How to properly save money?

[MarchHare]

Your housing costs in your condo aren't really relevant - we need to look at apples to apples...what is a family of four paying to live inner-city v. the burbs.

As I said above, there are several families with small children (including at least one family of four) living in my condo building. Obviously I'm not privy to their household finances, but I can't imagine their housing costs being much different from mine given that we live in the same building.

Bottomline, this thread is about saving money and was (I presume, perhaps incorrectly) started by a young single guy. The biggest thing he can do to reduce his monthly expenses is to live near his workplace and forego owning a car. After that, he should take all or some of what he would have been paying for car payments, insurance, gas, parking, maintenance, etc. and invest it in an RRSP, TFSA, or savings account.

[kevman]

Holy thread hi-jack...not that I don't enjoy it being one of those inner-city folk...

Originally Posted by MarchHare

I don't think that's true. My total monthly housing expenses (mortgage, property tax, condo fees, heat, water, and electricity) is about $2,200. I think that number compares very favourably to what I'd be paying for a typical $300-350k Calgary starter home in the suburbs.

Sounds high considering some pay much less and get a back yard...

Originally Posted by JiriHrdina

Part of the problem is that Calgary has very few communities where you can walk to everything (including work) and are also suitable for families.

So even though you are saving money on your vehicles expenses - your housing expenses are through the roof.

I totally understand the appeal to the burbs (noise, space, new homes, etc.) but one thing I just can't get behind is the family thing. Maybe it's just because I grew up in one of those war time bungalows, as did all my friends that lived in the neighbourhood and walked to school, but the idea that you need 2,000+ sq ft. for a family of 4 is absurd!

[MoneyGuy]

Originally Posted by dissentowner

Until she meets some younger musician from Australia and leaves you behind with the kid and when you divorce her she takes you to the cleaners even though she was the unfaithful bitch. I would pass on the marriage thing.

Sorry it didn't work out for you. I've done just fine.

[kevman]

Originally Posted by MoneyGuy

Sorry it didn't work out for you. I've done just fine.

Like the advice my Pop used to give me. The richest people are married, the poorest are divorced...

So getting married is financially kind of like investing in Equity... Greater risk, greater reward?

[MarchHare]

Sounds high considering some pay much less and get a back yard...

Perhaps I haven't experienced the "typical" Calgary suburban home, but whenever I've visited a friend in the burbs, their backyards are too small for even simple games like catch, frisbee, hide & seek, or tag. Anyone older than maybe 4 or 5 would have to go to the nearest park, schoolyard, or playground to find enough green space to really run around and play, and you can do that just as easily in the inner city as you can in the suburbs.

[Table 5]

Originally Posted by Kybosh

My method to save more money was to earn more money.

It might sound kind of obvious, but it's a good point. Personally, I've come to realize that the best use of my time, and the most lucrative, is focusing on my job, and not necessarily "investing" or "saving".

I've spent a lot of time trying to understand the ins and outs of investing and personal finance...and in the end I feel like I was spending way too much time on it compared to what I was getting out. After a while, I realized that I can make more money by spending my time finding new and better ways to do my job. It might not be as sexy as getting huge scores in the market, but it's more consistent, it builds my business, and I actually know what the hell I'm doing….and in the end, it makes me more money.

[JiriHrdina]

Originally Posted by MarchHare

As I said above, there are several families with small children (including at least one family of four) living in my condo building. Obviously I'm not privy to their household finances, but I can't imagine their housing costs being much different from mine given that we live in the same building.

Bottomline, this thread is about saving money and was (I presume, perhaps incorrectly) started by a young single guy. The biggest thing he can do to reduce his monthly expenses is to live near his workplace and forego owning a car. After that, he should take all or some of what he would have been paying for car payments, insurance, gas, parking, maintenance, etc. and invest it in an RRSP, TFSA, or savings account.

That's a good point - and I don't disagree with any of it. My point was simply that I wish Calgary had more of those communities. My wife and I don't want to live in the burbs but at this point we can't afford the type of home we think we need, in an area we are comfortable in to raise a family.
And we aren't looking for big homes....but 3 bedrooms is pretty much a must. And that's tough to find in an affordable price range in the suitable inner city neighborhoods.

[JiriHrdina]

Originally Posted by kevman

I totally understand the appeal to the burbs (noise, space, new homes, etc.) but one thing I just can't get behind is the family thing. Maybe it's just because I grew up in one of those war time bungalows, as did all my friends that lived in the neighbourhood and walked to school, but the idea that you need 2,000+ sq ft. for a family of 4 is absurd!

