Tag Archives: Personal Finance

Planning, Not Luck

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So when re-reading my last post I think I came up much too well adjusted, which is definitely not an accurate picture. There were some things that happened while I wasn’t working that definitely pissed me off and still do to this day. I haven’t made peace with the world yet.

One such frustration was a common reaction I got to the fact that I wasn’t out scrambling to take a job and could afford to take some time to find the right opportunity. Upon hearing this, the common refrain was along the lines, “It’s lucky that you can afford to take your time.” Even typing it now makes my blood boil a bit.

Guess what, luck didn’t have much to do with it. I guess in the broader sense I’m lucky I was born in Canada to a good family, and have been lucky for the support and privilege I have received as a result of that. I don’t think that’s what people meant, though, because in that sense virtually all of them were on the same footing as me.

It could also be that they have misspoken. A commentary on the further degradation of the English language, where native speakers can’t discern between the words “lucky” and “beneficial” which has culminated with my insult.

Maybe.

However, I believe that most of the speakers thought of it as actual luck. As in, “Wow how lucky is it that Kevin accidently has some money in the bank when this happened?” This interpretation is where my frustration comes from.

This situation has nothing to do with luck. It comes from planning and execution. Don’t understand the difference? Perhaps an example would help:

Two people find themselves out of work at the same time. Both are able to spend a few months not looking while continuing to live their life and make ends meet. Person one has saved a portion of every pay cheque and resisted the temptation to spend. Person two wins the lottery. One of these people is lucky, can you determine which one?

Obviously real world situations aren’t laid out quite like this, but I hope you get where I’m coming from. Dismissing a tough, annoying and frustrating action that someone takes (saving) and dismissing any benefit they get from it as luck completely diminishes the accomplishment. I try not to be “braggy” on the blog, but in this case I’m going to go for it.

This is something I’m going to watch for. In all seriousness, it likely has something to do with speech patterns. Still is a little frustrating, though. So when it has nothing to do with luck, don’t call it that!

The PST Hike

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Short and sweet, this post will be. It’s not going to be some huge rant about the PST going up. Honestly, I think consumption based taxes are one of the better forms of tax, especially as compared to income tax. If I want to save my money or invest it in starting a business, there’s nothing quite like being put at a disadvantage because I’ve chosen to live in Winnipeg.

But I digress…

What is worrying me about the PST is as a business owner. Not that I have to charge 1% more, but rather what happens if the courts rule that the government illegally raised the tax rate. Does that mean I have to go back to every client I’ve had since the beginning of summer and issue a 1% rebate?

It’s not like it’s a great sum of money I’ll be giving back and it was never really “mine” to begin with. Still, though, having to go through the process of getting mailing addresses and issuing refunds. Paying for postage and taking the time to write the cheques. It’s all time and money that could be better spent elsewhere.

I can only imagine the huge resource cost that larger businesses are going to have to take on. What about car dealerships and vendors of other large purchases? Where 1% is a significant enough sum for people to care. I don’t envy that.

As a consumer I’m going to go on record and say that if the PST charge was less than $10 for any specific transaction, I don’t really care about the refund. I’m sure it adds up to some meaningful sum, but I feel bad for the businesses that are stuck in the middle here. They don’t have any pull in the decision, but they’re the ones who will have to shoulder the cost. I would prefer they stay in business in Winnipeg.

Put the “C” in Customer Service

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In this case the “c” stands for crabby. You can let your imagination go on the word that I actually though of after the encounter I’m about to describe.

Normally I think I’m ok when it comes to useless customer service representatives. They usually have no power to make a real difference and are usually discouraged from using their brain, instead following narrow scripts that don’t really address the issue you have. Note: For an excellent book about the opposite of this method and how all customer service should be read Delivering Happiness by Tony Hsieh, CEO of Zappos.com.

For the reasons stated above I keep my cool and tend to let CSRs off the hook, but an encounter today (June 11) set me off and I’m now compelled to dissect it to come to some sort of peace. I’ll recount my story, marking the sections that pushed my buttons and explain why below. First some background:

I have two Visa cards. My primary and a secondary with the lowest limit possible. I use the secondary for parking meters, online purchases, etc. Basically any transaction that is higher risk, so if the card is compromised, I only have to worry about a $500 limit, not the one that’s higher than that and has all my bill payments coming off of it. The secondary card has been a bit spotty lately, but I use it so little that it didn’t bother me too much and I didn’t think much of it.

