How to Spend Less Money on Clothes

How much money do you spend each year on clothes? You may be surprised at how much. Recently I’ve been cutting back as much as possible on discretionary spending and part of this includes reducing the amount I spend on clothes. This is not easy. There are constant temptations, sales, and advertisements encouraging us to spend spend spend. Add to this that the general quality for clothing is declining, especially for women’s items, and it’s tough to avoid the clothing rack.

I recently encountered three instances where I had the option to throw out the item, or repair it for increased longevity. In an attempt to curb my instinct to toss and buy new, I opted for the more environmentally friendly approaches. My wallet is thanking me.

  1. Boots: Only a few months ago, I bought a pair of ankle boots for winter. The laces on them were not great, and they have already frayed (!! Further evidence to my point above about crappy quality >:[ ). They have been sitting at the door, being looked over on a daily basis, in favour of something that will actually stay secured to my feet. I finally got around to buying a new pair of laces, and after putting those on and giving the boots a good wipe down,they look so much better and are ready to see the light again! Check out my pictures below:
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Boots scuffed up with old laces looking pretty darn sad!
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Old laces all frayed
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Ready to see the daylight again 🙂
  1. Jacket: My winter jacket had a hole on the inside lining which was causing the filling to fall out – not ideal in Canada’s cold climate! Not only was the lining falling out but the rip was causing the jacket to catch on items, making it worse. It was a long rip, and the lining is a finicky material, but one day I just sat down while watching another episode of the Mindy Project and got to work stitching it up. Jacket fixed, check!
  2.  Pants: I had dress pants that were in great shape but never worn as they had become too big in the waist. This is something outside my skill set, so a visit to the seamstress was required. $15 later and I had a pair of pants I could wear again. I could have gone to the mall and bought a new pair for around $50 or maybe even less if I found a sale, but this option felt way better.

Why did I go through all this effort? Well, none of the above items were cheap to replace, and knowing how much money I have for clothes, I would rather spend the money on some awesome new skirts or dresses. The below table gives an indication of how much money you should be spending per year on clothes. The recommended amount is 5%, but I have provided 2.5% for those of you who are extra thrifty, and 7.5% to represent what is likely a reality for many people. According to the latest StatsCan report The average Canadian employee makes $49,000 per year, which would indicate an annual clothing allowance of just under $2500 if you are following the recommended 5%.

Salary vs Clothing Budget

This works out to $200 per month. In order to make a realistic budget for yourself, here are some things to consider:

  1. Climate: Do you live in an area that experiences drastic changes in temperature throughout the year? If you do, you will need to have clothing for each season. Being a Calgarian, I need coats that can withstand minus 40 C temperatures, and also lighter coats for a spring evening where the temperature may be 15 C.
  2. Lifestyle: Do you have a lifestyle that requires specialized clothing? Maybe you cycle to work, or are an avid horse back rider, or yogi. In these cases, part of your clothing budget should be allocated to maintain this part of your life.
  3. Job: What type of job do you have? A construction worker who is outside for the majority of their time will require clothing that can withstand wear and tear. An office worker may need to buy suits and accessories that are appropriate for the customers they are interacting with.
  4. Fashion Trends: How important is image to you? Keeping up with the latests trends comes with a cost, and it’s great to have an idea of what items you would like to keep up to date, and where to go to get the best deal.

It’s easy to be tempted by a sale when you are not clear on your wants. That sweater may be a great deal, but is it something you really want in your wardrobe or are you better off waiting for that great pair of boots to go on sale, and spending the money there? A few small shopping sprees can quickly add up and eat into your 5% budget.

When making a budget, break it down to the following:

  1. Necessities: Allocate some money for things like new underwear, socks, bras (ladies know those things aren’t cheap!!), basic T shirts, etc
  2. Replacing key items: Whether it’s a worn out pair of sneakers, a new winter coat, or jean jacket, set aside some money for these items. Also, writing them down will help you focus and be on the look out for these items! Also for every item that comes into your closet, one should come out. Think of it as the adult version of “one toy in, one toy out” that some kids have to live by! Why are you buying another knee length A line black skirt when you already have two that fit?
  3. Wardrobe updates: Allow yourself some funds for updating your wardrobe with a fun new pattern, texture, colour, whatever
  4. Splurge: Allow yourself to splurge. Being constrained by too many restrictions is a recipe for disaster. Permit yourself to pick up the occasional scarf or tie that catches your eye!
  5. Find a good seamstress: This will pay huge dividends. As many fashion experts advise, it’s just as much about fit as it is about style

Happy shopping 🙂

How I Saved Over 50% on My Last Purchase at the Grocery Store

Do you know how to be a savvy shopper at the grocery store? I’m not talking about flyers or coupons or buying what is in season. I mean REALLY paying attention to what you are buying. There are so many little tricks out there aimed at getting us to spend more money. Can you spot them?

