I recently read a great article titled “Your Lifestyle Has Already Been Designed: The Real Reason for the Forty-Hour Workweek” and it really resonated with me. The author David Cain recently got an engineering job after backpacking and traveling for nine months. During his nine months of traveling he focused on the little things, spending little money (because money was scarce), exercising, meditating, and enjoying his travels. He was basically living the simple life (I know it’s ironic because traveling seems like an indulgence and not simple at all).
Since he began working again, he has been spending without an awareness of where his money is going since he is making more money. He spends money on small purchases like daily coffees, things that are insignificant but add up over the long run and not something he would savor and enjoy slowly like he would when he was traveling.
He mentions that our lifestyle has already been designed because we have more money but less time. The 9-5 daily grind is exhausting to say the least, and we have only our weekends and evenings to enjoy ourselves. Hence, he argues that many of us resort to consumerism to “cheer ourselves up”.
The More We Have the More We Spend
Another thing that David Cain stated is that the more we have the more we tend to spend. It is called the Parkinsons Law whereby if you are given 20 minutes to do something you get your stuff done. If you are given an unlimited amount of time we tend to dawdle. We can’t help it, it is human nature.
David Cain argues that the Parkinsons Law can be applied similarly to the concept of money. The more money we have, the more we tend to spend. It is the idea of the lack of scarcity.… Continue Reading
I am doing a happy dance this month because I was getting a bit worried the last two months with my sad net worth updates. I spent very little this month with the big splurge being $200 on base layers (merino wool is pretty amazing, I must say I was hesitant to spend so much on a piece of clothing but it’s been great so far).
The markets have been doing alright and has accounted for a large portion of my increase in net worth this month.
My goal for the end of the year was to break a net worth of $350,000, which is means $8400 by the end of the year. If I include my pension contributions, my net worth goal was $380,000, which means $865 by the end of the year. Of course I will aim for the former net worth goal but I will use the latter one if push comes to shove (since it’s easier to achieve).
Okay, so here’s the breakdown for September 2014 ($341, 640): +2.4% +$8000
CASH: $39475 (+11%)
- I added up my chequing and savings accounts (High Interest Savings Account). I automatically deduct money from my chequing account and have it siphoned to the HISA account (paying yourself first)
I have $4800 saved up for my big trip that I hope to do this year.
Non-Registered: $105740 (+0.5%)
- Haven’t bought any more stocks yet, but so far things have been doing decently
- These are stocks that capture the “moment in time”, including unrealized gains or losses in my BMO Investorline and Questrade accounts.… Continue Reading
A couple weeks ago on The Money Mastermind Show we talked about how to get started, which isn’t something I’ve thought about for a while now. Sometimes we get so wrapped up in comparing dividend growth metrics and TFSA vs RRSP arguments that we forget the basics are still what matters by far the most when it comes to your personal financial health. Check out the episode here if you missed it and on the overall spectrum of personal finance blog readers you might be closer to the “beginner” side of things.
1) Get it all down on paper.
Hey, computers are great. If creating a spreadsheet or using some sort of integrated app helps keep you organized – go for it! For many people though, I believe this quest for technological perfection can lead to overall procrastination when it comes to getting finances sorted out. Look, with a good-old pencil and paper you can erase, draw arrows and just quickly shuffle stuff around if need be. Whatever you do, the key thing is just to get your arms around what your financial situation actually looks like. What sort of debt are you in? What interest rates is that debt? What assets do you own? What is your take home pay every week/month/year and what do your weekly/monthly/yearly expenses look like? I know this stuff isn’t sexy in the same way earning huge investment returns is, and it isn’t anyone’s idea of a happenin Friday night, but it really is the first win you need to get under your belt.
2) Figure out where you’re spending your money and decide if that’s where you want to be spending it.
The idea that budgeting has to painful is ridiculous. For me it’s a little bit like getting off of the couch and going for a jog – sure it takes a burst of initiative to break that inertia, but there are so many positive spin-offs once you get going that it’s almost always worth it. After you’ve written down where you’re spending your money ask yourself this simple question: Where am I spending my money that gives me the most pleasure?
Related: Transitioning from the Starving Student Budget to a Real Budget
Personal finance gurus love to hate on buying coffee every day, but hey, if that’s what gives you enjoyment every morning and gets you out of bed who am I to tell you not to treat yourself to some java four days a week? What most people find out when they write everything down is that they’re spending a lot of money in places they hadn’t realized. Sure going out to dinner is nice, but is it $300 per month nice? Maybe it is for some, but for others not so much. I’m a sports fan, but for me going and seeing live sporting events is rarely worth the financial sacrifice at this point in my life. Maybe when I have a little more disposable income – until then, beer is about a third of the price in my basement as it is at the game and the parking is free.… Continue Reading