Sunday, 12 November 2017

DON'T SAVE (too much) FOR RETIREMENT

This post is geared for Canadians as the American system for retirees differs, mainly because of the cost of healthcare.



Guiness Book of World Records - Oldest Paraglider

This scary article in Wisebread is typical of the advice out there which strives to encourage more and yet more saving for retirement.   People just aren't doing it enough the writer says.  Dire predictions ensue.  What if you live to be one hundred?  This article in The Globe and Mail discusses managing 'longevity risk.'   I guess for financial managers it's bad to live too long.  


Take a moment to consider your situation carefully.   Should you save, save and more save for your golden years?   Deprive yourself throughout your twenties, thirties, forties, fifties until at last you reach the magic age and you can start to really spend and enjoy yourself.   That's the theory, anyway.  Check out this article in Bloomberg.

I like to take a contrarian view, sometimes, or at least consider an opposing point of view.   Who exactly is singing this siren song or more likely threatening misery and deprivation if you do not sock away your version of a fortune.   Usually, it seems to me, the call comes from financial institutions who want you to invest or save with them.   The government wants you to save for your old age, lest you end up costing them money.   The more you save, the less they will need to make up the shortfall.

Unless you want to leave a legacy for your children or perhaps something for them to bicker about when you are gone, consider dying broke.   It is difficult to arrange to have your funds expire just as you do but I am going to propose that after age eighty you will not be spending large amounts of money for your amusement.   I base this upon admittedly unscientific observations of relatives and acquaintances. The spending and shopping urge is greatly diminished.  You're not buying furniture and knick knacks;  you're trying to give them away.  Following fashion trends seems of little interest;   comfort rules supreme.   Travelling is problematic.   Travel health insurance costs more than the vacation.    Dietary restrictions and mobility issues affect many after the three score and ten.   If you can't get out easily, you can't spend.  Try to arrange it so you own your own modest accommodation outright as well as your vehicle at retirement, if you don't plan to rely on public transport. 

According to the Wisebread article:  As of July 2017, the average Social Security retirement benefit was just $1,325 USD  per month.    In Canada, if you have made the maximum contribution during your working life the amount will be close to $1700 CAD.    Taking into account the exchange rate the amount is similar.  A couple should be able to be comfortable on Old Age Security and Canada Pension for each of them if those expenses (housing and transportation) are taken care of.   Defer your property taxes.


Some  activities can best occur when you are young or at least youngish.   Backpacking to foreign lands where you don't speak the language and don't know your way around is an adventure to the young;  a terror to the old.   I speak in generalities but that's the way it seems to me.  Learning to ski, scuba dive, rock climb, fly a plane, not to mention  two week hikes along the Appalachian Trail are the purview of the under 50's for the most part.   Don't deny yourself the opportunity to do those things if you have the agility and stamina, not to mention nerve, to partake.   You won't want to do it when you're eighty.  I know there are exceptions but there's a reason those people are featured on the evening news.

Eighty calls for more sedate pleasures, closer to home and generally less expensive. You may be the exception but know yourself. You don't want to end up with a bundle of money as well as a bundle of regrets for what you might of done but now can't.   


   

  


Sunday, 5 November 2017

Why Keep Shopping?

 




This article in the Huffington Post makes it all so so trivial.  Why do we keep shopping?   Why do we buy things we don't really need?  Are we really that shallow?  

Buying to impress people  -   If spending some money (which just about anyone can do) impresses certain people, it doesn't really say much.   It doesn't reflect in any way on me.


Buying out of habit  -    It's possible to get other habits.   After all, it's only because we've done them over and over that they become habits.   And repetition can get boring, can't it?

Advertising made you do it   -   Doesn't it make you feel a little foolish to be so gullible?  Technology (think Netflix, fast forward,  ad blocking) makes it possible to avoid a lot of advertising.   Avert your eyes

Buying it retail is the least creative option  -    You're better than that, aren't you?   I get a kick out of re-purposing something or adding new life to something that was going to be discarded.

Shopping cheers you up  -   We all like 'nice' things, however we define that.   Give yourself a small budget and enjoy the hunt through alternative venues (eBay, thrift stores, bartering) and find something that gives you some long term pleasure every time you look at it.  






Maybe the best alternative?   Find something else to do!

Sunday, 29 October 2017

You're Beautiful Already


Elegant walk-in closet




This fascinating article in the blog Prisoner of Class investigates what women spend on clothing and accessories in their lifetime.   Before you read it, make a guess yourself.     Perhaps you keep detailed records or if you are an airmiles points collector who only purchases using credit cards while dreaming of future vacations, you might be able to check back.   It is an interesting exercise.     It would seem likely that younger women spend more.   Appearance seems to count for a lot at that stage of life and many/most young women aspire to look their best, however they define that.   Or rather, the fashion magazines and friends have definitions that vary from year to year.  Clothing can assist with that sought after image.

For those following a traditional life plan, a home and children can take financial priority eventually.   There are additional tugs on the family finances.  Perhaps as the years pass, we finally appreciate inner beauty and diversity and love ourselves for who we are, not what we wear.   We still like to look nice but we recognize fashion trends as big business.   We value quality over quantity.

