Where I Stash My Money

Where I Stash My Money

Hidden in the cat.

Seriously. The money I spend on a regular basis, the funds that I access the most, are kept inside of my cat.

He looks like this:

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He holds my toonies and loonies (that’s Canadaspeak for two dollar and one dollar coins). I always keep my change in the cat, and if I need something, he’s the first person I ask to cough it up. My wife named him, but I don’t remember all the names for everything she names around the house, so I just call him the cat.

When I need money, that’s the money I use first.

I also keep a small “float” of $500 in my checking account. I use this to pay for anything that requires more than a handful of coins. However, most things go on my credit card, as I like the rewards, and that gets paid off twice a month from the float.

I don’t keep a strict budget. I just know that I have $500 in discretionary spending each month. This if for things like clothes, food, bills (excluding housing), cool new shorts, tornado fries, and dinner out. If I can’t afford something at the end of the month, like a new rear rim for my bike (curse the Lion’s Gate Bridge Bump) I have to save up for it. Many wiser people than I recommend that you track all of your spending and allocate monthly funds accordingly. This is probably something I should be doing, but right now this method works for me.

My pay, which comes every two weeks on the regular, gets split in a few ways;

  1. Paying Me: About 25% of my pay (net) goes into my investment portfolio. I have a reinvestment plan that automatically deducts $ from my chequing account and dumps it into four different Index Funds located in my TFSA and RRSP, heavy on the TFSA. Why? Here’s why.
  2. Paying Me Again: I try to put about 10% of each paycheque into an emergency/travel fund. This is a “high interest” savings account through my branch. This money goes toward emergencies (need a new suit for brother’s wedding), travel (need to travel for brother’s wedding) and emergency travel (can’t meet up at the rebel rendezvous because there’s business in the Dagobah system). Right now there is about three months worth of expenses in this highly liquid, easy to access account. I’d like there to be more, but things do come up.
  3. Large Bills: Housing, tuition, utilities, cell phone, internet, then tuition again, cause education is expensive, kids! Start saving today! Bills are split between pay periods. Small bills like Netflix are just paid out of my float. My wife contributes, of course.
  4. Paying Me AGAIN: Who’s gonna pay me like me, right? If my “float” is topped up, my bills are paid, and there’s no surprises, then I often use that money to purchase Exchange Traded Funds. I also own small amounts of common stock, but it’s rare that I invest that way. Track the indexes, kids. Praise Bogle.
  5. Leftovers: There are none. All my money is accounted for every month.

That’s where it goes.That’s where I stash it.

These aren’t large amounts of money, but I think it’s important that, if it were much less or much more, I’d still stick to keeping a small monthly float, paying myself first, and paying my bills and credit card balance each month. If I get a raise, not much will change except percentages.

If I had all the money in the world, I know what I’d do.

But I don’t, so I do this.

Leave the cat alone.

Hey Millennials, Do Your Own Taxes!

Hey Millennials, Do Your Own Taxes!

“I don’t need to. My mom’s accountant always does my taxes for me! “

picture-46_0 – This Guy

Well, guess what? Your mom’s accountant doesn’t give a bag of duck manure about your financial situation. Do you know what he cares about? He cares about the groceries in his fridge and whether or not he can turn them into dinner. He cares about how he is going to pick up Marty from soccer and Annabelle from piano when Jennifer is at an overnight accountant’s retreat in Montreal until Wednesday. He cares about the Canucks, his stock market portfolio, his fantasy basketball team, and House of Cards. He cares about his taxes. He doesn’t care about you.

Not, at least, as much as you do.

Do you own taxes. It’s not that a professional accountant will do a poor job, it’s just that they can’t possibly be as invested as you should be in making sure it’s done right.

Now, fine, if you have a very complicated tax situation, such as if you own your own large business or have a multitude of registered investments, it may be better to seek professional help. For the rest of us, it’s easy.

Start by registering with the CRA. Just create a new account. That will give you access to least year’s Notice of Assessment, which you’ll need. Download it.

