Canadian Personal Finance Blog

Busy day, so I went back into my archives to find my Tim Horton’s Savings Plan posting from a little while back (a new classic):

Think if you bought Tim Horton’s stock you are doing ok (no I am not saying go out and buy their stock, figure that one out for yourself), but I am saying look at that “Double Double” you have sitting next to you. Ever thought how much those things cost you? I have asked you this question before, so you should know the answer.

Let’s have some fun Arithmetic, shall we?

1. Assume you drink 3 “Double Doubles” a day for 5 days (what you do on the weekend is your trouble not mine). How much is that costing you a week then?3 * $1.39 * 5 = $21.00 per week
2. You work how many weeks? I’ll say 45 weeks to make it easier to calculate for me. So that means you are spending about:45 weeks * $21 / week = $945 per year on coffee
3. Over say 10 working years assuming you took that money made a lump sum payment every year into an investment vehicle that paid a modest 5% (remember if you put it in an RRSP you’d get back tax money too).We have:
   

   Year	Value
   1	$945.00
   2	$1,937.25
   3	$2,979.11
   4	$4,073.07
   5	$5,221.72
   6	$6,427.81
   7	$7,694.20
   8	$9,023.91
   9	$10,420.10
   10	$11,886.11

So after 10 years you’d have almost $12,000 in your pocket (less taxes on the growth, unless you do this inside of an RRSP).

Does that coffee seem so cheap now? Hey, you folks drinking at Starbucks and paying twice as much for your coffee, want me to do the calculations on THAT for you?

Food for thought for a Monday.

Michael James talked about found money yesterday and the joy of paying off bills with found money, and how we should not squander this found wealth, and really use it to create happiness in the future by paying off debt now. I think this is a sensible approach to found money, but it made me think about another post I did a while ago, which was how couples deal with money.

Many times found money can cause a great deal of consternation between spouses because each have their own idea of what the best thing is to do with found money.

I think this is natural, as with most every subject possible spouses are going to have their own ideas, but the problem arises when the two ideas are contradictory or even orthogonal to each other.

Say Mary and Bob get $10,000.00 in found money from an inheritance. Mary thinks she’d like to go on a nice vacation with the family because the family has never really been on a vacation, however, Bob thinks that putting that money on their Mortgage (thus shortening it’s term by 5 years), is the right answer.

Reading this, it sounds like an easy enough “problem” to deal with, both folks want to do what they think is best with the money, but the problem now is you have is a simple difference of opinion. The problem I have seen in my life and from other folks I know is that this is not a simple problem, because:

• There is no wrong answer (or right answer)
• Both spouses have voiced their opinion, and thus feel they have the right answer.
• Money and money management is a divisive factor in many relationships

Is there a Solution?

Only if both parties are willing to compromise, or one is willing to lose (i.e. typical Prisoner’s Dilemma issue). Wikipedia’s explanation of the Prisoner’s Dilemma is:

Two prisoners (the players) during the interrogation each have a choice: whether to betray the other one, and thus to decrease his own jail time by, for example, 1 month (as a compensation for the cooperation), while increasing the jail time for the other by, for example, 10 years, or to stay silent. Each of the prisoners is only interested in receiving the least possible sentence. It shall be assumed that the prisoners make their choices (to betray or to stay silent) simultaneously, and they know for sure that their choice cannot affect the choice of the other one.

All right I am stretching this (feel free to leave a comment), but the need to compromise and find the best solution for the couple is not always obvious to either spouse, and sometimes they feel it is not in their best interest (they got their way the last time, so I want my way this time). Sound familiar to any of my readers? Never happened to you?

Resolution?

I have no canned simple answer for this one, because as I keep saying, Money is a strange and divisive thing in a relationship, especially if the spouses do not agree in terms of money and how to use it.

What needs to be done is have clear lines of communication and rational discussions between the spouses about what they want to do, and a decision made that doesn’t cause either to feel that they have “lost” in this decision. Sounds easy doesn’t it ?

Think this is a simple thing to resolve? You and your spouse never have these issues? Then you are either very lucky (or very naive).

In Ontario we are celebrating the strangely observed Family Day. Strangely celebrated since most folks have the day off, except Federal Government Employees and some companies, so we do have mail delivery, but the Loblaws is closed? Going to make for an interesting day of figuring out whether I want to skate around the neighbourhood (yet another Freezing Rain storm in Ottawa) or sit at home with my Family and do Family things like:

• Paint the Family room (no, not likely to happen, Home Depot is closed too)
• Work on our Genealogy (I got a program for Christmas to work on that, so I may actually do that one)
• Ask my Children how their lives are going. That one is easy and it takes 3 minutes, because the answer is “Fine!” (with a very annoyed tone).

Enjoy Family Day, get into it.

How Much Do You Pay For Cable (revisited)

From time to time I talk about how much home entertainment costs. I view my home as not very extravagant in this area (I haven’t upgraded my stereo in years, and we still have standard definition TV’s for now). We do have “Digital Cable” but that ended up costing $1.50 more a month (for this year at least), that is our only major step so far. We also have High Speed Internet access, but I view that as a necessity now (for my work, and for life in general).

More and more I talk to my co-workers and they have extravagant home theater and entertainment systems and are spending a big chunk of money on subscription fees or buying media for these systems (i.e. Cable TV monthly charges and DVD (High Definition) purchases).

There is a very small group of folks who have gone completely in the other direction, and have turned OFF their Cable TV access (they still have high speed Internet access).

Their reasoning is actually quite good:

1. They are rarely at home and thus will rarely sit down in front of a TV to watch a show at a specific time, so most of the shows they watch are “recorded”. Some have actual antennas (not the old rabbit ears, better than that) and they can get some digital broadcast TV over the air for Free.
2. When they do have time to watch “TV” they actually watch a fair amount on their PC (DVDs sometimes or recorded shows), either where they are (traveling) or their PC’s connect into their home entertainment HDTVs.
3. They are cheap and don’t want to pay Comcast or Rogers Cable $80 a month for the privilege to watch TV, or fork out $25-$30 for High Def DVDs.

So what do they do? They simply find content on the Internet. Most shows are now available in their entirety from their original broadcasters. Those that aren’t are available from Bittorrent sites where you can download content (illegal in the U.S., might be illegal in Canada, not sure of the copyright laws).

So they save about $1000 a year and get to watch what they want, when they want? Sounds like a good idea to me.