The Frugal Canadian

A frugal spender seeks to find new ways to save money and increase her net worth.

Tuesday, February 28, 2006

February Savings Update

I saved 48% of my income this month for a total of $2,128 and overall have saved $10,630 since I started the 25K challenge.

While my expenses were pretty much on target, there are some room for improvement. I noticed this past month that I did the majority of my grocery shopping at Dominion which is much more expensive than the local NoFrills or IGA.

My excuse is that I'm working a lot of overtime(yeck - no overtime pay) during tax season and Dominion is just down the street from me. I think I easily could have cut about $20 out of my grocery spending if I had spent the extra time going to NoFrills or IGA. I'm not sure if this is exclusive to my local IGA store but there is a great "fast sale" produce section in the store. For the most part, there is good quality produce with only a few minor bruises for ridiculously low prices. It's not uncommon to get a package of vegetables such as eggplants and zucchini for $1 to $2.

I thought I'd do a chart to visualize where I'm spending my money. Not surprising, but discouraging, is that I spend 51% of my total expenses each month on rent. Rent also represents 27% of my after-tax income.

Entertainment, at 15%, is my second largest expense and something that I could control but also find the hardest area to find ways to cut corners. Statistics Canada has some interesting numbers of the average household expenditures. Based on Toronto's 2004 figures reported, I've estimated that the average household spends 12% of expenses on entertainment. I've derived this number to exclude personal taxes and pension contributions to compare with my figures.(1) The report also indicates 18% for transportation costs, so I'm clearly not an average household income. Still I'd like to find a way to reduce these costs slightly.

(1) - My income figures are net of tax and therefore incorporate taxes as income not as an expense.

Tuesday, February 21, 2006

Poker Bankroll Management

My poker winnings are up to $725US and I'm getting apprehensive about leaving money at the various sites due to ambiguity of the legality of online poker. In all likelihood I'm being paranoid, but I'd hate to see my hard earned winnings disappear with a couple court rulings or if one of the sites goes bankrupt. Also, since I've only been playing $0.25 no-limit tables, I really only need to maintain $200 at any given site to weather a bad streak.

I already use a Neteller account so that I can easily transfer funds back and forth to the different sites for bonus whoring. But, Neteller funds are not insured by CDIC and as my bankroll keeps growing, I'm looking for an alternative to protect my winnings. Although I can transfer funds from Neteller to my bank account, I am hit with foreign exchange fees which can be costly. I will need a US chequing account so that I can do electronic transfers as needed.

So far, I have found that TD has a US daily interest chequing account. While deposits into the account are free, withdrawals are $1 per debit unless $1,000 is maintained in the account. It also pays a dismal 0.05% interest on balances less than $5,000. What I found interesting, was that this account is not insured by CDIC either. I would think(hope!) that TD is reputable enough to not have to worry about being insured. I was hoping I'd be able to use my brokerage account, but Neteller apparently can't send ETFs to these types of accounts. I'd like to be able to find something that pays a little higher interest, so the search is on. Any suggestions?

I've also signed up for rake back at Rake Break. This will give me 30% of the rake that I pay back to my poker accounts. I've decided that at my limits, chasing bonuses is quite time consuming and this will be a better option for me. I'm estimating that this will generate $15/month. Admittedly, it's a small amount but it's nice to have a hobby that puts money into my wallet rather than empties it.

Sunday, February 12, 2006

Tax Software Reviews

If you're like most people, you haven't thought much about your taxes yet. After all, they aren't due until April 30th, so there are still nearly 3 months to file. If you're thinking about buying a tax software package this year, I've reviewed some of the more common programs which I hope you'll find helpful.

This is my favourite program which I found a few years ago and it was available for the bargain price of $8. This year, the price has risen to $9.99 but it’s new interface and ease of use has increased dramatically. While, it’s wizard/interviews and tax planning ideas are not as good as the other programs I’ve reviewed, it contains all the forms needed to file your tax return. The new interface should help most users complete their returns with ease. What I like best about TaxFreeway is that you can prepare unlimited returns, it’s small to install, quick and easy to navigate through the schedules and forms.

TaxWiz is my second choice. It is an Intuit product which I used for a number of years prior to finding TaxFreeway. It’s basic, uses an interview process and reasonably priced for what you get. The main drawback for me is the 5 return limit.

This is is my least favourite program. It’s cheap and great for simple returns, but I find the the wizard interview process is extremely frustrating. Self-employment income is a nightmare to enter in this program. The user is essentially forced to go through a series of questions and at no point do you actually see a completed tax return until you are ready to print the return. Maybe this will appeal to some users, but I find it difficult to find if I’ve missed anything and hard to review for accuracy.

