Personal Finance

Help Need To Get My Financial Life Straight

  • Last Updated:
  • Nov 10th, 2013 12:40 pm
[OP]
Deal Addict
Nov 26, 2011
1851 posts
162 upvotes
Ottawa

Help Need To Get My Financial Life Straight

I am looking for advice on what to do in order to get my Financial Life straight. This forum has helped me a lot in understanding basics, etc. Here is a rough guide to my accounts right now. I am with Scotiabank.

Chequing Account= $3000
RESP= Invested so far $1250 plan to have invest another $1250 before the end of the year to get max government benefits. (Invested in Mutual Funds)
TFSA- $627 (Cash)

I just signed up for the AMEX Gold card and supposedly got 15,000 pts (which is $150).

I am planning on going on vacation end of 2014 (Oct-Nov) and will need atleast $4000 for tickets and expenses.

I have about $500 left every week after minus gas, and eating out.

My expenses are
$400- Rent
$50- Home Phone + Internet (Starting in 2014)
$33- Cell Phone Bill
$58- Gym Membership
$150- Car Insurance for 2 cars

Total Mandatory Expense comes to $691 (say $700)

I should be saving around $1300

My son receives child benefit, etc which is used for his food, diapers, clothing and to max out his RESP

So what should I do with my $1300 saved up starting in 2014 every month. My current TFSA is ***** since I don't make anything off of it. Where should I put my money if I will be needing atleast $4000 by next yr November?

Any other advice to give out?
35 replies
Newbie
Jun 27, 2012
19 posts
4 upvotes
VANCOUVER
How can you even go on vacation that costs 4000 when there's only a few thousand in your bank? Ever consider if you lose your job??

Mind blown"
Deal Addict
User avatar
Feb 22, 2013
2028 posts
171 upvotes
Ottawa, ON
Jormungandr wrote:
Nov 8th, 2013 3:56 am
How can you even go on vacation that costs 4000 when there's only a few thousand in your bank? Ever consider if you lose your job??

Mind blown"
+1

You're planning $4000 for a vacation but you don't even have that set aside in your numbers.

Also, you're missing a lot of information. For example:
I have about $500 left every week after minus gas, and eating out.

Total Mandatory Expense comes to $691 (say $700)

I should be saving around $1300
These are conflicting numbers. Are you making $2000 per month, spending $700, and thus saving $1300 per month? Or are you making more (say $3000), spending $1700, and saving $1300? What are you spending $1700 on?

What is your salary?

Fixed expenses:
Are you married/common law/living with a girlfriend? I assume so if your rent is only $400 a month.
Car payments - do you own your cars free and clear?
Cable - no one watches TV?
Home/renters insurance? Property taxes?

Variable expenses:
Groceries and eating out - no one eats?
Gas for your car?
Electricity for your house/apartment?
Gas for your house/apartment?
Hygiene items?
Clothing and gifts?
Entertainment?

See http://www.gailvazoxlade.com/resources/ ... sheet.html for an example.

... Answer those questions and you'll be on a good start.
Deal Addict
May 31, 2007
4996 posts
2109 upvotes
Your $4000 will have to be put in a savings account since you need it by next year.

For your retirment, pick up a copy of "the perfect portfolio" by dan bortolotti and do a couch potato investing for your retirment. Do this over 10 years and you should get 5-6% annual return.
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Sep 4, 2005
2837 posts
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Toronto
Jungle wrote:
Nov 8th, 2013 7:56 am
Your $4000 will have to be put in a savings account since you need it by next year.

For your retirment, pick up a copy of "the perfect portfolio" by dan bortolotti and do a couch potato investing for your retirment. Do this over 10 years and you should get 5-6% annual return.
Or don't go on a $4000 vacation until your have some financial stability in your life and make a 100% return on it.
Banned
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Jun 2, 2009
2738 posts
165 upvotes
Toronto
Start by cancelling that vacation you absolutely cannot afford it.
Sr. Member
Aug 12, 2005
575 posts
10 upvotes
Toronto
Op's question is "Where should I put my money if I will be needing atleast $4000 by next yr November?"
Not "How do I save more?"
His thread title "Help Need To Get My Financial Life Straight" is a bit confusing however and suggests otherwise.

If the Op can save approx. $1,300 per month, he should have approx. $15,600 in a year's time. This is well beyond the $4,000 savings target.
There are, of course, two ways to accomplish this.

Save for Vacation First: Save $1,300 per month for say 4 months so that you have approx. $5,200 for the vacation and other incidentals. Then determine a more appropriate long-term financial goal and allocate accordingly each month to meet that target.

