Give Me Back My Five Bucks

I usually find that buying CDs gets classified under "want" instead of an actual "need." That is, unless any one of my favourite artists just happens to be releasing an album. Then I must own it, no questions asked, no matter the price. I'm all for being frugal, but a girl's gotta have some form of entertainment! (Another weakness of mine: concerts. Nothing beats live music. Nothing.)

It just so happens that two of my favourite artists are releasing albums in the next few months! Squee!! Jeremy Fisher is releasing his album, Goodbye Blue Monday, on March 27th. If you think his name sounds familiar, he's the Canadian guy who rode his bike across Canada for 6 months, performing and raising money for "Tour des Femme," which promoted bicycle transport and education for girls in Africa. He's a really great guy, and he even helped me by promoting my HIV/Sexual Awareness campaign at one of his performances in 2005. :)

The next album coming out is Easy Tiger, by Ryan Adams on June 5th. The man is a frigging genius, and that's all there is to it. This is his first official album in a while. In November 2006, he released 16 albums via streaming audio on his website. 16 full-length albums. Granted, most of it was crap, but a lot of it was pretty good.

Anyway, that's $30 extra I have to budget for in the next few months!

Also, since I've installed a hits counter on my blog, I've noticed no one has actually visited in the 3 days since I launched this site. I wonder how I can infiltrate and make friends with all the other PF bloggers out there? Maybe I'll go over to the blogs that I read regularily, and comment that I really like reading their posts, instead of being all annonymous about it.

I just found out that a good friend of mine got fired yesterday from basically her dream job. I don't really know the details, but we both graduated from the same program together last year, and she's an amazing graphic designer (a million times better than me).

Anyway, it got me to thinking: if I lost my job right now, today, I'd be fvcked. Royally. I have less than $400 in my emergency fund, and debts still looming over my head. I need to pick it up, because I know I've been slacking at work the past month or so. It's not that I'm being lazy about it, it's just that I think I'm still in a little over my head, know what I mean? I've found it really overwhelming to be SO busy all the time, with 5 or 6 coordinators pulling at me, all wanting different things, managing a huge budget ... I got hired because of my graphic design skill, and nothing else (even though my design skills are mediocre at best) ... and to try and learn all these new skills on the job, well, it's been an eye-opening experience to say the least! But I'm so grateful to have gotten this opportunity, and I'm going to take the most out of these next 8 months.

Also, this morning I checked my mutual funds online, and because of the lovely Chinese stock market, my porfolio fell over 2%! I checked the TSX this morning when I got to work, and to my horror, it was already down 300 points! But I just checked it now, and it's still down, but only by 45 points. What sucks is I have both my registered RSP and non-registered MF accounts in the same fund. They're still higher than they were at the beginning of 2007, but it's still a huge jolt to have them drop so much in one day.

I hate it that some of my friends have taken to calling me cheap or stingy. It actually makes me feel really bad about myself, because I've always thought of myself as frugal. But I guess there's a very fine line when it comes down to comparing the two.

For example, my boyfriend and I rarely eat out, and when we do we almost always use a buy-one-get-one-free coupon, or some equivalent discount. (Helloooo Entertainment Book!) I always feel cheap when I hand a coupon to a waitress, but I have to keep telling myself that by saving 50% of the bill, we are actually being frugal because we're being smart with our money. Being cheap would be basing our tip on the discounted price. We always tip as if we had paid for the entire meal without a coupon (even though I don't necessarily believe in tiping in the first place).

I have a set monthly and yearly budget, and I try as hard as I can to stick to it. For example, I have a $30/month budget for dining out - that also includes going out for coffee, or any sort of snack that I buy. I brown-bag my lunch every single day, and in the 4 months I've been at this job, I've only eaten out once with a co-worker. It takes a lot of discipline to stick to a budget like this, because I love dining out.

