of the tree fills your nostrils with the scent of holiday cheer. The gifts under the tree just add to the festive spirit. The mistletoe has been hung, meaning the more adventurous of us can attempt to sneak a kiss…

You know what? I can’t do this anymore. I really don’t care for Christmas. The music? Terrible. The decorations? Just an excuse to extract cash from your wallet. The gifts? The most pointless of all. We’ll look at them in more detail in a bit. The food? Okay, the food is usually pretty tasty. Some of the chocolate is a little strange, but other than that, that’s good eating.

Christmas has turned from a religious celebration to a consumer one. Consumption is encouraged at every turn, from the retailers all the way to your doting Grandmother. Christmas brings out the worst in consumers who have worked hard all year to keep their spending in check. Sure, it’s nice to watch little Johnny open up his mountains of gifts on Christmas morning, but at what point have we gone too far?

I’m going to stop the madness right now. I vote we cancel Christmas altogether, with one little caveat thrown in.

Stop Exchanging Gifts With Other Adults

How many times have you witnessed the following exchange?

Person A and B are getting each other gifts. Since both are self supporting adults, neither party has any other idea what to get the other. So, like so many other people before them, they both buy gift cards. This gift card exchange can either be for the same amount of money (thereby rendering it pointless) or it can be for different amounts of money, meaning that makes at least one person a little uncomfortable.

Many gift givers have figured this out, so they buy stuff instead. How many of you can honestly say you need more stuff? So you end up with something nice that you either have no use for, or you already have one. Since you don’t want to appear ungrateful, you don’t bother to ask for the receipt so you can return it. So you end up with an item that will just gather dust. What do you do? Why re-gift it of course. (But not to the same person. That would be quite awkward.)

The one exception I mentioned above is kids. Even though the entire personal finance blog community is on a mission to educate kids about money before they’re even out of diapers, the fact is kids have a vague understanding of money at best. Half the fun of Christmas is watching kids open up their presents. I completely support gift giving to kids.

How much money could we all collectively save if we limited our gift buying to those who don’t have the ability to buy for themselves?

Make Christmas About People, Not Stuff

Everybody says Christmas is really about family, and spending time together, and not about the gifts. And then the same people go and spend a mortgage payment on gifts. If it was really about family, nobody would spend any money on gifts. Of course, we already have that holiday, it’s called Thanksgiving.

The real reason people overspend at Christmastime is because they don’t want to appear cheap. They want their relatives to get nice things because it shows the world you can afford to buy nice things. It’s the same reason people buy brand new cars and expensive suits. Like it or not, there is still a large percentage of the population who think they need to spend money to be perceived as successful.

Many families do some sort of secret Santa exchange, which I think is a great alternative to my no gift plan. Each family member gets just one relative to buy for, with a limit of say $50. That way each person gets a gift to open under the tree, and everyone is saving both time and money because they only have to buy one gift, and not 12,483. (author’s estimate)

Just think about how great your life would be if you never got another ugly sweater, or underwear that’s a size too small, or gift set filled with smelly perfume you wouldn’t spray on your worst enemy. I once got a day planner, just mere moments after explaining to everyone in the room how I just scheduled everything on my iPhone.

These so called presents are just a waste of everyone’s time. Let’s stop the madness.

Christmas Is Cancelled originally appeared on Canadian Finance Blog on December 15, 2011.

How to Buy The Best TV For You

Alan Schram — Wed, 07 Dec 2011 10:00:53 +0000

There are a lot of different TV options out there. As technology has improved and progressed, new models of TVs have come and gone. Now, if you do a quick search for “new TV”, you’ll get thousands of different results. There’s a lot of different terminology out there as well that helps to confuse the issue. LCD vs Plasma, refresh rates, resolution, what does it all mean? What’s important and what’s not important? There’s plenty of guides out there that will tell you what they think you should know, and they are definitely worth reading if you want to make sure you have the absolute best TV possible, and are willing to pay for it. Don’t have the time, or just plain don’t care? Here’s the bottom line – what you need to know when you go to buy the best TV for you.

TV Type

There’s two main types: LCD and Plasma. In the end, it doesn’t really matter which one you pick. They refer to the type of technology that drives your TV, but to be honest, unless you have an LCD and a Plasma both in your home in the same room right next to each other, you’re not going to notice the difference. Plasma is generally better in higher light situations (near a window) and has better viewing angles (but do you really sit at a huge angle from your television anyways? If you do – just rearrange your furniture). Either way, TV type doesn’t matter – just get whichever is on sale or within your budget.

