An Inside Peek at my Personal Finance Systems

Ever wondered how financial experts run their own personal finances? As many of you know, I work in finance in my day job. I never talk about financial products or specific recommendations in social media. But over the years in my career, I have picked up some excellent general tips and whipped my own finances into great shape. A lot of people ask me for tips all the time so I thought I’d share with you how I run my own personal finances so that I’m always making progress toward my goals.

I keep an emergency fund at all times. It’s not JUST for emergencies, I’ll also use it for opportunities or larger purchases that are planned, such as a vacation or a down payment on a car. I keep this savings fund separate from my chequing account.

I pay myself first. I have a budget that I stick to each month*. When I initially created my budget, I included my savings contributions as fixed expenses. My savings amounts are non-negotiable – NOT what’s left over after I’ve created the rest of my budget. The rest of my budget has to fit around my savings commitment to myself.

I use my no-annual-fee credit card for nearly all purchases throughout the month. I pay it off in full every payday (which, for me, is every 2 weeks) so I never pay any interest on purchases. And I rack up points on my card for all the purchases that I have to make! I’ve  redeemed points for a free plane ticket to see my guy in Ontario, and I still have more points left for another trip!

I set up all fixed expenses (where possible) on pre-authorized payment plans. That way they’ll never go unpaid due to forgetfulness.

I keep a finance calendar. Listen up, because this is my BEST SECRET. I use Outlook, but any calendaring system like Google Calendar would work just as well. I put in everything that happens in a recurring manner as a colour-coded recurring appointment in my calendar. Payday is a green recurring task. And every single item that will be drawn directly out of my bank account on a particular day gets a red recurring task with the amount indicated. This means I can always see at a glance what a month of income and expenses looks like.

I always keep a buffer amount in my bank account. Never let your planned expenses and withdrawals take your main bank account balance below this buffer amount. This leaves room in your account for unplanned or forgotten withdrawals without running the risk of a payment bouncing.

Payday is my favourite day of the month — and not for the reason you’d think. It’s not for all the fresh new cash to spend! Nope – it’s because payday is the day I get to figure out just how far forward I can nudge my net worth on that day. As long as it’s always improving, it gives me such a thrill! My plan is to figure out all the transactions that will occur on my chequing account between this day and next payday. Here’s how I do it:

• I log into my online banking and pull up my current bank and credit card balances.
• I pull up my finance calendar.
• On a scrap of paper, I write down my current exact bank balance (once the paycheque has been deposited).
• From there, I subtract all expenses and savings contributions that will be withdrawn from my bank account before my next payday. I also subtract my bank account buffer amount, and I’m left with the minimum amount that MUST be left in my bank account.
• From that amount, I subtract the total amount I need to pay off my current Visa balance (and I damn well better have enough to pay it. If I don’t, then I’ve been spending irresponsibly and it’s time to tighten the budget immediately).
• I transfer the balance to pay off the Visa by doing an online payment.
• What’s left, after accounting for my buffer and expenses, is the amount I have to play with. Depending on my priorities at the time, I may use this amount to pay down my line of credit (if needed), or as a lump sum boost to my retirement savings or emergency fund, or sometimes I might spend it on something special!

Using this method, I have not missed a deadline or had a single bill payment bounce in over 9 years, I have really great credit, and my net worth is edging upwards with every pay period. And I do it all over again each pay day. It takes a little bit of work initially to set up your budget, finance calendar and pre-authorized savings and bill payments (but isn’t your future self worth it?!), but once they’re done, they go on autopilot. The calculations for bill payments takes me about 5-10 minutes each payday. I now love the little fist-pump feeling I get each time I find out how much I can use to pay down debt faster or boost my savings, so I love doing this exercise!

If you need help creating a budget, read this post on how to create a budget for the first time, and then join Words of Williams’ newsletter for a free budget template download. Mint or Mint Canada are also a great help for the lazy budgeter 🙂

Any questions that I might have missed that you’re curious about?

