10 Things Canadians Are Wasting Money On

A recent study from credit reporting agency TransUnion states that the average Canadian's debt load is increasing at an alarming rate. Canadians, on average, have: $19,228 racked up for Auto Loans, $3,600 in Credit Card debt, and have $34,000 owing on lines of credit... and that's without even talking about mortgage debt!

Why are we so stupid with our money? I think there are two big reasons to explain this.

Firstly, people are ignorant about their money. I use the word 'ignorant' because it sounds nicer than 'stupid'. People are unaware of what they're bringing in and what they're spending their money on, and they typically don't really care or want to know anyway. I believe the saying is, "Ignorance is Bliss".

Secondly, people are incredibly lazy and undisciplined. They want what they want, when they want it. Maximum pleasure for minimum effort. Sure.. I get it.. It sounds awesome right? I'm guilty as charged for wanting some super awesome instant gratification now and then. But, every so often you have to get a bit tough with yourself and for God's sake show some self restraint!

In my experience, all it takes is making a few small changes one step at a time... every bit counts!


Here are the Top 10 things you, as a Canadian, are probably wasting money on:

10. ATM Fees

These days ATM fees are anywhere from $1.50- $5.00 per transaction. Hidden costs exist in this transaction because not only does the bank charge you for the using the ATM but, you also get charged for the transaction from the ATM owner. It's a double whammy! For example, you withdraw $20 from a bar ATM. The bar charges $5 per transaction, and your bank charges you $3 for using the ATM. Suddenly your $20 withdraw becomes $28!  Yikes!  Also, checking your balance on an ATM can also incur extra costs as it's sometimes charged as a separate transaction on it's own.

9. Buying lunch at work

People seem to think nothing of dropping $5 or $10 bucks for lunch everyday. But it really adds up in the long run! Let's say, for example, you work at your job or career for 20 years... and let's give you the benefit of the doubt and say that you only buy your lunch at work 2 times a week. After 20 years that still adds up to $20,000! In other words, 'Brown Bag' it people!

8. Paying the minimum amount due

I really don't think people grasp the danger in paying only the minimum amount due. In some cases, the debt would take 100 years to pay off if you actually did the math.

Credit cards all have an APR (Annual Percentage Rate). This is the interest you get charged on your debt every year. For example, let's say you have $1,000 in credit card debt and the APR for your credit card is 18%. That means that every year you pay $180 in interest alone (1.5% or $15 per month). Let's say your Credit Card calculates their minimum monthly payment as 2.5% of the balance. So... when you pay your minimum payment of $25, only $10 is being applied to the principal amount, and $15 is being paid in interest. At this rate it would take you 13 years to pay off your balance and you would spend over $1,100 in interest alone.. more than doubling the initial amount borrowed!

There's also something known as a "Balance Transfer Fee" that credit cards charge when you transfer your balance from one credit card to another. This fee ranges anywhere from 1-5% of the total amount transferred. Let's say your transferring $5,000 from one card to another. You could end up paying $250 just for the transaction alone!

7. Unused Gym memberships

New Years Resolutioners are well known for this big money blunder! "Good intentions pave the road to Hell"... or better yet, financial ruin! It's not uncommon for people to drop anywhere from $75-$100 per month on a gym membership but if you're not regularly going to the gym this is a huge waste of money! Personally, I've invested in a home treadmill (on sale from Canadian Tire) and a bench with some free weights (off Kijiji). For an initial investment of about $1300 I've saved on gym membership fees (for the past five years) adding up to a total savings of $4500!

6. Tim Horton's Coffee

Ah yes.. A Timmies! The Kryptonite of every shift working, blue collar, patriotic Canadian! But, this caffeine infused, True North strong and free, hot beverage of choice is a sneaky money leak. At about a toonie a cup it's easy to buy and seems pretty insignificant. Let's say you only buy one Timmies a day (I know some people who buy 4 a day!). Over 20 years that's a total of $14,600! Now... let's say instead, you invested that toonie every day. After 20 years you would have made $34,846.45!
Makes you think twice about that little, patriotic caffeine jolt ;)

5. Parking

As a person who works in a downtown location with limited 'free parking' options I completely understand the convenience factor with this expense. However, for an extra 20-30 minutes of walking per day I save big time! And who couldn't use a little more daily exercise anyway, right?

