Canadian Personal Finance Blog

The Boy Scouts motto is very topical for this week in my life, you should always be prepared (or as prepared as you can be) for the “knuckleballs” that life may throw at you.

Click, Click, buzz….

This was the noise that my wife’s van made on Wednesday when I went out to start it. It kept making those noises even after I had taken the key out of the ignition, which really freaked me out. Luckily I called my mechanic who said it sounded like one of the cells in my battery had gone and my 12 Volt battery was now a 4 Volt battery. The little I know about electrical components in cars (especially a lot of the computer based stuff) this is NOT a good thing, and a bad battery can cause damage to a lot of VERY expensive components, so I was very worried what might come of this.

The nice man from the CAA showed up at my house, asked what year my car was and what the problem was. He was confident it was the battery, because he told me that any time he rolls up and it is an ‘01 or ‘02 year car that won’t start, if it still has it’s original battery, it is the battery! Luckily we were able to jump start the van and it stayed running. 

I was able to drive the Van to my mechanic who did a quick diagnostic on it, to make sure nothing in the control systems had been fried, replaced the battery and $250 later, I had a functioning van and a new battery.

Given I am living on my severance, this was not an expense I needed or wanted, but unfortunately it needed to be repaired. 

This Week in Personal Finances

My wife and I sat down and mapped out what to do with the lump of money we have so far from my severance (another block appears on January 1), the following financial actions were taken:

• All bills for this month were paid (can’t hide from those). Pay things that cause heat to be turned off, lights to be turned off and water to be turned off (i.e. The Rule of No Turn Off Bills)
• All short term debt vehicles were paid off (credit cards, and an unsecured line of credit), thus leaving only the Mortgage as a debt that must be serviced. This was a decision that may or may not be correct, simply servicing the short term debt and holding onto more money now, may be the right decision, but remember Debt Makes Me Sick, which is the reason this decision was made.
• Remaining moneys were dispersed to a Short Term savings vehicle (money market fund), a Higher Interest Savings account (shorter term savings) and an amount was left in the chequing account (you remember the one that has already had money defrauded out of it).

Enjoy the Autumn folks and have a great weekend.

Indeed this is approximately posting number 1000 for me, and after over 4 years of writing, I am beginning to think that I still haven’t really scratched the surface when it comes to home finance, personal financial issues and investing from a consumer’s perspective. 

Will I keep going? I am not sure, it seems most bloggers stop suddenly and just disappear, usually caused by the pressures of life or just disinterest. I am hoping to keep going for a while longer.

To help celebrate posting number 1000, here is a “Best of” list from me to my readers:

Personal Financial and Planning

1. Free Banking
   One of my favorite topics on how to get your bank to give you FREE banking for a while at least.
2. Quarterly Personal Finance Status Report
   A way for couples to keep each other up to date on their financial status. 
3. Debt is Like Fat
   Another way to look at trying to get out of debt.  
4. Debt Makes Me Sick
   A frank article on my feelings about debt.  
5. I Should Divorce My Wife?
   An interesting point of view from the tax side of things. 

Children

As most of you know I have kids and I write about their effects (affects?) on my financial life.

1. Real World Example: Kids Allowances
   Where I outline a system to ensure kids get their allowances on time. My kids were pretty mad at me until I implemented this system, and as a bonus, I am still watching them (financially).
2. Kippers
   Not just a salted fish eaten for breakfast in the U.K.
3. Hidden School Costs
   Not just for universities are there hidden costs in education, public schools rake a lot of money off parents too.  

Investment

1. Einstein: The Rule of 72
   Understanding what a doubling period is, and how the rule of 72 can help you with this concept is important to the start of your investment plan.
2. RRSP or Mortgage?
   Should you invest or pay down debt, always a good question to ask. 
3. Top 5 Investing Mistakes of my Life
   This one hurts to read EVERY time, seeing how much money I lost.  

Parables

In personal finances sometimes a lot can be learned in parable format.