There’s also an LED-LCD subtype. It’s an LCD screen that uses LEDs to make the lights go on. If it was 1 year ago, I’d say pass on them, but now, again, it really doesn’t seem to matter. It changes the picture a little bit, but again, unless you’re watching two TVs right next to each other in the same room, you won’t notice the difference. Some LED screens have trouble with light bleeding through on the edges, so make sure that you have a good return policy or warranty on your TV and you’ll be fine.

TV Screen Resolution

If you’re going to buy a new TV, it had best be a high definition TV (do they even make non-HD TVs anymore?). Here’s there’s two options. 720p, and 1080p. Yes, they make 1080i sets, but you should avoid those. Why? You don’t really need to know. It refers to how the high definition picture is displayed on the screen (progressive is p, interlaced is i). Progressive is better, if you want to know more, google it. So should you get a 720p or 1080p screen? It depends on the screen size. If it is 32″ or less, buy 720p. If it is 33″ or bigger, get 1080p. Why? Essentially, at 32″, a television screen is incapable of producing a 1080p picture that your eye is capable of telling the difference from a 720p screen at a reasonable viewing distance. It’s at like, 6 feet. So unless you’re using a 32″ television as a computer monitor (you shouldn’t), just follow the rule.

TV Screen Size

How big of a TV should you get? Basically, there’s something called “ideal viewing distance”. It basically is an attempt to replicate a type of experience in your living room. If you have a bigger room, you should get a bigger TV. The farther you are sitting from your TV, the bigger a television you’ll need. Now, there’s a number of calculators and guides on the internet that you can follow, but basically the rule is this: buy the biggest TV you can afford. I’m serious. Determine your budget, and get the biggest TV you can purchase. If that is over 32″, make sure it’s 1080p. Other than that, there’s a lot of crappy misinformation out there that you really don’t need to know. It’s practically impossible to buy too big of a TV, so don’t worry about that (unless you’re sitting 6 feet from the TV. Which you shouldn’t be – it’s a TV).

But What About…

3D TV? It’s a gimmick. If you really want 3D TV, you’re looking at a 3D capable TV, glasses (yes glasses) for everyone that wants to watch the TV at the same time as you, 3D content (meaning additional costs), and all so that you have the joy of having a headache. Not worth it. Watch the 3D in theatres where it belongs, and will shortly die as well.

120Hz, and 1,000,000:1 contrast ratio? Meaningless numbers. The Hz refers to how fast your screen refreshes. 3D TVs require a 120Hz refresh rate. Other than that, your television will be limited by the content, and 60Hz (aka, any other TV in the world) will be fine. The contrast ratio? You can pretty much attribute that to a completely made up number. Every TV manufacturer will calculate that number differently, and essentially means nothing.

Internet-capable, Google TV, built in Netflix, etc. More Gimmicks. I haven’t heard of a single TV interface that’s actually revolutionary or worth paying more for. If your television comes with it, fine. Use it if you want it. If your TV costs more because of it? Skip it. Not even remotely worth paying for. You probably already have 13 internet capable devices in your home, half of which can connect to your TV. Any game console, Apple TV, Roku Box, laptop or computer will be able to hook up to your TV and provide internet, video streaming, free TV, etc.

So in reality, all it will boil down to is a decent sized TV. Are there brands to avoid? Probably. Just make sure that your television comes with at least a 1 year warranty, pay with a credit card that doubles that to 2 years, and you’ll be set.

Reduce Your Electricity Bill By Choosing An LCD TV Instead Of Plasma

How to Buy The Best TV For You originally appeared on Canadian Finance Blog on December 7, 2011.

Are Live Sports Worth The Cost?

Nelson Smith — Thu, 24 Nov 2011 10:00:04 +0000

I went with a friend into the city to watch a hockey game this past weekend. It wasn’t even an NHL game, it was just a WHL game. (Western Hockey League, a top league for under 20 year old players, for those of you unaware) which is still good hockey, but definitely a step down from the pros in both skill and parity of the teams. But we went anyway, watching one team really beat up on the other, all while having to hear the guy behind us explain the intricacies of the game to his children, who were either really dumb or had never attended a hockey game in their lives.

Let’s go with option B, to give those kids some credit.

Even though we went to more budget friendly WHL hockey, the evening was still a significant cost. Our night cost:

$100 for dinner (granted, very expensive. We went to a nice place)

$46 for two tickets

$13 for parking

$11 for two bowls of ice cream

$170 total, not including any vehicle costs to get there

This is a lot of money to spend on a hockey game. Even if you strip out the expensive dinner, it’s still kind of an pricey night. And we went with a much cheaper option than one of the 4 major professional leagues. My experience begs the question: Is going to live sports worth the cost?

The Alternative

Today, in the age of LCD high definition televisions and surround sound systems, watching the game at home is a better option than ever. You also have the option of stretching out on your couch, instead of cramming into an uncomfortable plastic seat. If you have a really awesome wife, you can get her to make you food while you just sit there and eat it. I’d recommend getting a wife like that, or at least going to someone’s house where his wife will serve you. Stereotypes are fun.