You can read the article now!   I was surprised by the figures and simultaneously sad that most shopping seemed to be disguised as attempts to cheer oneself up.   Maybe that's why some places call it retail therapy.    Between $1800 and $4800 a year is the typical clothing budget although some might be hesitant to call it a budget.    Younger women spend about twice as much as older women in their lifetime.  It seems once the clothes shopping habit is acquired, it sticks.   Maybe it's because so many homes are now built with walk in closets and a more modest wardrobe seems sparse.   Look at the closets in older homes if you want to compare.

Sunday, 22 October 2017

Save Money on Cruise Vacations

  


In this post I will give specifics as to how you might save money on a cruise vacation.

We're back from an eleven day cruise from Vancouver to Hawaii.  Cost breakdown:

Fare:  $549 (CAD) or $439 USD each
Port fees and taxes of about $300 CAD or 240 USD 
Gratuities of about $125 CAD OR $100 USD.  


A total of about  $969 CAD OR $779 USD .   For an 11 day cruise that's about $88 a day CAD or $70 USD. This included our accommodation, all we could possibly eat and more of great tasting food, entertainment and activities and travel to three ports plus the final destination of Honolulu.  The cruise line was Holland America, one of the more sedate lines. We paid about $221 ($280 CAD) each to fly back home.  A grand total of $1000 USD each.

How did we make this happen?   We did not choose the least expensive cruise line but we did choose the least expensive stateroom, an inside. We waited until about 6 weeks before departure to book, when the fare had dropped considerably.  In the last couple of weeks after booking, we received two upgrade offers to a stateroom with a large window (not a balcony).   First for $129 each and then a few days later for $79 each.   Cruise fares are like that, up and down.  After the refundable deposit date has passed (usually about 6 weeks before sailing) prices go down.   But when it's sold out, you're out of luck so it can be all about timing.  Don't forget travel insurance.  We have ours through our credit card.

We stayed with our inside cabin which was small but functional.  Some people don't like the total darkness at night so consider that.   Or bring a night light to plug in.   We don't spend a lot of time in the room as there are many pleasant lounges and seating areas around the ship.    There are lots of ways to spend extra money.  The cruise fare covers the cost of having you on board;  cruise companies make their profit on your additional spending.   Consider carefully whether it will increase your enjoyment.  Although we occasionally enjoy wine or other alcoholic drink, we didn't buy any on the cruise.   There is no difficulty in saying 'no thank you' at any venue.   Plenty of people do imbibe and bartenders are kept busy.  We didn't buy any new clothes for our vacation;  our wardrobes were up to the task.  Then,  there are options for over-priced spa treatments like $120 pedicures or expensive candid photos by the ship's photographers or designer jewellery or clothing.   I'm not on vacation for that.  

Every evening a program is placed on your bed (along with the wrapped piece of chocolate) which details a multitude of possible activities for the following day.   We attended lectures by university professors and astronomers, learned to make a Hawaiian lei, took hula lessons, ukulele lessons, swam in the pool, listened to a classical music duet,  watched big screen movies, played trivia games, attended a fashion show, read books on the loungers and walked around the deck a couple of kilometres a day.   The latter was in an attempt to compensate for the 24 hour a day cuisine availability.





The food was terrific.  We met and chatted with pleasant people in the dining room.  The service was very good.   Everything was clean and well maintained.

A cruise vacation is a certain type of vacation.    We only had a couple of ports (Seattle and San Francisco) before five sea days to Hilo, Hawaii.   Some people feel stuck on the boat.  Choose your cruise line carefully.   Some appeal to young families and so have lots of children running around, some better behaved than others.     Take a one week cruise, perhaps to a destination, like Alaska, very popular and with very low prices (and sometimes poor weather) in May or September.   See if this mode of travel is for you.   If not, well there are many other options.   Camping, anyone? 

Sunday, 15 October 2017

Vacation Planning

  
Cruise ship in Vancouver

I love to travel but, having just come back from two weeks away, I also acknowledge that I love to come home.   My pets play a large role in that as well as my at home daughter but I like my home and my small town as well.  I know where everything is and how to get around.   I'm going to make some observations about my vacation while it's still fresh in my mind.   In the Stop Budgeting, Start Dreaming mindset, travelling is one of my dreams.

Although one of my dreams,  I still love to get a deal.      I am content to spend money on a dream but I  find it difficult to be extravagant, unless it is something really special.    Plus, it's a challenge, the thrill of the chase that's part of the whole process.   Spending a lot doesn't particularly improve the enjoyment, I have often found.   Sleeping in a tent on an African safari wasn't terrifically comfortable but the elephants and giraffes were equally enchanting.

An important part of travel planning is to know yourself.   How would you like to spend your vacation?  Using a metacognition strategy,  think about your thinking. Were you annoyed to be waiting in line?   Do you hate to get dressed up on vacation?  Do you dislike crowds or thrive on the hustle and bustle?  What did you like and not like about previous vacations.