Next, collect your T4 (statement of employment income). It should come in the mail form your employer. If you’ve made money in mutual funds, you’ll have a T3, or in stocks, a T5. They’ll come in the mail from your bank.

If you have other income, I hope you’ve kept your receipts. Also receipts from charitable donations, professional or union dues, tuition and textbooks, etc will be important. Now log into one of these free or inexpensive tax software programs and get started.

SimpleTax

TurboTax

UFile

I use UFile because it’s free if you’re still in school. SimpleTax is a “pay what you feel” model. I know that TurboTax gets good reviews, but I’ve never tried it.

Now, do your taxes.

If you think you don’t know how, you’re wrong. The tax software will start with an “interview” that gathers up all important information about you. Are you in school? Do you have a job or are you self employed? Do you have a disability? A dependant? How many? Once you’ve finished this section, the tax software with then only present you with the tabs that you need to fill out, specific to your tax situation. Then just fill in the blanks. They are numbered. It’s simple. When you’re finished, hit submit. You’re done.

I have one job and I’m in school. I also have some investments. My taxes take me about 15 minutes each year. My wife is self employed, so hers take about a half an hour because we have to add up receipts for gas and electricity and other items from her home office.

But seriously, an hour tops. And we’re doing it right. How do I know? I’ve been audited, and no errors in my accounting have been found. I always get a nice refund. Tax software also protects you from making grave errors, and it does this all live as your working.

When you do your own taxes, you’re also likely to become much better at tax planning. You begin to see how you can improve your tax situation each year and begin make it so you’re paying less and less tax through careful planning. This is probably the greatest benefit of doing your own taxes – becoming informed.

You’ll be fine.

Just do your taxes.

No one cares as much as you. No one will be as careful as  you.

Will they, Kanye?

 

 

The Tesla Model 3 vs. my Mazda3

The Tesla Model 3 vs. my Mazda3

Do you like to consume? I do. I consume a couple of eggs with veggies each morning (thanks wife), then leftovers for lunch and a home cooked meal for dinner. Dinner is the hardest part, because my wife and I don’t usually get home from work until 6:30, so it’s only around 7:30 that we eat, but it’s almost always a home cooked meal.

What I don’t like to consume is consumer products. But it’s a small percentage of us who feel that way in North America. Most people love buying stuff.

Take, for example, the Tesla Model 3. Within 24 hours of the March 31st announcement, there have been 180 000 preorders for this car. At an average cost of $42 000, Elon Musk has sold about 7.5 Billion dollars worth of cars in a single day. Not bad. With the current exchange rate the “electric car for the masses” costs around $55 000 for Canadians.

I don’t know how many Canadians bought these cars, but I did have to step over the people sleeping in line at the dealership the other day, and I hear this scene in Vancouver was similar to the lines outside dealerships in Toronto and Montreal.

So lots of people want this car. I get it, it’s fancy. But isn’t $42 000 a lot for a car? In 2014, the average Canadian’s salary was $49 000 a year. The average American’s salary was $41 392.

So, how is this possible? Surely these people aren’t spending 100% of their income on a new car are they? It must be only the ultra rich who spend this much on a car, right? Nope. Elon Musk chose this prince point because $35 000 (the cost of the lowest trim Model 3) is exactly what the average consumer paid for a new car in 2015.

Holy crow, $35 000?

Hey everyone, stop it. That’s too much.

If the average Canadian is spending this much, it means that they are going into debt for their vehicles. This is poor financial planning. Cars are depreciating assets, that $35 000 will essentially be scrap in a few years. What are you doing?

When I bought my first car last year, I did a lot of research. I read over and over that people should spend 1/10 of their gross annual income on their vehicle. This rule is everywhere online.

Ok, it’s not a rule, but doesn’t it make sense? You may LOVE cars, fair enough, If you do then you’re going to spend whatever you want, but let’s do the math. Just because. The new Tesla Model 3 vs. my 2008 Mazda3.