Agreed. But even small homes inner-city are expensive unless you are going for a fix'er upper. And I simply don't have the handy man skills to take on a home that requires a ton of work.

[return to the red]

All of you have it wrong.

I get the casino to hold all my money, I will be back for all of it someday.

[Flames Fan, Ph.D.]

1) Use Mint.com as others have noted. If you have a little bit of OCD, you can check it everyday and try to keep that monthly spending below the targeted monthly budget.

2) Do NOT take a credit card with you when you go out. Draw out some cash at the beginning of the night and make do with it.

3) Never, ever do the "I'll put this on my credit card and you guys give me cash" thing at dinners etc... you'll end up spending the cash AND you'll still have the charge on your card at month end.

4) Share internet with a neighbour / minimize cable bill / smartphone plan.

5) People may disagree with this one, but here goes: If you have credit card bills to pay, it is mathematically smarter to pay those off first before putting money into savings. However, I think the better approach is to make consistent but lower monthly credit card payments and use some of the money to start a savings account (even if it is just 50-100 dollars a month). Seeing some money save up will actually help your mental outlook on the whole thing and it may reinforce / motivate more savings. At that point, if you find that you can further streamline your savings to have additional money left over at the end of the month, you can put that surplus into your credit card bills. In the short term you'll end up paying more interest on any credit balances, but my bet is that this will end up paying off in the long term through better motivation for saving / limiting spending.

Good luck! Everyone goes through a money management crisis early on. I've been there, done that (stupid grad school). Try not to stress out too much over it, set a plan and stay disciplined.

[8sPOT]

Lots of great points made here. IMO it has to be about your goals. Where do you want to be financially? How long might it take to get there? If you are struggling with money, or not saving as much as you'd like there are two options:

Earn more (part time job, more hours, career change)
or
Spend less (cut down on eating out, fancy gadgets etc)

I deal with people of all sorts of different backgrounds and the general consensus is that my generation has the 'I need it right effin now!' attitude. This is why people have stupid amounts of debt and little to no savings.

Here is the golden nugget though, I have showed many clients a plan that will (insert any goal to be acheived) in x amount of years. And the one variable I cannot account for is discipline. At the heart of it all you have to be committed to reaching whatever goal it is you set.

You also have to make changes to your goals as you go along because your life will change (marriage, kids, etc).

I think all the points here sum it up though, you gotta change the staus quo and then stick to it. Most likely will be a drastic change, but well worth it.

[DownhillGoat]

Originally Posted by MoneyGuy

Get married!! Two salaries and expenses that are not that much higher provide opportunities to build your savings.

Tell that to the alimony cheque that just left my bank account.

Originally Posted by MarchHare

don't buy a home in the suburbs where you need a car to get anywhere. Live somewhere within short walking/transit distance of your workplace

Why rag on the suburbs? Believe it or not, not everybody that lives outside of downtown has to drive into downtown to work. Why not just leave that gem of advice to "live near your workplace" Since moving out of downtown, I'm closer to work, and shaved off about 30-50 kms off my trips to Kananaskis and Banff, where I drive to much more than I drive to downtown Calgary. It's different for everyone's scenario. A more universal approach would be:

- Live close to where you work and play.

I'm sure I've said most of these points in other threads, but here goes:

- Going against the grain, use credit cards. As the OP stated, he's having problem saving, not spending. If you monitor your cards and pay attention to what's being spent, cards IMO are great for 2 reasons:
1) Points/Cashback - I've saved a good chunk of change between air miles (getting products instead of flights ie: Shell gift cards for gas, Rona cards, coffee makers, etc). Also, cashback at the end of the year is quite nice too, even if it is only 2%.
2) You have a detailed statement every month. Personally, I can't be bothered to write everything down. With the CC bill at the end of the month, I can see exactly where everything was spent and where I can make cuts.

The major caveat is watch what you're spending. If you're paying interest on them, you're doing it wrong. I use mine for purchases I would be making anyways, and don't have the mentality of "Oh, if I get this I don't have to pay for a month".

- If you have bad debt, pay it down. You'll be money ahead if you're paying down a 6% loan quicker thank if you're putting money away and making 1-3% on it.

