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The Financial Fitbit

Mrs. C8j got me for Christmas, a fitbit, which is a nifty little device that tries to track how much physical exercise you have been doing (e.g. how many steps you take, how many stairs you climb, etc.,) and I do like it a great deal. She paid extra and got me the “charge” version, which attempts to track my heart rate as well, and so far it is working quite well. Wouldn’t it be great to have a financial fitbit ?

Surprisingly a few other friends (including Michael James) have versions of this device to track their movements, and there is an ability with the device to set up “groups” where you can compete with each other, to see who takes the most steps or other parameters, and this got me thinking, that maybe a Financial Fitbit might be an interesting device (yes, this is from the man who brought you the financial shock collar).

The Fit Bit Charge

The Fit Bit Charge
(from Amazon Canada)

The device could work in tandem with the Financial Shock Collar, however, let’s look at how the device might actually work:

  • Track spending while you spend. This could be tricky as it should really track all types of spending (cash, credit cards, debit or whatever), and give instantaneous reports if you wish.
  • Have possible limits set up on it, so that you don’t overspend for the day.
  • Downloading of data directly into whatever financial tracking system you’d like like Quicken or Mint

Financial Fitbit Features?

I realize that with smart phones and such, this might do better as part of a smart phone or better still as a part of the touch payment capabilities that are being built into them. Will our smart phones effectively become this kind of finance tracking device? Might not be a bad idea, but I doubt you’d want to share this with your friends in a competitive group, unless you want to play, “Who is the cheapest?” (I know who might win that competition with my friends).

Any other features the Financial Fitbit could have?

 

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5 Ways to Optimally Use Your Pay Raise

In the next little while many folks may be getting a pay raise and as a service to you folks here is a short list of some wonderful ways to optimally use your new pay raise.

You do know my great love for lists, so I hope you appreciate this as much as I did compiling it.

  1. Forget that you got a pay raise, use your current budget and use the extra money to pay down debt. Did you need this extra money to live on? I doubt it, so why not get yourself out of debt? Avoid Lifestyle Creep and live within your means.
  2. If you have automatic payments to your Mortgage and/or RRSP ( or TFSA ), increase them to reflect the amount of your raise (if you got a 4% raise, then up your payments by that amount as well). This way you are at least getting ahead more. The same should be done if you have young kids and you are putting money away in an RESP for them, more money NOW, means less pain later.
  3. If you haven’t started saving for the future, now is the time, and now you have extra money to do it with (unless of course you still have debt, if so go back to step 1). Get that RRSP going or a TFSA and your future self will thank you profusely.
  4. If you must “celebrate” keep it low-key. Vince Lombardi told his players, “When you get into the end zone, act like you’ve been there before.“, same thing with your pay raise, no reason to go bananas and blow your money, you deserved it, you worked hard, now keep it!
  5. If you feel you must go out and spend, make it on something that will help you be a better you , like a course to help your career, or even a gym membership to help stay in shape. It’s great to have all this money, but if you are sick or unhealthy it isn’t going to mean much. The educational aspect of this is the right way to go. Help expand your horizons by expanding your mind.
  6. Here is an extra one (for no extra charge) for those who aren’t really driven by money, but more by quality of life questions: if you are making 4% more (or 8 days more pay )how much less can you now work and make the same money (I mean days, not effort on the job)? If your firm allows you to take unpaid leave, have you got yourself a few more days off that you can take? It’s trite but nobody says in retirement, “I wish I was at the office more days”.

I am sure I have missed many other great ideas, but remember hopefully this is the first of many pay raises, so don’t go berserk spending or celebrating, act like it will happen again (soon).

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Best Way to Save Your Money

I borrowed the concept from another article, but the idea is so flaming simple, I think it does need to be repeated.

The best way to save your money is to not spend it.

The simplicity of this is clear, but most folks just really don’t get it, do they? I have railed on about the Semantics of Money, but let’s get back to the basics on this one, and here are some simple questions I’d love to hear some opinions from my good readers.

Also very True

Also very True

Someone goes out and spends less on some interesting piece of stuff (maybe it was planned), is that person more likely to take the unspent money, and spend it on something else (due to the halo effect of saving money on the previous purchase)? I have caught myself doing the same thing, “I saved money, so I can splurge on something else”.

