Author Topic: Reader Case Study - My Budget *Update Nov 24th  (Read 7916 times)

Le0

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Reader Case Study - My Budget *Update Nov 24th
« on: November 11, 2013, 08:12:39 AM »
Original Post in Black
Nov 24th Update in Red

Made some changes based on the suggestion in this thread.

I would like to make good use of the MMM forums by asking the kind people here to look at my budget and give suggestions.

I am married with one baby girl and renting at the moment. We live in Ontario, Canada.

Rent - 975
Utilities - ~380 370 (Set up budget billing so this number no longer changes month to month. I build up credit if I use less)
Insurance - 191 183.91 (I ride my bike to work every day so I changed my insurance to reflect that)
Phones/Internet - 131.59 (two phones)
Bank Fees - 17.90 (Moved to a free account with CIBC, debit card now accesses the line of credit, transfer from the free account to the line of credit. Its not perfect but its working for us)

Groceries - ~340
Fuel - 50
Spending - 50

Debt - 600
Giving - 300 (haven't actually managed to give this much yet)
Savings - 70 (obviously looking to improve this)
Other - ~100

Total ~3205 ~3170

Income 3190 (Now receiving ~ 200 additional income via Baby Benefits)

We are trying to make money through a few other means like Airbnb and selling baking around Christmas etc, but that money isn't intended for the budget thats for a specific savings goal.

Ask and I can answer. Thanks for the advice.
« Last Edit: November 23, 2013, 10:28:23 PM by Le0 »

jpo

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Re: Reader Case Study - My Budget
« Reply #1 on: November 11, 2013, 08:18:37 AM »
Utilities and groceries seem high.

Not sure what all you're insuring (renter's? auto? health? life?) but that seems high as well - have you shopped around?

You should not be paying any bank fees.

Le0

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Re: Reader Case Study - My Budget
« Reply #2 on: November 11, 2013, 08:23:42 AM »
I should have mentioned and I will edit the main post, I am living in Ontario, Canada.

So ya, We actually were in a situation where we were paying a lot more for insurance because of a number of minor accidents that stacked up. So the insurance is the cheapest its been for a while. Changing at this point wont make sense until we are completely 'clear' of those accidents. I also just turned 25 so there has been a huge price drop.

Do you think if I asked my bank to drop the fees they would? Or how do I do that?

We are trying to keep our groceries to $80 a week.

Now that I look at it Utilities do seem high. I have been looking at hydro and heat as separate numbers this is the first time I added them together in a category. Does anyone have advice on how to approach a landlord about this?
« Last Edit: November 11, 2013, 08:25:16 AM by Le0 »

jpo

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Re: Reader Case Study - My Budget
« Reply #3 on: November 11, 2013, 08:51:21 AM »
Anytime I get hit with a bank fee (only happened a few times over the years) I go in and ask it to be reversed. I'm a longstanding customer and haven't had a problem.

Le0

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Re: Reader Case Study - My Budget
« Reply #4 on: November 11, 2013, 08:52:31 AM »
These fees are like the monthly cost for the type of account. Not penalties. Do you think it would still work? 

grmagne

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Re: Reader Case Study - My Budget
« Reply #5 on: November 11, 2013, 08:59:36 AM »
These fees are like the monthly cost for the type of account. Not penalties. Do you think it would still work?

We're with RBC and we pay nothing for monthly fees. In order to qualify for that we have a chequing, saving & investment accounts plus a mortgage and credit card. By having the full combo they waive our monthly fees. Other banks might have similar offers where they give you discounts for using multiple services.

Le0

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Re: Reader Case Study - My Budget
« Reply #6 on: November 11, 2013, 09:03:25 AM »
These fees are like the monthly cost for the type of account. Not penalties. Do you think it would still work?

We're with RBC and we pay nothing for monthly fees. In order to qualify for that we have a chequing, saving & investment accounts plus a mortgage and credit card. By having the full combo they waive our monthly fees. Other banks might have similar offers where they give you discounts for using multiple services.

Thats great to hear as i do have multiple products with CIBC. I am going to give it a shot.

jpo

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Re: Reader Case Study - My Budget
« Reply #7 on: November 11, 2013, 09:05:51 AM »
These fees are like the monthly cost for the type of account. Not penalties. Do you think it would still work?
Not sure about Canada but there are plenty of banks in the US who will maintain no-fee accounts. Unless you are somehow gaining more than the fee by using that particular account, I would switch or get them to permanently waive.

baniak

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Re: Reader Case Study - My Budget
« Reply #8 on: November 11, 2013, 09:41:36 AM »
Quote
Now that I look at it Utilities do seem high. I have been looking at hydro and heat as separate numbers this is the first time I added them together in a category. Does anyone have advice on how to approach a landlord about this?

