Category: Frugality

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Guest Blog Post: Boppy’s Rules of Money and Investing

Welcome back readers! (Yes, both of you.) I know it’s been a while, but life has been… well, life.

Today marks this site’s first ever guest blog, featuring the words of wisdom of my father-in-law, the one and only Boppy.

My father-in-law is a long-time investor. He has been retired now for many years. In his working days he was a teacher, but also a cautious investor and an inherently frugal man who above all else understands the value of a dollar. I always enjoy talking to him about money and investing (among other things) and the teacher in him is always happy to offer advice to those who seek it. Between his teacher’s pension and his assets from a lifetime of investing, he now spends his days doing things he loves, which mostly involves spending time with his grandchildren and enjoying his summers at the cottage. And of course, another thing that he enjoys doing is keeping an eye on the market and his investments.

When Boppy found out I had this little corner of the internet, he was intrigued. He revealed to me that he always wanted the opportunity to share some of the wisdom that he has accumulated over the years with future generations, starting with his grandkids. So I told him I would happily offer him some space on this site to share some of that wisdom. Sure enough, Boppy has come through with his first contribution.

So to my nieces and nephews (and my own children, assuming you are reading this in the future once you have learned to read), mark this page as a bookmark, a favourite, a Pin, or what have you. Without further ado, I give you the words of Boppy.

Boppy’s Rules of Money and Investing

  1. If you take care of the pennies, the dollars will take care of themselves.
  2. No one looks after your money better than you.
  3. A dollar saved is equal to two dollars that you earn. Why?
  4. It’s not how much you make, but what you do with what you make.
  5. Never allow debts to increase. Pay all bills and credit cards when they are due.
  6. Don’t put your money in banks, but buy the shares of banks (preferably in a DRIP plan).
  7. Put your money in a true credit union. I have always been a member of at least two different credit unions so I could play one against the other for the best rates. Remember you are doing them a favour when you lend them your money.
  8. Avoid spending money on depreciating assets. Invest in appreciating assets. Name a few of each.
  9. Understand the difference between needs and wants. People that make a lot of money but have little savings spend their money on wants which are depreciating assets.
  10. Save a given percentage (10% or more) from every pay cheque. Put it in an account that gets the highest rate possible.
  11. Save for important purchases and avoid borrowing money and paying interest. Buying a house is one exception.
  12. As soon as you start becoming taxable, open TFSA accounts and contribute as much money as you are able to avoid paying tax.
  13. Use RSPs to reduce taxes, but do not contribute more than about $100,000 in your lifetime if you also have a pension. You will still have to pay tax on this money when you withdraw it, and you could put yourself above the threshold for Old Age Security benefits.
  14. When saving for your children’s education, do it through yearly contributions to RESP accounts. Familiarize yourself with the different kinds available and benefit from the yearly government contribution.

There are other specific things that require planning and strategies like; buying a used car, selecting and using a credit card, and stock trading rules. You can always ask Boppy.

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Scary October: A bad month for spending

We try to do our best here at Casa del CIQY, but sometimes, things can get away from you. This October was one of those bad months for us and saw a big spike in our household spending.

Maybe you’re thinking to yourself “they must go overboard for Halloween and Thanksgiving” (recall we are Canadian so Thanksgiving is in October for us). Well, we do like Halloween around here and we did host Thanksgiving, but we did pretty well in terms of spending on both of those fronts. What we did have though was a number of irregular expenses that all ended up arriving at around the same time, leading to a month where our net income was very much in the red.

The Expenses

So what were these expenses? Well for starters, our home renovations picked up some serious steam during the month of October, which also accounts for the dearth of blog posts during that month. Our renovations were put on the back burner for a lot of the summer so we could enjoy the weather and each other. Mrs. CIQY and I tend to work opposite shifts, so if we don’t see each other on weekends, we pretty much just don’t see each other. But when the weather started to turn cold we also realized that New Baby was not that far from arriving and we needed to finish our renos before that happened, so we kicked the renovations back into high gear. Consequently, even though we’re doing the work ourselves to save money, there was significant spending on materials during the month.

