Post COVID-19 Budget ?

Now in the 2nd month of the COVID-19 lock down (May 2020) many folks are starting to see exactly where they have been spending money. Those lucky enough to have kept their jobs, but were asked to try to work while at home, now have a good snapshot of their spending habits, while at work.

Now, you should have a good perspective on how much you spend on:

  1. Commuting, gas costs, or mass transit costs. Did you ask for a drop in your insurance rates for your car? You should. What if you chose to take mass transit when you return to the office? How much would you save.
  2. Eating and drinking at work. How much were you spending on a few coffees, and your lunch? How about those Friday lunches out with a few drinks, or after work drinks?
  3. Clothing and dry cleaning and such. You might not have a solid hold on how much you spend here, but you haven’t really been able to buy new clothes (as easily) these days.
  4. Various subscriptions and gym memberships and stuff. You aren’t still paying for those are you?
  5. What extra costs you have incurred not going to work
    • Extra electricity usage?
    • Internet, did you upgrade your access?
    • Did you add new streaming services?

These expenses and a few others I didn’t mention should help you see where your money is going.

What To Do?

With this data you could:

  1. Make a budget for the COVID19 era (for lack of a better term). How much should you spend while you are locked up at home? This may be helpful so you now understand what you are spending money, and where you can save money.
  2. Make a budget for your return to work, and maybe cut this spending in 1/2, giving you more money to live with? When you return to work is it going to be full-time? If not, maybe you need an interim budget and then a return to full-time work budget?
  3. Figure out if working at home full-time, part-time or occasionally might be a thing for you? Many folks like working at home, I enjoy the interactions of an office, but you at least have a view of how this might work.
  4. See how much money you have saved and maybe put that on your debt load?

Something for you to ponder while you are at home not spending money.


Work Less and Pay Less Tax ?

This was written a few years ago, but is more a discussion of the “I don’t want to make more money, so I can pay less tax” argument that I keep hearing. If you make more, your income is not completely taxed in the new bracket, only the money in that bracket.

A discussion arose about whether as a “rich Ontarian” would you work 20% less to avoid the new “tax on the rich” that was proposed on the Liberals in their ill-fated budget last week ? Jon Chevreau’s tweet seems to have started the discussion:

I think if I was close enough to the $150K “filthy, stinking rich bastard” line (as delineated by the Liberals budget) I wouldn’t worry about it too much, although I find it interesting that Jon’s tweet stated: "If I were a high-income Ontario citizen making much more than $150K/year...", what do you mean IF brother? JC, you are not fooling anyone!

Vacation Choice ?
Which is better ? One Day off a week or whole months off instead?

Getting back to the discussion at hand, if I decided this was the strategy I’d want to take to “stick it to the tax man” and stay in a lower (provincial) tax bracket how would I do it?

The obvious choice is to simply take every Monday or Friday off and thus make every weekend a long(er) weekend, however, would my employer respect my 4 day work week? My suspicion is no, they would simply expect 5 days of work out of my 4 day work week (at least if I worked in the Private Sector).

I would prefer to take the extra 50-ish days vacation (thus another 10 weeks of vacation), because then you can take entire months off. I have found that when you take an entire month off, no one expects you to do any work during that time period. You can then take another month off, along with all your regular vacation!

Do I think this is a good idea? Taking off time to lower your income, so you pay less tax? I think I’d try to make more, so the tax didn’t hurt that much, but that is only my opinion. Many firms do allow for “income averaging” where you can take unpaid leave of absence, but have the loss of income averaged over the whole year, which would be the option I would choose (if I was to want to take off 20% more time).

What are your thoughts?


What is Money?

Another one from my archives that I do like, as it goes back to the things I like to write about: My Family and Money.

Michael James posted yesterday an interesting article about inheritances and how money can disappear or dissipate at least from generation to generation. I commented on it and then spoke to Michael James about it (while watching a Little League baseball game).