The base model Model 3 costs $35 000 USD or $45 527 Canadian. My 2008 Mazda3 was $8000 in 2015. This was 1/10 of my salary. Slightly less, actually. If I wanted the Model 3 instead and, let’s just say that I had $45 527 to spare, that’s a difference of $37 527. If the life of a car is eight years, that $37 527 would grow (if invested at a conservative 6%) to 59,812.34 in that time. Buying the Model 3 would mean missing out on potentially $22 285 free dollars.

Now imagine you didn’t have any cash lying around and needed a car loan. A 5 year loan at 5% would price the Model 3 at $ 54,276.43, whereas my Mazda3 would total $10,210.25. That’s about $900 a month for the Tesla, or $170 a month for my Mazda.

No, I don’t love cars, but they’re necessary tools so that’s how I see them. It drives me to work when I can’t bike, and that’s about it.

Here’s the breakdown;

Screen Shot 2016-04-01 at 4.42.19 PM

If you absolutely have to have a $35 000 car, go ahead and get one. I’m not your boss. But the truth is, you’ll probably need to do into debt to do it, and from my point of view that’s just not worth it.

What to do instead? Save up some money while you read some reviews, maybe Consumer Reports, and find a car that suits your needs. Then spend some time pricing the ones available in your area, pay to have one or two inspected by a mechanic (this costs about $125-$150 in Vancouver, but will save you much, much more) and if everything checks out, buy yourself a reliable, (probably Japanese) used car. Then take what you would have had in monthly payments and put it into your investment account. Hopefully, in a few years when you need a new car, the savings (properly invested) will make it feel like it’s paying for itself.

Bam. Free cars for life. (Kind of) (Not really, but it could feel like it!)

Elon, you made something very pretty and I hope that it helps the electric car movement to grow, but it’s just not for me. Maybe when someone else has paid the depreciation and they start to show up on Craigslist in 2023, but not just yet.

Stacking Bordens #1: RRSP v TFSA

Stacking Bordens #1: RRSP v TFSA

If you’ve read some of my other posts about money, found here and here, I’ve explained how 2016 is the year I turn things around. I used to be really bad with my spending, I didn’t understand much about personal finance, and I never really new what this ignorance was costing me.

So, after a few panicked life episodes where I feared for my financial future, I read a few books and completely overhauled my finances.

I’ll write about what I did as simply and as hilariously as I can, but it’s important to do your own reading so that you make decisions that are best for your situation. I am not a financial advisor, nor am I very smart.

This post is about the difference between a TFSA and and RRSP, and which I prefer. This is a great place to start for the average Canadian interested in Stacking Mad Bordens. The TFSA and RRSP are the two greatest tax-dodging, wealth building mechanisms available to Canadians, and we should all have one of each.

Much of what I have learned on this topic comes from the writing of Gordon Pape. This nice man.

gordon_pape-size-xxlarge-promo

After reading Dave Chilton’s The Wealthy Barber Returns, I recommend Pape’s books on RRSPs and TFSAs. For my American fanbase, the RRSP is the equivalent of the 401K, while the TFSA is your ROTH IRA.

An RRSP is like a bucket. You can fill it with money. It’s not an investment, just a bucket. However, for every dollar you contribute to an RRSP, your taxable income is reduced by a dollar. If you make $55 000 a year, you will pay about $14 300 of that to the tax man.  But if you make $55 000 and contribute $5000 of that to an RRSP, you will only pay tax on $50 000, meaning a tax bill of $13 000. Not bad, right? And you still have that $5000, it’s just waiting in your RRSP account until you need it. The day will come, however, when you retire and want that $5000. It is a Registered Retirement Savings Plan after all. However, because you are likely to have a smaller income when you retire, that $5000 will be taxed at lower rate than when you are working. You can’t avoid the tax man, but you can hold him at bay. For a while.

A TFSA doesn’t hold the income tax man at bay initially. Contributing to a Tax Free Savings Account will not reduce your taxable income. If you make $55 000 and contribute $5000 to a TFSA, you will still be taxed on the $55 000. So what’s the point?