NOTE: Talking from a U.S. perspective.

Do you get the bills for the hydro and heat? Or does your landlord get the bills? Is your bill the same every month or does it vary? I would see if you could get a copy of both bills, and especially useful would be a history of monthly usage.

If your bills vary from month to month, see if the utility company can set up a plan where you pay an average cost each month, instead of paying very little in the summer for heat, and a huge amount in the winter it will smooth out what you pay over the year. It doesn't save you money, but it evens out the payments so you can predict your expenses a little better.

As far as actual savings, cutting usage is about all you can do. In a rental situation where you are paying the utilities, your landlord doesn't have much incentive to help you by paying for efficiency improvements (insulation, etc.) In the winter you can put plastic on your windows, wear sweaters, channel ambient heat from other appliances (i.e. if you bake, you can let the oven cool off by releasing heat into your apartment, though that might not work so well when your baby learns to walk.)

Le0

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Re: Reader Case Study - My Budget
« Reply #9 on: November 11, 2013, 09:50:49 AM »
Quote
Now that I look at it Utilities do seem high. I have been looking at hydro and heat as separate numbers this is the first time I added them together in a category. Does anyone have advice on how to approach a landlord about this?

NOTE: Talking from a U.S. perspective.

Do you get the bills for the hydro and heat? Or does your landlord get the bills? Is your bill the same every month or does it vary? I would see if you could get a copy of both bills, and especially useful would be a history of monthly usage.


I do get the bills yes. I have equal billing set for heat i think. I will look into setting it up for hydro. Thanks for the suggestion.

I will also look into putting plastic on the windows. Will that make a big difference? Also we have a sliding door in the living room. Is there a good way to insulate that?

baniak

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Re: Reader Case Study - My Budget
« Reply #10 on: November 11, 2013, 10:05:29 AM »
Actually, it looks like there is little definitive evidence one way or the other for the effectiveness of plastic window insulation. This page: http://www.rodalenews.com/insulating-windows?page=0,1 recommends using drapes to prevent heat loss. That might be the best bet for your living room door.

Additionally, if you have rooms that you don't use as much in your place, try closing them off from your main space so that they don't get heated.

Kazimieras

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Re: Reader Case Study - My Budget
« Reply #11 on: November 11, 2013, 10:21:44 AM »
We're with RBC and we pay nothing for monthly fees. In order to qualify for that we have a chequing, saving & investment accounts plus a mortgage and credit card. By having the full combo they waive our monthly fees. Other banks might have similar offers where they give you discounts for using multiple services.

Switch to PC or ING (soon to be Tangerine I think) for your regular banking. Most banks will give you free credit cards with points in order to get your business (remember they earn like 1.5-2.5% of the transaction's worth). I am with PC for regular banking needs, but am with TD for two mortgages (principle and rental) and one gold credit card (no annual fee, free car insurance on rentals, and some other perks).

I'd suggest breaking your utilities out into Heat, Hydro, Water, and Internet (if you include it in there). It will make finding cost savings easier. And for now, I would reduce the giving until you get that debt wiped out.

Le0

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Re: Reader Case Study - My Budget
« Reply #12 on: November 11, 2013, 10:37:38 AM »
We're with RBC and we pay nothing for monthly fees. In order to qualify for that we have a chequing, saving & investment accounts plus a mortgage and credit card. By having the full combo they waive our monthly fees. Other banks might have similar offers where they give you discounts for using multiple services.

Switch to PC or ING (soon to be Tangerine I think) for your regular banking. Most banks will give you free credit cards with points in order to get your business (remember they earn like 1.5-2.5% of the transaction's worth). I am with PC for regular banking needs, but am with TD for two mortgages (principle and rental) and one gold credit card (no annual fee, free car insurance on rentals, and some other perks).

I'd suggest breaking your utilities out into Heat, Hydro, Water, and Internet (if you include it in there). It will make finding cost savings easier. And for now, I would reduce the giving until you get that debt wiped out.

My water and hydro come together, with water being a set fee that I can't change.