Please buy my Craigslist finds and invite me over to enjoy them

In light of the fact that I’ll be merging two households into one in the near future, and also that I’m moving to a new place in a couple of months, I’ve been thinking a lot about home design and making a fresh start in this area. I’m not moving for a few months, and until I’ve got myself into the new space and got a sense of what will fit where, I don’t think I should be buying any furniture.

And yet, trolling Craigslist for cool finds has become an OBSESSION. I am totally into the more unique stuff you can find this way, and also the incredible cost savings! Plus I feel good buying pieces that are already out in the world, rather than something brand new. It feels less “consumer-y” that way.

Since I’m just window shopping and can’t pull the trigger on any purchases, let me share my great finds that I wish I could buy with you all! Someone in Vancouver, please buy these so I may live vicariously through you.

Sofa and love seat set, $150 for both. Ridiculous deal.

Not that there’s anything inherently special about this couch and matching loveseat, but $150 for the pair? They must be desperate to get rid of these items, that’s a steal.

Antique, shabby chic kitchen table, $150.

Due to my lack of design vision, I would have a hard time figuring out what type of chairs to pair with a table like this. But I LOVE the table!

Two pink velvet occasional chairs with jewels, $125 each or $220 for both.

I think these bright pink chairs would add such an element of fun to an otherwise plain living room set. But I suspect my lovely boyfriend would kill me if I chose to add two pink velvet sparkly chairs to my living room JUST when he moves in with me. If only I’d found these years ago!

This table & chairs set for $100.

The table is fine, but the chairs are what make this really cool! And I can’t believe they’re selling the lot for $100. I’d probably buy this despite my no-buy policy if I had a van to transport the set in short order!

Wood & mirror bar cart, $150.

Would you LOOK at this vintage beauty! It is one of the silliest (and probably easiest to achieve) dreams of my life to own a vintage-style bar cart and have it fully stocked, at the ready to make a cocktail party live up to its name. My Pinterest design inspiration board holds proof of this dream.

Somebody buy these and invite me over so I can enjoy them.

Home is a Person

The moment has arrived for me to write about some unbloggable things… things that overtook my brain and made it impossible for me to write anything else, but I couldn’t write what I wanted either, so I just quit writing. It’s taken until now for me to feel comfortable putting it out on the public web!

Jurjen and I like to call each other “retro boyfriend” and “retro girlfriend” because we recycled each other from 2000. I mentioned in my last life update post that I had a boyfriend, and that we’d known each other for 14 years. He and I have been back together for about 7 months now and I’m more sure of him than I’ve ever been about anything in my life.

What I didn’t mention previously is that he lives in Ontario… over 4000 km away from me. I attended college in his hometown, and we dated while I was there. I moved back to Vancouver when I graduated, leaving him behind (I try really hard not to play the ‘if only’ game over this one!) We’ve been in a long-distance relationship for the last few months. It’s been great, and we’ve seen each other far more than I would have dared hope, but it isn’t sustainable with so much physical space between us.

In January, my landlord really put this to the test when he put my house up for sale – and it sold in a week! So we had to figure some housing things out, long before we wanted to be dealing with it seriously. Would I sign a lease with the new landlords? Would I get kicked out? Would I get a new apartment here in Vancouver where Jurjen could join me? Would I pick up and move to Ontario? We had so many good options, it was overwhelming to choose among them. The only thing I knew for sure is that my home would be with him.

Well, I’m happy to announce that I’M STAYING IN VANCOUVER! I’m still ironing out the housing details, but it will be here. I’m so happy to have my love join me in my hometown, to discover it again through his eyes and share my favourite spots with him, to be introducing him to all my favourite people, and to build a home together. He is still in Ontario, but we’ll be together in a few short months.