When I want something badly enough, I buy it, and I buy quality. Ever since I started changing my spending habits, I've discovered a lot about myself when it comes to want vs. need. I want to buy a fancy $4 coffee from Starbucks, but do I need it (and the calories)? No, so I'll buy a tea instead for $1.70. I choose my battles when it comes to buying things, and I feel so much better about myself when I can afford to buy an amazing pair of shoes that'll last me years (or a ridiculously expensive computer), because I've stopped wasting money on the small things that I like, but don't necessarily need.

I'm not cheap because I never deprive myself of anything I really want. If I go out for drinks with friends after work, I'll get a beer, but I won't order any food. Or I'll order a "daily special" and drink water. That way, I can enjoy "going out" with friends without having to break the bank.

Some of my friends just don't understand where I'm coming from and continue to rag on me everytime I see them, and that's fine by me. I'll shut my mouth, and go along saving thousands of dollars, while they'll stay perpetually in debt. :) Real friends should understand, and I shouldn't have to go into debt just to maintain their friendship.

In September 2006, I sold my beautiful car (1989 Mazda 323). Okay, fine. She was a piece of crap, but she was my piece of crap, and I loved her. But I needed to sell her. She was one of my biggest expenses, and I wasn't driving her enough to justify paying $80/month for car insurance. I worked downtown, so most mornings, I got a ride into town with my Mom, who worked in the building next to me.

I bought my lovely car in 2003 for $1800, and sold her 3 1/2 years later for $1600. Not too shabby, eh?

So what was I going to use to get around the city? I purchased a scooter! Better fuel economy, and way cheaper insurance - I couldn't go wrong! So I ended up buying a 2005 Yamaha Vino 50cc scooter for $2200, which only had 34km on it so it was practically brand new.

A month later, I got a new job in a different municipality - which translated into a 45km roundtrip commute every day. If I still had my car, I'd have to either 1) drive to work every day, or 2) buy a bus pass for $60/month. 4 months into my job, and I can't say that I love riding my scooter in every day, but for the money I'm saving, it'll be worth it in the long run.

Let's do some math, shall we?

• Price difference between car and scooter: $600
• Price difference between annual insurance: $540 (from $80/mo to $35/mo)
• Price difference for gas if I had to drive my car to my new job: $180
• TOTAL SAVINGS: $120

So even though my scooter was more expensive than my car, it's already paid for itself in just 4 months. A big bonus is that because my scooter is new, I haven't had to do any repair work on it. With my car, I could count on spending at least $800 annually to fix something.

I do plan on buying a car again in about a year, but I'm definitely going to buy new, and drive it until it falls apart. My dream car is a Mini Cooper. The price tag is quite steep, and I may not be able to afford it if I end up having a mortgage to pay for, but I'd rather drive a car that I'm in love with for the next 20 years, rather than an ugly Yaris that I hate. However, that's a long time away, so we'll see!

Countdown to pay day: 3 days. Hoorah!

I've been wondering if I'm making sound choices with my investments. I want the most "bang for my buck," but with limited investment knowledge, it's hard for me to grasp exactly what I should be doing.

My emergency fund is currently in a PC Financial Interest First account that's earning 3% interest. Once I have over $1000, I will transfer the balance into the Interest Plus account, which will earn me 4%, plus an anniversary bonus each year I keep a minimum of $1000 in the account. The reason why I chose this account is because it's highly liquid. I'll have access to my funds in 24 hours, and as high interest savings accounts go, PC Financial beats practically everyone.

My mortgage down payment fund is being held in a non-registered mutual fund with TD Canada Trust. This is where I don't think I'm making the right move. The MER on this MF is quite high (I believe it was at 2.39%). I want to earn more than a 4% return, but since I plan on spending the money within 2 years, I don't really know where to park it. I'm getting a 7.5% return right now, which is practically nothing. I'd like to be earning at least 10% ... but how?

My RRSP is being held in a registered Balance Growth mutual fund with TD Canada Trust. It's the same fund that my mortgage down payment fund is in, with the difference being this one is tax sheltered. This is earning 7.5%, and I'm okay with that for now. Once I've gotten more investment knowledge, I'd like to try TD's eFunds, and manage my own financial portfolio (goodbye, ridiculously high MER!).