Save for Vacation as part of Long-term Financial Goal: Determine an appropriate long-term financial goal and allocate accordingly each month to meet that target without placing considerable risk that your financial assets cannot meet the vacation expense in 11-12 months time. This could be as simple as allocate $400/mth of the $1,300/mth to your high-interest savings account over 11-12 months (which will be enough to pay for your vacation) and the remaining $900/mth to some appropriate allocation between equities and bonds.

Now, with that being said, as many have already alluded to, the funding for the vacation itself is not an issue here -- you will have the funds necessary as long as you do not take undue risks. There's an opportunity for you to do a full evaluation of your income/expenses to see if taking that vacation is appropriate given a long-term financial goal that you need to create if you have not done so.
Deal Addict
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Aug 17, 2008
1180 posts
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Unplan that $4000 vacation.

I just saved your financial life.
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Jan 6, 2011
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HeavenLeigh wrote:
Nov 8th, 2013 8:41 am
Start by cancelling that vacation you absolutely cannot afford it.
This is the time you go on that vacation, but do so after you got the plan down...and maybe cut that to $3000 so you save yourself sometime reaching your goal....

Unemployment is the best time for travel, the precondition is you planned, saved and optimally exercised..
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Dec 14, 2010
5130 posts
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masoud100 wrote:
Nov 8th, 2013 2:28 am
My expenses are
.......
$50- Home Phone + Internet (Starting in 2014)
$33- Cell Phone Bill
$58- Gym Membership
........
You already have a cell phone - do you really need home phone? If you do, why don't you get VOIP for $3 or $5 / month? You can keep your number and have more features. If power goes out, you still have your cellphone. You can get a decent Internet for $25 / $30.

Considering what other said (regarding not having money aside), do you really need a Gym membership? If you have the discipline, can't you exercise at home or community centers? $58 / month is steep for someone that is trying to save so bad.

I second the advice from others regarding your vacation. You need to separate the "need" items from the "want" items and only do the "want" ones after you saved for it ahead of time.

Rod
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Oct 7, 2012
1361 posts
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Dibble wrote:
Nov 8th, 2013 10:21 am
Op's question is "Where should I put my money if I will be needing atleast $4000 by next yr November?"
Not "How do I save more?"
His thread title "Help Need To Get My Financial Life Straight" is a bit confusing however and suggests otherwise.

If the Op can save approx. $1,300 per month, he should have approx. $15,600 in a year's time. This is well beyond the $4,000 savings target.
There are, of course, two ways to accomplish this.

Save for Vacation First: Save $1,300 per month for say 4 months so that you have approx. $5,200 for the vacation and other incidentals. Then determine a more appropriate long-term financial goal and allocate accordingly each month to meet that target.

Save for Vacation as part of Long-term Financial Goal: Determine an appropriate long-term financial goal and allocate accordingly each month to meet that target without placing considerable risk that your financial assets cannot meet the vacation expense in 11-12 months time. This could be as simple as allocate $400/mth of the $1,300/mth to your high-interest savings account over 11-12 months (which will be enough to pay for your vacation) and the remaining $900/mth to some appropriate allocation between equities and bonds.

Now, with that being said, as many have already alluded to, the funding for the vacation itself is not an issue here -- you will have the funds necessary as long as you do not take undue risks. There's an opportunity for you to do a full evaluation of your income/expenses to see if taking that vacation is appropriate given a long-term financial goal that you need to create if you have not done so.
Good analysis
Sr. Member
Mar 4, 2007
538 posts
414 upvotes
Halifax
Super_Chicken wrote:
Nov 8th, 2013 8:36 am
Or don't go on a $4000 vacation until your have some financial stability in your life and make a 100% return on it.
+1

That trip might be ok if you were a single guy living at home or something but you have a child for Christ's sake...
[OP]
Deal Addict
Nov 26, 2011
1851 posts
162 upvotes
Ottawa
CWatson87 wrote:
Nov 8th, 2013 7:52 am
+1

You're planning $4000 for a vacation but you don't even have that set aside in your numbers.

Also, you're missing a lot of information. For example:



These are conflicting numbers. Are you making $2000 per month, spending $700, and thus saving $1300 per month? Or are you making more (say $3000), spending $1700, and saving $1300? What are you spending $1700 on?

What is your salary?

Fixed expenses:
Are you married/common law/living with a girlfriend? I assume so if your rent is only $400 a month.
Car payments - do you own your cars free and clear?
Cable - no one watches TV?
Home/renters insurance? Property taxes?

