Canadian Personal Finance Blog

Some interesting stuff this week starting off with good-ish news for those with debt:

• The Bank of Canada lowered its interest rates, but why aren’t Mortgage rates following suit? That same article talked about the importance of negotiating for your mortgage (that caused a Mortgage Broker to comment on it).
• I wrote about how Green I am, not very, but then again, I am not sure I can afford to be too Green.
• Michael James wrote a book review of It’s All Too Much , which has inspired me to get back to my de-crapification program (see below for more details).
• Larry McDonald wrote about the whole, Inflation is Worse than I think it is hysteria going around on radio stations.
• Ellen Roseman celebrated her 100th Blog Post , good for her, I am nearing 1,000 I think, but who is counting? She espouses the joys of blogging, it’s fun, I’ll admit it.
• Canadian Dream: Free at 45 posted about the Keys to Early Retirement , I posted about that a while ago, and retiring early is much like improving your Golf game: Go back to when you were a teenager and start playing then and you’ll be a much better player.
• I asked how many accounts do you have ? If you have too many accounts maybe you need to consolidate them?
• Finally the best post of the week was Always Have a Target , and any time I can use a Urinal as part of a Financial Planning Discussion, I have won!

De-Crapification Progress

My company is having a “clean up the site” initiative to help get rid of a lot of crap that is lying around the site. Being a high tech company they are disposing of a great deal of hazardous waste-like crap, so I have started returning some of their assets that I have been storing in my home (and thus taking up space in my home).

I managed to dispose of a 20″ CRT and an old 586 based PC, which if I’d try to take to a recycler would have cost me upwards of $50.00 to get rid of, so I am glad to see it. Unfortunately my “carrier” broke carrying this heavy weight, so I threw it on the “refuse” pile as well.

I feel I am being greener already, and if I save myself money being Green, that is my kind of Green.

Next step is attacking my basement and back room again. Made some progress, and I must remember it took years to build up all of this crap, so it may take a while to dispose, hide, mangle, spindle or vomit away this crap.

As has been pointed out by both Canadian Capitalist and Michael James the Bank of Canada’s 1/2 point rate drop has not been reflected by the major banks yet, in terms of Mortgage rates (especially in longer term mortgages). Short term mortgages and credit vehicles that are typically based on the Prime interest rate, do reflect this dropping, but longer terms (greater than 6 months) certainly do not reflect this drop.

Why are Mortgage Rates not Lower? Darn good question. Currently the TD Bank’s prime rate is 4.75% and that is also what they are charging on their variable rate 6 month mortgage, however, after that the rates start climbing, to a maximum of 7.75% for a ten year fixed rate mortgage (more than twice the current Bank of Canada rate).

Remember that all rates posted on these sites are negotiable in some fashion or another, and here we come to the real core of this post.

If the bank says, “We don’t negotiate Mortgage rates”, simply leave, and call a Mortgage Broker and you might be surprised that the Broker can get a cheaper rate from the exact same bank (and remember the Broker makes money on this too).

Banks Need You

Remember, if you are a good credit risk and you want to truss yourself up with a long term debt like a Mortgage, the Banks want you! They want your business, and they want your money passing through them. They want you even more, if you carry balances on your Credit Cards, but let’s not go to that subject today, but remember, the bank wants your business, and keep that in mind.

When you are talking to a bank about Mortgage rates and such, it is an excellent time to discuss getting Free Banking too. This corporation wants your business, now is the time to be asking (or demanding) for the best deal you can get. Be prepared to talk to a few banks, and also be prepared to be promiscuous with that information, tell the banks the deals other banks are offering you, and see if they will match the deal or even make a better deal (I don’t suggest lying, mostly because I am a lousy bluffer or liar, being dishonest isn’t the way to go).

Let me be honest, I am awful at negotiating, but I am learning that it is an important skill to develop, so I work on it. It is all a game for me, and getting the best deal I can, is the goal of the game. A really good tactic is to get friends or family to tell you what deal they got, and see if you can beat that deal. You may not get that deal, but maybe you’ll get a better deal, you never know, until you negotiate.

The only thing I can tell you for sure, if you do not try to negotiate, you will not get a good deal from the bank. Strangely the opposite of this is not true (i.e. if you negotiate you will get the best deal), but, if you don’t negotiate, I promise you will not get a good deal (unless your father or mother or a relative owns the bank or works at the bank, but then you are playing the game by using connections, so go for it).