Well, not quite. Yesterday, an hour before I launched this website I dropped just over $3,000 on a new 24" iMac computer. Let me be the first to admit that 1) I did not need to get an iMac, and 2) I did not need to load it up with a ton of add-ons. That being said, I'm considering it an investment in my graphic design business. Let's face it, working on a crappy Seanix PC laptop just wasn't cutting it anymore. Plus, if it's any consoloation, it's tax deductible. I know I shouldn't have to justify splurging a little lot. What's done is done, and I'm very happy with my purchase. I should get it in the next week or so, and I'l be sure to post pictures. :)

Let me start off by saying that I am by no means a financial expert. In fact, I hardly know anything about investing. Up until a year ago, I was living paycheque to paycheque, up to my eyeballs in debt. Some months, I could barely make ends meet. It was horrifying and embarrassing. I made some dumb mistakes when I was younger (including lending money to a significant other, who obviously never paid me back), and I am determined to make up for lost time. Just thinking about all the money I've wasted over the years makes me sick to my stomach. I think a lot of my friends think I'm "money-obsessed" these days, and think I'm too wound up in it all. Maybe I am, but maybe I'm okay with that. I want to have the financial freedom to do anything I want to do, and that is my ultimate goal.

My job. I currently have one full-time job @ 35hrs/week, and one part-time job that gives me approximately 20-35 hrs/month. Combined, I gross about $4000/month, and actually net around $3000/month. That's a decent salary for someone my age, and with my education. That's also not including any graphic design contract work I receive.

After fixed expenses such as my cell phone bill, rent, groceries, RRSP contributions, and Mutual Fund contributions, I am able to put $2000 towards my debt. Any money left over at the end of the month gets put into my emergency fund. As I write this, I'm carrying about $6,500 worth of debt. Because March is a 3-paycheque month, I'll be able to put away a little more. Hopefully.

March 2007 Goals:

• Sit down with a potential client for my graphic design business, and get a contract signed
• Take on a 3rd job that will yield 10-15 hrs/month or less
• $2,000 towards my line of credit
• $1,000 towards my student loans
• $150 towards RRSP
• $75 towards Condo Down Payment
• $300 into my Emergency Fund

Who is krystalatwork?

Hi, and welcome to my blog! :)

I started this blog in late February 2007 because I felt like I needed an outlet in which to talk about personal finance issues, and to keep myself honest and accountable for my spending. I am an ex-shopaholic, and I love(d) spending money. Unfortunately, it all caught up to me, and coupled with my daunting student loans, I found myself trapped under a mountain of debt.

I am a college graduate (April 2006), and I hold a 2-year degree in communications. I also have 2.5 years of education in Sports Marketing at a university in Michigan. Before I turn 30, I would like to have completed my B.A. in Communication Studies through correspondence classes at Athabasca University.

On May 11th, 2007 I became 100% debt-free, and my goal is to live well below my means for the rest of my life. Financial independence is very important to me.

About Give Me Back My Five Bucks

This is a personal finance (PF) blog. I try to keep all of my posts somehow related to my finances in every day life. Among other things, I am interested in investing, real estate, being frugal, and smart shopping.

My online name, krystalatwork, does not refer to the fact that I'm blogging while I'm at work (well, sometimes it does) ... rather, it's that I'm always at work, trying to achieve my financial goals and trying to better myself as a person.

The name of my blog, Give Me Back My Five Bucks, refers to a conversation I was having with my sister while I was in the middle of creating my Blogger account for this site (and was having the hardest time trying to think up a creative name for it). I honestly have no idea what we were talking about, but for some reason, that phrase stuck in my head ... and I decided I wasn't going to come up with anything better on my own, so my blog was born!