Try to obtain different opinions about destinations and vacation options.   Some people who work hard physically  on a daily basis feel they want to sit on a beach and do nothing.   If you are used to being active, following that course may only feel good for a day or two.  On the other hand, sightseeing is hard work.  If you go to Paris planning to see The Louvre in the morning and Versailles in the afternoon you will simultaneously exhaust and disappoint yourself.   You can't do justice--or enjoy--either under that plan.


  
Roller skating on a  Royal Caribbean cruise ship

We wanted to take a cruise to Hawaii.   Cruising can be a real bargain . . . or not.   You can spend ridiculous amounts of money reserving a Neptune Suite complete with a grand piano and your own butler.   We didn't do that.     If you are looking at cruises, research what the different lines offer.   Will the male person in a couple be happy to wear a suit or tuxedo to dinner and the female person, a gown?  (that would be Cunard)  Or will you both be unhappy with that requirement.   It's a problem if you're on different style wavelengths.   How about a cruise with a go cart track, a bowling alley, a skating rink and/or a climbing wall.    If you don't fancy that, remember your cruise fare will build in those costs even if you don't use them.   Think about the costs to get to your departure port.   Best if you can drive to it or at least only fly one way.    Lots of information on Cruise Critic.

Next week I'll give some specifics as to enjoying a cruise vacation for the best price.


Sunday, 8 October 2017

SUBSTITUTE

   



There is an alternative, or substitute, for almost anything you might need.    Do you remember the tables in cook books or perhaps from your home economics class that showed how you could substitute something else for an ingredient you were missing.    Cocoa, which is less expensive,  can be substituted for chocolate baking squares, usually with the addition of some butter.  During World War II, government pamphlets and homey advice from the popular Betty Crocker publications encouraged homemakers in their quest to make wartime rations stretch to feed a family.


Sometimes you will need to substitute because you don't have an item or it is too costly.   Regular vanilla is an example of an expensive ingredient as is saffron.   Other times, it might be for health reasons that you substitute  applesauce for half the butter in a recipe.  Just google substitutions for . . . and prepare to be enlightened.   Just do a little research and be leery if the substitute involves a complicated chemical formula.    Some substitutions for sugar have had bad publicity.


What about substitutions in other areas of your life?   Can you substitute a night at home with Netflix and whatever snack pleases you (and is likely more healthy than movie popcorn) for a visit to your local multi-plex at the $16 a person ticket price?  I find it a great advantage to be able to pause the movie for various purposes.  I still remember missing a vital part of a three hour movie during a trip to the washroom, inconveniently located.   There was no pause or rewind button there.

Make it a creative challenge.   If you have a goal or dream  that is truly worthy of your carefully nurtured funds your so-called deprivation will be easier.  I have paid for too many entertainments in the past that were ultimately forgettable.   Sporting events and concerts can be a disappointment if the team loses or the band seems apathetic.   Taking the family to a major league hockey game or musical concert including tickets, parking, gas to the event, and snacks  between periods or at half time will cost you in the several hundred dollars.  I remember buying tickets for one of the boy bands of the past (Back Street Boys?) as a treat for a pre-teen daughter who was crazy  about the and desperate to go to the concert.   By the time the date of the concert rolled around, some six months later, she was so over them it was laughable except for the money I'd paid.   And I sure didn't enjoy watching them gyrate.  

You could buy a CD or DVD of a music group's performance and listen to it many times over.  Or you might find that rather than being a spectator, being a sport or musician yourself is ultimately ore rewarding.  I get a lot of pleasure out of playing the piano and since my parents were kind enough to pay for the lessons I took in childhood, ongoing expenses are limited to occasional music purchases and tuning the instrument from time to time.

Sunday, 24 September 2017

Heirloom/Vintage/Dated/Old Junk







Those words could be used to describe the same item, whether it is clothes or furniture.   What do you see when you look at the items pictured here?     If you see this table in an antique shop window does it seem more valuable than if it is stored in your grandparent's basement?     Young people, starting out their independent life, used to be happy to accept offerings from relatives.   The price was right.  Perhaps there were memories attached to the piece.  I still own a table similar to the one above.  So useful;   the extension leaves fold under.   Many family meals have taken place around this table.

It can be easy to be caught up by advertising or visits to furniture showrooms or even more affluent friends' homes.    Flat packed furniture from big box stores can seem to be part of the transition to independence and adulthood.     Fast furniture, like fast fashion, doesn't seem to last very long.   I'll confess to buying my share over the years but when I look around my home now, I don't see many things that have survived.   The sheen seems to disappear rapidly.

Sometimes I have watched house hunter type of shows from foreign locations.   I cringe a little when what appears to me to be a perfectly acceptable kitchen is disdainfully dismissed with the comment, "That will have to be gutted."   The realtor/host/spouse nods in agreement.   Easily arranged, it seems.

I have had the thought that as we get older/because we are getting older we start to value older things.   We don't want to be placed in the old junk category!   I would prefer to think that we get wiser and appreciate quality materials and workmanship.    Younger people are not immune to this point of view, however.







No post next week as I'll be on vacation.