Today, however, I tried to make a purchase over the phone, which didn’t go through. I thought to myself, “enough is enough,” and tried calling CIBC Visa. The following recounts the call.

Started pleasent enough, getting my verification, asking what was wrong. As I started to explain I was interrupted (1) and asked if it was an issue with entering my PIN incorrectly. I said no and tried to explain, but was interrupted again with the same question (2). I said no again at which point I was told that I needed a new card, one was on the way and asked if I needed anything else (3).

At that point I was finally able to spit out that this happened with a telephone transaction. Taken aback I was told there were no notes on the card’s file and I was wrong (4). I’ll admit that at this point I was frustrated, I said goodbye quickly and not to worry about it. In my mind it was clear she was going to be no help, so I was just going to hang up.

As I was taking my phone away from my face I heard her yell that she was going to cancel my credit card (5). This obviously got my attention and I stayed on the line. I got yelled at that I’m not allowed to hang up (6) and if I did my card would be cancelled.

I, as calmly as possible, asked her what she was getting so upset about. She repeated that I can’t hang up and asked if I still wanted a replacement card. I declined and informed her that she essentially said that the card not working is my fault and there’s nothing she can do, so that’s why I was hanging up. At that point she said a quick “bye” and hung up on me (7).

So, here’s the way I see it:

  1.  This is the first time I was interrupted, but it wasn’t the last. A good CSR should hear the whole story before trying to help.
  2. Reasking the same question, especially when you haven’t allowed for me to tell the whole story AND the question implies fault on my end is a huge no-no for me. Never try to make the customer feel stupid. (Side note, this happened to me a month or so ago when I called 311 to report yard waste pick-up being days late on my street. I was asked no fewer than three times each if I put it in the right place [yes] and if my neighbour’s was still out [yes].)
  3. Jumped to an answer, still without fully understanding.
  4. Telling me I’m wrong about the issue I’m reporting. Again, don’t try to make the customer feel dumb.
  5. The customer can hang up at any time. There is no reason to make a threat, just chalk me up as an asshole and let it go.
  6. Yelling and again ordering me around didn’t help her cause.
  7. Hanging up on me, especially when I was told that “wasn’t allowed” isn’t the best way to finish a call.

Always trying to take some sort of positive from an experience, I think that I now know how not to treat people. Seriously, though, I think this is a case for better CSR training and allowing your people go go off script (but not in the way she did).

Being as this is a bank we’re talking about here, I’m guessing there isn’t a lot of empowerment of front-line staff. This person was likely doing everything she was allowed to, which is stay on a script and try to get me off the phone ASAP. I have to say this didn’t make me feel good as a client of over eight years, and a former employee for that matter.

Without empowerment there is frustration and that frustration may be directed at your clients, which is not a good thing for your company. Give people the tools to actually help.

Bitcoins Intrigue Me

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I find the growth of mainstream awareness of Bitcoins amazing. To be perfectly honest, I didn’t quite know what they were until the mainstream media starting reporting on them, and even then if I hadn’t done some of my own research would not have fully understood. If you’re in this group you can find out more on the Bitcoin official website and (even more helpful) Wikipedia page.

For those of you who trust me, a Bitcoin (BTC) is a boarder-less “crypto-currency” which first came into use in 2009. The concept is that there is no government backing the currency and it can be used from country to country without need for exchange. The control of the currency is all electronic, from management to transactions, and it’s release into use is scheduled from now until 2140, when it reaches the maximum of 21 million BTC.

Recently there have been some major Bitcoin developments: a man in Alberta is attempting to sell his house for Bitcoins, which is the largest “real world” transaction to date. Secondly, a Bitcoin ATM has been created, which is one step closer to making the currency something the majority could consider using, expanding it beyond it’s current internet sub-culture.

Now that I have, hopefully, provided enough evidence that this is a real thing and I’m not crazy, what does this all mean? As I’m sure you can imagine, with the increase in mainstream awareness, critics have been coming out of the woodwork. Every talking head on TV now has an opinion about them, and I’m sad to say that there are very few that are positive, or even thinking clearly.

To me, this type of monetary policy is actually a step in the right direction. To get to my reason why, I need to first explain a few of the criticisms and why I don’t think they’re valid:

It is not backed by any government.