Next, we had to buy new tires. Eight new tires, to be exact. My wife’s winter tires had worn down their tread far enough that they wouldn’t last another winter, so we needed new winter tires for her car. Meanwhile, I replaced my car over the summer (which I bought used and got a great deal, thankyouverymuch) and I needed winter tires for my car as well. So there was another big expense for the month. Two, if you want to nitpick.

If that wasn’t enough, we bought a new vacuum. I’m not sure when the last time was that you bought a vacuum, but they tend to not come super cheap. And given that we live in a household with three fur babies who shed, this was not an expense we wanted to cheap out on. We have needed a new vacuum for a while and have been on the lookout for a while as well. It just so happened that this was the month when we finally ended up pulling the trigger.

And to round it all out, there was a property tax bill due. Now maybe this doesn’t necessarily count as “irregular expense”, but it’s also not one that is due every month. In our case, taxes are paid in five installments, on five different month-ends. October happens to be one of those months.

The Silver Linings

On the other hand, I don’t view any of these expenses with any regret. They were all justified, they were all arguably necessary, and furthermore each case represents good value (except maybe the property taxes, but there’s really not a whole lot you can do about that one. Taxes gots to get paid).

Let’s start with the renovations. As I have mentioned, we’re doing the work ourselves with a lot of help from my handy dad. So right away, we’re saving a lot of money on labour. My dad and I both estimate that if we had hired contractors to do this work for us, it would have cost us approximately $25,000. So far we’re on budget to have it all done for about $6000-7000.

Furthermore, we’re significantly adding to the value of our house. We’re adding a full bath, turning our formerly 1.5 bath house into a 2.5 bath house. And in refinishing our old rec room, we’re adding insulation where there was none before to the external walls. So we’ll be saving a lot of money in future years in heating costs. And of course, most important of all, finishing these renovations will bring us more enjoyment of our house, we’ll get better use out of our basement space, and we’ll be making our lives easier. Win-win-win. No brainer.

Next, the winter tires. I’m of the opinion that when you live in Canada (at least in our part), winter tires are essential. Especially when I think about the safety of my wife and kids, this is something that is well worth the expense. So I’m definitely not second-guessing the purchase of winter tires in general. That’s a good start.

But beyond their being essential, we also got a good deal on the tires too. My wife got a great deal at Canadian Tire during their “Biggest Tire Sale of the Year” or whatever it’s called. And we had them installed on a set of steel rims that we got for free, along with the old set of winter tires, from my brother after he got a new car and his old winter tires didn’t fit. As for the tires I got for my car, I found them on Kijiji. They are fantastic tires. Top of the line Nokians, from Finland. Normally these things retail for about $200, per tire. I got a set of four, on rims, for $350. And lots of tread left. These babies should last me for a good 3 or 4 winters I’d wager. Not to mention the man I bought them from was very nice, and had even marked them for me, for proper tire rotation. This was definitely an example of good value for a dollar. Kijiji, baby!

Finally the vacuum. Like I said, we have pets. Three of them, to be precise; two cats and a dog. And a toddler, and a baby on the way. Our old vacuum had become unreliable. It was also heavy and had a broken power switch (we had to just plug it in to turn it on and unplug to turn it off). We had gotten several glowing reviews for Dyson vacuums from family and friends, and decided we wanted to get one for our next vacuum. When someone you respect and trust says “it’s the last vacuum you’ll ever buy”, that is the best endorsement you can hear. This was something we already knew we wanted. So when we came across an older model that was marked down at Canadian Tire and came with a $50 rebate, we recognized our window of opportunity and climbed through it.

As for the property tax… well if you know a way to get out of paying that bill, I’d love to hear it. On the other hand, as a good citizen I recognize the value of paying my taxes and I do it willingly. Personally I think there’s some good value in this expense too. As long as my plumbing keeps working, my trash keeps getting picked up, my streets cleaned, my traffic lights stay operational,…

So add it all up and it was an expensive month. There’s no two ways about it. On the other hand, we’re closer to having an extra bathroom and an awesome rec room to play in, we have peace of mind when it comes to driving safely this winter and for the next few winters, and we’ve got an amazing vacuum that should last us a lifetime. So it’s not exactly like we’ve got nothing to show for all that extra money being spent. Sometimes it’s better to focus on what you get, rather than on what you have to give to get it.