I see problems with what a lot of people view what money is to them and without a good understanding of what money’s value is, and what it actually means to you it is very easy to spend it without thinking about it.

The Value of Money

Scenes Series $20 – front / Billet de 20 $ de la série Scènes – recto

Now that is Money to Me!

My eldest daughter and I have been having talks (OK monologues mostly from me) about her spending habits now that she has a part time job. I have tried to get her to understand that just because you earn money, does not mean you have to increase your spending to compensate for this (yes, I know sometimes parents should listen to their own advice too). She doesn’t seem to understand this point, or forgets it a lot, but I think I made a good point with her a couple of days back.

I still have access to her bank account, so I can see where she is spending her money (she doesn’t usually carry cash, she uses her debit card, and that is another problem, but also for another post). I saw that she had spent $6.95 at Pizza Pizza (presumably for lunch), I remembered she had worked a very long shift at her job the previous night and when I drove her home, she complained about how her feet and back hurt, so I tried to use this to explain the value of money to her.

I pointed out that, the lunch she bought and snarfed down without thinking about it, was almost an hour on her feet, scanning food in the express line at Loblaws (where her job is). Did she really think her lunch was worth the hour of standing, scanning products and listening to customers either complain or ask questions about what she was doing? I hope this helps her understand the value of money, I am not sure, but if it causes her to think, before she spends, that is all I can hope for.

I remember when I was younger, and I had a paper route, I got paid 4 cents a paper, for a paper route of 35 papers, for 6 days a week (I got paid more for Saturday paper), but at the end of it, I made about $8.40 a week and then maybe some tips from my customers. I could have easily gone to a movie every week, but luckily I was socially inept, and really cheap, because I knew how hard I worked to make that money, so I didn’t want to just blow it on the first thing I saw.

Wonder when I lost that?

How do you value money? Do you see the work that went into buying that iPOD? All comments appreciated.


Bus Pass or Arithmetic Comes to Commuting

Given I am now the Big Cajun Bus Man, I figured I’d discuss an interesting (if not confusing) discussion I had with a co-worker about why she might only use tickets to ride the bus (even though she rides it to work pretty much every day).

The arithmetic of the bus in Ottawa is quite simple:

  • To ride an express bus costs $4.25 cash (exact change only please, and they don’t really like bills much either).
  • You can get on the same bus for 3 bus tickets which is a total cost of $3.90
  • If you have a pass, which costs $116 for the month, so if you assume 22 days and two trips a day the approximate cost is about $2.70 (rounding up).

Why would anyone use tickets alone? If it is someone who only occasionally takes the bus, then tickets are much better than ca$h. However, if you are travelling for more than 15 days (round trip), tickets no longer make a lot of sense in terms of spending.

Another more compelling reason  I got from a young lady that I work with is that if she had a past, she would take the bus everywhere and stop walking as much (and thus would not be in as good shape). An interesting argument (much like my f(Convenience Constant) value from Big Cajun Bus Man post), but the fact that she does take the bus every day to work, means it isn’t a valid argument. She has seen the light and will be getting an ECOPass which is even better than a monthly pass because it is a yearly pass, where you end up paying for ten months on the bus (thus 16% cheaper).

Buy a pass, bite the bullet and start saving some money, oh and if you buy tickets or pay cash, you can’t write off the price of your Bus riding either (you can go with a pass).


Work Life Balance

So back I go to Ted.com to find an interesting piece by Nigel Marsh about Work/Life balance. I have ranted about Work/Life balance many times, and I think I am doing a better job about it, but Nigel’s fairly blunt presentation I think is quite refreshing to hear.

Work-life balance, says Nigel Marsh, is too important to be left in the hands of your employer. At TEDxSydney, Marsh lays out an ideal day balanced between family time, personal time and productivity — and offers some stirring encouragement to make it happen.

I like the quote about how no company is really caring about you, they care about how much money they make, so keep that in mind.


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