Where I work the going rate for parking is either $16 a day, or $80 a month. Let's say I go with the monthly plan because it's less expensive... over 20 years that adds up to $19,200!!

Instead, let's say you choose to park for free and walk about 15 minutes to work. Not only would you gain an extra 30 minutes of exercise every day (and lose excess body fat in the process), but invested, that same $80 every month over 20 years would have made you $45,825.47!!

4. Eating out at restaurants

The average person in Ontario spends $2,057 per year on eating out. If you're a social person who likes to hit the party scene every week than you can easily double or triple that number.

Let's say you are able to get a bit more disciplined and cut this cost in half and save $1000 a year (just spending $20 LESS a week). Over 20 years that money invested would earn you $47,734.86!

3. Cable

"I've got 500 channels and nothing good to watch!"... sound familiar?

Cable T.V. these days costs about $75-$100 per month depending on your cable package and provider. This really adds up over time, not only financially but health wise as well. A more cost efficient route is signing up for Netflix which offers not only hundreds of T.V. shows but great movies too for only $9 a month. Hulu is also another good option too for internet television and movies and is only $8 per month!

Over 20 years that's a savings of $18,000! The same amount invested over 20 years would earn you $42,961.38!!

2. Lottery & Bingo

Economists like to call this the "Stupid Person Tax".

It's not uncommon these days to see people dropping anywhere from $20-$100 a week on gambling. Even though statistically you're more likely to get stuck by lightening it doesn't stop people from throwing their money down the drain at a rapid rate.

If the thought of winning the Jack Pot sounds good to you then invest that Bingo money now!
If you really want to 'win big' consider taking that $20 a week you might spend on lottery tickets or Bingo and invest it. After 30 years, you would hit 'the jack pot' and make $113,032.71!!! .. and probably still would have never been struck by lightening ;)

1. Cigarettes

"In 2002, tobacco usage cost Canadians about $17 billion, including $4.4 billion in direct health-care costs." (Alberta Health Services)

Let's say, you buy a pack of cigarettes ($10) a day. Over 30 years you would spend a total of $109,500. If you took that same amount and invested it, over 30 years you would have earned $396,701.33! Where I live that could buy you a 4000 sq foot brand new home with all the fancy up grades!






Well, there you have it! It's all a bit over whelming.. even for myself, but just think of it as 'food for thought', and take it one small step at a time. Every bit counts!

Cheers,
Bootsy :)

My Rental Property: And Tales of Silly Tenants

For the past five years I've been renting out a one bedroom condo that I bought in 2008 (smart eh? recession.. lower housing prices... you get the idea).  I've rented out to students, working adults, working-students, males, people with dogs, people with cats, and so on and so forth. To say that it's been a learning experience is a staggering understatement. What I've come to realize (although I was pretty convinced of this beforehand) is that people are very Silly. And by Silly I mean Stupid.

I'll start off by saying that overall, renting out my condo has been a positive and financially beneficial experience. Having the rental unit located in Kingston is a plus as well. There are plenty of Colleges, the Queen's University, prisons, hospitals, and a Military base which provide lots of individuals (students, working professionals, Army Dinks) who require lodgings.

The key to being a good landlord is being able to read people and picking out the potential 'good ones' from the group. I've lived in a lot of places in my life and have met more people then I would care to, however, it's given me a pretty good 'people radar'. Sometimes I feel like Sherlock Holmes when interviewing for a tenant. I notice everything. When finding a tenant you can't be an eager beaver and desperate for that first and last month's rent cheque. You have to be calm, patient, and very suspicious! I come by that latter quite naturally.

Even with my excellent 'people radar', I've gone against my 'gut feeling' before, and given people the benefit of the doubt (I won't be doing that again).

