Comments on: Hand in the Candy Bag

By: Car

Car — Tue, 02 Jun 2009 01:57:50 +0000

My income just went up substantially and I was able to buy some things I had neglected while being a broke student (ie new glasses) but I also got my own apartment and went a little crazy. I figured, hey, I’m making xxx I can afford it. It is a lesson to learn that our lifestyles go up when our incomes go up. I have gone back on a strict budget though and am chipping away at my debt and started an emergency fund.

By: angela

angela — Mon, 01 Jun 2009 21:47:13 +0000

Wow Sudbury is so close to where i grew up only a few hours drive. If I still lived in Ontario i would so love to meet you Gail.

Im super excited because our final payment on our van has been made, so thats now $500 more a month to put towards our debt repayment and not worry about having money to set aside into our emergency fund. In December my husband was lucky enough to get a job at a local open pit coal mine. And in Alberta thats what our province uses mostly for energy. They were also told that they will pretty much have their jobs guaranteed for the next year as long as they keep their production up.

I have to admit that i tend to do fairly well for a while with watchign my spending then i get the itch to get something new. My sons second birthday is coming up too. So were keeping it fairly simple BBQ fill the kiddy pool and Dollar store. We want to get him a wagon though but we can do it with the van payment out of the way we can take a bit from that for his birthday.

Now we get to re do our budget seing as we have more money to workwith, most of it will go to the debt though.

By: *pol

*pol — Mon, 01 Jun 2009 21:40:15 +0000

Jay; I LOVE that lesson, your parents put it well.

By: jay

jay — Mon, 01 Jun 2009 21:32:34 +0000

@rosie and id:
The ING cashable GIC is what I did too. I figure that the interest penalty for cashing out the GIC will keep my fingers from it unless it’s a true emergency. And I put it in $2k blocks so that I wouldn’t have to cash out all of it if I only need a bit.

To extend the candy analogy:
Earning = Exercise
Spending = Eating

What it comes down to is that it’s a lot easier to eat than exercise. If your eating (spending) is out of control, it doesn’t matter how much you exercise (earn).

Because you can eat 1000 calories in 5 minutes, but you can’t burn 1000 calories in 1 hour. Likewise, you can spend thousands with a single mouse click, but you can’t earn money that fast!

One of the lasting lessons that my parents taught me is that it’s MUCH easier to control my spending than it is to make more money.

By: psychsarah

psychsarah — Mon, 01 Jun 2009 20:45:25 +0000

*pol-I’m laughing aloud at your last sentence-that totally describes me too. It used to make my little brother crazy that I still had Halloween candy for months too!!

Gail-I think this is a fantastic analogy!! Thanks for another thought-provoking post.

By: Geoff

Geoff — Mon, 01 Jun 2009 20:28:47 +0000

One option to put emergency money is to put some of it in an online account and put the bulk of it as ‘prepaid’ against your mortgage. Most banks will let you withdraw that money out of that account if you need it. Biggest bank for your buck I would think. Keep in mind if you do need it, you will be charged a slightly higher interest rate than your mortgage is at. But that could easily be a risk worth taking if it saves you more money in interest if you don’t have an emergency for several years, as some people can manage.

By: Rosie

Rosie — Mon, 01 Jun 2009 19:49:07 +0000

to id:

I had the same dilemna and decided to put half of my emergency fund into an ING GIC for 5 years @ 3%. If I do need to access this money, I can cash it in and get my money right away but only get an early redemption rate of 1%. I figure since I am only getting just over 1% keeping it in a savings account this is a better option for me and since I hope that I never do have to actually use my emergency fund I can easily leave it in the GIC for 5 years.