The POINT is that the TFSA, just like an RRSP, is also just a bucket. It holds things. If you put money in it, it holds money. If that money accrues interest, then you can spend that interest without ever paying tax on it, or the principle. That’s not true for any other banking product, registered or non-registered (not a TFSA or RRSP). In every other situation outside of a TFSA,  you would have to claim the additional income on your taxes.

From this description, it would seem like the RRSP might be the winner, but I don’t think so. Because the TFSA and RRSP are just buckets, you can put things in them other than money. These buckets can hold your INVESTMENT portfolios.

Here’s where the TFSA wins in my books. If you hold your investment portfolio in a TFSA, you can MAKE A KILLING in the stock market and pay no tax on that money at all. EVER.

For example, if I contribute $458 a month to a TFSA (the maximum amount allowable. There’s a $5500 a year cap) that holds investments with an average annual rate of return of 6%, I will have invested $55 000 after ten years, but my TFSA will be worth $76,844.03. At 25 years I’ll have contributed $137 500, but my TFSA will be holding $319,860.10.

Funds in an RRSP can also be invested at the same rate of return, but you would owe a good chunk of that money to this guy, who can, quite frankly, afford his own sweaters. If you max out your contributions to your TFSA, then start thinking about the RRSP.

I’ll get into details on exactly where and how I have invested my money in a future post (it’s just index funds, nothing exciting)  but the Canadian reader would benefit greatly from checking out The Value of Simple from their library, in which Dr. John Robertson spells out exactly how to open an investment account for every major (and some not so major) bank in the country.

Fill your buckets. Stack some Bordens.

How Understanding Bank Fees Saved Me $500 000

How Understanding Bank Fees Saved Me $500 000

MER. Management Expense Ratio. Mother#&@%* Eats your Return.

Haven’t heard this term before? Either had I. When I finally paid off my student loan, I went to see a financial advisor at a Big Brick and Mortar Canadian Bank, she talked me into investing in a high MER mutual fund. And I did. For years.

You know when want to buy a car, if you’re interested in a particular model, you do  your research into mileage, expense, reliability, costs, etc. That’s just smart shopping. But I didn’t and I would suggest that most people just don’t consider the fine details  when purchasing a financial product from the bank, like a mutual fund. I certainly did not.

In my ignorance, I did not equate “financial advisor” with salesmen. To me, a car salesman existed entirely to rip you off, a financial advisor was totally different. They are there to give you the best advice possible to manage your money. Why? Because you belong to the bank and so, as a kind gesture, the bank provides free financial planning services to help their customers make good decisions. Because they are kind. Because they want what’s best for you.

But that, of course, is the lie.

And they’ve been successful lying to us for years. Because they were allowed to.

Prior to July 2016, Canadian mutual fund salesmen and Investment Advisors did not have to publish the MERs of a fund they sold you. The MER of course being the fee associated with buying a mutual fund. It’s a yearly fee that you pay to your bank and advisor for “managing” your mutual fund. And these fees are expensive. Usually 2.5% every year for as long as you hold the fund. This adds up quickly.

2.5% may not seem like a lot to invest in a mutual fund, but here’s what Canadian Finance Guru, Preet Banarjee said on the topic last month on the  CBC . The article is titled, “Banks misleading clients on mutual funds”

If you have a fund that has an MER of 2.5 per cent, that’s going to consume almost 50 per cent of the potential value of the portfolio over 25 years,” he explained. “When you frame it that way, it becomes very clear that fees are a big deal.

This makes sense. If you’re mutual fund is returning a conservative 5% a year, half of your returns are going to fees.

50 PERCENT!?

Since I plan on retiring 25 years from now with $1 000 000 in the bank, a MER of 2.5 would cost me $500 000 by the time I’m ready to hang up my white board pens.

Now, of course, you can’t escape fees all together, but you can drastically reduce fees to well below 2.5%. My investments cost me less than 1% currently, and I have plans to reduce them to about 0.3% or less in a few years when I have a little more capital. (I’ll explain exactly how you can do this too in another post, promise)

So, if it’s possible to pay less, why do banks charge such high fees for mutual funds? Because financial advisors are salesmen. And, as they’ve been allowed to hide fees from us for years, they’ve gotten darn good at it.

