I didn’t know I was that far in debt!!!!

Back in the bad old days of 2009, I had a nastier edge to me that is for sure.

I have found two new guilty pleasure shows on TV, one is 16 and Pregnant on MTV (that one I can’t even talk about right now, I’ll save that for a separate rant) the other is “I Didn’t Know I was Pregnant” where women explain how they can go 9 months carry a child and then claim they never knew they were pregnant.  What does this have to do with Personal Finance, you may ask? Do you know someone who told you, “I didn’t know I was that far in debt ?”, I know a few (and I am pretty sure I have met others who just wouldn’t admit to it).

How Did I get This Far In Debt?

That is the second question after someone asks once they figure out they are “going under” from their debt load, and the question in this case is the answer. If you are asking that question, but you know  you are in deep financial debt, your question answers itself since you had no idea what was going on in your finances.

Finances need to be watched and monitored (at least read my articles on Quarterly Personal Finance Statements), or you are asking for trouble. If any of the following statements resonate with you, it’s time to look at your personal finance story:

  1. I don’t know how much I spend on:
    1. Entertaining and Vacations
    2. Eating out
    3. My car
  2. I never read my monthly statements on my bank accounts or my investments
  3. I don’t know what day my credit card (or any other bill) is due
  4. I eat out a lot because I don’t have time to cook at home
  5. I use my credit card to pay for everything

There are about 300 more statements like this I can make but let’s keep this list short, if you are not keeping track of your finances or you don’t care, you are going to be asking, “How did I get this far in debt ?“, very soon (if not now). It does not take long to figure out where you stand if you are honest and you have all the pertinent information, if you don’t have it, go get it.

Can someone get pregnant and not know it until the deliver, I am skeptical about that. Can someone get into debt and not realize how bad it is, until it is too late? That I am sure happens more often than anyone would want to admit.

Maybe I have stumbled across the next great TV Show Concept? Don’t think so, Gail Vaz-Oxlade and others already have this topic covered.


Advent Financial Calendar Box Day 11: Home Inventory ?

Advent Financial Calendar Box Day 11

You open this box and it is a list with the following entries:

  1. Sorny 80 Inch Television  Serial Number: ABCDE123  $500
  2. Jewelery    $3000
  3. ….

It is a home inventory of your valuables in case you are robbed, or your house burns down. There really is no excuse not to have a home inventory, and even better if you have serial numbers, model numbers and possibly a picture of each valuable item, because Insurance companies are going to ask for it, if there is a claim.

And you can put your home inventory list in either your home safe, or in your safety deposit box.

Personal Finance Advent Calendar

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Internet Shopping Up Credit Charges too!

More Canadians Buying on Internet

In Canada we enjoy our Internet shopping to the tune of $12.8 Billion and 61% more purchases for products and services than in 2005 according to Stats Canada. An interesting statistic is that the average price for each transaction was $183.00 which seems astronomical to me, but since delivery is usually a major cost in Internet purchases (unless you are buying a product or service that can be downloaded), I suppose this isn’t as strange as I think it is?

I spend a fair amount on the Internet for services and software, and I do buy the occasional “do-dad” on E-bay but I don’t think I have spent $183 on any purchase in the last little while, maybe I need to buy a fur coat to help compensate for this lack of spending?

Oil Companies Care About Environment?

Another article from Stats Canada had me a bit confused as well, evidently the industry that spends the most on Environmental Protection is the Oil/Natural Gas business? The stat that had me floored was:

In 2006, $4 of every $100 invested by oil and gas extraction went to environmental protection

So 4 cents out of every dollar spent goes to environment protection? Wow, that must mean they must be making one heck of a mess? I really don’t know what to make of that number but it is very interesting that is for sure.

Live Now, Pay More Later

With the credit crunch it seems consumer credit companies are squeezing their clients even more, and will increase their late fee penalties, in response to the alleged credit crunch. Does this mean that some of the store credit cards that were already charging close to 50% usury fees on their credit vehicles are heading even higher? Goodness, maybe Loan Sharks will get back into business, and create competition? (someone please tell me what the correct font is for sarcasm). I really wonder what the rates will be for the Usury Pay Day Loan Businesses?


The Shredder, Your Financial Friend

We bought a shredder a while ago because I kept taking stuff to shred to work. I had enough stuff that appears in my house that I do not want to leave my house in the garbage where anyone might look at it, and I also enjoying destroying things.

What kind of things do I enjoy running through my shredder?

  • Most of the credit cards I have kept sending me “cheques” that I can use to make cash withdrawals and get charge 20% interest from the moment the cheque is cashed. These things have on them my credit card number on it, and thus if someone got a hold of it in tact, I would be in very deep trouble. They shred very nicely.
  • Credit Cards that I do not use, I have a bunch of credit cards that I do not use, that I am going to cancel, but I have already shredded them. They shred very nicely indeed.
  • I also shred many old financial documents that I don’t need to keep, don’t want to burn and don’t want to leave out in my garbage either.
  • Canceled cheques and the like as well.
  • Old pay stubs.

I put my shredder in the same class as my safe deposit box as being something important in my Financial Planning, an important aspect of safety and security in finances.


April Personal Spending

The topic of what my household spends money on has been discussed before, but here is as a percentage of my entire expenditures, what my family spent its money on last month (April 2008)

  • Tax 25.24%
  • Recreation 19.68%
  • Groceries 13.11%
  • Insurance 8.88%
  • Mortgage Int 5.55%
  • Utilities 3.94%
  • Auto 3.54%
  • RRSP 3.04%
  • Commuting 2.70%
  • Savings (non RRSP) 2.28%
  • Other 12.04%

These numbers are relatively trustworthy since I use Quicken fairly religiously, and my expenses are mostly tracked there (and we don’t really use a lot of cash in our household).

Financial Scary Things

Recreation being 20% of the money I spent things on last month. That is down to my kids recreational activities (basketball). That is one hell of a lot of money, and that is not registration fees or anything like that, that is money spent on going to and coming from and being at tournaments. That one scared the nickels out of my piggy bank.

Why was Insurance there? I pay for my house insurance in one payment every year, and I had to pay it last month. This month it will be big again, because I have to pay my car insurance as well. I also have on going Life Insurance costs that come up for my wife and myself (that was 9% of my spending).

Commuting, is actually the cost of bus passes for my daughters to be able to go to school, so that is not an insignificant amount of capital spent either.

Financial Oddities

The money I am paying in mortgage interest costs is only 6% of my expenditures in a month? Wow, that is really not a whole heck of a lot in comparison to say the amount I spend on Groceries (13%). I honestly don’t know if that is good or bad, it’s mostly confusing, I guess. Anyone care to hazard a guess, I am open to interpretations.

I am also putting 5% away in savings of sorts, in comparison to my total expenditures for the month. Since you don’t know how much I spent last month (no I am not saying what that number is), it’s kind of hard to figure out if this is a good or bad amount (it actually isn’t too bad, and I have to keep remembering that one).

Financial Insights

There are areas where spending can be curtailed, and there will be areas where spending will stop for a while too (specifically recreation), so that is a good thing. My guess is the Auto side of things is going to go up with the cost of gas continuing to go up as well.  I think also this is not reflecting debt repayments either (as this is not a category in Quicken) except for specific mortgage interest as a cost basis point. I’ll need to look at that more as well.

Any comments or insights from my readership appreciated.


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