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Lessons about money from mom and dad

This post was inspired by something similar I read at She Picks Up Pennies. Thank you Penny for the idea.

I think we can all agree that we have all learned a lot from our parents. I certainly have. Some of the lessons I learned from my parents were intentional on their part. Other things I just picked up from observation. Most crucially, some of these lessons had to do with doing the right things, while other lessons I learned from them were prime examples of what not to do.

My parents were both immigrants to Canada. Mom came as a teenager in the 1960s with her family. Dad came solo as a young man in the early 1970s. But one thing they had in common is that they both grew up poor.

I have found this to be pretty common among people I know in my parents’ generation. Especially in Europe after World War II, most people were poor. My parents grew up in poverty. They both have many stories about hunger, about not having enough, about having to share meager rations with their families and doing whatever they could to scrape by. They both left Europe in search of a better life. And they both found one.

We all know the phrase “know the value of a dollar,” but that means different things to different people. My parents weren’t the type to spend a lot of money on expensive big ticket items, like fancy cars or gadgets or what have you. They knew exactly how many hours they would have to work to pay for those things. My dad always bought used cars and would fix them himself whenever he could. And he was clever enough not to spend way too much on brand new technologies. He would tell us stories of colleagues of his who would spend thousands (in the 1970s and 1980s mind you) on brand new Betamax machines or CD players. Our family was never the first to get the latest new toy. We waited for the prices to come way down before we bought them. So to my parents, spending too much on things they considered to be luxury items was just silly. Wasteful even.

On the other hand, there were a couple of things my parents would spend money on without giving it a second thought. The two biggest examples are food and clothes. And I think the reason why is because they were two things that they had to do without for a lot of their upbringing.

My parents seemed to measure wealth in shoes a lot of the time. I’d hear stories about how my dad had one pair of shoes that lasted him many years and had to be used for every occasion. He had to take care of his shoes and have them resoled time and time again because there just wasn’t enough money for another pair.

Same thing went with clothing. There was one story I remember about my dad putting on his Sunday best to go to church, and then having his suit ruined by a flock of birds passing by and doing what flocks of birds that pass by do. There was no church for him that day because he had to turn around, wash his one suit and have a bath.

So after moving to Canada and amassing a little wealth, he never hesitated to spend money to ensure his family was well clothed. He didn’t want his children to feel deprived or embarrassed so he was happy to spend the money. My mom was exactly the same. If as a kid I asked for money to buy candy or hockey cards I was out of luck, but if I asked for money to buy clothes or shoes, there would be money in my hand before I even finished speaking.

It was the same with food. I have touched on this subject a bit in a previous post, but there was always more than enough food to be had at our house. Do you know what happens when people who grew up poor and hungry start earning decent incomes and have children of their own? They have fat kids. In my parents’ mind, the biggest sin was for a child to go hungry. So gosh darn it, they made sure their kids never were hungry. We never even got close to hungry.

At the same time, we weren’t rich. My parents knew the value of a dollar and while they always wanted to make sure their family was well fed and clothed, they didn’t want to waste money either. So while they didn’t necessarily have any “rules” in place about spending money, it was easy to discern their outlook and their values from how they approached money and spending. And not just when it came to clothes and food either. I’m talking about the lessons I learned from my parents from nearly forty years of observing how they handled money.

Some lessons came from both. For example, both my parents thought spending money on labels was stupid. Their belief was that one should never pay extra for a brand name, especially when it’s a fad. (No Vuarnet t-shirts for this cool cat when he was in school). On the other hand, they felt that spending a little extra on quality is wise, especially if it means you’re less likely to have to replace the item, or will replace it less frequently.

But other lessons were specific to one or the other. And they came in both the “what to do” and “what not to do” varieties.