Do you know what the MER is on your mutual fund? It took me forever to find it. It doesn’t tell me the MER on my bank statement, my T3, my online banking account, or even on the fund’s website, which is supposed to give a detailed history of its performance. I had to find out the MER of my mutual fund in the fine print of the physical paperwork that I signed when I bought into the fund years ago. And I was pissed off.

It gets worse when you imagine that you have a good understanding of how your fund is performing, and you have yet to subtract the MER. Think you’re getting a nice 6% or 7% return on your investments? Sorry, you’re not. It’s more like 6 – 2.5, meaning you’re getting a paltry return of 3.5%. Barely beating inflation.

But that’s going to change. New banking regulations are coming into place this summer which will demand that banks disclose fees when  bankers or advisors push products on their customers. This is from the Globe and Mail,

“As client fees become more transparent, some investors are going to get sticker shock in what they are paying, particularly if they are in mutual funds with high MERs [management expense ratio fees],”

Sticker shock. There’s the used car analogy again.

While focusing entirely on fees rather than your returns is kind of like the tail wagging the dog, it’s important to note just how much these fees are eating into your returns.

But you can do something about it. You can refuse to be a MERman (or MERmaid) but that’s another post.

(Hint: It’s ETFs and Index Funds)

What I Did With My Money Before I Knew I Needed to Do Something With It

What I Did With My Money Before I Knew I Needed to Do Something With It

Embarrassed and afraid that I don’t understand much about my personal finances, that I can’t afford the things I need, and that I’ve felt ‘broke’ since I paid my first bill at 18, I’ve resolved to make some changes. At 33.

It began with the fear of not knowing, which is a deathly, cold, but somehow sweaty feeling that creeps in whenever I don’t understand something that I know I should. This fear, which set in most recently after a visit to the bank where I faked my way through figuring out how I was going to pay for graduate school, can at times drive me toward making good choices. Not always, but sometimes.

This time, it lead me to picking up Dave Chilton’ s The Wealthy Barber Returns out of a stack of someone else’s unwanted overflow.

This book taught me a lot, such as what a TFSA (US, Roth IRA) and RRSP (US, 401k) were, how (and why) to pay down my debts, and how to start saving for what I needed.

Some things, I already knew. This is a post about where I started.

After university, I had a boatload of student debt. No one’s fault really but my own. I worked throughout school and my parents helped me out generously, but I qualified for loans and so I took them. And spent them. Mostly on dial-a-beer, cds, concerts, pizza, a few vacations with my then girlfriend, a few new guitars and amps, and the occasional textbook. After five years and two undergrad degrees, this was about $28 000 worth of almost fruitless spending with borrowed money.

This was irresponsible.

And while I’m not defending myself, I knew that while I was in school the loans were interest free, and after school I would just pay them back with the money I received from the amazing job that was sure to come.

I didn’t see the loan as a tax on my future income; I saw it as part of life. Everyone had debt, right? My parents had debt, and they were smart people. I planned to enjoy university while I could and worry about it later. That was the plan.

When I graduated I had about $3000 in my bank account and a job making $18 dollars an hour (26 hours a week) as a Special Education Assistant in Vancouver, by far the most expensive city in the country. Almost broke, not making much more money than my expenses, including debt repayment, and with no intention of finding a second job, I did what any wise 22 year old would do. I bought a second hand scooter. I named him Cringer, because he feared hills and speed over 50.

It cost 2/3 of my savings, but it was super rad. It was a Yamaha BW50. It was also a poor decision.

Eventually I found a job teaching. It paid $37 500 and I felt like I hit the jackpot. But as my income increased, so did my spending. It wasn’t long before I upgraded to a new motorcycle and got out of the basement apartment and into a place with a pool, closer to the mall. I still never had more that a thousand dollars in the bank, but I was a teacher now. I was gilded. I was going to be OK.

I kept up this lifestyle for half a decade. Never having much savings, just trying to have fun and eat good sushi. I had never heard the term “Lifestyle Inflation”, but I was sure guilty of it.