While creating the header for this site (May 2007), I really wanted my graphic to incorporate what I was all about, as well as play on the name of my blog. Yes, that's my real wallet in the picture. I actually had to "borrow" the $5 (and change) from the BF for the photo shoot, which I thought was pretty funny. And he actually kept saying "give me back my five bucks!" I took it as a sign that I really had chosen the perfect blog name for my site. :)

I try to keep this blog anonymous for privacy reasons. I've never officially disclosed where I live (although I assume most people know what city I'm referring to when I write about my day-to-day life), and I've also never mentioned specifically where I work, or any names of the people that I write about. And if I post any pictures, I do make sure to blur out the faces of everyone in them. In this day and age, I'm sure it's possible to track down even the most anonymous blogger, but hopefully I'm doing my part to keep myself safe.

This blog is also kept private from any of my friends and family in my "real life." Only those closest to me even know I have a PF blog, and I would like to keep it that way. There's something comforting in knowing that this blog is mine, and it makes me feel free to talk openly about my finances.

Blog disclaimer

I am not a financial adviser. I am not an expert. In fact, I hardly know anything about personal finance ... but I'm learning. My posts are a reflection of my life experiences, so please do not make any financial decisions based on what I have said or done.

I decided to start this blog for a variety of reasons, but mostly because I want to clearly outline my financial goals, and write about my failures and (hopefully) my successes along the way. I got really inspired by reading other financial blogs (listed on the sidebar of this blog), and seeing that I'm not the only one who's made mistakes in the past. For me, it's good to have my financial profile out in the public - no more secrets. It makes me feel good that I'm actively working to change my way of life.

Investing is very important to me. It is something that I can directly control, and at my age, it's about time I start to look towards the future. The funny thing is, this time last year, I never even thought about retirement, but now that I know better, I don't want to be scrambling at 40 to try and save for retirement when I can start building my nest egg now, and earn interest on my investments. A big key for me to achieve financial independence is to buy property, which is my next big step in life. I would like to achieve this goal before I'm 26.

My financial profile:

• I have approximately $3,600 in student loan debt (original SL debt was just over $14,000 when I graduated in April 2006)
• I have no credit card debt (just finished paying off my maxed out Visa)
• I have $3,152 owing on my personal line of credit (and worth every penny)
• I have approximately $1,000 in a registered RSP Mutual Fund
• I have approximately $125 in a non-registered Mutual Fund
• I have approximately $335 in a high-interest savings account
• I have limited-moderate investment knowledge

Read my financial goals for 2007

E-mail:
I love getting e-mail! Please feel free to contact me with your feedback, or for any other questions/comments you may have. You can e-mail me at krystalatwork [at] gmail [dot][com]. Just so you know, I may post my reply to your e-mail on my blog if I think the dialogue would be appropriate. I think it's nicer to interact with readers that way. If you don't want me to post your e-mail (and my reply) on my blog, please let me know!

Those Darn Progress Bars:
Also, I've been getting a ton of e-mail about the progress bars I have set up on my sidebar. If you know HTML/CSS please feel free to scoop the code from my site, since all I did was scoop the code from someone else's site and then tweak it to make it look how I wanted it to look. :) For the HTML/CSS-challenged, you can check out http://www.licketyknit.com/progressbars.html. It'll provide you with step-by-step instructions on how to set your own progress bars up. Hope that works for you!

If you'd like to exchange links, please leave a comment below or e-mail me.

I love personal finance blogs (new or old, it doesn't matter just as long as you post regularily) that relate to everyday life. Putting the "personal" back in "personal finance" is important to me. I can read PF articles anywhere on the internet nowadays, but reading about a real person's struggle and triumphs to reach their PF goals really hits home with me. I also think there's a lack of Canadian PF blogs, so please let me know if you know of one, or write one yourself!

Also if you have a blog that isn't about money and personal finance, I will also link to non-PF blogs as well. I don't have many listed yet, but it doesn't mean I don't read a ton of them on a daily basis. :)

If you haven't updated your blog in 6-8 weeks, I'll probably take you off my blogroll until I see that you've posted again (through my Google Reader).