First off, there’s work ethic. Neither of my parents were ever afraid of hard work. When my mom came to Canada as a teenager, she was the first member of her family to find a job and provide for the rest of her family. Mom started putting food on the table even before my grandparents did.

My mother also always seemed to know the price of everything. As the parent who did the lion’s share of the grocery shopping, she always knew what was a good price for any given item. And mom read flyers. She would read the flyers and look for the deals. If something we consumed regularly went on sale, mom would go to that store to buy it. If it was something that stored well or could be frozen, she might even buy a lot of it.

Unfortunately this also meant that some days she would go shopping at three or four different grocery stores because there were different items on sale at each store. This might seem like a good idea and maybe you applaud my mom’s commitment to thrift, but like my dad always loved pointing out to her, you could argue that the money she spent on gas going to all those stores might not have been worth the pennies she saved from buying those items on sale.

The other way my mom wasted money was by buying too much food and allowing it to spoil. I remember especially when my brother and I were teenagers, we used to eat a lot. Like, a lot a lot. And like I have said before, my parents always liked to have a little extra on hand in case we had any visitors, which happened often enough. But as us kids grew from teenagers into adults, we started eating less. And then we all moved out and into homes of our own. But my mom still shops and cooks for a family of five. And because she always liked to buy fresh healthy food and plenty of fruits and vegetables, it means a lot of the food she buys goes from the store, to the fridge, to the trash. The way my mom wastes money is akin to death by a thousand cuts.

My dad’s primary approach to frugality is by not consuming. He tries to spend as little as possible. He is great at not buying things.

To this day, my dad’s knee-jerk answer to the question “would you like a sandwich?” is “no”. Why? Because for years when he was working, he would pack a lunch to bring to work, and the cheapest lunch he could think of to bring was sandwiches. For years and years he ate food he hated five days a week because it was an inexpensive thing to eat. To the point that now he’s still sick of sandwiches over 20 years later.

My dad was also pretty good at math, and keeping track of things. My mom would spend small amounts here and there, and not realize how quickly these small amounts were adding up. Not dad. He knew the danger of the “oh, it’s only a few dollars” mentality to spending.

I remember one time our family took a trip to Disney World. My dad estimated how much the trip would end up costing us, and when he told my mom, she didn’t believe him and accused him of exaggerating and being miserly. So on the day of the trip, he showed her the cash in his wallet and made her count it. At the end of the day, he made her count what was left over. Sure enough, his estimate wasn’t too far off the mark. She was shocked and he was smug.

But while mom’s most likely method to waste money was like a leaky faucet, my dad’s way of losing money was by being penny wise but pound foolish.

Here’s an example. I’m in the middle of a bathroom renovation. My dad is very handy and he’s been a big help with the reno. We’re putting in a custom shower with a niche. Something like this:

Something like this.
Because this particular project is new to me I decided to watch some YouTube videos about how to make a niche like this. And in the videos one common recommendation is to use a liquid membrane to seal the tile backer and make sure it’s waterproof. My dad’s input? “You don’t need that sealer. Your grout will make it waterproof enough. That sealer could run you almost $200!”

Maybe he’s right. Maybe I’m too risk averse. But I’ve seen grout cracks before. Haven’t you? Call me crazy but I feel like extra peace of mind might be worth $200. Especially when it comes to my own home and when the alternative could be water damage and a repair bill in the thousands, or weeks of easily avoidable work and inconvenience.

I have always admired my mom for knowing the price of everything. Likewise I’ve always admired my dad’s talent for anticipating the amount of any bill.

But I’m equally grateful for my mom teaching me not to be wasteful by buying more than I need, and my dad for teaching me when it’s wise to spend a little extra to avoid future trouble. Even if those lessons weren’t intentional.