With Earth day passing yesterday my wife asked me the question, “How expensive is it to be Green?”, I wanted to consult with Kermit the Frog, but I figured I’d look at my life and see in the obvious areas, would it be cheaper, more expensive or a wash to be “Green”.

1. Automobiles, currently I have two cars. A relatively frugal and clean(er) Toyota Corolla and a gas guzzling Montana van (that most likely pollutes more as well). The green solutions here might be:
   1. Get rid of both cars and use public transit and walk where we need to go. This is a non-starter, with kids and such, my lifestyle and my families could not tolerate that option. Would it be cheaper to buy 5 bus passes a month at $375 ? Not sure, but I do get to use the mass transit tax credit.
   2. I could get rid of the van and only have 1 car. This option will be more possible soon, when I hopefully have less kids living at home. For a while we only had 1 car and I took the bus to work, but it was an inconvenience, as OS Transpo does not offer great service from South Ottawa to West Ottawa. If I worked downtown the story would be very different.
   3. Staying as I am is definitely not green and not as frugal either.
      Grade: D (not very green choice by us, but I am being honest as well).
2. Attempt to limit my families water usage. I’d really like this to be better in my house, because it is getting out of control.
   1. I don’t water my grass and I rarely water my garden, mostly because I am a lazy sod, but also because I view the Grass as a gift from God, and if God thinks it should be green, he’ll water it.
   2. Low flow toilets, or better still composting toilets? Well, not really, I do need to replace the toilets in my house, so I think the water usage there might be better, but composting ones, um, no.
   3. Low flow shower heads. Yes, I do have those, and they help.
   4. Screwed up water heater. At first I thought this was a bad thing, but the fact that my water heater doesn’t seem to store that much hot water is a good thing, since it shortens my daughter’s showers significantly. Don’t think I’ll have anyone come in to fix that issue!
   5. Low water usage washer and dishwasher. The dishwasher is pretty new and is supposed to not use as much water, and my washing machine is “up on the roof” so that will get replaced this summer.
      Grade: C+ (could do better, but at least trying)
3. Good insulation in house and good windows to limit use of fossil fuels? I think my house is ok, but the windows need replacing, and that is going to cost me a bloody fortune, so I will make sure I get fairly good ones when I do.
   Grade: C
4. Efficient heating and cooling systems. Replaced two years ago and my gas bill has been dropping as has my electric bill, very worthwhile investments.
   Grade: B+
5. Composting of household wastes? Yup, we do that, not as much as we should but we do have two compost containers in the back yard and we do use them. We don’t do this in the winter, because the snow is too bloody deep!
   Grade: B-
6. Recycle? Yes indeed, and we put out yard waste too. Our garbage output is still fairly high, but we are careful not to put recyclables into the normal garbage. Once Ottawa goes with a “Green Box” for kitchen waste this should drop our garbage a great deal.
   Grade: B
   
7. Replace conventional lights with lower electric using ones? In a couple of places, but the fact that these “super bulbs” then have to be disposed of in the Hazardous Waste dump, worries the hell out of me. This doesn’t strike me as being “Green” at all.
   Grade: C-
8. Green household cleaning products? Maybe a little, not much. Might be an area we can explore some more.
   Grade: F
9. Really wacky green ideas:
   1. Alternate feminine hygiene products? Um… no.
   2. Home Solar panels? Don’t have the capital to invest to make this a worthwhile investment, but if electric prices keep going up, who knows?
   3. Not running the air conditioning in the summer? Not in this current lifestyle, my kids would revolt, that is for sure. I try not to run it too cold, but I plead guilty about being used to this creature comfort.
   4. Worm farms in my compost heap? Nope, sorry, don’t fish enough to have some Red Wigglers (the Cadillac of Worms) in the backyard.
   5. All natural clothing, no synthetic fibers? Sorry, just am not that with it as to what material I am wearing (nor am I wanting to be ensconced in velvet).

   Grade: F
   

Not too bad really, I think there is a great deal more my family and I can try to do to be more Green, however I also don’t feel heavily obliged to go out of my way to be Green if it is going to cost me a bloody fortune (or causes an incredible inconvenience in my current lifestyle).

The two ways I think the Green Movement will make farther in roads into every day life will be, Gas shooting to $150 per barrel and higher and the Government giving “Green” credits on taxes or eliminating taxes on “Green” products.

How Green are you?