Canadian Personal Finance Blog

I was telling my daughter that comment and she looked at me like I had five heads. I tried to explain that building up debt rarely happens overnight, just like building up your body mass is not done overnight, and I think it is very true.

When I had my weight gain it happened over about a 14 year period, and it was slow, but by the time I finally did something about it, it was significant. It was a compounding of eating the wrong things, in the wrong quantities at the wrong time, and a complete lack of physical exertion, luckily I have taken the weight off and am keeping it off (mostly).

Debt build up is the same way, usually (unless you make some gruesome investments, an incredible blunder or you are a victim of a fraud), slowly without you noticing you are doing it. Buying your lunch every day isn’t going to put you into debt, neither is leasing your car, vacationing in Las Vegas, or buying lottery tickets either, however, start adding these together with spending more than you make and suddenly you are building up debt, instead of equity.  Keep doing this over a long period of time, and suddenly you have a debt load that you cannot afford and you are just not sure how the heck you did it. It was done one small step at a time.

Unfortunately, or fortunately, debt reduction is accomplished in the same way. Unless it rains money, getting out of debt is done slowly and one month at a time, using a plan and self-control and a wililngness to change your lifestyle (because losing weight and debt reduction are BOTH lifestyle changes, not just a quick fix that allows you to go back to your old habits).

Losing the financial bad habits is the key to debt reduction, keep that in mind.

Carnivals

My posting about Jesus is Watching You! was mentioned at the Personal Power and Self-Help Carnival.

Given that for now I am still a telecommunications employee I can join the Telecommunication Technologies Credit Union (this is not a promotion for them, nor am I being paid to mention them, this is me querying my readership). This Credit Union has ATMs on campus where I work, and thus if I need money I must use their machines (or drive to find a TD Canada trust machine).

As a bit of history about 10 years ago, CIBC was on campus and their ATMs were on site. They had a no charge banking deal back then, so I opened a bank account with them, where I put some “mad money” (usually no more than $50.00) where if I needed money and I was at work, I could withdraw it without incurring any extra service fees. This worked quite well, and then when CIBC played the dirtier trick of “out sourcing” their ATM machines, it was even better, because then I paid no service charges, but if I tried to take money out of my TD account, I got nailed with a $1.50 charge from TD, and CIBC nailed me with a $2.00 fee for it being a “White” ATM machine (and not a CIBC machine). You wonder why I invest in banks, they are just so darn EVIL!

Now I have the option to open an account with the Credit Union, which I almost did last week, since they seem to offer “no fee” banking so I was going to go back to my old “Work” account concept, except, the Credit Union has an interesting twist for new customers. I must be a “member” of the Credit Union, thus I must buy a share in the Credit Union (I think this is standard practice with Credit Unions), and this share costs $220. If I ever leave the Credit Union, this money is refunded to me, and it evidently earns a dividend of some sort every year as well.

This leaves me in a quandary, do I pay the $220 set up fee to have a convenience account for me to save $3.00 a month or so in service fees, or do I just get some “intestinal fortitude” and simply not take money out of my bank accounts willy nilly (and instead take out the money I need for two weeks in 1 block, and when it is gone, it is gone)? The Credit Union does not have a lot of ATMs around Ottawa, so thinking of them as an option to move ALL my banking to is not really “on” either, although they do seem to have some good services as well.

I can guess a few of my friends answers, but I am curious to hear what my readers think would be the better thing to do in this situation.

Lottery Tickets, another reason to Loath Them

The CBC is reporting yet another internal investigation at the Ontario Lottery Corp about their approval of a $21.5 Million “Insider Win” in the 6/49.  Given this is the 6/49 so the ability to tamper with this lottery is less likely (unless the person figured out how to “past post” the winners (see the Sting to understand that)), it still has the appearance of something smelly in the Lottery business (which already has had fun and excitement with Fraud allegations in the past year). Given the Lottery Commission has investigated, I guess they are satisfied their was no Fraud involved. Either way, I read this story, and I thank my lucky stars I don’t buy Lottery Tickets.

The Canadian Government is a mega-business in terms of size and jurisdiction, and to keep this monster organization in line there is the Office of the Auditor General. Yesterday the Office of the Auditor General put out it’s 2008 Annual Report, and as usual it is full of many interesting issues with the Government specifically in the area of spending. There are some very interesting comments on User Fees in general and how they have been arbitrarily added by many government agencies without a specific accounting of what the “fee” is for. Interesting reading.

The concept of the Auditor General got me thinking about whether I could stand an audit of kind by a 3rd party of my finances. My answer is I don’t really think so, however it might actually be a great idea to force me and my family to explain some of the purchases and financial decisions that have been made over the past little while. Think of having to explain to someone why I held on to my High Tech stocks for so long? Makes me cringe just thinking about this whole idea, but to me it sounds like a good idea.

I have previously written about the Quarterly Financial Review (which we are almost half way through the second financial quarter) and also about your Financial Resume, and these ideas are great concepts to help families communicate with each other about their current financial status (especially once you have a few reviews under your belt so you can actually compare and contrast quarter to quarter), but I am thinking that maybe these ideas aren’t quite enough. If you add more accountability (pardon the pun) to your Personal Financial Life you may be forced to make more informed decisions (i.e. you are less likely to rely on your “gut” or impulses, if you know you have to explain later to someone why you did what you did).

Any ideas where this kind of “Personal Audit” could be implemented are welcome.

Decrapification Update

My continuing attempts to declutter is still on track. I have taken more “crap” to work to offer to other geeks for them to take home, however, none of them took my pile, so I ended up throwing it out. Yesterday, I hauled up a bag of Pink Fiber Glass insulation from the basement (it had been sitting there from when we finished our basement three years ago), and I put it out for the garbage. I was pretty sure the garbage man wasn’t going to take it, however, within 20 minutes it disappeared. My guess is a neighbour took it for later use, which is fine by me.

It continues to amaze me how much one man’s crap is another person’s treasure in these instances.

More decrapification to come (I hope).

Don’t remember this in the bible, but it is a very good thought. Our society seems bent on quick gain tactics to wealth and assuming that it is the only tactic, to gain wealth. The people I know who are wealthy (I think rich has negative connotations) in the monetary sense all worked hard to get this money and it did not happen over night (although some larger gains for them may well have).

I get “Get Rich on the Internet” schemes in my inboxes every single day, and I have read most of them (without paying for them, I don’t pay for this stuff) and it all entails either “trickery” or methodologies that make little or no sense. People get rich on the Internet by working hard and doing something FIRST or BEST, not by doing “me too” stuff.

If I am to ever “Get Wealthy” I know that there are a few simple rules to follow:

1. Spend less than I make
2. Pay off all my debts
3. Invest carefully
4. See rule #1

Simple, and the bible tells us to also be patient, it will take time, keep that in mind.