Book Review: The Signature of All Things

I just finished reading The Signature of All Things by Elizabeth Gilbert, and oh my, how much I loved this book! I will preface my blatant love for it by mentioning that Elizabeth Gilbert is probably my favourite author, which is possibly not a popular viewpoint. Eat, Pray, Love is a book that came along at just the right time for me, and changed my life for the better in the wake of the broken engagement that I was going through at the time. Though Committed was not her best work, I gobbled that one up as well, eager to hear more of Elizabeth’s story. Having always been smitten with the author’s gift for beautiful prose and describing the indescribable, I was interested to see how she would do with a historical novel instead of the memoirs I was accustomed to. This book didn’t disappoint.

The Signature of All Things is set in Pennsylvania in the 1800’s. It follows the story of Alma Whittaker, a large and unfortunate-looking woman with a brilliant scientific mind, born to a no-nonsense Dutch mother (Beatrix) and the richest man in Philadelphia, Henry Whittaker, who made his own fortune by funneling his expertise as a botanist into profits in pharmaceuticals. Alma suffers many disappointments in life, and with nowhere else to channel her energies, she successfully becomes a well-respected expert botanist as an adult herself, in a time when most women did not work outside the home.

This book has a colourful cast of complex characters who I came to adore even as they sometimes infuriated me. The relationship between the selfish, egotistical Henry and his daughter Alma was interesting to watch unfold. I loved the dynamic between Alma, her adopted sister Prudence (who was so uptight but whose inner self was slowly revealed over time), and Retta Snow, the fanciful girl who thaws the frosty relationship between the sisters when the trio are together as friends. I wished I could have grown up with my own Hanneke de Groot as my personal nanny. I adored the stark contrast of Alma’s methodical search for facts, truth and answers about the world, set against her love for Ambrose Pike, an ethereal artist concerned with God and angels. There is love, sensuality, disappointments, tragedies, travel tales, philosophical points, and much focus on the cutting-edge science of the day.

One of my favourite parts of the book was how the author was able to weave real historical figures into the fictional story of the Whittakers. Before Alma was born, Henry had travelled on a botanical expedition on board Captain Cook’s third voyage. Charles Darwin was also a figure featured later in the book, to great effect! It was also interesting to read about the ideas of science that would have been considered bold and controversial at the time, knowing all we take for granted about evolution today. And Gilbert has a gift for using the flowery, descriptive language reminiscent of the 1800’s when the book is set, while still being readable in contemporary times.

Alma’s grapples with what’s important, what she wants to make of her life, and her “AHA moments” reminded me of my own and got me thinking about decisions I’ve made as well. It’s a rare novel that can do that.

My only criticism of the book is the portion in Tahiti was a bit of a slog to get through; it was less interesting to me than the rest. It could have been shorter. Nonetheless, I highly recommend this book and hope you’ll let me know what you think of it.

The Instruction Manual for Farting Around on the Internet

Source: Ed Yourdon on Flickr

The instruction manual of our times on how to relax correctly goes like this: Unplug. Step away from the computer, put away your mobile phone, don’t give in to FOMO, be fully present.

I’m totally guilty of spending mindless minutes (or sometimes hours!) reading blogs, browsing Pinterest, or texting when I’m bored or want to relax in the evening after work. It makes me wonder: Am I relaxing “right”? A really lazy day for me probably looks a lot like this: sleep in late, eat a half-assed “meal” that requires little to no prep (think: pita and veggies dipped in hummus, bowls of cereal, etc), TV watching, checking social media sites, book reading.

The key word here is LAZY. This is not necessarily the usual way I would spend a day off work. I love to go outside, to hike or snowshoe, breathe fresh air, pet a dog, have brunch with friends, cook an involved meal from scratch with fresh ingredients, attend a play or take in some sort of cultural event, connect with others, go for a drive and take in beautiful scenery. But I’m unlikely to do many of these things when I’m very worn down.

Here’s my thought: I think we should be making a distinction between the best activities for free time when you need to recharge, and free time when you have plenty of energy.

The instruction manual hits the nail on the head for those times when we are bored. In my experience, in this state your brain is hungry for something novel to focus on. It is fully charged and looking for a challenge. This is not time best spent playing solitaire on your phone. This is time you should reach out to other humans, take a class, focus on learning a new skill, engage in stimulating conversation. Putting your phone down helps to properly take in these experiences!

