Last year, due to all of the contract weirdness I ended up with some cash bonuses which sent me into another bracket. At the time I decided to put a chunk of change into my RRSP to offset the increase. Knowing that I was taxed heavily, I was determined to get some of it back at refund time. A few months ago, prior to the RRSP deadline I was nudged by the bank to borrow to get ahead. The sold me on the low interest rate. In my mind I figured that using my refund I could dump the money into paying back what I borrowed. I could swing that! I’d be getting more money back from the government and boosting my RRSP with minimal pain. At least, that’s what I thought. Months later, I’m sort of cursing my decision. I followed through, to be sure. Still, the refund wasn’t enough to cover what I borrowed: I’m still paying that bit of debt off. It has been squeezing my budget for the past few months. My goal is to erase that borrowed debt as fast as I can so I’ve been sending fair bits to it, but it’s made me uncomfortable. Borrowing to get ahead? Sucks! You have to pay things back eventually. The rewards aren’t worth the gut issues.
Category Archive: finances
Heating patterns
I just got my gas bill for the past month. It’s ridiculous. I don’t know how I let it get to such a high point. Over the month I’ve had it set to a steady 66°F/19°C. It’s not the warmest setting, but it’s enough to warm the place up when things get too nippy. Perhaps I could have set it lower. I mean, over the past few nights I’ve been waking up in the middle of the night covered in sweat. You’d think that would be a clue that I don’t need that much heating. Also, I’m out of the condo most of the time anyway. Work, improv, and running take me out of here often enough and there aren’t any pets here that might require some heat. I only have plants here, and I’m almost certain they can tolerate a bit of chilliness.
The bill has a bit of my heating history. From what I can see, most of the time my gas bill is really low. January is my highest month, followed by February where I only seem to use half as much gas as January. Last year, by March, the heating was off and I toughed things out. By that time spring weather was starting to emerge so I was happy enough to just put on a sweater when I needed to. Fast forward to this year, and it seems like the same pattern is emerging. I can almost see the psychology behind it all.
- With January being really cold it’s far too easy to turn on the heat and just let it run.
- When I get the bill there’s a moment of “what the hell?!” That, in turn, causes me to use half as much heat in February.
- By March I feel like an ace at toughing out the cold, so I end up switching off the heat for the whole month.
I still recall Hui stating something along the lines of saving money shouldn’t mean having to be cold. I guess I agree. All the same, I know what my tolerance levels are. If I can save a few dollars and still feel like I’m not freezing in here, then all the more power to me. I’m happy enough to be curled up here under the duvet.
Examining the grocery bill
I honestly need to be a little bit more careful when I go grocery shopping. The past few times I’ve gone I’ve ended up buying so much food. You’d think I was preparing for some big approaching natural disaster. OK, so maybe that’s an exaggeration. If I think about it, the last time I went grocery shopping was right after Thanksgiving. Still, was there really any reason me to fill up two of those black PC bags and a green bin? Really.
Perhaps it’s because I’m still in that phase where I’m stocking up on basics. For example, there would be no reason for me to buy olive oil every time I go out, right? That was $5.99. Meat is pretty expensive, too. Luckily one tray of meat tends to last for a few days. I bought bacon and separated it into 3-strip packages prior to freezing it. I don’t eat that daily, so it’ll last for around 3 weeks. Have you tried to buy boxed fish lately? I got a box of High Liner fish fillets, and that cost me $11.49. That’s ridiculous! I think I recall that being cheaper in previous years. Or perhaps I’m thinking of the really oily fish cuts–those tend to be cheaper. Even if they’re cheaper, it doesn’t mean I want them. A few weeks ago I bought a box of English-style haddock fillets. I’m sure that was cheaper than this box. Thing is, holy crap, that fish was ridiculously oily. I had to blot the pieces prior to eating them. Even after that, I just didn’t feel great eating them. In that case, the extra cost is worth it.
I wonder how much this new healthy streak is affecting what I’m getting. Remember how I was talking about buying a lot of fresh fruit before? I got carried away this time as well. Maybe it’s for the best. Some of the fruit I bought last week went bad and I had to bin it. I told myself that next time I get fruit I better work hard to eat it all before it goes to waste. Well, with that much in the fridge, I better make sure to get in the recommended servings of fruits and veggies or else it’ll be like I’m just tossing cash to the wind. Part of the solution is knowing what spoils quickly, and to plan to eat all that as soon as possible.
So, OK. All things considered, I guess I don’t have that much useless stuff on the list. Everything is stashed properly and should hold long enough for me to get to it. It’s part of the price of independence, isn’t it?
