From Traditional Media
Last week, critics rebuked Quebec Liberal Leader Philippe Couillard after he suggested a family of three — one adult and two teens — in the province could survive on a $75 weekly grocery budget.
A family of four will likely spend $11,948 on groceries and eating out in 2018, according to an annual food price report by lead author and Dalhousie University professor Sylvain Charlebois. That figure amounts to about $230 a week.
There are no easy solutions to this. Eating out is definitely more expensive than eating in, so reduce the amount of times you eat out and when you do decide to do so, spend it with family, friends, a loved one and make it nicer than it would usually be (as long as those costs would be less than the amount you’re saving by not going out as often).
Another suggestion is to choose where you buy your groceries carefully. There are definitely more expensive places to buy groceries and less expensive places. The best part? Most of where those stores get their produce are from the same suppliers. I cover that here.
From a few Canadian Bloggers
Truth is, travel in today’s age is incredibly inexpensive. With rewards programs, discount airlines and cheap accommodations – not to mention endless possibilities for remote work – you don’t need a lot of money to travel the world.
If you’re putting off a trip or the urge to live abroad, take a read of what this person has done. He was actually able to save 20% more by living abroad than by being at home.
Or you can do it like me and follow this guide to make the travel possible.
From a Few International Bloggers
- Understand your experience level: if you’re just starting to learn how to budget, then you’ll have more unexpected expenses (think car repair, christmas spending, birthdays etc).
- How steady is your income: if you can safely rely on it then you won’t need as much money in your emergency fund
- What’s Your Price for Peace of Mind
Only you are the expert on your life. Taking into account your cost of living, income, job stability, health and your tolerance for risk, how much money do you need in the bank in order to sleep well at night? You don’t have to stress about getting things perfect, either. The most important thing is that you’re aware and saving!
Is It Smarter to Use a Debit Card or Credit Card?
Some reasons to use credit cards include fraud protection and credit building. With fraud protection, if someone were to somehow get access to your credit card and start spending on it, the credit card company will not ask you to pay for it (provided that you tell them promptly of the fraud).
Credit building means that you’re showing lenders that you are a responsible person that they should consider lending money to at a good rate in the future (think home loan or car loans, or even personal loans). Of course, the only way to be responsible is to use your credit card responsibility and never miss a payment (ideally paying off the whole thing).
A big reason to use debit cards is to make overspending impossible. Since every time you use your debit card, they take the money right away from your account so if you don’t have enough, they won’t let you take it.
Another way to make overspending impossible is to get a credit card with a very low limit so that you cannot spend more than that amount, thus helping you get the fraud protection and credit building at the same time.
The Average Household Net Worth In America Is Huge!
I’m putting this article up to show you how dangerous statistics can be to paint a picture.
In this article, the person talks about how the average American’s income has gone from $551,300 in 2013 to $692,100 in 2016. (He actually then starts to talk about a different statistic which I go into here)
That is technically true (assuming the data they collected was true). However, that’s not really a cause for celebration.
Let’s use this example to understand why. Let’s say we have 99 people in a room, with net worth of RM 10,000 a year. Then all of a sudden, we have Jho Low walk in with all the money he’s stolen from Malaysia. We’ll just say RM 1 billion. What is the average of the room? 10 million. Does that mean that everyone is doing well for themselves, that the average malaysian in that room is filthy rich?
A better number to use in this type of scenario is to look at the median. The median is literally lining up all the numbers in order and then taking the middle number. In this case, we see that the median number is $97,300. Still better than the median of 83,700 in 2013 but very different than the ~700,000 that was being reported.
Anyway, the point is be careful around the way people present the data.
How to Invest for Medium-Term Goals
Understand what your investment options are:
- Savings account
- Certified deposits (think of GICs or fixed deposits)
- Bond index funds
- Stock index funds
- All in one mutual funds (or unit trusts)
Things to consider to determine the right balance
- How soon is the deadline: the sooner you need the money, the more conservative you should be
- How certain is your deadline: if you have some flexibility with either the timeline or the amount of money you need then you can take on a bit more risk as the downside isn’t as bad.
- What returns do you need: If you’re saving enough money to reach your goal with only a modest return, it’s probably not worth the risk of reaching for a better return. The downside will almost always be more significant than the upside.
- Are you comfortable with the ups and downs of the market (especially the downs)
And how should you find your personal balance? You could start with this questionaire.