Philosophy on sensible spending

 A few months back, I saw a diamond painting. It piqued my curiosity because I didn't know what is that. Who else is better than Google to answer such a question?

One thing lead to another, and I am on the Amazon website and interested in the diamond painting kits. I bought one kit. The kit was going to come from China. It took about two months to get it. (Oh, and several emails to the seller). By the time it arrived, my interest changed, and I was into propagating house plants! So the kit is still waiting for my attention. 

I spend money on things to do crafts without much thinking. If I was giving a bit of time instead of buying on impulse, I wouldn't have bought that to clutter my table. It was not a needed purchase. I could have thought of craft items I already had, like embroidery thread, acrylic paints, card stock, beads...  

That is the problem with needs and wants. "Want" has no limit. Being content with what I already own is the solution. 

I wanted to buy Blundstone boots when my daughter was looking at them. But, I have nice boots already at home, which is barely used last winter. It is very warm and comfortable. A new and expensive boot was not a needed thing. So I didn't buy new boots and was happy with my decision.

The spice rack with all the cute containers at Costco was pretty. My and hubby wanted it! But I already upcycle many of our plastic and glass bottles to store the spices. I have a good collection of similar containers now to keep things pretty too. Those containers came with spices we bought prior. some were glass containers of pasta sauce. That brings the second philosophy of finding multiple purposes for one thing. It will go with the 3Rs too. 

Do you find any philosophy to tame unnecessary spending? 

Bindu

What makes you happy?

Ever read the book, "Your time or Your Money"?

It is a book by Vicki Robbins. Most of the Financial Independent bloggers have mentioned about that book. 

I read it several years ago. It came to mind just today again. This book makes us think about our purchases based on the time we have to work to get that material possession. 

If you hate your work, and spent long hours at work to have your stuff, then think about it. Time is fixed. Every one get 24 hours a day and 365 days an year. What you want to do with this time? If you are working 80 hour weeks, you have to reduce your time to do other things in life. It can be spending time with your love ones. It can be no time for exercise. It can be less time for the fun and interesting things to do with life.

So, is that 80 hours of working really worth it? 

What you want to do with life? Like to have freedom to do more fun things and less material stuff  or doing more at work to accumulate more stuff in life?

This book made me think of how many hours to slave for work to buy a not so needed expensive dress.

I highly recommend reading this book. It will tell you how you "money is something you choose to  trade your life energy for" 

What is important to you?

What makes you happy?

Is it worth spending your time to work more hours to have more stuff? 

Do you like to work or do you like to spend your time doing something else?

 

Bindu

December 2020 Passive Income

2020 is over. Yes, we are still under lockdown. Covid 19 still controls our daily lives. 

I stayed home from March to June. I received CERB. Stayed on top of finances and didn't accumulate newer debts. 

That being said, let us look on the December passive income. 

The holidays was spent by staying home. I spent my time on learning a course from Coursera. 

Okay, back to money stuff. December was bit better than November. 

I received a total of $737 as passive income aka dividends. Most of which is reinvested. 

I owned shares of RME, rocky Mountain Equipment. The company acquired all of the common shares back. The company delisted on TSX. I got my my money back in my account. Haven't bought anything yet. 

The goal for 2021 is to continue the investments and try to have $1000 per month in passive income. 

What are your goals for 2021? 

Bindu

Save Money faster in 2021

 It is 2021 already! Any New Year resolutions for you?

We should make learning about money as a priority this year. I mean, make saving as a priority.

Every one want to save money. No one really want to accumulate debt. But, life happens and we buy things, that we don't really needed. 

So the first step to saving faster is to make saving the priority. We all heard about "paying yourself first". It actually means is to save the money you want from your pay check, before you start spending. So, think of an amount you can live without. Budget that as your "savings"

Most people get paid biweekly. To start, make an automatic deduction to savings account when you deposit the check. It need not be big. Just start the habit. When it is not in the checking account, you might keep it there and let it accumulate. I will actually say to automate it. If you are not seeing it, you won't feel like spending it either.