Rating the rates
I think I have this mortgage thing settled without much effort. Really, it’s kind of like there are a couple of people out there that are doing the dirty work, leaving me to just decide what the best course of action for myself is. There’s one offer out there tied to the builder and a big bank that’s a rate that’s actually quite unbelievable at this point in time. I tried to take it to my bank this morning to see if they could match it, but alas no luck there. From the general consensus of colleagues and friends, it looks like the rate that I was presented with is indeed nothing to scoff at. I just need to get my documents in order, but it looks like I’m pretty much set.
Even though I didn’t really do much work in terms of scouting out a rate, I actually did spend a little bit time educating myself on the numbers behind rates and what banks might do in the future. People can make educated guesses but ultimately it’s hard to predict what the Bank of Canada is going to do. Consider the past few months. I know a few people that decided to go with a variable rate. That all made sense because the banks and what not were offering rates at the prime rate (currently 2.25% at many banks) minus some small percentage. I guess the banks were really trying to encourage people to get mortgages. All of a sudden though, the variable rate became prime plus a certain percentage. At this time the rate seems to be prime + 0.6%. Maybe the banks are reacting somehow and trying to cool things off. If I were to get a variable at this time, it wouldn’t seem like such a great deal once the prime rate starts heading back up when the banks recover.
So, all right, I think I’m going to settle on a fixed rate. Traditionally those rates are higher because you’re kind of paying a premium for that security. Historically, variable tends to save more, but in my case I think the timing is off. The whole prime plus scenario gives me pause. Given the fixed rate I was offered, all prime would need to do is go up by more than 0.5% for a prime + 0.6% rate to go above the fixed rate being held for me. I have to decide: should I bank on the fact that prime will go up within the mortgage term?
Yes, what about the mortgage term? When you talk fixed rates, most banks tend to give 5 year terms. Those seem the most common. Thing is, is that ideal for my situation? Five year rates tend to be higher than shorter terms. In general, the longer you go the higher the rate because of the uncertainty factor. Do I plan on living in that condo for all five years? If I decide to move and break the mortgage early, I’ll have to pay a penalty. The rate I was quoted is for a 3 year fixed term. In all honesty, that seems to work perfectly for me. If at the end of three years I still plan on living in that condo, maybe the variable rate will be back to a prime minus situation. Who knows?
See! It’s fascinating stuff! It’s a numbers game with a bit of luck and prognostication involved. There are some cases where a little bit of knowledge can be detrimental. In this case though I almost feel like having this bit of knowledge is like a bit of armour. It’s giving me a bit of confidence in knowing that I won’t be making this important decision blindly.
The pending clamp down
Generally, I’m not the type of person that’s an extravagant and mindless spender. Almost obsessively, I log into my bank’s online site to check how my money is doing. That’s not to say I’m a tight wad, but I at least try to be responsible.
Now, with possession and closing really creeping up close, it’s finally dawned on me that I really need a good chunk of cash in order to make it through that period. There are so many fees and incidentals that I have to worry about. I wonder, why didn’t all of that ping on my radar much louder up until now? Will I be prepared enough to handle anything thrown my way? I’d like to think I am, so I don’t plan on losing much sleep over it. Still, I acknowledge that I am going to have to really clamp down on spending.
I’m sitting here listening to the radio, flipping between an oldies and a new rock channel. I’m taking this opportunity now to feel relaxed because I know that higher stress times are nigh. I hope that they pass without any major disasters because I can’t stomach the idea of being financially up the creek without a paddle.
Tentative to confirmed
I came home to find a registered letter from the condo builder. I knew it was possible that the letter would contain good news, but I knew that it was even more likely to contain something more bittersweet. Seems my hunch was correct. For the longest time, talk of the possession date has been prefaced with the term “tentative.” With this letter the term has now changed to “confirmed.” Great! Right? That’s all well and good, but the actual quoted date has changed from April 8 to May 25.
Unlike the last time the date changed, I’m actually quite at peace with this change. This move means I’ll have another two pay cheques banked by this new date. I’ve mentioned this as well last time: it allows me more time to gather more resources. I’ll have enough to post a 20% down payment, but is that a good use of money when I need cash to pay for appliances and furniture as well? We’ll see.
Once again, I’ve reset the clock on the widget to the right. Right now it’s saying “Only 5 months and 7 days left.” All in all, that’s not that long from now. I’m still psyched–none of this will dampen my enthusiasm. 2009 will be an awesome year.
Stay locked, damn it!
On the way in this morning it started to rain a little bit so I turned on the wipers. That’s the point when my day turned sour because all of a sudden my car problem started occurring once more.
Damn it!
The car was doing well for the past week or so. I wasn’t having any issues with the lights at night. I didn’t attempt to use the wipers because frankly I was afraid that the problem would reappear. Go figure that it took a bit of rain to get me to actually test them out.
