A Bit Here and There: It All Adds Up!

Money Saving ChallengeI first heard of the Money Saving Challenge last winter just as I was rebuilding my budget spreadsheets for the next 10 years to see if I could indeed afford to retire at 60.

It goes like this. On Week 1, you put $1 in the pot. On Week 2, you put in $2, giving you $3 in the pot, and so it goes for 52 weeks, each week putting $1 more than the previous week. At the end of 52 weeks, you’ll have $1,378. When I posted this trick on Facebook at the time, one of my friends said that she used it to save for Christmas gifts, except that she did it in reverse (starting at $52 on Week 1 and putting in $1 less each week).

I hardly ever have any cash on me. I find that when I break a $20 bill, the change I get back isn’t money to me anymore so I just waste the rest away. So, since money has become more of a mathematical abstraction to me, I never needed a trick like this to develop my ability to save. I’m better at going from an abstract model, as complicted as it might be, and enacting it in reality.

But what sparked my interest about this challenge is the number: $1,378. When I started my quest to rebuild my financial health in 2011, I had no idea what I averaged in gas money each year. I mean, it’s such a moving target: in the last decade, I’ve seen regular gas go for as much as $1.49/litre to as little as $0.89/litre, plus some years I travel considerably more or less than others. However, after tracking how much I spent on gas each year from 2013 to 2015, I found that I averaged about $1,500/year, which is damn close to $1,378!

So last December I decided that every late-December when I get my yearly bonus, I would leave $1,500 in my chequing account and earmark it as gas money. Initially I just paid cash as I went (with my debit card) and had a spot in my spreadsheet that showed me the balance in that “virtual account” I called Gas Money. My thought was that I could top it up if I ran out before the following late-December (which I thought unlikely even though I’m driving more these days), and if there was still some money left in it by the following late-December, I would only top it back up to $1,500. I figured I would have to try this for a few years to see if I needed to squirrel away a bit more than $1,500, but the benefit for me is that I wouldn’t be counting that amount as potential savings when I knew that I would in fact be spending it.

Then, last May, Tangerine Bank (where I maintain a savings account) offered me a MasterCard that would pay back 2% on three categories of purchases and 1% on all others, but for the first three months, the cashback on the 2% categories was 4%. You can change your three categories at any time, but knowing I would be going on vacation in those next three months, I chose “Hotels & Accommodations” as one of them, to be changed to “Gas” later, and “Restaurants” and “Groceries” as the other two.

The cashback goes directly into my savings account on the 17th of every month, and by paying absolutely everything I can with that card since the middle of May, I got $135 back as of September 17. It’s not a huge amount, but it’s free money just to use a card! Also, I wouldn’t care if the interest rate on the card were 50% (it’s actually 19.99%) because you pay no interest for the first 21 days and I pay it off at least once a week, often as soon as expenses are posted. I haven’t paid a bank any interest in the last 3 years, except for $35 in 2015 when I borrowed about $31,500 from my line of credit for 10 days in order to meet that year’s RRSP contribution deadline which was a few days before I would be receiving a huge tax refund from the Feds.

Also, twice a year for three months, Tangerine gives a considerably better interest rate on new deposits in their savings account. You have to read the fine print because sometimes the “new savings” are only up to a certain date well within the three-month period, but other times it’s for the whole three months. For July to September of this year, the rate applied for the whole three months and went from its regular paltry 0.8% to 3.25%, so I moved much of what I had in a savings account at my credit union where the rate is 1.7%.

Because Tangerine’s rates aren’t as good as my credit union’s for half the year, I used to drain that account at the end of every offer. However, as the new credit card cashback would go into that account, it dawned on me that I should simply view it as my virtual gas account and earn at least 0.8% rather than ziltch in my chequing account and, on my spreadsheet, I would separate the gas money from the funds I move in and out just to benefit from the semi-annual better-interest-rate offers. And then, in so doing, something else dawned on me.

Now, twice a year (in early-June and early-December), I move whatever interest I’ve earned at the credit union’s saving account into the Tangerine savings account and earmark it for the virtual gas account. Then, whenever I get some interest or cash back from Tangerine, I also earmark those amounts for the virtual gas account.