But when I’m zapped, tired and overworked, it’s sometimes all the energy I can muster to sit on the couch with my laptop and read up on current events or listen to a favourite podcast while playing a computer game. The alternative, honestly, would be to lie down and take a nap, disengaging from the world of consciousness entirely. I don’t think I should be apologizing for this. As a textbook introvert, I am pretty boring company if I go to social events while depleted; I turn into a rapidly wilting wallflower. I need some alone time to get that energy back. One of the best ways for me to do this has generally been to hide out with my computer and allow my thoughts to wander while playing a minimally taxing game, or reading light fluffy articles that make me laugh.

The struggle is to keep this balanced and not sway too heavily toward time spent idly with electronics. But electronics also give me the gift of recharging. I don’t like my gifts with a side of guilt.

A Long Overdue Update

Ahem. Is this thing on?

So I’ve been on a little hiatus. Truth be told, my life has been a (mostly awesome!) mess of Unbloggable Things for the last couple of months, and it’s all I can think about it, so it’s all I felt capable of writing about, except… see: Unbloggable Things. So I couldn’t write about the only things I could write about. So things went dead over here. But allow me to try to separate the wheat from the chaff and blog the bloggable parts of the Unbloggable Things.

Thing #1:

I have a new boyfriend.

His name is Jurjen (that’s pronounced like “Yurien”) and he’s Dutch, but he grew up mostly in Canada. This is us about a month ago at Shannon Falls on the way up to Whistler for a quick lil’ day trip.

He’s also my old boyfriend! I’ve known him for 14 years and he’s pretty much the best guy I’ve ever met. This, as you might imagine, is quite a long story that I will tell one day. For now, I will leave it at this: I’m just so content. This relationship feels at once comfortably familiar but also exciting & new, and it’s a really lovely combination.

Thing #2:

So many of my plans for the future have changed in the last couple of months and some are quite uncertain right now (UNBLOGGABLE THINGS!), and my planny little brain is having a hard time with the uncertainty. I am finding that in the absence of knowing how the chips are going to fall, my inspiration to work on any big life goals has basically gone up in a puff of smoke until I get some details nailed down. I am a girl who needs to know where my foundation is before I can attempt to soar. So the next few months will be dedicated to sorting out those details.

Thing #3:

I’m going on vacation on Friday.

I’m headed to Ontario, where I went to university. It’s the most glorious time of year there. Summers out there can be stifling with heat & humidity, and winters are freezing and snowy and drag on forever. But October? Gorgeous. I can’t wait for a break from work, visits to my old haunts, and seeing people I haven’t seen for a decade.

I can’t say when I’ll be back on a more regular schedule, but I will be back. Eventually!

Fun Reads for the Long Weekend

Vancouver Celebration of Light. Source: Thomas Bullock on Flickr

How was your week, friends? I’ve been busy since my last link post. I’ve been to the waterslides, met an old friend from years ago for bellinis, spent a day hanging out with my best friend’s adorable pooch while she was out of town, and saw some amazing fireworks. Summer in Vancouver has been pretty amazing this year.

Onto the weekly links:

An interesting observation on the culture of extremism in America vs. moderation in France. There are no fat people in Paris

If you have pets, this may shock you as it did me: apparently “pet-flipping” for profit is a thing.

Along the lines of Cards of Humanity, this looks like a pretty fun party game: The Game of Things

Great post from Sarah about how to travel with a group and keep everyone happy.

Loving these new-to-me blogs: Superlatively Rude (NSFW) and Metamorphocity

101 Uses for Coconut Oil. Who knew? I’m definitely going to try it as a moisturiser for super smooth & soft legs 🙂

Mo’ Money, Mo’ Problems

Image Source: Bluewinx15 on Flickr

I had the privilege of growing up in a home with relatively more wealth than average. I did not want for anything that a kid needs, and I had a lot of incredible experiences that I didn’t need but that made my childhood more special and prepared me better for life as an adult. The most eye-opening of these experiences was attending a very expensive and exclusive private high school from age 13 until I graduated and went to college.