So what? If the last 6 years have taught us anything is that money backed by a government can be worthless as well. Not only that, but when there is a government involved there are all types of lies and cover-ups to deal with. Along with competing priorities and human error.

It is primarily electronic.

Again, so what? The large majority of our current transactions are electronic, as well. When do you really use cash? With the use of cheques, debit and credit cards, along with the growing popularity of online shopping, people don’t have to see cash for years at a time if they really don’t want to. If you think that the government is printing all of the money they are releasing into the economy, give your head a shake.

It has no underlying value and relies on a group of users believing it is worth something.

… which is the exact same as our currency. Only difference is that there is a larger group of people who believe in it and a government who is telling us it’s all going to be ok. Ever since our currency was debased, it is just a made up system of numbers that rely on the users to believe it is worth something. In terms of “underlying value” it is not worth more than the paper it is printed on. At least with the Bitcoin there is no false confidence.

Why the Bitcoin interests me.

To me this is democratic currency. It is made by the people and it’s value is based on how it is adopted. The other interesting thing is that it is predictable, in a sense. We know how it is being released over the next 130 years, which is way more than could be said for government-run currency. All of the points raised by critics are nothing different from how world currency is being managed right now.

There is a large amount of volatility right now, so proceed with caution, but I think that once it has wider adoption some interesting things are going to happen.

Common Sense for Common Law

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Deciding to move in with a significant other is a huge step in a relationship and any couple who gets to that point should be commended. There are many different people with many different opinions on the relationship / emotional side of moving in with someone. I’m actually a little glad my mom doesn’t read this, because I don’t want to launch into a hypothetical conversation about ethics.

What I want to pay some attention to is something that seems to be overlooked by people I know who have moved in together. I just want to point out that this isn’t a judgement in any way, only things that I have seen happen that I maybe would have done differently. That being said, I have never been in the situation and I can definitely see how all the positive emotions will cause the couple to gloss over some of the more practical issues, but as always I’m a firm believer that some practical thought when things are good make it much easier to handle when things are bad. Specifically, what does living together without having a formal marriage document mean for both of you financially, both when you’re together and if you split up?

In casual conversations I’ve had with people, the rules of common law seem very widely misunderstood. I will fully admit, before some research for this post, I had some incorrect assumptions about common law in Manitoba. I am happy to say that once I set the record straight, the laws aren’t as unreasonable as I once thought they were. Regardless, it is important to familiarize yourself with what you are and aren’t entitled to should you break up.

If you don’t agree with the letter of the law, based on how you and your partner are living, then it’s time for a difficult decision. I’m not a lawyer, but common sense would dictate that should you believe that you have a level of entitlement to certain possessions, but the law disagrees, a signed agreement needs to be created. If you decided to pursue this, then an even more difficult discussion needs to be had.

You need to sit down with your partner and agree to how the assets, monies and responsibilities will be split while you’re together, as well as if you break up. While I agree there is nothing less exciting than having this conversation, I’m a firm believer that it should be had during a happy time, when you still care about the person. You are thinking more clearly and don’t have all the messy, negative emotions you have when you’re doing through a breakup.

Once the agreement has been made and signed, then you have a basis to defend your rights on. This can be for anything from the owner of certain objects not having to split them, to not getting kicked out of your home too early. Another thing, is having a guideline to base all “who gets what” conversations on helps keep emotions out of it, as much as possible.

If this is the most unromantic thing you’ve ever read, I agree. One last thing I would say is to really think through combining finances. Even if you’re living together, it doesn’t mean you have to share every bank account. This is just another backstop against what could make a bad breakup, worse.

Moonlighting

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I realize that there are (and will continue to be) posts where I’m waving my finger, talking about how people should live within their means. While this may be true, I know I’m violating a rule that I try to always hold myself and others to, which is if you are making a criticism, at least make it constructive.

The obvious answer to living within your means is to keep a leash on your spending, which is all good and fine for some. If you’re anything like me, however, rather than conceding to giving up on doing things that would make you happy, I prefer to think of creative ways of working around the issue. One answer to this is moonlighting.

Before some of you start getting defensive. This doesn’t mean going to get a job in a mall, nor does it mean working the night shift at a factory (not that there’s anything wrong with either of these). There are almost endless ways to make some more scratch and it needs to fit into your life in a comfortable way. Don’t feel shame, though. People from all walks of life choose to do a little work on the side, from physical labour, to doctors, to tutors, to accountants. The list goes on and the only thing that these people have in common is the fact they want to make more money.