The point? As of right now, I spent $1,080.17 on gas in 2016. However, my gas fund isn’t down to $419.83 ($1,500 — $1080.17); it’s in fact at $819.50. In other words, with just a bit of planning and a few mouse clicks, I made a few cents shy of $400 and painlessly dumped it into my gas fund. So, come late-December, I might only need to put +/- $1,000 of my yearly bonus into my gas fund instead of the full $1,500. (Update, late-December 2016: I ended up spending $1,298.67 on gas in 2016 — I didn’t have much reason or opportunity to drive in the fall — so with the interest and paybacks earned to the end of December, I only needed $607.69 to top myself back up to $1,500. In other words, it looks like I got banks to pay about half my gas consumption this year!)

A bit here and there: it’s really does add up! I’ll take cash back over air miles anytime because I can really make it work for me. When I told one of my brothers about this little scheme, he just laughed and said, “That is SO something Mom would have done!”

His saying that made me smile. Because he’s right. I hadn’t thought of it that way until he mentioned it, but it really is something she would have thought of as well.

Misleading by Numbers

MisrepresentationHe didn’t mean it with any ill intent, but I once had a colleague who would sometimes word things in such a way that, while he wasn’t lying, he was answering the question in a way that skewed what was really happening.

Let me try to explain while remaining as unspecific as I can.

My team had a backlog of clients waiting to get an appointment with any one of four or five people. Each of us had a few available timeslots starting three workdays ahead, and then more and more timeslots the further ahead you looked. But each of us is one of two parties, the client being the other. While we might have two timeslots available three days ahead and three timeslots four days ahead, the client might not be available or ready for an appointment for any of those times. Therefore, we have to look for a mutually acceptable time further down the calendar — sometimes many days or even a few weeks ahead.

Concerned that we were having to make our clients wait an unacceptable number of days before getting an appointment with us, our supervisor asked my former colleague at one point, “How far ahead are we booking appointments right now?” In my mind, the answer should have been three days ahead, with the caveat that there aren’t many availabilities. However, my colleague, remembering that one case when he booked an appointment 15 workdays ahead, answered 15 days. While he answered our supervisor’s question literally, he seemed to be implying with his answer that there was no availability before 15 days.

The reason I’m bringing up this anecdote is that I had this nagging thought after posting about my epiphany on how I would be able to afford to retire at 60, or in 9 years. Therein, I asserted that “already I’m living on 70 percent of my income,” but was I really misleading by numbers as my colleague was? Indeed, I realized that when I would add up all the incoming money in one year and substract all the outgoing expenses for the same year, there were a few thousand dollars that I couldn’t trace even if I counted as an “expense” the amount I managed to set aside in the year. The percentage of income spent and the percentage of income saved never added up to 100%, so what was wrong with my logic?

It then occurred to me that I was confusing income with cash flow. For instance, I get a $50/month non-taxable expense reimbursement for my home Internet connection since I work from home, which I just put back into my cash flow. Similarly, the interest I earn in savings accounts, which is taxable, gets circulated into my cash flow as well (specifically to suppplement my gas fund). But I don’t recirculate the interest or dividends I earn in my Tax-Free Savings Account (TFSA) and my retirement fund (RRSP), which are not taxed, and every cent I get back in tax returns goes into my RRSP. While those amounts are incomes, they don’t go into my cash flow.

The minute I added up take-home pay and other revenues that I add to my cash flow (expense reimbursement, interest earned but not tax sheltered, cash payback on all spending done on one of my credit cards), I came to a totally different lower number (CF) from which I substracted all my real expenses (E), which gave me the exact amount I socked away in savings from cash flow (CFS [for cash-flow savings]) as opposed to the total amount saved (S). Then, using that different number as the denominator for percentage of expenses (E / CF) and percentage of savings from cash flow (CFS / CF), I always get 100%. (Well, except for 2015 because I bought my new car cash and used some of my savings, so I adjusted the E / CF formula so that the result cannot be higher than 100% and the formula for CFS so that it cannot be less than $0.)

So what’s my point? I don’t currently live off 70 percent of my income but 75 percent of my incoming cash flow. Or stated differently, I manage to save one quarter of my available cash flow just by planning ahead, paying as I go, and keeping my list of “wants” (versus needs) short so that when I do indulge in wants (which I do!), they’re real treats! What I haven’t wrapped my mind around yet is whether 75 percent versus 70 percent means that I will have to cut back my expenses by 5 percent upon retirement (about $1,500 a year) or if it’ll all work out in the wash. However, I think I’m further ahead in my thinking 9 years before retirement than most people are on the eve of their retirement.