Conversely, does someone who decides not to buy something that was planned, less likely to have that kind of “halo of savings”, and thus less likely to splurge the “saved” money?

If someone spends time trying to figure out how much can be saved buying something, why isn’t the most important question, that is usually not asked,  “Do I need this?”. Spending less money is not saving your money, it is just using less. Saving money, is keeping the money in your pocket (or your bank account).

Have you caught yourself saying (or heard a friend say), “If I buy this on sale, I can get two of them”?

Have you heard someone else say, “I decided not to buy that thing, but because of me not spending the money, I’ll go buy something else”? I guess (as Mrs. C8j pointed out) that if you decided not to buy a $5000.00 TV, and decided to celebrate with a cup of coffee and a donut, that might not be too bad.

Which of those previous two statements are more likely? I’d like to think that the second one is more likely, but I must admit, I have caught myself doing the first statement (far too bloody often). Does impulse spending compared to planned spending change the decision point?

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What is Lifestyle Creep ?

A while ago, I asked Do You Make More than You Did 5 Years Ago . I got some interesting responses on the question. Let us delve a little deeper into what I call Lifestyle Creep ™ which seems to be one of the things that may cause the economy to fall over, all by itself.

What do I mean by lifestyle creep? In my interpretation, it is the same as “Feature Creep”, a term used in High Tech Development teams, where someone keeps trying to shove more and more into a release of software or hardware, thus slowing things down, and eventually making the whole thing unusable. This scenario is pretty much what happens with young folks these days:

lifestyle creep
You Deserve this don’t you?
  • Graduate with a debt load of student loans.
  • Still need to start saving for a house, and things, because that is what you need to do
  • You need a car to get around
  • That furniture you have is really crappy, after all you aren’t a student any more
  • The laptop stinks, it’s the same one from school, and it isn’t even supported any more
  • Must need a Big Screen TV
  • Good High Speed Internet access is important
  • Need to go out with friends, after all you aren’t a hermit, life is short let’s have fun
  • Man, this work thing is hard, must need a fun vacation
  • Getting married, you can’t scrimp on that, after all you only get married once (hopefully)
  • etc., etc.,
Save up to 50% on life insurance.

Christmas Wishes from the Past

I seem to do this a lot, so here are my Christmas wishes from years gone by:

How Does this Add Up So Quickly ?

Isn’t it easy for all of it to build? Before you know it, you are now paying off student loans, credit cards, car payments, and rent and thus you have no money to save with any more, but you have great earning potential, you’ll get a raise next year, and it will all be good.

Speaking as a 59-year-old, Lifestyle Creep ensures you never make enough to live up (or down) to your lifestyle.

Image courtesy of  foto76 / FreeDigitalPhotos.net

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Financial Anarchy Day?

Hollywood’s latest retread of the idea of one day where everybody goes completely nuts and no laws apply is a happy little movie called The Purge: Anarchy (it’s been done a few times, by the Twilight Zone, Star Trek and other similar genre of movies), but when I saw that if I put on my Financial (rose-coloured) Glasses, I realize that we have many such days every year.

Financial Spending Time!!!
Financial Anarchy Let’s Buy it All!!!

What could I possibly mean? There are days every year where all financial rules seem to go the hell out of the window. What days could I possibly mean?

  • Black Friday (the one that is the Friday after American Thanksgiving)
  • Cyber Monday because Black Friday isn’t enough for this pre-Christmas orgy of spending
  • Christmas Sales (also known as December)
  • Boxing Day (the day after Christmas)
  • End of Year, I have extra money, better spend it (December 31st)
  • St. Swithin’s Day
  • Opening Stores after a major Pandemic??
  • Back to School (also known as the summer)

Yes the last few are  just me being my normal sarcastic self, but if stores, banks and credit card companies had their way, we’d have Financial Anarchy every day of the year.

What is needed in the Financial World are more days where the Financial Rules are followed. How about a Thrifty Tuesday every week? A fun Financial Friday, where we make sure all our bills are paid? Maybe make January 2nd and July 2nd Financial Planning Days?

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