Another blast from the archives from the year 2008 (just before I was laid off), note how critical I was of the government. Do you have your own Financial Auditor General?
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 its 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.
Figured I’d add my 2 cents to the fray of Bloggers talking about the problems on the Stock Market these past few weeks. Is this an opportunity to buy? Should we be selling? Is it time to crack open skulls and eat the goo inside? Don’t ask me, I am standing pat for now, and we shall see what happens. My portfolio is down a fair amount, but my feeling is, now is the time, just to “Not Look”. Remember most of my stock holdings are in an RRSP, and thus aren’t a short-term investment either. I am watching TD with intent.
Q3 of 2008 for Personal Finance Started
For those of you doing a Quarterly Personal Finance report, remember that Q3 just started, and you might want to think about doing your Q2 report. I have been procrastinating doing mine, but need to get it done, to see what happened in the past 3 months, and see if there are any changes needed in our financial plan.
Money in the Jars?
Gail Vaz-Oxlade‘s favorite trick with her problem spenders is putting her spenders on a set cash budget which she puts in glass jars for them. Mrs. C8j is thinking that might be an intriguing summer project, I am not so sure. I understand the concept, but am not sure it is something I can live with. Stay tuned this could turn into an interesting discussion (Mrs. C8j did convince me to go on a diet 6 years ago, and I lost 80 lbs., and I didn’t want to do that either).
Rates are down by 1/2 a percent again folks. Nope not time to borrow more, time to pay down now!
Bank of Canada lowers overnight rate target by 1/2 percentage point to 3 1/2 per cent
OTTAWA – The Bank of Canada today announced that it is lowering its target for the overnight rate by one-half of one percentage point to 3 1/2 per cent. The operating band for the overnight rate is correspondingly lowered, and the Bank Rate is now 3 3/4 per cent.
Information received since the January Monetary Policy Report Update (MPRU) indicates that economic growth in Canada through the four quarters of 2007 was broadly in line with expectations. Domestic demand has remained buoyant, as rising commodity prices and high employment have continued to support income growth. Canada’s net exports weakened further in the fourth quarter, reflecting the slowing U.S. economy and the impact of the past appreciation of the Canadian dollar. Overall, the Canadian economy remained above its production capacity at year-end. Core and total CPI inflation – at 1.4 per cent and 2.2 per cent, respectively, in January – have also been consistent with the Bank’s expectations.
Back to March
A new month begins for us and we end up with lots of interesting questions and topics to think about for this crucial month in the fiscal year (both at home and investing):
- Q4 results are being announced by many important companies and the stock market has been diving fast. Is it time to buy? Who the heck knows? Follow your investing plans and figure it out yourself.
- Have you paid off Christmas yet? It’s March, you should really be planning next Christmas by now, but if you are still paying Christmas off, keep that in mind for your plans for Christmas 2008.
- How has your financial plan for 2008 been going? At the end of this month, you will have finished your own Q1 (time to update your Personal Finance Quarterly Status Report), and should really do some kind of report on how things stand in terms of your plans too. If you don’t keep this up to date, how do you know where you stand?
- I will attempt to resurrect my “No spending at work” plan, which kind of fell apart in February but I will attempt to begin again (given I will be out of the office a lot this month, it might be easier to succeed as well).
Conclusions and Recommendations
Now you have transcribed all of your pertinent information into a report, and you could simply say, “I am done” and hand this to your spouse, but, I have learned that if you do not put your opinion and conclusions into this report, your spouse or whoever reads this report won’t really understand what you think about your current financial situations.
You now have down on paper how much you make a month and how much you spend a month, this in itself is invaluable information to have. This in itself is the core of this report, you now know whether your income is larger than your output. If your report shows you make more than you spend, yet you continue to go into debt, you are not being honest with yourself and you need to revisit your income and/or debt reports (this report is simply paper if you are not being honest).
You need to add a section in your conclusions section about what your plans are for the coming quarter. Doesn’t have to be a long plan maybe just a one liner like, “Stop Using Credit Cards”, or “Pay off Credit Card Debt”, that is fine.
I call my summary or conclusion section as Truths, where I am brutally honest about the mistakes we (mostly I, but we) have made this quarter or in the past while that we have not talked about. My wife reads this, I’m not sure she likes it, but we do end up talking about something we don’t usually talk about. Will this work for you? I have no idea, I offer it as an idea.
For those of you who want to try this out a Powerpoint template of the Big Cajun Man Quarterly Financial Report Template is available here.
Other Interesting Articles
oThe question you must ask now is what else do you want to pass on to the reader of this status report? Remember you should keep the scope of the section to be within the realm of Personal Finance (might not be the best place to complain to your spouse about their hygiene or their ability to show up on time).
A couple of other sections to think about adding to the report might be:
- What is in the Safety Deposit box? We have a safety deposit box that has some important documents and some securities in it, but if you don’t tell your spouse about it (and maybe where the key to it is) how can they get access to it in an emergency? If you have a home strong box, or safe or you have some important documents frozen in some ground meat in the basement, you might want to mention that here.
- Status of your will(s)? Do you have an up to date will? If you don’t you might want to mention that to your spouse, and then go out and fix that problem.
- Retired Debts in this Quarter which are important to remember. Simply forgetting about a retired debt, doesn’t allow you the satisfaction of celebrating the debt’s demise, and it also helps your reader to know that you are working towards actually getting solvent.
With all of this information you have collected there is no way anyone reading this document could say, “I don’t know where we stand financially”, but you might need to create a “Conclusions and Recommendations” section, and that we can talk about tomorrow.
Other Interesting Articles