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How We Are Planning For A Staycation

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Planning For A StaycationI will admit I’m not the best flyer. I guess I’m out of practice. From 2010 to 2013 I was on a plane 4 times, once a year on vacation including international flights. However the thought of heading into a closed space for 3-5 hours with a 1 year old is a bit stressful for us. Scott has vacation time to use and our daughter turns 1 next week so we thought why not hang around the city and take in the sights. So we are planning for a staycation this year.

In the past we have used time off for work around the house like the first part of the basement or our outdoor patio. Not this year. When we first started talking about time off a concern Scott brought up was that he wanted it to actually feel like a vacation instead of just hanging around the house all week. So we are trying to do as much as we can to make it feel like a vacation without flying anywhere.  Here is how we are planning for a staycation. Read more

Cost or Cost Per Year?

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Cost or Cost Per Year?

Big purchases usually mean big costs.  Being budget conscious doesn’t mean that we are cheap.  When it makes sense to do so we are willing to part with hard earned savings.  When I look at a big purchase, I typically will look at how much it is going to cost us right now.  Another way to look at it would be to identify how much use you will get for something and then figure out the cost per year.  This can be a measure of quality of goods, or an investment in eliminating future regret.

The House

Several years ago, Sarah and I bought our current home.  There were certain features that came standard, but quite a few things we wanted were considered upgrades from the builder.  While the house was being built we had our décor appointment set with the developer.  We were told to come with a list of anything we might want, they would provide us a quote for each item and then we would decide what we wanted.

The price of the upgrades was considerably more than fair market value. This is typically when buying a newly built home.  One of our “asks” was for flat ceilings on our 2nd floor.  The standard was popcorn/stucco ceilings because it saved them money on having to properly mud/tape the drywall.  The price tag on this “upgrade” was $3,000.  For perspective that is just over $4.00/square foot of ceiling space.  We could not bring ourselves to justify spending that much money on something that was for aesthetics only.

We have now been in the house for five and a half years, and are hoping to stay for quite a few more.  Even at this point the price tag on that upgrade looked at as a price per year is down to $545 per year.  This has caused some regret on Sarah’s end for not giving the thumbs up to this upgrade.  I still feel it is too much money for what it would have brought to our life.  It certainly is more palatable breaking it down to the cost per year.

Some builders encourage you to add the cost of the upgrades to your mortgage.  You are amortizing them over the same time as your house as a whole.  This means you are paying interest on the costs.  Running the bill up higher over a number of years but it also provides an avenue for people who can’t afford the upgrades to get them away which isn’t a good thing.

The Baby

Babies cost money.  A lot of money.  Spending on the baby is really more about upfront costs than cost per year since most baby items are outgrown inside of a year.  That means that the cost per year is actually higher than the upfront cost.  As I’m writing this article Sarah is going through Ava’s old clothes and organizing them for storage since she has outgrown them all.  Although many of the items were given as gifts or purchased by her grandparents, the cost of this box of clothes is more than $500.00.  Realistically the clothes she wore for less than a couple of months had a higher cost per year than the flat ceilings on the 2nd floor we didn’t spend on.

Shopping for second-hand goods is an obvious solution to this problem.  All parents have the same issue of their children outgrowing clothing so as there is a fairly stable avenue for getting clothes you need now from those who no longer need them. We hope to reuse them in the future to reduce the total cost.

The Car

This one is fresh.  Last year we purchased a used car for Sarah.  We typically buy used cars and run them into the ground while saving up for a replacement over leasing/financing a new car.  Recently we began looking for a replacement car for the one I’m currently driving.  It is a 14-year old vehicle with a body that is starting to fall apart.  The first car we went to see was within budget.  It is only 4 years old currently with relatively low mileage.

This car would likely last a solid ten years, assuming it is mechanically sound.  What makes it difficult to pull the trigger on is the luxury features that drive up the cost of the car (pun intended).  This model has a nice panoramic sunroof which adds between $1,000 and $1,500 to the price tag of the car.  Breaking it down over ten years makes that pill easier to swallow at only $100 to $150/year.  The way I look at it is that the car without the luxury sunroof would last just as long (if not longer).  If the extra cost was for a feature that would extend the life it would be a different scenario.  So at this point we are taking a pass on that car – we’ll see where the hunt takes us to see if we want to go back.

When shopping for a car the quality of the car should hold more weight than the luxury features like leather seats or fancy sunroofs.  Putting your money into a model one year newer, or with 15,000 less kilometers on it will provide better value in the long term.

When you have to spend big money, do you consider the cost over time or just the initial costs?

 

Whats The Point of Point Cards: How Gift and Point Cards Get Ignored

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Cards are worth as much as the plastic they are made out of if they don’t get used!

There is no doubt that you’ve witnessed or done it yourself – points cards gathering points that never get redeemed or gift cards that never get used.  If you look in my wallet on the main side I have my payment cards and my identification.  Flip over to the other side and you’ll find a treasure trove of points/loyalty cards.  We have an envelope at home with a dozen or so gift cards from places we don’t go to that have been given as gifts over the years.  These go unused and are wasted.

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The Tipping Point: Thoughts on Tips

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There is a lot of thought that goes into tipping.  Recently we had a family event for our daughter.  Part of this event was to take out our immediate family and grandparents for dinner.  It wasn’t a huge group.  My brother and his fiancée live out of province and were unable to make it.   Final tally was 13 plus a couple of babies.  The restaurant we picked was pretty good.  We decided to just have people order off the menu instead of doing a fixed priced thing.  Due to the size of the group we were advised that there would be a “service charge”.  This was 18% automatically added to the bill.  I’ve found this is pretty common practice in a lot of restaurants.  I don’t generally have an issue with tipping our server.  The process did get me thinking a bit about tipping etiquette. Read more

Saving for Holiday Shopping

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Holiday ShoppingThe Most Wonderful Time of the Year:

It’s that time of year where the holiday music is playing non stop and ads for Black Friday are popping up.  In Canada since we have Thanksgiving in early October the unofficial start of the holiday season is right after Halloween; basically 2 months long.  In the United States it’s only about 5 weeks long starting on the day after the American Thanksgiving, Black Friday.  Here are some tips for your holiday shopping.

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Financial Regret: Hindsight Is $20.20

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Living With Financial Regret

Regret can be a funny thing.  The difference between regretting an action and being happy about it is related solely to the result.  We make decisions with the information we have at the time; regret pops in when that information changes or we find out it is wrong.  Financial regret is no different.  When I spend money on something it isn’t a mistake.  It may be an impulse buy where not much thought went into it. This is almost never done by accident.  It is easy to look back on decisions and think about what you could or should have done.

What you don’t know is what would have happened had your decision been different.  Would things be better, would things be worse?  Would you ever get the opportunity to make what ended up being a great decision had you not made a bad one previously?  I’m talking about alternate timelines which is a topic that is filled with paradoxes and endless loops.

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Fuel Economy: A Tank Full of Cash

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Fuel Economy and How/Why to Figure it Out

A while back Sarah wrote a post about buying a “new to us” car.  When buying a car there are so many things to consider – so many features to balance.  How much the car has been driven, if there have been any accidents or liens put on the car, signs of rust or other factors about condition.  You need to factor in style – SUV, sedan, truck, coupe, crossover.  Then there are design features like sunroof, backup cameras, paint colour and navigation consoles.  One stat that people always look at, even if they don’t understand it, is the fuel economy.  This is a very important factor in the ongoing cost of the vehicle.  I doubt I’m alone in not giving it fair play in terms of the financial decisions involved with a car purchase.

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