Building Frugal Habits

When it comes to building frugal habits, I think the biggest and most important step you can take is to adopt philosophy. Think about the things you do, and ask yourself why you do them. This is the key to so many things, and being frugal isn’t an exception.

Now, be warned, taking a long, hard look at any aspect of your life can present you with both good and bad revelations. When it comes to being frugal, once you truly embrace it, it becomes an addiction. Not spending money is an addiction? That’s jazzing it up a bit. It becomes addictive to only spend money on what you need.

Since I truly embraced being frugal, I’ve put so many things back on the shelf, removed them from my shopping cart, and deleted them from my wish list. This may sound a bit ridiculous, but it’s very satisfying when you know you have only purchased what you will need and use. Now, when I do buy something, I am extremely satisfied knowing that it was money well spent.

The things I do own, I cherish, and the value goes beyond money. Once you know what you value, and you can see through the facade of more and be happy with less. Frugal is a mindset, and isn’t really easy, but it does have a huge amount of impact on your life. In my opinion, it makes life better. Really.

-Mike

 

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Housing Costs; Plan first, move once.

For the average Canadian, housing is typically the largest line item in their monthly budget. There is a general rule of thumb that you should be spending 30% of your income on housing. Canadians are spending as much as 50%. My advice? Spend 20% or less. I also recommend spending a lot of time shopping around and weighing your options before you move.

The cost of housing in almost every major city in Canada is increasing year over year. Once you find the place for you, buy it or rent it. Yearly increases in rent and interest rates are lower than the increasing costs of the rent and mortgages themselves. The sooner you nail down a place, the better.

Once you have a spot, stay there as long as it fits your lifestyle. Avoiding cashing out only to be greeted with more expensive housing. This also helps eliminate moving costs, give you leverage when you renegotiate services, and more. Every time you move, you risk needing to swap out furniture, buy appliances, and spend money that you wouldn’t need to otherwise.

If you can live far below your means, you’ll have more money to save and more money to spend on things you want. If vault ceilings and stainless steel appliances truly make you happy, that’s okay too. For some, a quiet, comfortable place to lay your head it enough.

Are you overspending on housing? Do you have any housing tips?

-Mike

 

 

Let Other People Pay For Your Stuff!

You might be asking, why would someone else pay for your stuff? Well, the more common term would be ‘buying things used’. When you buy an item used, another person has put up the money for the immediate drop in value. Even selling an item new and in the package, you won’t get retail price for it. Some things you don’t always buy used, but things like clothing, dishes, cookware are easy to visually inspect.

If you’re moving out for the first time, you’re going to save a TONNE of money buying used. If you’re a single person, you can probably get by with 1-4 dining sets. Don’t bother with a 16 person plate set unless you host people frequently. Otherwise you’ll find yourself using the same plate over and over again; never making it to the bottom of your pile of plates. That, my friends, is what we call a waste of money.

You stand to save a lot of money on clothing as well. Typically, items you find used at thrift shops are in great shape, sometimes never worn, and they’re higher quality products. An H&M t-shirt never lasts long enough to make it to the thrift store racks. I’ve managed to buy brand new, white, Fruit of the Loom t-shirts that are MADE IN CANADA for $3-5. Where can you buy clothing made in Canada for that price?

Electronics can be hit or miss. Do your due diligence though and you can score a great deal. I recently sold my television because I’m moving. Someone got an amazing panel with little use for $150 less than retail. I got a really good deal on it during boxing, and definitely got my my money’s worth, but they got a steal as far as I’m concerned.

Before you buy anything, ask yourself, can I buy it used?

-Mike

Ask Your Coworkers How Much They Make!

This is always a touchy subject for people. For some reason, we have been convinced to not talk about our salary. Whoever made this the norm, is a genius social manipulator. What do you have to lose by asking? Nothing. Sure, it might be embarrassing to find out other people make more than you..but it should light a fire under you to change that!

It is equally as important to keep an eye on what the going rate for your skill set is.

  • What is the highest amount people are getting paid?
  • What is the lowest amount people are getting paid?
  • Where are you on this spectrum?
  • Which companies/industries pay the most?

Make a determination to see if a few words with your boss might get you a sweet increase. I’m a saver, but all the saving in the world could be in vain if you’re getting under paid. What is your time worth? What is your pride worth?

Get out there and ask! If you’re low, make a plan to get even or better. Find your worth and get it.

-Mike

The Allure of Luxury

One of the unfortunate side effects of the condo boom in Toronto is the surplus of luxury condos and a shortage of affordable houses. How is this bad? Well, pretty much every new condo built in the last 5 years is a luxury condo. Some are affordable but they come with costs that don’t really become apparent until you really take a step back and look at the condo living situation.

  1. Typically, the clusters of condos have a grocery store at the base of at least one building. Unfortunately, these are typically high end stores with name brand products. No store brand products in these smaller format stores. This means every time you go shopping you’re paying a premium on everything.
  2. These condos have lots of amenities but they’re only worth it if you use them. Too often to people like to talk about all of the awesome features of their building, only to never set foot in them. Additionally, if you own your unit, you’re paying for these everyday regardless.
  3. There are usually a lot of places to eat our nearby which can be tempting for some. I think this is typically a good thing, but some of the most mediocre restaurants I have ever been to are contained in these condo groupings (I’m looking at you, Liberty Village).
  4. This is a tough one. Do you really need this luxury living? A lot of people leave college having spent time living in less than ideal shared housing, and then make a jump right to a luxury condo. Can you spend a few more years sharing a house? How about splitting a modest apartment? There are other options out there.

More and more condos go up everyday, pushing people ever towards living in boxes in fancy towers. Some of us will hopefully continue to resist this urge, creating a need and want for reasonably priced housing without all the bells and whistles.

Canadians are addicted to home ownership, I just hope our thirst to own doesn’t destroy the affordability. Hopefully, we can use a little foresight and look to other countries and stop problems before they get out of control.

-Mike

Travel Photography

If you plan on retiring early, like me, you have to have hobbies. They are part of your retirement ecosystem. Myself, I enjoy photography, an expensive hobby that I’m not very good at. I especially enjoy photos from my travels. Fortunately, these hobbies work out perfectly for a blogger!

An added bonus of writing this blog, is a need for content. I enjoy getting out and shooting photos but I can get lazy and spend too much time on other things. Now I NEED to go out and snag a few photos a week, which has helped self regulate my photography sessions. I always enjoy the sessions and find that self managing myself in this way is super useful. Kill two birds with one stone.

Finding a way to build your hobbies into your life before retirement will help you plan better. You may not enjoy a hobby after a while, you might take it really seriously. Knowing what you like before retirement will help you plan ahead. You can’t always be sure, but it’s vital to try!

Hopefully I’ll continue to enjoy my hobbies, and maybe even profit from them one day. You never know!

-Mike