However if CIBC doesn't remove the fees I think I will go to PC for regular banking, Direct Deposit etc.

parkette

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Re: Reader Case Study - My Budget
« Reply #13 on: November 11, 2013, 11:35:22 AM »
I am in Canada and I use a couple of different ways to eliminate my bank fees. My main account is with my local credit union. They charge $7.95/month for 25 transactions, but this is eliminated if you keep $2,500 in the account all month long. I also have an account with ING Direct that charges no fees and is pretty much entirely online (unless you live in a big centre; I don't). I transfer most money from my credit union to my ING account except that $2,500 and I have no fees! I could eliminate the CU account entirely, but I do appreciate the face-to-face service from time to time. I would recommend looking at the various types of accounts CIBC offers- you may be able to find one that suits your needs without being so high- and $17.90/month is very high. I think it would still be worth getting an account through ING or PC though as they generally have higher interest rates. (Shameless self-serving plug: by using this ING referral code you'll get 50 free dollars (and so will I) until Dec. 31- 35488713S1 :)

Also- your cell phone cost could certainly be cut down. We have 2 cell phones through Koodo that have unlimited texting, 400 mins/month and 300mb that cost us $35/month each ($80/mth for 2 with taxes). I'm sure we could cut this down further as well, we just haven't cut the cord yet. But, our set-up would save you $50/mth, which is more than what you're short.

unpolloloco

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Re: Reader Case Study - My Budget
« Reply #14 on: November 11, 2013, 12:00:59 PM »
You're paying almost half of your income on housing (rent+utilities).  Can you improve this at all?

Can you improve your income at all?

Shop around for insurance now - you may still be able to save $$ before accidents fall off your record.  Worst case is that you'll waste an hour of your time.  Also, check out several - I've had quotes come back 3x the price from one place over another.

Le0

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Re: Reader Case Study - My Budget
« Reply #15 on: November 11, 2013, 12:13:37 PM »

Also- your cell phone cost could certainly be cut down. We have 2 cell phones through Koodo that have unlimited texting, 400 mins/month and 300mb that cost us $35/month each ($80/mth for 2 with taxes). I'm sure we could cut this down further as well, we just haven't cut the cord yet. But, our set-up would save you $50/mth, which is more than what you're short.

I am going to do some calling around and I will check out ING, if it works out the best for us I will defiantly use the promo code - Free Money.

As for the phones / internet category, maybe I should have broken it down more.

We pay;

Phone Koodo 45.77
Phone Bell 40.68
Internet Bell 45.14

So its close to what you have I think. We are waiting for the new rules to be put into place in December before we buy a new phone for the bell line (so we can get it unlocked) and then move it over to koodo also. We have no contracts.

Le0

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Re: Reader Case Study - My Budget
« Reply #16 on: November 11, 2013, 12:16:05 PM »
You're paying almost half of your income on housing (rent+utilities).  Can you improve this at all?

Can you improve your income at all?

Shop around for insurance now - you may still be able to save $$ before accidents fall off your record.  Worst case is that you'll waste an hour of your time.  Also, check out several - I've had quotes come back 3x the price from one place over another.

I feel like I can't improve the rent+utilities because the home is close to work (I bike) and we have the lease for a year. We are making efforts to improve income, but I work for the government so my wage is set.

I am make a little list of suggestions that I need to follow up. I will add the insurance shop around to it. Thanks. 

The Taminator

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Re: Reader Case Study - My Budget
« Reply #17 on: November 11, 2013, 12:23:39 PM »
I agree with trying to improve your income. Though I do recognize that you are very young so most of us do have smaller salaries at that age.

I'm assuming your baby is new also. Is your partner going to do the entire one year mat leave? Can your partner do any work on the side while she stays home with your little one? Taking in other kids is always suggested as a way to bring in some extra dollars.

parkette

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Re: Reader Case Study - My Budget
« Reply #18 on: November 11, 2013, 12:42:59 PM »
Quote
I am going to do some calling around and I will check out ING, if it works out the best for us I will defiantly use the promo code - Free Money.

As for the phones / internet category, maybe I should have broken it down more.

We pay;

Phone Koodo 45.77
Phone Bell 40.68
Internet Bell 45.14

So its close to what you have I think. We are waiting for the new rules to be put into place in December before we buy a new phone for the bell line (so we can get it unlocked) and then move it over to koodo also. We have no contracts.

Ahh, I missed that it was phone and internet. That sounds more reasonable.

How much is your total debt and what interest rates? It would be interesting to see how long it will take you to knock that out- it will eventually make a huge difference in your saving rate.