But the debts didn’t go away. I never really checked the OSAP (Ontario Student Assistance Program, the lender) website which let me track my payments. I just assumed things were going well. After a few years, when I finally did check it, I was stunned by how much money I still owed. Where had all my money been going every month?

You already know – to interest. Ug. I felt sick.

The OSAP website included an interest calculator, and when I found out what my loan was costing me on my current repayment schedule, I was floored. It was well over 30 grand.

Immediately, I panicked and took the few thousand I did have in the bank and threw it at the loan. Then I upped the repayment schedule and stopped the daily sushi binge. For 2 years, between 24 and 26, I didn’t spend a lot of money. I ate primarily from the discount grocery store, didn’t go on any big trips, and gave every spare dime to the OSAP people.

One day, I got a letter in the mail. In a large, bold font it read: “Congratulations, you have paid your student loans in full”. It was a proud day, and that letter hung on my fridge for over two years.

I wish I knew the damage that interest repayments can have on my debt repayment. I just didn’t understand that paying the minimum was no way to pay down the debt. I know, it’s very naive, and I have no excuses.

But mistakes build character, and I know now. To this day I take on debt only when absolutely necessary, and even then it’s an extremely difficult decision. I’ll explain in future posts when and in what circumstances I’m comfortable with debt. For now, I just want to start my money story with the mistakes I’ve made that got me to where I am.

Very early I learned –

  1. Pay more than the minimum. Pay as much as you can, actually. Mr. Money Mustache calls debt an emergency. He feels that you should treat debt like your hair is on fire. While I don’t think I would resort to never paying for a coffee if I were in debt, I very much understand the sentiment.
  1. Just because you can pay your bills every month doesn’t mean your money situation is fine. I felt for a long time that if I could afford my monthly bills, then I was OK. But it just isn’t the case. Looking at your money month-to-month is like looking at your health day to day. “Well, I don’t have heart disease today, guess I can eat another six dozen donuts before bed.” Taking such a small view of your finances will hurt you in the long run.

Learn from my mistakes to avoid making your own.

Next time on my money story: Why even when I thought I had gotten my act together, I had not. A story of bank fees and consumer ignorance.

Get Rich in Just One Night

Get Rich in Just One Night

Money. This is my money story. Or the start of it. It’s a little embarrassing. I have, however, begun to turn things around. I’ll tell you how.

I was never interested in money. I wasn’t the kid who saved allowances, worked three jobs, or purchased a mutual fund at 15. I was the kid who painted houses for an entire summer at 18 in order to buy an America Fender Telecaster (Cherry Red) then take out a loan to buy my textbooks.

I never thought about money. I know this is a privilege. I understand that this is a result of coming from a middle class family. My parents were teachers, and though I never felt “rich” growing up, I also never felt in need. My parents never really talked about money. If I ever asked how much money we had, and I may have, the answer would have been “enough”.

So that’s all the money I ever wanted. Enough.

Luckily, I have it, or at least, I had it. I’m also a teacher, and in Canada teachers make enough money. So, what’s enough? Enough to pay back my $28 000 (+ interest) student loan five years after graduation. Enough to get me through my 20’s – rent a apartment in Vancouver, pay my bills, go on a few trips, buy a motorcycle (…or 3), even put a little bit away every month into an RRSP that held a Managed Mutual Fund. Though if you asked me, until about a month ago, I wouldn’t have been able to tell you the difference between an RRSP and a Mutual Fund. Just that that’s where my money was. That was enough.

Until I decided to go back to school. The estimate for my graduate studies is close to $20 000, and I didn’t have $20 000 saved when I signed up. Damn. Not enough anymore.

At first, I scrimped and saved for my first few semesters of tuition. But it wasn’t sustainable, I just didn’t make enough (not true, actually, I just didn’t know how to save at the time). So I went to the bank and asked for help.

My Big Brick and Mortar Canadian Bank financial advisor looked at my accounts. I needed to come up with about $2000 in a week in order to stay in my grad program. I thought about loans, though the though sickened me, I didn’t know what else to do.