Next is to try reduce the spending. Each time, you are tempted to buy something, think it through:is it really needed? Can I do without it?

Do I really want to work 5 hours to make the money for this item? If the answer is no, then we don't usually buy it.

I have a reminder in my purse on a card asking "Do you really really want it?"  That gives me a moment to think before swiping my credit card.

IF you get a raise, try to save that money. The natural tendency will be to increase the expenses too, right? Try to at least increase your savings little bit whenever you get a raise. 

Many people won't get a raise easily. So, learn to negotiate for better pay whenever you get a chance. 

Make a targeted amount for savings. Then treat yourself with something nice with 10% of what you saved. That treat will be sweeter to enjoy!

Bindu

TFSA: Important things to remember

TFSA is a boon for most Canadians. The money in TFSA can be withdrawn at any time without a penalty. Investments in RRSP are subject to withdrawal tax.

Then there are some things we need to consider making investments in TFSA. 

TFSA is not just a savings account

Don't be limited to having only a savings account in TFSA. You can actually hold a trading account to invest money in TFSA. It can be growth oriented or dividend income  oriented: your choice. You can hold mutual funds, bonds and securities in this account. The money grow inside is not taxed. 

You can invest in interest generating accounts as well. The interest is not taxed. 

Transferring TFSA from one bank to another

If you need to transfer your TFSA to another financial institution, make sure you use the transfer form, T2033. 

If you are withdrawing money from one TFSA and investing it in another TFSA, make sure, it won't considered as an over contribution. 

Choosing the investments

If you are doing DIY dividend investing  within TFSA, make sure you are holding only Canadian stocks. Dividends from foreign stocks are subjected to withholding tax. 

You can also hold REITs like Reocan REIT in your TFSA. The distributions are not taxed. But make sure your investments are Canadian, to avoid paying taxes.

Paying Fees.

I used to invest as the money comes in. Then, I realized, each transaction costs me the trading fees. So, now a days, I will wait to make it at least $1000 to make a trade. 

You should also check the MER or the management expense ratio, if you are investing in mutual funds.  

DRIPing

DRIP is short for Dividend Re-Investment Program. I like to invest in dividend paying stocks. Some trading platforms allow to reinvest your dividend to buy the shares of the same company.

For example, you bought 100 shares of ABC company. When the quarterly dividend received, it is $12. the share is now trading at $10.25/share. If you are registered for  DRIP , you will get one new share, without having to pay trading fees. If the trading cost is $7, you are saving $7 to acquire that one share.  On top of it, you will get dividend for 101 shares in the next quarter. 

Maximizing the contribution

Every year the government will determine how much will be the TFSA contribution room. I will suggest all of us should contribute to maximize TFSA. That is the best way to grow the money. 

It may not be possible for every one to maximize the TFSA and RRSP contributions. We should at least think of maximizing our TFSA. 

Estate planning

As a final point, everyone should remember to name the successor or beneficiary for TFSA.  You can name spouse or common law partner as successor holder

Then  they can contribute the amount to their own TFSA. No need to check the contribution room.

If the beneficiary is not a spouse/common law partner, they can contribute the proceeds to their on TFSA only if they have room available. Capital gains or income  from the proceeds will be taxed as regular income from the beneficiary.

Disclaimer: I am not a financial expert. Please do your own research before making any decisions. 

Bindu

More to invest and the blogs

Covid 19 cases are increasing in Ontario. Now only 10 people can be gathered in a place. Stock market went down last week.

New buys 

I bought few shares of BCE for my TFSA. There was some accumulated dividends in the RRSP, which I reinvested to buy Riocan shares (REI.UN). 

In Canada, BCE is one of the blue chip companies. It will give an annual dividend of $3.25 per share. My idea is to receive enough dividends to do DRIP

REI.UN pays monthly distribution. Price of the shares went down during the pandemic. The plan is to create the income to DRIP to gain more units. 

Finance blogs

I am a regular reader of the my own advisor. I learned about DIY investing and dividend investing basics from that blog. 

Another interesting blog is Mr. Money Mustache, or in short MMM. 

Then I stumbled on another blog this week; It has an interesting name!