The software remains the most user friendly and most capable package yet also the priciest. If you have absolutely no tax knowledge it’s easier to use than TaxFreeway, but offers little benefit over TaxWiz and Ufile. The number of returns which can be filed is the lowest of all three packages and this is my main reason for not liking this package.

QuickTax has several different versions, each of which has a different price level with more bells and whistles. These are fun to play with, although, in my experience are not very useful. If you’re going to go with QuickTax, I’d recommend the Standard version as the Platinum and Unincorporated packages really have no additional “required” features to help you complete your returns. They have some neat features, but if you’re self-employed you’re better off getting a decent accounting package at the beginning of this year, so you’re in good shape for next year. In my opinion, these added features are not worth the extra $20.

Our Not so Frugal Valentine's Day Dinner

My Valentine and I went out for a lavish dinner last night. Neither of us have never spent a lot of money on Valentine's Day. Over the past few years we have probably spent no more than $20 on each other. This year was a little different.

Months ago, I recieved a $150 gift certificate for a swanky restaurant downtown from a couple of close friends as a birthday gift. At the time I found the gift wildly inappropriate. I had already found that birthday gifts were getting out of hand, and this was a step in the wrong direction. I put the gift certificate aside and figured we'd save it for a special occassion.

We used the gift certificate last night. We had 2 appetizers, 2 entrees, a bottle of wine, and 2 decadent desserts. I had also used a coupon from Toronto Life where you buy one entree, and get a free dessert. The bill came to $150 and we also had to shell out our own own money to cover the tip. The dinner was phenemonal, but it was absolutely outrageous. We spent my entire grocery budget for the month on one dinner! Thankfully only $30 came out of our pocket. We easily could have gone to the pub down the street and had just as nice of an evening. This spending will come out of my entertainment budget this month.

I hope you all are able to have a nice simple frugal Valentine's Day. It doesn't take a lot of money to let your loved ones know that you care. Don't give in to this commercialized day.

Friday, February 03, 2006

Reducing my cable bill

As I mentioned in my last post, I had to make an attempt to reduce my cable bill. I was facing another price increase to an already hefty bill. After looking at various packages on Rogers website I finally mustered the strength to pick up the phone.

I had decided to cancel The Movie Network package and downgrade to the Ultimate TV pak. While my package was already a Digital VIP package where prices are not broadcasted on the website, I figured this was going to save me about $15/month.

The process took me 45 minutes in total. Here's a summary of the events
- Sales rep #1 told me I could save $12/month. He tried to switch packages and couldn't so I was transferred to customer service
- I was hung up on and had to call back! (perhaps this was intentional to avoid a bill reduction)
- Sales rep#2 successfully transferred me to customer service
- A large song and dance was performed by me telling them that while I really enjoyed my current package, I just couldn't afford it any longer
- After 5 minutes of being on hold, the customer service rep, offered me reduced overall rates of 10%, waiving the modem fee, waiving the digital terminal fee, waiving the system access and the final price was $93.76. After this a price increase of $6 would still apply as these rates are apparently going up across the board.

Below is a summary of my ending package.

I managed to save $8.23/month by keeping the exact same package. After the price increase, I'm technically saving $14.23/month. I have to call back in February 2007 if I want an extension to the reduced rate.

While I was at it I asked for an evaluation of my cell phone plan as well. I couldn't get much out of them. I'm already on one of the lowest rate plans and get a 10% discount because of my bundle package. I cancelled my Essential Value pack leaving me only with voicemail. This was a saving of $5/month.

I've been tempted for awhile now to sign up for a personal video recorder for $9.99/month. But... that's not going to help me save any more money so I'll resist the urge until the technology becomes more affordable.

Wednesday, February 01, 2006

January Update

It was a good frugal month for me. I achieved a savings rate of 50%.

I'm displaying YTD numbers based on when I started my blog(October 2005) rather than a calendar basis. This way I can easily track my 25K challenge.

Food savings were my biggest achievement this month. I really made an effort to use my groceries that I bought before they reached the expiration date. It was tough at times resisting the urge to go and pick up some groceries when I wasn't in the mood for ingredients on hand but with a little bit of creativity I made it through the month with great savings and some pretty good meals.

Included in my gas costs is an oil change and some other air filter that Mr. Lube sold me. I need to learn more about cars so I don't get scammed every time I go to the auto shop.

Entertainment costs were also high. There were quite a few nights out with friends that I couldn't connect with over the holidays. Damn $7 martinis!

This month I have to call Rogers and reduce my cable and phone services. I just got a notice that my rates are going up $6. I'm already on their VIP bundle package and get another 10% off on my phone services with them, but the total bill is getting out of hand. Looks like I'll be missing the upcoming season of the Sopranos.