Le0

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Re: Reader Case Study - My Budget
« Reply #19 on: November 11, 2013, 04:21:15 PM »

How much is your total debt and what interest rates? It would be interesting to see how long it will take you to knock that out- it will eventually make a huge difference in your saving rate.

We have about 49,000 combined student debt. ~20,000 is OSAP the rest is a line of credit. 600 dollars for debt covers the minimum and then some for both loans. I think if I focused on my debt I can get rid of it in 6 years. However that assumes a steady income. I am working contract.

Keep baby expenses low. Encourage wife to breastfeed long-term. Twelve months for the minimum, and until the second birthday would be ideal. This will reduce your temptation to buy baby food, Gerber finger food, etc. It also keeps baby as healthy as possible (and the longer mom breastfeeds, the less likely she is to have breast cancer). Use cloth diapers. These are easy to wash! Also, if you move or something, babies don't need their own bedroom. You may be able to downsize your home.

You will need to accrue an emergency fund. This will minimize future debt.

You sound like my wife! We didn't buy newborn cloth diapers, but we are planning on purchasing cloth shortly. With a leftover tax return.

Kazimieras

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Re: Reader Case Study - My Budget
« Reply #20 on: November 11, 2013, 09:25:03 PM »
Phone Koodo 45.77
Phone Bell 40.68
Internet Bell 45.14

So its close to what you have I think. We are waiting for the new rules to be put into place in December before we buy a new phone for the bell line (so we can get it unlocked) and then move it over to koodo also. We have no contracts.

If you're in a major city, Wind may be cheaper than Koodoo, depending on your needs. Depending on your location Teksavvy or Acanac may provide internet in your area. They are cheaper than Bell and offer better bang for buck, for example I pay $33/month of 15M service. As well don't bother waiting until December for the new rules. The new rules only apply if you buy subsidized phones on contract, and all they will do is up the monthly fee in order to recover the subsidy faster. Oh and if you're willing to go for it, used cloth diapers can be a very cheap alternative. I just got ~2k worth of stuff for $160 :)

With respect to paying off loans, oddly I will say pay off the LOC first, even though I suspect OSAP has the higher interest rate. I have heard (never needed so please check) that you can get debt forgiveness if you end up with periods of unemployment with OSAP. So it may be worth checking into and should help mitigate some of your risk should your contract end early.

Le0

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Re: Reader Case Study - My Budget
« Reply #21 on: November 11, 2013, 09:54:20 PM »
Phone Koodo 45.77
Phone Bell 40.68
Internet Bell 45.14

So its close to what you have I think. We are waiting for the new rules to be put into place in December before we buy a new phone for the bell line (so we can get it unlocked) and then move it over to koodo also. We have no contracts.

If you're in a major city, Wind may be cheaper than Koodoo, depending on your needs. Depending on your location Teksavvy or Acanac may provide internet in your area. They are cheaper than Bell and offer better bang for buck, for example I pay $33/month of 15M service. As well don't bother waiting until December for the new rules. The new rules only apply if you buy subsidized phones on contract, and all they will do is up the monthly fee in order to recover the subsidy faster. Oh and if you're willing to go for it, used cloth diapers can be a very cheap alternative. I just got ~2k worth of stuff for $160 :)

With respect to paying off loans, oddly I will say pay off the LOC first, even though I suspect OSAP has the higher interest rate. I have heard (never needed so please check) that you can get debt forgiveness if you end up with periods of unemployment with OSAP. So it may be worth checking into and should help mitigate some of your risk should your contract end early.

So I looked up Teksavvy... and I am calling them tomorrow to see if its true and they are actually in our area! Looks like I might be able to save 14.64 on internet.

***Update
I called Teksavvy. It was going to cost more than 150 to setup the internet (Modem, Router & Activation). I am planning to move in 10 months and the savings would have taken over 12 months before it started making sense, so I decided against this for now.

However great option that I never knew I had. Will look into them next time I set internet up.

*****

Also I agree with you advice on OSAP verses LOC. I can write off the interest I pay on the OSAP loan, so its a less of an emergency loan until the LOC is gone. 
« Last Edit: November 12, 2013, 09:47:18 AM by Le0 »

Le0

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Re: Reader Case Study - My Budget *Update Nov 24th
« Reply #22 on: November 23, 2013, 10:32:15 PM »
Just bumping this thread up so everyone who made suggestions can see that it helped. Thanks again!