1. Parable: Money and the McDonald’s Play Structure
   How can my son getting stuck in a McDonald’s play structure have anything to do with money? Read and you will be amused to see where I went with this story.
2. Best Financial Advice Ever Given
   Outlines a parable my Dad told me when I borrowed a large amount of money from him. I have used this parable many times myself.
3. Don’t Pass it to the Other Team
   How does the Carleton basketball coach have anything to do with finances? Read and you’ll see a long stretch.
4. The Dangers of Advice
   How I inadvertently gave very bad financial advice to a dear friend. 

Humor

I enjoy a good laugh, mostly at my own expense and here are some of my favorite personal finance posts with a humorous angle.

1. Always Have A Target
   OK, yes, my humor normally drops to toilet humor, but this one is funny too! 
2. God and a Stock Broker?
   This is funny, except last week.
3.  Why Banks are always funny
   Going into banks, talking to banks, interacting with banks, etc., you had better have a sense of humor, because if you don’t you’ll go crazy.
4. Get Off the Throne
   A perspective on the Throne Speech, that Stephen Harper might not have appreciated. 

The Fed taking over IndyMac in the U.S. made me wonder about whether this kind of thing can happen in Canada. Of course the simple answer is no, it is not likely to happen, however, it is still amazing that this kind of financial failure can happen in this day and age.

Evidently this lending institution has been in trouble for a while, and the FDIC stepping in was inevitable, but seeing the panic’ed clients standing outside of the Bank Offices was scary (to me). Evidently there are over 10,000 people who have more than $100,000 in the bank (from CNN), deposits are only insured up to $100,000. The other question is, how much is this going to cost the U.S. government? Numbers bandied about on the weekend were $7-8 Billion, which isn’t cheap!

CNN was abuzz the entire weekend about this, and analysts were on all asking, “How could this happen?”. The simple answer is greed, and incompetence, someone tried to make money the wrong way, and no one stopped them, as simple as that.

The U.S. Government took the extraordinary step to assure folks that Freddie Mac and FannieMae will both remain solvent. This whole thing sounds like it is going to get a lot more interesting before it all resolves.

For immediate release

The Board of Governors of the Federal Reserve System announced Sunday that it has granted the Federal Reserve Bank of New York the authority to lend to Fannie Mae and Freddie Mac should such lending prove necessary. Any lending would be at the primary credit rate and collateralized by U.S. government and federal agency securities. This authorization is intended to supplement the Treasury’s existing lending authority and to help ensure the ability of Fannie Mae and Freddie Mac to promote the availability of home mortgage credit during a period of stress in financial markets.

Makes you feel all warm and cozy doesn’t it?

Why do I see that scene from “It’s a Wonderful Life” being replayed when folks were trying to get their money out of the Bailey Savings and Loan? Monday should be an interesting day.

Anyone else care to add their comments or opinions, I am eager to hear what my readers think of this.

TSX Forward to the Past

Thanks to the latest bit of market jitters, the TSX composite index closed Friday at where it started 2008 (on January 2nd). This means if you had an index fund for the TSX composite, you are breaking even this year.  Guess it could be worse, but it has been a topsy turvy kind of year on the markets.

Banks are certainly taking a beating, and I await the moment to get into them more (my opinion, not a recommendation). I note Nortel is below $7 but BCE is managing to hold it’s price above $39.00 for now as well, so that is a good thing too. Bombardier should be interesting to watch as well, maybe Larry MacDonald will have something to say about that :-).

Tomorrow: A review of the book Smoke and Mirrors 2008 by David Trahair

Market Crash?

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).

How Much Do I Make?

For those curious about the scads of money I make doing Financial Blogging, well check over here at my working diary site: How Not To Make a Fortune on the Internet. Yes it’s a slow day for topics (if you haven’t guessed).

Happy Birthday Personal Finance Blogger

Michael James on Money a member of the N.C.F. B.A. is celebrating his birthday today, go on over and wish him a Happy Birthday.