The Gold Star

Vers L'An 2000It took one of my Facebook friends to introduce me, albeit indirectly, to a term I surprisingly never encountered before even though it’s been around for a long while, according to the Urban Dictionary website: Gold-Star Gay or Gold-Star Lesbian.

In case you’re in the dark as much as I was, it means a gay guy or a lesbian who has never slept with someone of the opposite sex. There’s some debate about how and why this term should be retired, but I don’t really care about that even if maybe I should. The point that captured my imagination was affixing a term to my own status, for yes, I am most definitely a Gold Star Gay.

It doesn’t happen as much these days, but I remember being asked many times when I was younger if I’d ever “been with” a woman. And when I would be asked that back in the ’80s and ’90s by a straight person, it was often followed with a “How do you know for sure?” after I’d replied that I hadn’t. So, while I was unknowingly identifying as a Gold Star Gay, I had no clever comeback for them other than to ask them the same question in return.

According to user jw4444 on YouTube, the guy in the picture at the top of this post is “Alan Wells (hand drums) [who] returned to his hometown Halifax [after the musical group Syrinx broke up around 1972] but died in 2010.

The fact is that I can think way back into my childhood and recall how I was always attracted to guys. I didn’t really understand it; how could a 6- or 7-year-old “get it”? I think in my young kid’s head, that attraction translated into a kind of aspiration of what I hoped to become as a grown up.

* * * * * * *

When I was about 6 or 7 — that would be around 1972 — there was a show on Radio-Canada called Vers l’An 2000, which would roughly translate to “Circa 2000.” I only recently found out that its (original) English equivalent was aired on the then-new CTV network under the less aptly named Here Come the Seventies. The show was meant to look into what the near future would look like, although the year 2000 for a 7-year-old in 1972 didn’t seem that near at all, not to mention a little bit scary.

A few times in the last few years I tried to find the show’s musical theme, but searches on “Vers l’An 2000” were always in vain. I remember being able to hear the tone of that theme (although not the exact melody). Moreover, I think what subconsciously motivated my search was this vague memory of how it oddly excited me as a kid. I also remember the kid in me being utterly confused by this show, for how could they be filming something that hadn’t happened yet?

Then, when someone on the “Montreal Then and Now” Facebook group posted the following clip, I felt my stomach drop a little at the last sequence of images. The image at the top of this post is a screen capture of that sequence, and that’s the image that shocked me. (By the way, I translated the cheesy voiceover below for those of you who don’t understand French.)


On the road toward tomorrow :
First, the shock of the future;
Then, where are we going?
When will we arrive?
Two-kilometre-high cities programmed for Man…
Travelling in vacuum tunnels or floating vehicles…
Laboratories in space…
Unimaginable clothing…
And finally, jet-pack belts :
It’s already tomorrow.

I had forgotten that closing sequence. But when I saw it again some 45 years later, the now-adult me recalled my attraction — that kind of tickling in the stomach — to whom I’ve just learned is a Haligonian named Alan Wells who passed away six years ago.

My rediscovery of this theme came just as I learned the term “Gold Star Gay.” And, odd as it is, this rediscovery now serves as an answer to the question, “Have you always known that you’re gay?” I just hope that Alan, may he rest in peace, wouldn’t be offended.

Same Piece, Better Sound Quality

My Epiphany (Or One of Them)

Me and Stony from Ste. Flavie, 10 Jul 2015I had a bit of an epiphany during my vacation last summer. No, not the summer that’s ending now; the previous one. And it has given me a sense of freedom ever since.

Remember how, in October 2013, I reached my milestone of getting out of debt? In hindsight, I’m so glad that Mom got to see that moment. It didn’t matter that I was 48 years old; she still worried about me and was my best cheerleader. I can still see the expression on her face through Skype when I told her. “I knew you could do it!” she said. “I’m so happy for you.” And she legitimately was.

I didn’t know then that she would be gone a year later, and I didn’t know that I would inherit so much that my debt would have been wiped out and that I would still have some money left over. I had my doubts that it would happen when she’d go, but I preferred to deny that she would ever go and refused to think of her as my retirement plan.