The choice to send a kid to private school elicits very strong opinions that are often tinged with jealousy. Also, people are usually surprised with the career struggles I’ve had, considering my educational background. (SO AM I. Let us all take this as a lesson that money or education do not guarantee perfect outcomes!) So I hesitate to invite a critical look at my life through the lens of knowing I shared textbooks with the girl whose dad basically owns all of Whistler, and that Kate Hudson, Goldie Hawn and Kurt Russell sat directly in front of me at my sister’s high school graduation. But having attended school with some filthy stinkin’ rich kids (many of whom are lovely people!), I’ve observed firsthand how wealth can shape a person’s judgment of others, materialism, and sense of entitlement. And I would love to have a discussion about that aspect of it.

Among the general population of Vancouver, my family was considered well above average in terms of family income. However, relative to the pretty insulated environment at that school, we were friggin’ paupers. My parents made ACTUAL FINANCIAL SACRIFICES in order to pay the tuition. So I had the interesting perspective of feeling both wealthy and poor at the same time. NOTE: I am in no way insinuating that I had the same financial struggles as someone who is actually below the poverty line. But I know what it’s like to have relatively less wealth than others in your circles.

A lot of my classmates always had the latest gadgets, wore the most coveted clothing brands, and a brand new convertible on their 16th birthday. For many, if they wanted something, all they had to do was tell their parents and it would be purchased for them. I know that this was mostly done because those parents wanted to give their kids what they hadn’t had growing up. Or in some cases, because they had to work insane hours and were using “stuff” to replace quality time. But I don’t think it did the kids any favours.

This was not the case for my family or for a few of the other kids I was friends with. I had the opportunity through this school to go on exchange to Australia for four months at age 15, but my parents made me help pay for my plane ticket with my own money. I had to save half of all my babysitting money, and I got a summer job to help pay for it as well. I was allowed some of the clothes that I wanted, but I rarely owned the most expensive brands. I never owned a car until well into my 20’s and I paid for it myself.

As an adult now, I don’t really get along with my peers who were given everything they ever wanted as kids. I was always jealous of them in school, but I’m not anymore; we don’t understand each other. They never learned concept of earning what you buy and were usually judgmental of kids or people who didn’t have the best of everything. And it made sense back then: from their perspective, why on earth would you choose a tape deck when you could have picked a Discman? YOU MUST BE AN IDIOT. (Can you tell I was a teenager in the 90’s?!) But that attitude persists into their adulthood, only now it’s bigger things: Why would you rent when you could just own your home? Wow, a basement suite must be so dark. Why don’t you just go out and find a husband?

I’m proud that I have well and truly earned every modest piece of my life. I don’t need immediate gratification with the things I’d like to buy. I wait until I can afford them. I enjoy them more when I get them. And I seldom experience buyer’s remorse because I almost never buy things on impulse.

I think it’s great, if a family has the means, for the kids to be given things and experiences that will benefit and enrich their lives. Send them to the best after-school programs! Enroll them in private school, sure! Give them spending money to hang out with their friends! Heck, buy them a car or a house one day if that’s what you’d like to do, and sometimes, shoot the lights out and just buy them an expensive gift they want just for the heck of it. But don’t say yes to everything, every time. It’s so important to talk to kids about money and where it comes from, how it is earned, and how it must be used carefully to pay for the things you want and need. It’s great for them to have a job as a teenager, even if they don’t need one. The humility gained by having to sweep floors or clean up counters is a good trait. And the sense of pride from having earned that money themselves is truly priceless.

Do you have kids? How do you talk to them about money and gifts?

Fun Reads for the Weekend

Jesse & Celine in Before Sunset… one of my favourite screen couples of all time.