- Get an automatic savings account. If savings are coming off the top, you surprisingly don't really notice them.

Lots of good advice thread. I won't bother repeating some of the points here but there's definitely some good stuff.

[THE SCUD]

I'll add another $0.02 for mint.com. It's great to have eveyrthing in one place and easy to budget.

[MarchHare]

Why rag on the suburbs? Believe it or not, not everybody that lives outside of downtown has to drive into downtown to work. Why not just leave that gem of advice to "live near your workplace"

Even if you live near your workplace, car dependancy is still a problem in the suburbs because people have to travel around for reasons other than just work.

Unlike Calgary's downtown area, the suburbs weren't designed with walkability in mind. With few exceptions, most suburban Calgarians will still need a vehicle to run day-to-day errands like going to the nearest grocery store, pharmacy, liquor store, convenience store, post office, restaurant, pub, doctor's office, etc. In the inner city, all of those can easily be reached without having to own a private vehicle.

This is a handy website to test how walkable a neighbourhood is. My condo in the Beltline scores 92/100 for a rating of "Walker's Paradise"; my friend's house in Copperfield scores 23/100 for a rating of "Car Dependant".

http://www.walkscore.com/

[V]

I used to live downtown when I was in university(U of A), married, but before I had kids. I loved it. But I still needed a car for all of my extra-cirricular activities (sports, drinks with the boys, committee meetings).

I'm curious how you get by without a vehicle for anything like that? For example, you mention going to your friend's place in the burbs. Do you use transit to get out there? Does transit work for everything you need to go to? Or are you just more of less confined to downtown? I'm curious, because like I said, I still really needed my car.

[chemgear]

Originally Posted by MoneyGuy

I've done just fine.

For now . . .

Seriously though, the concept of getting married just to save up money seems to be rather . . . extreme to me.

[JD]

Originally Posted by V

I used to live downtown when I was in university(U of A), married, but before I had kids. I loved it. But I still needed a car for all of my extra-cirricular activities (sports, drinks with the boys, committee meetings).

I'm curious how you get by without a vehicle for anything like that? For example, you mention going to your friend's place in the burbs. Do you use transit to get out there? Does transit work for everything you need to go to? Or are you just more of less confined to downtown? I'm curious, because like I said, I still really needed my car.

Yeah, that's my sentiment.

I lived in the Beltline and never used my car on weekdays. I could walk for groceries, I would take the bus to work in the winter. But despite my own intentions of using the car as little as possible, you can't control where your friends and family live! On weekends, what happens if you want to visit your parents in the burbs? You could take transit on a Sunday and add 3 - 4 hours to the ordeal... what if your buddies want to meet for drinks at the Kilt and Caber? I suppose the 302 runs nearly right to it...

Calgary is just not a pedestrian friendly city. Unless you have very generous friends that will drive your ass around every weekend, I think you need a car. Taxis aren't affordable enough either.

Even now, living in Inglewood, a comparably walkable neighbourhood for Calgary, I need my car much more than I did in the Beltline.

As for the money saving, most of the good advice I've been given and discovered on my own is in this thread. Certainly the most effective method is to simply make more money! Much simpler said than done... but much like being a good driver, being a good saver boils down to knowledge and attitude. There's plenty of knowledge given here, but you need to go into it with the proper attitude and ability to commit.

[Sr. Mints]

Originally Posted by MarchHare

http://www.walkscore.com/

Neat website to play around with, thanks.

My condo in Spruce Cliff scores a 50, which I think is pretty fair unless you're a keener like myself who walks into the core most of the time.

When the WLRT is completed it is going to be a completely different situation, and is going be so frickin' awesome. I can't wait; it will be just like living in Sunnyside again.

[kevman]

Originally Posted by JD

Calgary is just not a pedestrian friendly city. Unless you have very generous friends that will drive your ass around every weekend, I think you need a car. Taxis aren't affordable enough either.

Yup, in my experience most people that don't own cars are really freaking annoying. The preach about how great it is to not own a car and how much money they're saving while you're driving their ass around.

Unless you're only hobby consists of sipping late's you really do need a car...

[Slava]

Originally Posted by fotze

Don't put money into mutual funds, the fund managers just realizing we have caught on to that scam

I'm not a pure mutual fund guy, but if you are making monthly contributions and buying stocks every month or biweekly you are spending way more on transactions (for the most part). I do understand why people don't love funds, but that blanket statement isn't good advice for every investor.