How I got into debt ... and out of it

In May 2006, I graduated college owing over $20k in student loans and credit card debt. I had absolutely nothing saved, and I was living with my parents. I was 23 years old, and it was downright depressing.

What did I spend my money on? Well $14k of my debt was my student loans, and I had maxed out my credit cards on stupid things like clothes, concert tickets, trips, etc. I was stressed out all the time, because I literally had no money to my name. I could barely make my minimum payments on my bills.

For the first few months after college, I was just getting by, making minimum wage working part-time at a drug store. As my classmates were starting to land their first jobs, I was receiving statements from collection agencies. It got to a point where I honestly couldn’t even afford my monthly prescriptions, and it was so humiliating having to ask my boyfriend at the time to lend me the money. He couldn't believe I didn't have $10 to my name in cash, or in credit. He was nice about it and lent me the money, but I know what he was thinking, and I felt awful. That’s when I knew I had to change. I want to become financially independent so I don't have to live my life relying on someone else to bail me out.

I needed a life change, and as scary as it sounded, I decided not to hide from my debt any longer. It was horrifying having to actually open up the bank statements that I’d usually just ignore (and throw away), and after carefully calculating how much I owed, I was in shock. I had no idea I owed so much, and I knew my first course of action was to make a budget and stick to it.

I had decided to move home in 2004 because I couldn't afford to keep my apartment, pay all the minimum balances on my cards, and go to school at the same time. It was a great decision, because instead of spending $650/month in rent plus utilities, I was only being charged $150 including utilities. Then there was my lack of a budget. I was regularly spending $100+/week in groceries for myself alone, and I was going out and partying with my friends every weekend. That had to stop. And let me tell you, it was really hard. My friends weren't as supportive as I had hoped they would be ... but I kept on with my new lifestyle. I became a coupon clipper, and only bought what was on sale. I also quit partying and found alternative ways to have fun for free.

My next course of action was to get a full-time job.

In June 2006, I landed an entry level job with a government agency. It wasn’t what I was trained to do, but it was a job. My take-home pay was about $2100/month, so I decided to earmark $1,000 of that income towards debt repayment. I opened up an RRSP, and started putting money into an Emergency Fund. I also started to save for a condo down payment. Each of those accounts got $50/month. It wasn’t a lot, but it was a start.

By October, I had eliminated my credit card debt and vowed never EVER to keep a balance on my cards again. There's nothing worse than those outrageous interest rates they charge!

So it was onto my student loans next. All $14k of it. That much money was intimidating as hell, and I knew I needed to adjust my priorities. So, I sold my car and bought a scooter. It was a little drastic, but drastic times called for drastic measures. Not only did my insurance drop from $80/month down to $15, but I only paid $5 to fill up my scooter every week. It was a great decision, and yes I missed my car (and it sucked having to ride in the pouring rain), but I knew it would be worth it in the end. I saw the BF with $450 car payments every month, and I was so glad I didn't have anything like that to deal with. I also implemented a very strict budget on myself. But that still wasn’t enough. I needed to do something more extreme – so I started applying for a new job.

Miraculously, in mid-November, I landed a great opportunity in my line of work with another organization. It was a one-year maternity leave position, and although it wasn't a permanent thing, it would give me the mid-level experience I needed within government. I also started a part-time job, and was able to step up my debt reduction to $2,000/month!

It was around this time that I really started counting my pennies. I literally threw every last cent I had at my debt. I kept within a $30/month dining out budget, and never let my groceries creep above $25/week for my share (I lived with my BF at the time, and we split the groceries evenly). I also learned little tips and tidbits on how to save money on the little things. I got a ton of heat from people about being too "extreme" about my budget and not having a life because they thought I was afraid to spend money ... I guess everyone has their own way of dealing with debt, but the way I saw it was: I got myself into debt, so I didn't deserve the niceties I was so used to spending on myself until I got myself out of debt. It seemed fair to me, anyway.