Good news! I had a TFSA. What’s that I wondered? Didn’t matter, I had one, and there was about $1500 in it. I must have opened it years ago, but I don’t remember doing it. I played it cool. “Oh, yeah, well I wasn’t sure if I should take money out of my TFSA…” (The sound of one man bullshitting. I had no idea what those four letters even meant.)

“You’re might be right, actually.” Said Woody, my randomly assigned advisor. “But you have an RRSP, and you can take money out of it tax free with the Lifelong Learning Plan.”

“Totally tax free? That’s great” I tried to sound excited. Why would I be taxed on my own money? I pay my taxes, why would the government get any more? I didn’t get it. I do now.

“Yeah, we can get you your $2000 in a few days. Not a problem.”

“That’s great. I didn’t know about that program. Let’s do it.” What am I doing? Is this legit? If I knew anything at all about the RRSP, is that you don’t take money out. You leave it in. It’s better if you leave it in. Why? I didn’t know.

But I signed the papers, got the money, paid the tuition, and went back to eating dinners out four nights a week. Usually Sushi. Often “The good sushi place” because why not? I had the Lifelong Learning Plan!

Not three month later, I was back at the bank asking to withdraw another $2000 from my RRSP.

“No Problem!” said Lin. My new randomly assigned Big Canadian Bank financial advisor told me. “Just sign the papers for the 10% holding tax and we’ll get you your money.”

“…Ok…no problem” Holding tax? What’s this? Did Woody forget something? Do I owe taxes now? Is Lin wrong. I let her start the paper work, while I sweated though my ignorance and fear of not knowing. 

Finally, I got up the courage to speak up. “Um. I had thought there wasn’t supposed to be tax if I’m using the money to pay tuition…?” Lin paused in her work.

“This is for Lifelong Learning?” She asked, a little obviously pissed off.

“Yeah, I told you I was in school. I thought you knew” That should have been enough, right?  Lin paused, shrugged, and shredded everything she had just printed off without saying anything. She glanced behind me through the window at the line of people waiting to see her.

“I’ll have to start the paperwork again.”

And I got the money, tax free. Nice. That was January.

But I felt like an idiot. What if I hadn’t spoken up? What if I hadn’t met Woody? Where would I be right now? Probably with more loans, maybe in debt, who knows.

I didn’t like this feeling. This I really don’t know anything about this and I really should feeing. Before grad school, I never needed to know. I could pay my bills and that was enough. I was spoiled, really. Now, I felt terrible. I have multiple degrees but absolutely no knowledge of what to do with my finances, or how they even worked. Not ok.

So, because this is the year of the U-Turn, I decided that as long as I’m getting my health in order, I’ll get my finances in order as well. I’ll figure it out. I’ll learn about personal finance.

God, this was going to be boring. So I put it off. Of course.

Then, not three weeks later, a teacher on my staff was giving away a bunch of old books she didn’t want to store any longer. I picked up a Murakami, a Douglas Coupland, and a Ken Follett. Excellent score.

On the bottom of the pile was another book that wouldn’t have held my attention at any other time of my life, but because I had resolved to fix my money, Dave Chilton’s  The Wealthy Barber Returns stared up at me as if my own guilt and procrastination had found shape and form.

So I took it home, and while my wife was cooking dinner (we share this responsibility), I opened it up, dreading the inevitable boredom of the next hour or so until dinner was ready.

And I couldn’t put it down. I finished the book that night. It was a wonderful read that taught me two very important lessons;

  1. Dave Chilton is not a barber, and
  2. Personal finance can be really very simple

I’ll probably review the book at a later date, but let’s start by saying that if you haven’t read it, you should.

After reading Dave’s book, and a few more like it, I have total understanding of my family’s finances. I know what the letters RRSP and TFSA mean, and how these accounts work. I understand better how to save, prioritize spending, and plan for the future. I’ve made changes that will benefit my family long term, and you can too!

I look forward to sharing all that I’ve learned, but this post is long enough as it is. I’ll just leave you with this – one night’s worth of reading has already made my family much richer. Not a bad investment.