For some of us, moonlighting is likely something we’ve considered once or twice in the past, in some shape or form. It could be in the form of a part-time job, doing some contract work in your field, starting a business, or doing something even more creative. Whichever path is best for you really depends on multiple factors and the decision won’t be the same for everyone. There are a few things that should probably be considered.

  1. Will it work around / be allowed by your current employment? In terms of schedule, as well as your employer being OK with the type of work. I recommend being open and honest about it, because regardless of the upside, losing your full-time gig because of something on the side isn’t worth it. Also, violating your employment contract is rarely advisable.
  2. What impact will it have on you and your life? If you love going to the cabin every weekend, getting a job that keeps you in town may solve the money problem, but I’m guessing will leave you unhappy before long. Similarly, if you feel like something is “below you,” that mindset doesn’t usually vanish and you’ll continue to be miserable.
  3. Can you actually do the work and are people willing to pay you? Deciding one day to be a “management consultant” sounds very impressive, but do you have the experience and expertise to back it up? There is no point in marketing yourself as a high-level guru if you can’t walk the walk, because people will eventually realize you have no clue what you’re talking about. Better to not give them the chance and stick with what you know.

Besides giving your financial freedom, moonlighting may give you the opportunity to expand your skill set and learn something new. If you have an area of interest and can find something related to it, all the better. My tired example is that I wanted to have a small side business and started it up, which is now making me some money. I wanted to get better at writing, so I started this blog. I’m not making anything off of it (yet), but don’t know what the future has in store.

Taking it a step further, if you have a hobby that you are spending time on anyway, it may be interesting to see if anyone will pay you to do that. For example if you enjoy painting on the weekends, why not try and sell a few? You can set up a website, post them on Kijiji or go to a craft fair. This way your work doesn’t even feel like work. The obvious downside is you may not end up feeling great about your work if nothing sells, but if you are OK with that possibility there’s no harm!

All in all, I’m just here to say that there is no harm in looking into your options and this is a better choice than spending above your means. While it may not be the sexiest choice, doing it now while you’re young is still a much better option than being forced to do it at an older age. Really, when it comes down to it, who out of us honestly has no free time to spare?

Budgeting

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I’ve been told by certain people (not naming any names) that I’m a little obsessed with budgeting. Admittedly, it’s not “normal” to be tracking your spending on a spreadsheet from your phone, as you leave the store and walk to the car, but what can you do? We all have our obsessions and this is one of mine.

I maintain that at least my compulsion is a hyper-productive one. A habit that allows me to stay one step ahead of myself, and have comfort in the decisions I do make with my money. I think that this is something that young people tend to discount.

Unless you have more money than you can possibly spend (lucky you) or so little that you don’t have the luxury of making choices as to what to buy (sorry to hear it), it seems from my non-scientific observation that budgeting isn’t a high priority. Many young people, me included for a time, know the rough amount of money they have in the bank, therefore know roughly how much they can spend. This is fine, so long as you manage to keep your loose rules straight and your assumptions are correct. If not, it could lead to some serious problems.

You see, for me, while my acute money tracking may seem like an insane obsession from the outside, it is quite the opposite. I spend a few minutes every day reviewing and updating a spreadsheet, make a quick mental note on where I am with my “fun” money for the week and then not worry about it again until the next time I sit down with it. It’s that simple.

While tracking your finances to the level that I do may not be your thing (or may make you question my level of sanity), I think that creating a budget is something that everyone can and should do. It sounds very grown up, and even hard, but it’s not as difficult as you may think.

It really just comes down to simple math:

  1. Take what you earn, subtract your fixed costs (rent, phone bill, car insurance)
  2. Determine your savings needs (retirement, going on a trip, new tv)
  3. With what’s left over reasonably project your spending

It’s important to do the above in order! Many people reverse numbers 2 and 3, budgeting what they would like to spend and saving anything that is left over. This is dangerous, because we would always want to spend more, but the reality is that ensuring you are saving enough for your future is more important that a few extra meals out with friends.

If at the end of the month, you have run out of money or have more left over than you thought you would, then revisit your budget and make some adjustments. Either tighten your belt or allow yourself some more room. Do this and see the stress of having to ask mom and dad for money to cover rent melt away!