Throughout this process, I started reading personal finance (PF) blogs and articles online. I found it hard to relate to my friends in real life because they didn't seem concerned with personal finance or paying back their debts. They just didn't understand why I was so stuck on saving money, and often made fun of me for it. I was the "penny pincher" of the group, even though I didn't feel deprived of anything at all. So, needless to say, it was inspiring and uplifting to know there were other people like me out there who wanted to change their lives.

The PF blogosphere was so welcoming and inviting, and I felt so inspired through the actions of others that I decided to start my own little PF blog. It really helped me become accountable for my actions, and I quickly made online friends who were so encouraging and supportive. To this day, I still think creating my blog was one of the best decisions I’ve ever made.

On May 11th, 2007 I became debt free. What a wonderful feeling! I still can't believe it. Now, when I get my pay cheques, I don't owe money to anyone but myself, and it feels great! Not only did I eliminate my debt, but I have established a pathway to my future, and I know that my dream of financial independence is going to become a reality.

Short-Term Goals (1-2 years):

• Get out of debt - achieved as of May 11th, 2007! I'm officially debt free for the first time in over 5 years. It's a great feeling. It's my life goal to never be in debt again, aside from carrying a mortgage. I know it probably won't be attainable because I do want to purchase a new car in the next 2 or 3 years (once I get a suitable down payment ready), and I also want to go back to school. Tuition will run me $13,000.

• Find full-time permanent employment - achieved as of January 21st, 2008! I moved from the island to Vancouver to take on an amazing job with a not-for-profit organization. I had to take about a $8k pay decrease, but I know in time I'll be back up to where I want to be salary-wise.
  

• Establish self-employed graphic design business for a return of $5,000-$10,000 annually - Well, I think this goal was a bit optimistic for my first year of my side business. So far, I have earned zero in revenue, but I have prospective clients established. I have also finished designing my company website, and when my position is up at my full-time job, my boss is looking to hire me on as a contractor to do a lot of the graphic design work.

• Create a positive net worth - achieved as of April 2007! You can check out my networth here.

• See an 8-10% return on my investments - so far, my mutual funds are returning around 9%, but because of the MER, I'm actually only seeing about 7%. Just recently, I took control of my non-registered account and will be managing it myself. Since taking over the account, I've seen a better rate of return than before ... but I'm not sure if that's due to my savvy investment skills, or just because the market is hot right now. :)

Mid-Term Goals (2-5 years)

• Save money for a down payment for a condo/townhouse - Ideally I'd like to have $40,000 (plus closing costs) saved up ... which would probably amount to the 20% down payment needed, but I'm willing to pay the mortgage insurance if I found the right place.

• Get my B.A. in Communication Studies from Athabasca University - I know how important it is to have a degree, so I'm going to try and achieve this before I'm 30. This will all be done through distance education courses so I can continue to work full-time and further my career.

• Have $30,000 in my RRSP by the time I'm 30 - As of right now, I have just over $16k in my RRSPs and I'm 25.
  

• Set up an Emergency Fund of $3,000-5,000 - Barring any major disasters, I believe I can have this funded to at least $3k by the fall of 2008.

• Set up five 5-year escalator GICs - I would love to invest $1,000/year for five years in Outlook Financial's 5-year GICs, so that a GIC would mature every year. The rate of return is great for their GICs, with the first year starting at 4.30% and going up to 7% for the 5th year. That would only mean I'd need to save $1,000 every year, so this goal is definitely attainable. My investments don't necessarily need to be at Outlook Financial, it's just that their rates are the best available at the moment.

Long-Term Goals (5+ years)

• Set up an Emergency fund of $15,000 - This would equal 6-8 months of expenses, depending on the amount of my mortgage, if I have car payments, where I'm living, etc.

• Have $100,000 in my investment portfolio by the time I'm 40 - I have yet to really figure out how I'm going to do this, but one of my life goals is to retire before I'm 60. Ideally at 57. Maybe I should make it a goal to win the lottery.