Watching sports at home has all sorts of other advantages too. The popcorn might not be as delicious as the stuff at the hockey game, but the cost will be about 90% less. It’s the same thing with the nachos or the ice cream. The markups at the hockey game are borderline obscene, but they know you have no other choice, so you’ll indulge in some overpriced snacks. Or, even worse yet, beer. And this isn’t even factoring in things like 50/50 draws or other things that raise money for the local team. If you watch at home, all those potential money drains aren’t there to tempt you.

Ever watched a game live and missed the best part because you were checking out the hot girl two sections over? We’ve all been there. If you watch at home, there will be 14 replays of that great play, and even more if there’s a PVR involved.

Cutting out cable TV is often presented as an easy step toward getting your budget on track. But, without cable, you might be tempted to spend more on either going to games or going to sports bars to watch them there. Suddenly cable looks like a real bargain compared to the alternatives.

Selective Spending

I’m not going to ask you to cut out going to live sports altogether. As a sports fan, I can attest, live sports are awesome. Sports are meant to be watched live. The atmosphere in the building is difficult to describe, especially during a tight game. People watching is often every bit as fun as watching the game. Seeing your favourite team surrounded with like-minded fans is great, especially when said team is winning.

If you can’t bear to cut out going to live sports, at least be selective about the events you go to. No offence to Winnipeg Jets fans, but there’s no way I’m shelling out cash to watch that team play. It’s the same thing with the Houston Astros in baseball or the Miami Dolphins in football. If someone wants a pal to go watch the home team play a crappy opponent, maybe pass on the invitation. Save your time and money for a better game, even if you have to shell out a little more for tickets. Quantity isn’t necessarily the goal when it comes to going to live sports. I know it’s tough to resist the opportunity to watch your favourite team live, but maybe you should, at least sometimes. Your wallet will thank you.

Are Live Sports Worth The Cost? originally appeared on Canadian Finance Blog on November 24, 2011.

6 Tiny Tips to Help with the Holiday Season

Alan Schram — Wed, 23 Nov 2011 10:00:59 +0000

Everyone could use some help with the holiday season. Whether it is a few more bucks in the banking account, or having family over to help manage the kids while you wrap presents, everyone would appreciate having an extra boost for the upcoming Winter. With that in mind, here are a few quick things you can do to help launch yourself into the Christmas festivities with a few more dollars in your pocket.

1. Use a rewards credit card for all of your Christmas purchases

Obviously, be sure to not overspend by using a credit card (you did set a budget, didn’t you?). If you can resist that temptation, then in January you can cash in your rewards to pay off your bill or get started on your new year’s resolution. Make sure that you have the best rewards credit card for you – it depends a lot on where you make most of your purchases. I personally use a Capital One cash back credit card. I don’t spend a lot in any one place, so getting a consistent 1% back on everything that I put on the credit card really helps.

2. Skip the annual Christmas party

Spoiler, someone gets drunk. So often Christmas parties require such time and energy that they’re simply not worth it. Unless you really want to go, or unless you feel like keeping your job is dependent on it – skip it. You save the hassle of getting ready, and the money on gifts, clothing, and liquor.

3. Get all your Christmas shopping done now

Every day you wait just means that the stores will be that much busier. Not to mention, the frantic mindset you’ll have come Dec 24 will mean less chance to comparison shop, get the best bargain, and save yourself some money. Even worse, you could end up purchasing something that the gift recipient doesn’t even like and they end up returning the gift after Christmas!

4. Skip Black Friday/Pre-Christmas/Boxing Day sales

Recent studies have shown that prices for some items tend to fall well after Black Friday. If holiday sales didn’t work for retailers, they wouldn’t be having them. Come January when sales have slowed down, prices start to drop as new models come out and old stock needs to be moved off the floor. Give yourself a late Christmas gift and purchase your big ticket items after the crazy November/December “sales” are over.

5. Clarify gift giving etiquette with friends and family

Are you still going to give a gift to Uncle Johnny? Are you expecting a gift from your neighbours? Take a few minutes and phone the people you’re not sure you’re going to give or get a gift from. If you’d like, agree to not give each other a gift, and instead promise to send an update email or grab a coffee sometime. Obviously, that won’t work for everyone. In some cases, try suggesting that instead of an awkward gift exchange, you each donate to a Charity of the other’s choosing. Exchange the gift receipts. It will probably cost less than purchasing a gift, the receiver gets exactly what they want, and the charity gets a donation. Win, win, win. If that doesn’t work, consider taking a day off to craft a plethora of gift exchange presents. Do one thing really well (like your famous cookies, flavoured oils, hand paintings), and use those for each different gift/exchange you go to.

