Canadian Personal Finance Blog

From the archives and now from the new Favorites page, one of my favorite financial metaphors (note that Carleton is now the 5 time Canadian Champions):

Don’t Pass it to the Other Team!

So one of my sidelights is coaching basketball, and I love going to clinics from coaches who talk about coaching and plays and stuff (I’m an old gym rat at heart). Last Saturday I was lucky enough to hear from Dave Smart who is the head coach at Carleton University (the Ravens have been Canadian Champions the last 3 years running), and he was fascinating to listen to. Coach Smart admits to being a perfectionist and telling it like it is, and one of the expressions he tells all of his players is “Don’t Pass the ball to the other team“.

The first time you hear this expression it sounds obvious, of course, who would do that, but what Coach Smart was trying to say (I think) is most basketball players watch their own players, but rarely see the other team’s players. If you watch the defensive players, you won’t pass it to them! Simple, right? No! You know where the offensive player is going to go, you don’t know where the defender is going, and you need to watch them!

What does this have to do about finances? (Darn good question, get ready for a stretch here) Don’t take your eye off things that you can’t control, the stuff you can control: your savings, your retirement, your investments, your debt reduction plan, if they are under control that is good (and hopefully you don’t have to watch them as well).

You have to plan for the things you don’t control, and that means:

• Reduce DEBT! You can’t control interest rates, you can’t move forward with your car in reverse. Debt reduction is first and foremost. Everything else can be dealt with much more easily if you are carrying little or no DEBT!!!
• Have contingency funds in place for:
  • Car repair. I am guilty of that one, car repair bills always throw me off kilter
  • House repair. I am going to get a major bill to replace the roof and furnace on my house, but they had to be done. If your house is new, you’ll need to replace these things in 15 years, but in 15 years, if you haven’t saved any money for it, it’s going to HURT!
  • Catastrophic illness. I have long term disability insurance with my company just in case. If I had a stroke tomorrow, my family would at least have an income of some kind.
  • Loss of employment. If you lose your job, how long will you last? A priest once told me everyone is 12 weeks away from living on the streets, make sure you are not one of those folks
  • Death! Term insurance to protect your family, and a will to protect them even more (thanks Dividend Guy, for pointing out I missed that).

These are SOME of the unknowns, that you need to watch for, and not pass the ball to them!

Hope for the best, and plan for the worst! –C8j

How are your teeth? Mine are not in great shape and I have had a history of bad teeth, and it hasn’t got much better as I got older. Currently I have 4 Crowns in my mouth and at least 3 teeth that I would guess will soon become crowns.

Crowns are a wonderful thing that for some reason is viewed as a Prosthetic for most insurance plans, and thus are rarely covered more than 50% by most Dental plans (and in some cases not at all). What does this mean, financially?

Each crown with installation has been approximately $1000 each (that does not seem completely out of whack with what I have heard from other folks, so I don’t blame my dentist for this charge). This means I have been out of pocket almost $2000 so far for the crowns that I have had put in, and that is a LARGE chunk of change, as I had not planned on these expenses, but I will be in the future.

Do I have other options? Yes, I could have the teeth extracted, but then I must get either dentures or a real prosthetic, both of which are not covered much under most dental plans.

Other interesting dentistry related expenses might be Orthodontic work, for you (adults are getting braces more and more) or for your kids. This is usually only covered 50% by most dental plans. A lot of times if both parents are working they can get almost all of this work done, but for us lucky single income families we only get about 1/2 of the expense covered (unless it is for a medical condition like a cleft pallet, in which case it is mostly covered under Medicare (and rightfully so)).

That ability to cover both 1/2’s of a coverage shortfall that dual income families (that both have benefits plans) is yet another advantage that dual income families have over single income families.

My kids wonder why I keep bugging them to brush their teeth? For your financial future, that’s why!!!

Begins with a single step, but if we don’t take a second step, the journey is only one step!

I am notorious for great plans and hopes and such, and starting them, and then they “die on the vine”, and I come back to them 6 months later feeling guilty that I didn’t persevere with them and continued on with them. Now this isn’t for all things, but I think this is what happens when I try to do something “synthetic” that I don’t believe in, that I believe I can force myself to live up to.

If you are going to start a financial plan, or a debt reduction plan, you need to know that you are going to keep it up and live it. If you don’t believe in it, you won’t do it, it’s just that simple.

Deep thoughts, for a Saturday, but I am enjoying a Saturday at home, so it isn’t that bad. –C8j

I have been bashing around my Resume at work, since that is something you should do at the start of every year (at least) to keep it up to date (since you never really know when you might be in need of a resume), and I got to thinking, what would my Financial Resume look like?

What do I mean by a financial resume? Well I have been “managing” my money for over 25 years now (actually all my life, but for real since I was about 21), and if someone asked me, “Do you think you did a good job?”, I’d say, “No”, but I’d never be able to give them a reason as to why I think I have done a sub-par job.

So how would I write my financial resume? The hard part is trying to remember all of the financial “decisions” that you actually have made in your life time (significant ones, let’s not get down to the minutia of how many coffees you bought at work and such).

The easiest ones to remember for me are the purchases of my two homes:

Buy house #1, already had 1 child and another on the way. I was positive I couldn’t afford a house, but I gave my Agents a “can’t go any higher than this” price, and then naturally ended up purchasing a home $10,000 more than that. In hindsight, I was being far too conservative, and could afford the home (with some help from family). The house itself didn’t appreciate in value, but I did manage to sell it for what I bought it for.

• I ended up out the cost of moving out (I paid for movers), the commission on selling the house, and the cost of the new roof and furnace I put in the house.

Overall I would say that this financial decision was a good one, even with a small “loss”. The money I would have been spending on renting would have been “lost”, whereas the equity I paid down on my house went into my pocket (with 0% interest, unfortunately), but still it was worthwhile, and my family needed more space.

Tomorrow, more houses bought and odd decisions on investing that worked in spite of the bad reasons behind it.