For example, I once had this young female tenant aspiring to be a police officer. I should have said 'no' on the spot just based on that. But I thought to myself, well, if she's working with the Police Department and trying to become an officer she'll have to behave and be an 'upstanding citizen' (*I could barely write that last sentence with out coughing). My first assessment of her upon meeting was that she was very 'young minded' (aka: 'not the brightest bulb in the tanning bed', aka: 'dumb'), her over bearing mother was with her, and she had nervous, 'flighty' energy.... all the classic warning signs that I should have listened to. But I tried to think rationally, and think to myself 'Be Nice'.

Needless to say, things went bad quickly. The day she moved in to be precise. I was called at home by the property manager's minion and notified that the tenant had damaged the stairwell walls while moving in. Pictures were taken of the damage; scuff marks, scratched paint, and dents in the dry wall. At first I was skeptical, how do I know these marks weren't always there. I then talked to the tenant who admitted to doing 'some' of the damage, but not all of it. She then told me that she signed a piece of paper that the minion provided, claiming responsibility for the damages. OK.. so, she's accepting responsibility here, this is good. Well... it's good until the bill comes around. The condo corporation sent me the bill for damages (because I'm ultimately responsible for my tenant..and our lease agreement didn't specify damages incurred outside of the rental unit). The damages came to $620.00!!  I brought it up with the condo board that this amount seemed ridiculous but, they wouldn't drop it or even lower it. I offered my tenant a deal.. I would pay half of the damages. I felt bad for her at the time... and I knew that she probably didn't make very much money.

When I made the offer to her she was furious. She said, "I'm not paying them anything! That's stupid!". I was thinking a big, fat, "UH OH!". She eventually agreed to pay her half, and I offered her a payment plan... She could put $75/month towards the bill. She eventually agreed and paid $75 with one month's rent cheque. (*Not to mention she never once thanked me for offering to pay half of the damages).

Soon after that she emailed me saying she couldn't afford the condo anymore and was moving.
I said that once her half of the damages were paid, I would release her from our lease agreement. She refused and high tailed it out, filling out some 30 day notice form that she was leaving. Quite frankly I was very glad to get rid of her. She said to me, "I give you my word that I'll pay you the rest as soon as I get it."  Needless to say, I've never received another dime from her and that was over a year ago. The cost of taking her to small claims court over the issue would have cancelled out what she owed me anyway.

My most recent tenant texted me in the middle of the winter and said, "It's snowing in my bedroom... I think the window's broken!". I immediately thought to myself, the window's probably not shut properly. The tenant then assured me %100 that the window was in fact closed properly. When I went over the next evening (while she was at work) to look at the "broken window", I immediately deduced that the window was in fact Open! Not by very much, but it was definitely not 'Closed'. I could tell because the window frame wasn't lining up properly, it was probably about 0.5cm open.

Now, I know what you're thinking. "Bootsy... give the tenant a break, that's such a tiny opening... it's not like she's a scientist or anything." WRONG!!... she's in school to be a Laboratory Technologist!!! These people are supposed to be able to identify the smallest living microbes on EARTH!!  Give me a break lady!! Work with me here people. Sooooo... I had to Thaw the entire window with a hair blow dryer because ice had collected within the "OPEN' window frame making it impossible to close. After an hour of hair blow drying, wiping, wiggling, pushing and pulling... I finally got the window shut and locked.

I texted the tenant that night and told her what had happened and how I fixed it, and that it took an hour of 'defrosting'. She answered me back immediately with, "Did you put the plastic insulation back up around the window when you were done?"
Oh Sweet Lord Baby Jesus give me the strength. So, I mustered up a polite response and said, "No.. but the window is shut now so you won't need the plastic anymore." (the plastic was collecting snow inside it... not to mention moisture and potential water damage). She answered back with, "Oh that's OK.. I'll put it back up just in case it's not fixed."

No, "Thank You".  No, "Wow, I feel like such a huge idiot! I'm so sorry". No, "Oh my God I should not become a Laboratory Technologist!!"... Nothing.  But, that's what you get when you have to deal with "Silly" tenants. Is the rental money worth it? Is it worth the stress and ridiculousness?  The jury's still out on that one.