On the train, all I could think about was how draining this issue was. I’m spending a lot of energy just taking the car in to let the mechanic have a look. My mind was going through some tough scenarios. For example, what if the mechanic just can’t find the issue? I can’t risk driving at night in the wintertime with the problem there. What if the lights cut out and the wipers stop working during a storm? That’s not only a safety hazard to myself but also to everyone around me. In my worst case scenario, I’d have to look for another new/used car. That’s all well and good, but damn, can I even afford to go down that route? Those financial experts on TV say that a person’s debt load should not go over 32% of the person’s net income. Well, with my mortgage on the horizon I don’t think I can reasonably swing making car payments with going into 50-60%. That’s certainly no way to live, is it? I was feeling downright sick to my stomach thinking about how all of this will relate to my income. Sure, I can afford a car, but if it means relying on Mr. Noodle for breakfast, lunch, and dinner for a good long while then there just isn’t any sense in doing in.
Oh, but of course, there’s no point freaking out about hunting for a car just yet. I have to wait and see what the mechanic has in mind. I’m certainly still have faith in his abilities. However, this type of thing may be beyond anyone’s ability. That kind of scares me.
An $18.5K mistake
Jesus. Someone’s head need to roll for this one.
I haven’t gone out shopping for a few weeks now so I thought it’d be good to trawl through the mall and see what I could come up with. I picked up a pair of shorts at the GAP. At the cashier I pulled out my debit card, had it swiped and proceeded to punch my numbers in. Moments later I got a notice that the transaction was declined. Strange. So the cashier swiped it again and I punched in my PIN with a little extra care. Again, it came back declined. I thought, “Whatever…” and just pulled out my Visa. When it came time to sign, as I hovered the special pen above the electronic signing thing, the screen proceeded to write something in the box even though the pen made no contact with the screen. What the heck? I tried writing in the air, and it dutifully mimicked my movements. That doesn’t even make sense! Maybe I was transmitting some weird aura through the pen. Ha! Apparently I can channel my energy through a stick.
Well, eventually we got the transaction done. Due to the freakiness with the signing thing, I chalked the debit issue up to a faulty machine. I ventured over to a branch of my bank though to just make sure nothing kooky with my card was going on. I got there and swiped my card. When I entered my PIN everything turned out alright. So hey, I just left and went about my shopping duties.
Over at Old Navy I found some khakis and decided to try paying for it my debit once more. They had the same type of machine I saw at the GAP (no surprise since they share a parent company). I swiped and put in my PIN, but once again I was declined. Now I was worried. Willing to blame the machine type I went to HMV, picked up a few CDs and tried to use my debit card. Again, I was declined. The keypad indicated that I had insufficient funds. The keypad was different from the other two places so I knew that this was serious.
I hauled ass back over to the bank and had someone check my account. The teller told me that I currently had a negative balance. What the hell?!!!! She asked if I made a cheque for around $20K to someone. I responded with an emphatic “hell no!” My mind started going through various scenarios as to why something like this was happening. Was I being defrauded? Did someone hack into my account? I was in a panic.
Oh, then I realized that I had written cheques for $2067 or so for the condo upgrades. I wondered if it was related. The teller came back with (probably) a superior. They came with a print out of the cheque that was cashed in. There was nothing wrong with my cheque. Apparently though, someone made an egregious data entry mistake. Instead of inputting that $2067 should be taken out of my account, they input $20607.
Bloody HELL. That’s a mistake worth $18.5K. Obviously that’s money I simply don’t have. As a result, that mistake send me into overdraft. I was unbelievably frustrated at that point. Unfortunately for me, they said that the mistake was something that could only be rectified directly at my home branch. My home branch has horrible hours and is only next open at 10 am on Monday. So, I’m stuck waiting on this ridiculous issue for 2 days until I can go in person.
When I got home, I tried calling customer service, but they told me the exact same thing–I had to go to my branch. Damn it, damn it, damn it. Something like this should never have happened. Everyone agreed with me on that point. However, now that it’s done, it’s simply ridiculous that I have no other avenues to get the situation rectified. Instead, I have to inconvenience myself by missing a few hours work to get them to fix their mistake. Maaaaan. What the hell is with that?
Right now, I’m trying to stay relatively calm because really there’s no point in expending energy on it since there’s nothing I can do. It’s just hard to not worry about it. I’m the type of person that keeps a close watch over my balances. I try to keep things under control. So it’s really killing me that it’s out of my hands for now. Well, I guess when I come in on Monday I can see if they can provide some sort of compensation for such a stupid mistake (where are the damn checks and balances?). However, I certainly won’t hold my breath. Still: I want justice! 
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