How was your week, everyone? I went hiking to see a waterfall with my mum, did a Before Sunrise/Sunset/Midnight trilogy movie weekend, and found a great dress on clearance while shopping.

Some links I enjoyed this week:

Do you like playing Would You Rather? Then you will appreciate the incredible difficulty of answering these ridiculous 15 WYR questions.

Some creative pregnancy announcements!

The Heineken Dropped! campaign is pretty neat. They set up some departure boards in airports, and offered travellers a free trip if they would give up their existing travel plans. The catch? They had to press a button on the departure board, wait to see what random location it generated, and leave right away. Would you be up for that adventure?

Lululemon’s app specialist posted his three favourite apps for summer 2013.

Five financial tips for young couples. I like the one about combining finances for income splitting purposes.

Dying to try this summer salad this week: grilled potato, lemon & zucchini salad with romesco.

I highly enjoyed this American girl’s Twitter tale of playing hooky from school in Morocco to track down Matt Damon on a movie set. Promptly followed her on Twitter. Best part: how she stole toilet paper rolls.

The 10 worst people on the subway. YES.

Sailing Off Into the Sunset

I have this feeling that I’m in one of those years where I’m leveling up, and it feels very freeing, but it’s also stressful. In a good way.

2008 through 2011 were very challenging, unsettling years for me where it seemed that everything that could go wrong, did. I was not in a phase of making progress toward big dreams in my life then. If my life was a boat, then my boat had been ravaged in a storm and was full of holes, and I was so busy frantically trying to bail out the water to keep from sinking that I sure couldn’t focus on sailing away to discover new land.

2012 was the year I finally got all that water bailed out, and patched up all the holes. The boat looked a little worse for wear, but it was keeping afloat and I’d found calm seas. Didn’t really get anywhere, though.

And now 2013? THIS is the year of discovery. This is the year where things are actually moving in the right direction. I not only got my own apartment without a roommate, but IT HAS A SPARE ROOM. I upgraded my old beater car to the car I’d been dreaming about for years. I took a vacation to Vegas to hang out with a bunch of strangers from the Internet who have turned out to be some great new friends, and I checked my most dearly held item off my bucket list:  I went to see Shania Twain perform live. It’s looking gooooood this year.

But there’s a lot more I still want to do. Things I need to do. Bigger things, things that would have a bigger impact on my day-to-day life. Career things. Expanding-my-comfort-zone things. Taking big risks that have the potential for huge reward or crash-and-burn disaster.

That’s the clincher, of course, is that these things will require me to leap outside my comfort zone, and that is Scary with a capital S. So there have been some freakouts.

My general process for dealing with overwhelm looks something like this:

1. Lightbulb goes on… big idea! Inspiration! Excitement!
2. … which lead to more ideas, more than I can keep up with. Write them all down.
3. Shit, I’m losing some of my ideas before I get them inked on paper. OH NOES I WILL NEVER GET THIS TO WORK IF I CAN’T REMEMBER EVERY SINGLE RELATED BRAINSTORMY STEP. STRESS! HULKSMASH!
4. Deny & hide. Watch some Netflix.
5. Turn off Netflix, take a good long hard look at brainstorm notes and attempt to create an action plan.
6. Realize just how much work this is likely to take, how uncomfortable or risky it’s going to be, and how little time I have to get it done and how impatient I am for progress. This usually hits me in waves.
7. FREAK THE EFF OUT. Cry for two days and watch more Netflix while talking my sister’s ear off about how my life is so hard and I’ll never amount to anything and this is all impossible.
8. Get over myself and get to work on that action plan.
9. Watch as my hard work yields actual results. Celebrate with champagne!

I’m doing a pretty good job of staying focused on #8 most of the time these days, but I’m having my moments of #7. Thank God my sister is a saint but also not a pushover and will listen and offer advice but then call me out when I’ve been navel-gazing for too long. I hope to be able to share some of the bigger stuff I am working on soon.

What’s your recipe for dealing with overwhelm? How do you “do it all”?