By: *pol

*pol — Mon, 01 Jun 2009 17:06:12 +0000

It’s kind of like getting into a bigger house.
When we first moved to our 1200 sq ft house it seemed like a mansion after living in the 800 sq ft house for 4 years and that seemed huge after our 650 sq ft cottage that we had started our married life in. But it didn’t take long to fill it up! And then we finished the basement to not feel so cramped, increasing the living space to almost 1800 sq ft and we use every inch!
It’s funny how FAST we expand our lifestyles to fill up our space, or how fast we can adjust to spending an increase in pay. Make more, spend more, it’s easy math in that direction….. it takes MUCH longer to cut back the other way though!
In college I lived off of $350/month. That was EVERYTHING from books to rent to car maintanence to groceries, I didn’t have a choice. I knew I had X amount of dollars in the bank and Y amount of months that it had to last, so roomates and frugal living to the extreme was what HAD to be done.
Now the numbers are bigger (thank heavens) thanks to having an income, and knowing what my commitments are, the math is more complicated but the results are the same… a pleasant sense of “okay” about the money.
Of course now the emergencies are more expensive with a house and kids, but at least I can budget for that too.
Candy is nice to have as a treat, but I know I may have another craving later, so I tend to save it. (yes, I was one of those annoying people that still had halloween treats around past Christmas, rationing myself one piece a day…. totally boring)

By: Brenda

Brenda — Mon, 01 Jun 2009 16:53:21 +0000

Back in the fall of 2006, I made a major decision for our household. I stopped working! My husband makes good money, but with me working out of the house, and taking care of two girls in daycare (at the time), plus travel to work – the so called extra income was being eaten up. So, to save some stress of running around, etc., I stopped working. Our income did drop, however, now we are actually saving money. No daycare, more time with the kids, less eating out, and less stress. Best decision I made in a long time! It also makes a difference not going out with girlfriends at lunchtime to “shop”, and buying things because it’s there, and I have the money. Now, we plan the items that we truly need, and our excess spending has gone down. We know that we only have one income, so our thought processes have changed.

I’m really looking forward to meeting you, Gail in Sudbury. Definitely want a hug!

By: Amber

Amber — Mon, 01 Jun 2009 16:14:00 +0000

I’m going over our May money numbers right now.

One thing I’ve learned is that if you don’t pay attention, your spending almost magically expands to match your income. It’s so true that overspending is not limited to those who don’t make much. You have to pay attention to where your money goes no matter your financial situation.

I recently learned that I won’t have a job to return to when my maternity leave ends. I am fortunate to have a pretty good severance package coming my way. However, I am also very glad that we did some planning and have healthy savings. It’s reduced the panic (just a little).

By: Christy

Christy — Mon, 01 Jun 2009 16:12:51 +0000

For us, we were supporting the farming habit… yes I said the farming habit as it is truley a culture all on to its own. All costs were justified because it was a write off and we were building up the farm.

That beef just got too expensive to continue supporting. We are now beef free (except at that dinner table) and we are almost consumer debt free. It’s amazing how far one will go to justify the candy… opr in our case the beef!

By: id

id — Mon, 01 Jun 2009 15:14:35 +0000

Gail,

Where is the best place to keep emergency fund?

I know it has to be easily accessible, however the banks are paying almost nothing for interest right now.

It hurts to keep such a lump sum in the bank and losing money (due to inflation).

The only thing that pays better right now and safe is a GIC, but then you have to lock it in for so many months.

Thanks for your help.

By: Jessie

Jessie — Mon, 01 Jun 2009 13:21:44 +0000

It’s June first and i have my notbook in hand.

By: Kate

Kate — Mon, 01 Jun 2009 11:27:20 +0000

So, so true. I do think having higher incomes can cushion the blow though- or, as I like to put it, “delay the inevitable”.

Hubby and I were certainly going the ostrich route- “we earn good incomes, we should be able to afford this” but never bothered to actually sit down and check (pure laziness). The fact that we aren’t completely up to our eyeballs in debt is due, I think, both to having higher incomes than normal and smartening up pretty quick.

Everybody should have a budget, even if the numbers are bigger/smaller for some people than others.

By: Nadine

Nadine — Mon, 01 Jun 2009 11:11:18 +0000

Way to go, Michelle. I’m with you absolutely. Candy is so tempting and I don’t really think you can learn to ration yourself without having gone overboard at least once and felt the cost.

I stopped using my credit card 6 months ago and went to cash. How it changes you is amazing. Last Saturday, I meant to go to the bank to get my weekly money and then to Wal-Mart but ended up shopping in Wal-Mart having forgotten about the bank first. I was in the third row I think when I realized I had no cash. For a minute, I just froze, stopped right in the aisle thinking “How am I going to pay for this stuff?” I was about to start putting it back when I realized I had the credit card. Long story short, went to the bank next, left the amount I’d put on the credit card in the bank and it was all good.