La Martre, 7 Jul 2015

La Martre, 7 Jul 2015

La Martre, 7 Jul 2015

Grande Vallée, 8 Jul 2015

Grande Vallée, 8 Jul 2015

Petite Vallée, 9 Jul 2015

Parc Forillon, 9 Jul 2015

Then, just before Christmas after she died, the taxman figured out that I hadn’t filed in years. Many years. Many, many years. But because I had asked my employer to hold back a sizable amount per paycheque for five years, I knew I didn’t owe any back taxes and properly was owed some. Except that while I knew that, somewhere in some piles in my apartment, I had all the necessary paperwork to file, I had no idea how to get the forms going so far back and thus I became frozen into inertia. When the taxman offered to send me all that paperwork in one envelope and made me promise to immediately get a professional to file for all those back years, I jumped on the occasion to finally get that monkey off my back.

I won’t say it here, but you would shit a brick if you knew how much I got back, counting that current year (for which I actually filed early, all on my own using tax software). Deciding to invest most of that unexpected income into an RRSP, which I never had before, certainly inflated the final amount.

A few months passed and my three-week Summer 2015 vacation came. On the last week I visited my older brother in the Gaspé. Since he retired a few years ago, he spends two months in the summer in a trailer on a cliff overlooking the Gulf of Saint Lawrence where every day he gets to see the sun rise on one side of “his cliff” and set on the other side.

I had never been to the Gulf side of the Gaspé and I was 17 years old the last time I’d been on its Bay side. Although my brother and his wife had often sent us pictures of what they called their “little paradise,” none of their pictures had prepared me to what that place would be like when seen in person.

While the city boy in me couldn’t stand spending two whole months over there, I sensed on the 10-hour drive back to Montréal that the little hamster in my head had hopped on his wheel and had started to run furiously. Until then, because I was 40 by the time I started working at a steady, well-paying job, I had assumed that the earliest I would be able to afford to retire was at age 65 (or 67 under the change to the age of eligibility for Old Age Security, which has since been rescinded), and even there it would probably be tight. But the little hamster reminded me how I can live quite contentedly with little as long as all the unavoidable bills get paid and I don’t ever get back into debt. And then he reminded me of how much I already had invested and roughly how much I would be getting from my pensions.

That was the moment of my epiphany.

Speaking to my supervisor on my first day back at work, I declared, “I’ve had a fantastic vacation because I had an epiphany: in 10 years and no longer, I will retire even if it means having to eat a bit of cat food now and then.”

My supervisor was obvioulsly surprised: “But you’d be awfully young, wouldn’t you?” To which I reminded her, “Girl, I’ll be turning 50 next month! So 60 doesn’t strike me as being that young to retire.” That’s when she said that she had me pegged at 43 or 44, hence her surprise.

A few months later, during the two consecutive very long weekends I enjoyed during Christmas and New Year’s, I decided to redo from scratch my budget-slash-spreadsheet-from-hell for the next 10 years in order to uncover one single number: what would I have, give or take a few thousand dollars, even if I switched to the most conservative approach to saving for my retirement but kept the same financial discipline?

It had taken me only nine months to realize that I don’t have the nerve for mutual funds. I know that they say that you have to take the long view and not look at your RRSP’s value every day, so what did I do? I looked at it every day! By late 2015/early 2016, following a mild recession in the middle of 2015, it looked as though the Canadian economy was heading toward the precipice. So I found the best guaranteed investments I could put my hands on and figured out that I prefer having a firm number distributed over several types of savings schemes than a bigger (or smaller) “you could have” number.

What convinced me after all those calculations that I would be able to afford to retire at 60 is the commonly accepted advice that one should be prepared to live on 70 percent of their income at the time of their retirement. And you know what? Because I’m single and disciplined (although I don’t deny myself much of anything) and make pretty good money for one person, I currently sock away 30 percent of all my income that includes sizable tax returns because I’m putting much of it in a registered retirement plan. When I reach retirement in 10 …err …9 years, my days of saving massively will be over. But already I’m living on 70 percent of my income, so I estimate that my savings and my pensions will have me set for 20 to 25 years, by which time I’m pretty certain I’ll be dead.

Yes, I still have to work for a living a while longer, but I sense my parents are smiling down on my siblings and me, knowing that we’ll all be fine until we go join them. I don’t know where Mom, especially, took her financial wisdom but I thank her every day for having taught it to me. And I’m in total awe at how those two magnificent people of relatively modest means have managed so well at taking care of four kids from cradle to grave, and are still taking care of us now thanks to the memories and the love we still feel coming from them.