Cheers,
Bootsy

Weddings: And Tales of the Evil "Wedding Industry Monster"

Sometimes weddings make me angry.

I don't say this because I'm currently stressing out planning my own wedding (well, maybe a little). I blame it on this whole "Wedding Industry Monster" created by society that keeps getting over fed by little girls who grew up with a deluded dream of a 'Cinderella Wedding'. It also seems that family and friends also feed into this 'wedding monster' with their own expectations and ideas about what you "really should have" for your big day. There are countless shows on T.V. that sensationalize and promote these grand, expensive wedding themes and create this sort of expectation of what you need to do - And it's all so very frustrating.

When I hear women talk about their wedding day, they speak of it as if it's the only day in their life where they get to be a princess. These women make it sound as if this is their ONE day  to be truly special. You hear them loudly proclaiming, "This is MY day!".  This is just really sad. If your wedding day is your only chance to feel truly important and special then you are living a very pathetic existence. And to all the Bridezilla's out there- stop saying it's "MY day".  There's also a Groom who's getting married... so it's "YOUR day"... together.. two people.. marriage.

Another point that I find really upsetting about Weddings these days is that it seems like people have forgotten the true meaning of why they're getting married. It's about celebrating your new union together with family and friends. That's the beginning and the end of it. Of course it's very deep seeded and traditional to celebrate with specific things such as food, music, dancing, and so on. But the 'Wedding Industry' has turned it all into a big fat, hungry 'Wedding Monster'. Now getting married has become an endless list of things you have to do for your special day. You need the best: Venue, Church, 2 or 3 photographers, video-grapher, appetizers, linens, crystal, party favors, 'save the date' invitations, formal invitations, midnight buffets, open bar, wine on every table, limousines for the wedding party (to the church- to the reception), flowers everywhere, bouquets, boutonnieres, elaborate lighting, smoke machines, a rehearsal-followed by a rehearsal dinner, a party bus for guests, dessert buffets, a fancy wedding cake, entertainment, pre-wedding mani's/pedi's/hair/make-up/spray tan/waxing, special wedding night lingerie, Thank You cards, photo booths for guests, a Grand Exit Celebration, and a Honey Moon!

*Not to mention prior to the wedding: An engagement party, Engagement photo shoot, Stag & Doe, Bachelorette Party, Bachelor Party, Bridal Shower.... Good Sweet Moses... I'm exhausted just thinking about it.

Another point of contention I have with Weddings is that it's generally viewed as 'unacceptable' and 'tacky' to ask for 'cash only/monetary' gifts. These are usually the same people who have no problem sticking out their grubby paws and asking for money by creating their own "Stag & Doe" party, where they ask friends and families to buy tickets to celebrate their upcoming nuptials. I'm sorry...maybe I'm slow. But that seems completely hippo-critical.

Back to the Wedding Monster- do you know what the Wedding Monster's favorite food is???  MONEY! And it will eat all of your money... including all the money you can BORROW from the bank!  I seriously think that people who work in the Wedding Industry think we all have "SUCKER" written on our foreheads. I recently read someone's wedding blog where they tried to justify and rationalize all the money they spent for their wedding. The author said it was all worth it because with it she created a "singular emotional experience". *Cough*... I call 'Bull-S*#T"!  That's one bloody expensive emotional experience. Guess what lady? You can get those for free. And don't even get me started on people who go into debt for a big wedding.. that literally makes ZERO sense... much like those people in general.

Your wedding is a special day where you and your partner celebrate your new union together with your loved ones. Above and beyond that, it's whatever you TWO want it to be. There's absolutely NO reason that justifies going into debt for this occasion and buying into the Wedding Industry's deluded vision of what you NEED for your wedding- the same goes for your friends and families expectations. I realize it's hard not to fall victim to other people's demands.. let alone your own unrealistic, delusional, expensive demands. Try to remember what's most important on your wedding day and say to yourself, "As long as I'm with the person I Love, and getting married to them... that's all that really matters" :D

Cheers,
Bootsy :D