6. Automatic withdrawal to your savings account for Christmas

Seriously, create an automatic withdrawal to a savings account for next year’s Christmas. Set it up to take $50 a month and put it into a separate bank account, and by next year you’ll have over $600 towards gifts, travel, whatever you need. This is the first year that we did it, and I’ll tell you, it’s a huge relief to have that money tucked away. There’s no stress in trying to fit Christmas budgets into regular budgets – the money is just there.

All of these things are simply, one step actions that will reduce a huge amount of financial stress for the next few weeks. What are your tiny tips?

6 Tiny Tips to Help with the Holiday Season originally appeared on Canadian Finance Blog on November 23, 2011.

How To Screw The Power Company

Nelson Smith — Thu, 17 Nov 2011 10:00:32 +0000

As an admittedly ~~cheap bastard~~ frugal guy, I cringe at opening my bills each month. Sure, I like having things like running water and heat, I just don’t like paying for them. Even though utilities are incredibly cheap, I still don’t like paying. Imagine all the money I’d have if I didn’t have to pay utilities. I could spend it on all sorts of other extravagances- like potato chips. Have I ever mentioned how awesome chips are? Oh, only every minute? Never mind then.

We’ve established my hatred of paying for utilities. How can you avoid paying for them? Well, beyond illegally squatting in your neighbour’s basement, there’s no way to get free utilities. But what about minimizing them?

Enter Solar Power

One of the ways that’s become popular is buying a solar power system for your home. Especially if you live in a warm climate with a lot of sunlight. Before you go down to the local Canadian Tire and start buying solar panels, is the idea even feasible? Just how much will it cost? This blog post will attempt to answer some of those questions, and will probably fail. Don’t say I didn’t warn you. Keep in mind that I have zero practical experience in this arena, nor do I even know anyone who is doing this. With that out of the way…

A solar power system has two components, the panels themselves and the battery system. In simplistic terms, the panels convert the sunlight to energy, where the battery stores it, since your house will use energy even when the sun isn’t shining. The panels are installed on the roof commonly, meaning you might have to replace your roof before even embarking on the project. Let’s assume your roof is relatively new, so onto the next step. How much does it cost to install?

Cost of Solar Power

Well, this is where it gets murky. Canadian Tire has a 85 Watt panel currently on sale for $600. An 85 watt panel will produce 85 watts per second, which is just enough to… power a 60 watt light bulb with a little room to spare. Doh. You’re obviously going to need more than one.

According to this article (easily the most useful one I found on the topic) having 720 watts worth of capacity will mostly power a normal house. 9 Canadian Tire panels would give you 765 watts, at a cost of $5400. As is the nature of our economic system, I checked around, and the cheapest I could find after my exhaustive search (read: 3 minutes on eBay) was about half that much from a wholesaler out of Montreal.

That’s just the cost of the solar panels. If you’re a relatively handy guy, you’ll probably be able to install them yourself. If not, you’re looking at maybe $500-$1000 for installation. Once they’re installed, you can either install a battery system to draw on when it’s dark, or simply draw from the existing power grid system at night. You’d sell your excess power back to the grid during the day (often at attractive government mandated prices) and then draw off the grid at night, meaning the cost would approximately be a wash.

There are also tax incentives available for home owners who take the initiative to install a solar power system. In Ontario, the provincial government is willing to let a homeowner write off the HST paid for the system, a 15% savings. Many other provinces have similar incentives for solar power. The federal government is willing to kick in $500 assuming the components of the system are on their approved list. We’re not talking huge amounts of money here, but a few hundred bucks here and there help make the system more economical, which is the real reason we care.

Should You Bother?

Understandably, you’re probably a little nervous about this. Solar power has come a long way since you were first amazed by a solar powered calculator, but is it feasible for your energy needs? I’m not going to pretend this piece is the penultimate authority on the subject. However, the cost seems downright reasonable. Just how much money can you save?

Assuming the system costs $7500 to install (a generous estimate, to be safe) and you pay $100 in power like I do, your investment in solar power pays for itself in a little over 6 years. Considering the solar panels have an expected life of 25 years, you could have next to free power for 19 years. As demand for energy continues to go up, the price of said energy will surely increase as well, meaning the return becomes even more attractive in the future.

What’s most exciting about this concept is that solar energy isn’t very far away from being a mainstream source of energy, even in a cold place like Canada. A key part of thinking like a wealthy person is not being dependent on others. I don’t know about you, but I’d enjoy the freedom of no longer having a power bill. As long as the numbers make sense.

How To Screw The Power Company originally appeared on Canadian Finance Blog on November 17, 2011.