Variable expenses:
Groceries and eating out - no one eats?
Gas for your car?
Electricity for your house/apartment?
Gas for your house/apartment?
Hygiene items?
Clothing and gifts?
Entertainment?

See http://www.gailvazoxlade.com/resources/ ... sheet.html for an example.

... Answer those questions and you'll be on a good start.
I am self employed and always have atleast $500 left after subtracting gas and eating out while at work.

I didn't include my back story so that has many RFDers curious of why my expense is so low I guess. I am married and have a baby son. We live with my parents. In my culture the sons never leave the house while the daughters do after getting married. I am the only son. My $400 I pay is what I just pay my dad that includes living there and food, hydro, etc.

I own both cars. One car I use solely myself the other car my dad, etc use it 95% of the time and I don't pay gas for it just insurance. My gas I already subtracted since I said I can save atleast $500/week after gas/eating out.

I just got the Voip and will be paying less than $5/month starting 2014 and Internet I will be paying $45/month with TekSavvy.
[OP]
Deal Addict
Nov 26, 2011
1851 posts
162 upvotes
Ottawa
rodbarc wrote:
Nov 8th, 2013 11:54 am
You already have a cell phone - do you really need home phone? If you do, why don't you get VOIP for $3 or $5 / month? You can keep your number and have more features. If power goes out, you still have your cellphone. You can get a decent Internet for $25 / $30.

Considering what other said (regarding not having money aside), do you really need a Gym membership? If you have the discipline, can't you exercise at home or community centers? $58 / month is steep for someone that is trying to save so bad.

I second the advice from others regarding your vacation. You need to separate the "need" items from the "want" items and only do the "want" ones after you saved for it ahead of time.

Rod
We have home phone with Bell but I just got a Voip system and will be paying less than $4 month. My internet is also being cancelled and going with TekSavvy and going to be paying $45/month. So it comes to $50 a month like I said. I live with my parents and my neighbours are my uncle. We only have one home phone line but many handsets that are spread out through both houses. So I need the home phone but I did a good thing by getting Voip as it will reduce my costs. Internet same thing we have it going through both houses thus saving again. And when I meant going on vacation I don't mean like to Cancun or the Bahamas lol. I am taking my wife and son to their country to visit her dad and spend time with him as he is also getting married after his wife passed away. My son goes for free as long as he is under 2, and say 2 tickets for both of us is $2400, and another $1600 to spend for being there 3 months.
[OP]
Deal Addict
Nov 26, 2011
1851 posts
162 upvotes
Ottawa
Dibble wrote:
Nov 8th, 2013 10:21 am
Op's question is "Where should I put my money if I will be needing atleast $4000 by next yr November?"
Not "How do I save more?"
His thread title "Help Need To Get My Financial Life Straight" is a bit confusing however and suggests otherwise.

If the Op can save approx. $1,300 per month, he should have approx. $15,600 in a year's time. This is well beyond the $4,000 savings target.
There are, of course, two ways to accomplish this.

Save for Vacation First: Save $1,300 per month for say 4 months so that you have approx. $5,200 for the vacation and other incidentals. Then determine a more appropriate long-term financial goal and allocate accordingly each month to meet that target.

Save for Vacation as part of Long-term Financial Goal: Determine an appropriate long-term financial goal and allocate accordingly each month to meet that target without placing considerable risk that your financial assets cannot meet the vacation expense in 11-12 months time. This could be as simple as allocate $400/mth of the $1,300/mth to your high-interest savings account over 11-12 months (which will be enough to pay for your vacation) and the remaining $900/mth to some appropriate allocation between equities and bonds.

Now, with that being said, as many have already alluded to, the funding for the vacation itself is not an issue here -- you will have the funds necessary as long as you do not take undue risks. There's an opportunity for you to do a full evaluation of your income/expenses to see if taking that vacation is appropriate given a long-term financial goal that you need to create if you have not done so.
Yes I agree the title is misleading. I thought saving $1300 a month is a lot. That is $15,600 in a years time, plus $3700 I have now (chequing/TFSA)= $19300 and add to the fact I have maxed out my son's RESP $5000 (plus $1000 from govt, plus $500 learning bond, plus how well my investments have done). And just spending $4000 to take my wife back home to visit her dad and spend time with him is a waste of money?

My question was really how can I maximize my money knowing that I need atleast $4000 by 12 months. Because I think Scotiabank has low interest rates for TFSA. And I liked what Dibble said by putting $400/month into a high savings account. Which one though? That leaves about $700/month to put into long term investment for myself. Should I keep that in like Scotiabank and invest in Mutual Funds or what?

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