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5 Tips on throwing a Frugal (but not cheap) party, including my secret weapon

Growing up I remember my parents hosting a lot. Ours was the house within the extended family that was large enough to accommodate everyone and my parents were always willing and welcoming hosts. In fact, we pretty much had a year-round open door policy, not just on holidays. Anyone and everyone was always welcome. There was always food for everyone and always beer and wine for those who wanted it. My friends eventually came to realize that they would get fed if they were at our house during meal times, sometimes by force, if necessary. Sometimes for some events we would end up with more guests than expected. Other times we would have people spontaneously stop by, and then some more, until a party would be born out of nothing. I remember there were times after my siblings and I were old enough drive when one of us would be discreetly taken aside by one of our parents and told to sneak out and go buy more beer, food, or whatever they were worried was in too short of supply. But for the most part, my parents always tried to make sure the cupboards and fridges were always full and prepared for just such occasions.

As I got older I would start to play a bigger role in party planning and preparation. I would get sent on errands to buy provisions and in so doing, I started to become aware of just how much my parents would spend to host. It was a sobering realization. Over the years my parents spent thousands and thousands of dollars entertaining family and friends for holidays, special occasions, birthdays, etc. And I’m quite certain they don’t regret spending a single penny of it. These are the things, I’m sure they would tell you, that make life worth living. I tend to think they have a good point, But then again, they are my parents and they raised me so it’s not surprising that I feel the same way as they do. I should also add at this point that we weren’t rich. They just thought that celebrating and hospitality were things worth spending their hard earned money on. They would squabble over pennies for everyday expenses like a lot of families do. Just not when it came to entertaining (especially for holidays).

For people who try to live frugally, the idea of hosting can be downright scary. You want to be a good host while entertaining friends and family but if you’re living on a budget and worried about money, trying to do so while watching the purse strings can lead to stress and anxiety. It can be a delicate balance. But there are ways to pull it off if you try.

Allow me to offer a case study in frugal party planning: My daughter’s first birthday party. It wasn’t necessarily all planned with frugality in mind but as I look back, I can see a lot of useful lessons and tips on how to host on the cheap.

5 Tips on how to host frugally (but not cheaply!)

1. Limit your guest list

“Large” or “small” as adjectives to describe parties and guest lists are completely relative. To some cultures, a wedding of 200 people is considered downright intimate while to others it’s obscenely huge. So it goes for babies’ first birthday parties. I’ve been to first birthdays with 80+ guests before. But I’m sure in some households there are a grand total of two people in attendance.

Obviously providing food and drink for fewer people will cost you less in the end, all else equal. This of course goes against my parents’ open door policy (and my own, frankly), but it can make a big difference. That said, I have also come to realize in my wise old age that sometimes people view invitations as obligations more than a thing they want to do. There are people who just might not rather be invited. In the end if there is someone you want at your event, then you should invite them. But once you get into “well we invited X, so we should probably invite Y”, well now you’re playing with fire.

What did we do? We realized that the party was more for us than it was for our daughter, who would of course not remember the event at all. We decided to limit the guest list to our immediate families and 2-3 close friends who also had young children. We still ended up with a guest list of about 30, one third of whom were children or toddlers. This number included my wife and I and our little guest of honour. You might be thinking this seems like a pretty big guest list for a one year old, but like I said, I’ve been to much bigger.

2. Host during the day

Most people tend to eat the most at supper time. Likewise, most people tend to do most of their drinking at night.

So hosting an event during the afternoon means your guests are most likely going to eat and drink less than they would if you asked them to arrive in the evening.

I’m not suggesting you should plan a party in such a way that you don’t have to feed or properly lubricate your guests. That would be silly. But the nature of the event which you are hosting will likely dictate appropriate times to have your party. In our case, it was a one year old’s birthday party. What time would you expect us to have that? For us it was more circumstance than anything, but it did help keep costs down.

3. Accept help!

There are lots of guests out there who will offer to help. Accept their help! If someone asks you whether they can bring something, give it some thought. Chances are they can help in such a way that will save you some time and also maybe save you a few dollars.

Does that mean you should ask one of your generous guests to bring lobster or prime rib for everyone? Of course not. You definitely shouldn’t impose a big financial burden on these lovely guests. The goal here is not to shift your financial burden onto others. On the other hand, little things can add up. If you have a few helpful individuals offering to bring something, collectively they can make a bigger difference for you while not individually costing each of them very much at all.