Reversethecrush.com  I haven't read many posts from this one yet. The style is interesting. Author says his blog is an online business. It looks like the blog is making some income from advertisements. 

 

Bindu

DIY investing

Hi all,

I stopped doing crafts.

Way too busy with dental assisting now a days.

My goals also changed. 

I started taking care of my own investments. It is getting better every day.

I learn to to stock trading. I learned to do my own RRSP and TFSA. That is pretty cool, isn't it?

No one is more interested about your money than you!

So, my strategy is to do dividend investing.  Will it work? No one knows! 

But for time being I am happy and proud of being my own investment guru.

When you invest money, you want it to grow. You love to see some returns from your investments. You want your money to grow.  

So, why don't you collect some dividends from the companies you invest in?

I learned that all banks offer DIY investment options.

So I registered with my bank to invest in my RRSP.

It is very simple. You can do it online. If you give a call to the help line, the bank will be eager to help you. 

So that is how I did!

 

Is it worth to do Extreme couponing?

I was wondering what these folks doing wit Extreme Couponing. While, in Toronto, many of the coupons cannot be combined with any other offer, I still wanted to watch the show.I really wanted to know how they are saving money.
What I saw was people buying tons of mustard, sauses, and other processed food. They also have tons of paper towels, hygiene products etc.What I didn't see is the day to day things like bread, milk, and other food items to be cooked before eating.Their house is full of stuff. That made me wonder how much stuff a family needs!!
The valuable space is filled with things, they are not going to use in the near future, some probably in years to come. They bought things, which could be worth a $1000, and did not paid because they used coupons. To be honest with you,do any one in their right mind, will buy $1000 worth of things from a grocery store, even though you are not paying the full amount? These people spend a lot of time to cut and organize the coupons. Then after shopping, they need to find space to keep the things.The valuable real estate is used up for storing things and not for living. Actually they are not saving. They just spend some money to use up the coupons and got some things to be stored at home. OK, if they are selling it for profit, I agree they saved money. But honestly, How many bottles of mustard you really need for an year? How many litters of laundry detergent you need for an year?
Now the question is did the extreme couponer saved money or spend money? I really think, the money is spend on things that they don't really need.

Don't take me wrong, I do use coupons. But I use the coupons to buy things I really use. If there is a coupon available for soyamilk, for the brand I normally use, I will use it. The bottom line is use the coupons to buy the things you really use, in a reasonable period of time. Since time is extremely valuable, use up the time to be really productive and bring in some income.

Clean Home challenge Week 2

This week's clean home challenge, I think, I am successful.
All the laundry is done and put away. Also, I did vacuum clean the place. More than that I used Pledge to dust the surfaces.
Now I am taking some measures to save money on the Hydro, ie the electricity. While cleaning and throwing away unwanted stuff, I came across the energy plan guide I got on the mail and forgotten to put on the fridge for reference. The time of peak power rate time is different than that of summer.

Since the off peak time is from 7 pm to 7 am, I decided to cook either in the evening or in the morning before 7. That also changes my cleaning time. The vacuum cleaning time is either on the weekends or in the off peak time.
For this week, I am glad that there was no dirty dishes in my sink. After finishing the cooking, I am able to clean all the dishes and wipe down the counter tops. Wow!!!! That makes the kitchen clean and nice.
During the week, I used my broom and dust pan to clean the floors, instead of using the vacuum cleaner. The house is looking much better. Thinking of adding some picking up time to the schedule to keep the floors neat.

http://www.bindu.ca

Clean home Challenge:week 1

This first week  of the challenge went fine. I cleaned my living room. Vaccumed, even under the sofa, love seat and under the TV stand. Took out all the cushions and vacuumed them too. So the furniture is dust free now. The glass and wood surfaces are cleaned with Pledge spray cleaner. I love the lemony smell of it. 
Also, did 3 loads of laundry. 
Not that much crafting though. But I would like to mention about creating a stripped crochet cover for one small Ikea  cushion. 


As a next step, I washed all the bathroom rugs and put them out side to get dry in the sun.
http://www.bindu.ca