What did we do? My mom brought a veggie tray. My mother-in-law brought a fruit platter. My sister brought coleslaw and a salad, each of which she lovingly made herself. I don’t know if you’ve noticed the cost of cabbage and lettuce lately but it’s not very much. The cost to each of these family members was likely in the $10 or under range. Collectively though all this help probably saved Mrs. CIQY and I close to $40 and a lot of time and effort. Also in my experience people often will overlook vegetables as sides. Asking a willing guest to bring a vegetable side dish can be a great way to round out a meal and it won’t cost your guest very much at all.

4. Choose to serve the right food (a.k.a “My secret weapon”)

As I alluded in the previous point, serving your guests prime rib and lobster will set you back a fair bit. On the other hand, my parents would certainly not approve if their son invited people to his home and didn’t make an effort to provide more than enough good food to eat. That’s just bad hosting and it’s definitely not how they raised me.

But as any frugal grocery shopper will tell you, you can feed a lot of people for very little if you’re clever about what you serve. Choose wisely and shop carefully and a dollar can go farther than you might expect.

Well I have a secret weapon in these circumstances. Unfortunately it won’t necessarily help everyone who might have some dietary restrictions, because my secret weapon is pulled pork. (Sorry to my Jewish, Muslim, and vegetarian friends). If you’re a barbecue specialist, then this should come easy to you. If you aren’t, then go to Pinterest or Google and search for “slow cooker pulled pork” and choose from one of hundreds of recipes. You basically need pork, sauce, a slow cooker and time and you’re all set. We bought a whole pork loin, about 6 pounds of meat, for about $18 at Costco. We spent another $10-15 on buns.

Don’t like pulled pork? How about souvlaki? All you need to do is take that same 6lb pork loin, cut it into cubes, marinate it, skewer it and grill it. Sub out the buns for pitas and voila, you’ve got a Greek feast to feed lots of people. The point is, pork is cheap and versatile. And darn tasty (for those who eat it).

And we also got an extra large, party size vegetarian pizza for a little variety (and for our guests who don’t eat pork specifically or meat generally) which cost about $13. There was way more than enough food. For about $45 we fed almost 30 people and had leftovers for a few days.

5. Don’t go overboard

Because I am my parents’ son, this is the lesson that has been the hardest for me to learn. Our family’s philosophy on food and hosting was that it was better to have too much than not enough. But “too much” for us didn’t just apply to quantity of food. It also applied to variety. Over time and with the sobering influence of Mrs. CIQY I have come to accept that sometimes less is better.

I’m a big fan of variety. People like choices. I’m no different. But I also remember the stress my mom used to go through when preparing for big events. She would choose to do so many things and inevitably find herself short on time. She would manage to get everything done but she would sacrifice on rest, so when it was time for the event she would often find herself exhausted and unable to really enjoy herself with her guests. This always seemed kind of silly to me. I mean isn’t the point of it all to spend time with loved ones and have fun?

And truthfully a lot of the time she was just going overboard. She would decide to cook roast beef. But then she would also make some chicken, in case some people don’t like beef. And then a ham, in case some people don’t like chicken. And then cook a lasagna in case… you get the idea. And in the end none of her guests would be picky. Everyone would try a little bit of everything and consequently everyone would overeat. Not exactly a healthy approach either. Sometimes learning when you have enough is the key to saving time, money, effort and caloric intake. As a chronic overeater, this has been a hard lesson for me to learn, but a valuable one nonetheless.

For our little celebration, we had the pork, the pizza, some salads, veggies and fruit. And of course birthday cake! (Which we also bought at Costco for $24 and was way more than enough for everyone and then some.) We didn’t go overboard but we had a really nice spread and everyone was happy. It didn’t cost us much, because it didn’t need to.

So there you have it. Those are my tips. I’m not suggesting we threw the world’s most frugal party. I know there are other great and inexpensive ways to feed people, but this is what we chose for that particular occasion. Everyone had a great time, we didn’t go overboard, and because we made a few clever choices, we were able to keep the costs nice and low. And since my daughter’s birthday is in late December, a fun but affordable event was exactly what we needed.

What about you? What are your frugal party tips?