Yesterday I had to pick up a prescription at the pharmacy. As I was waiting in line, I noticed denture cleaning tablets on the shelf. I have a mouth guard at home (hey, it might not be super sexy but it’s better then grinding down teeth!), and it needs to be cleaned on a regular basis. Sometimes I’m lazy and just brush it but it’s a good idea to get some cleaning tablets too. As I was pondering whether denture cleaning tablets were safe for mouth guards, the pharmacist called me up.

While ringing in my prescription, I asked her whether she knew if the denture cleaning tablets were safe for mouth guards. She said that someone had asked her the same thing yesterday and they had found “mouth guard safe”cleaning tablets next to the denture ones.  Awesome. So I go take a look, grab the box, and then double back….this is what I saw:

So, here are the observations:

  • Overnight cleaning tablets for dentures: $8.79
  • Retainer tablets (mouth guard safe as per logo on bottom left hand corner): $6.49
  • At first glance the retainer tablets are cheaper, however you are smarter than that and observe the quantity in each box – 96 vs 32
  • Hmm….you don’t get nearly as many tablets in the Retainer box….
  • See that yellow circled price on the bottom right hand side….that’s the per unit (in this case per tablet) price. $0.09 for the Overnight tablets, and $0.20 for the Retainer tablets!! That’s over DOUBLE the price!!! WHAT?!
  • Ok, hold on, hold on. Before we jump to conclusions, maybe the price premium is due to the chemical make up of the tablets. So the next step is to look at the ingredients on each box to see the differences. Guess what….the ingredients were exactly the same! (You’ll have to take my word on this one, I tried taking a picture but the text on the boxes was tiny).

So to summarize,

……EXACTLY the same product, over twice the cost!

Why? Because of fancy marketing.

Now, I could list HUNDREDS of examples in the store of how companies do this. Womens shaving cream vs mens? No difference, just pink packaging. Tylenol vs no name brand? No difference, just patents.

So here are some tips for you next time you are at the store:

  1. Observe the PER UNIT price of the items you are buying
  2. Look at the ingredient list – many items can be marked as having this extra feature or that added benefit, but when it boils down to the ingredients, they are the same
  3. Don’t fall for flashy marketing tactics
  4. BONUS TIP: I didn’t talk about it in this post, but items which are placed at eye level on the store shelves are ALWAYS the most expensive. Take a moment to look up and down for cheaper alternatives.

I hope this helps you to avoid unnecessarily high grocery bills 🙂

 

You Will Never Get Ahead With a Monthly Budget

One of the hardest things to face is being diligent with your spending, putting away savings for a rainy day, and yet feeling like you are never getting ahead. It feels like every time you turn around there is another unexpected expense which drains the “rainy day” account or ends up on the credit card or line of credit. How is anyone supposed to get ahead?

The funny thing about a budget is that we automatically resort to creating a monthly budget. It’s not hard to see why…most of us get paid bi-weekly or monthly, and our bills come out a monthly basis so it just makes sense! The problem is, not all of our expenses are monthly. There are items that “pop up” during the year that catch us by surprise due to their irregularity. If we pause a moment though we may see these expenses are predictable….they maybe are just not at the forefront of our minds.

Here are some examples:

  • Vehicle maintenance: On a monthly basis, most of us would include a budget for car payment, gas, and insurance. The vehicle also needs regular maintenance like oil changes and fluid flushes. Look at your owner manual to anticipate what expenses will come due this year and call around to see how much the shops in your area charge for these services. If you expect $1,000 worth of preventative maintenance , you should budget $83 ($1000/12) per month for this expense. For those of us with older cars, it would be a good idea to increase this by say $50 per month to $133. The additional $50 is for unexpected maintenance expenses. After all these are machines and things break! Additional things to consider in this category include tires (Winter/summer), car registration, car washes and any accessories.
  • Vacation: It’s so important to take time for yourself and your family to recharge and relax. Think about what vacation you want to take this year. All inclusive trip to Mexico? Couples yoga retreat? Disneyland? Prepare a budget for this trip. It does not have to be a laborious exercise – just something simple. Then put away some money each month to get to this goal. I cannot over emphasize the importance of this one! When times get stressful, it’s easy to say “we don’t have the money for fun.” However, if you have been consciously putting some funds away each month for this purpose, much of the stress is taken away about affording the trip. It also encourages you to minimize impulse spending knowing you are saving for a bigger goal! Also think of how awesome it would be to come home after a trip with a credit card balance of ZERO because you already paid for it 🙂
  • Electronics: phones, tablets, laptops, PCs, smart TVs, cameras….the list is endless. These consumer goods seem to have shorter and shorter life spans and require regular replacement. Decide what items in your house will be upgraded this year. Keep a look out for sales and deals. This is even more important if you are a small business owner relying on technology to keep the business going. Have an IT plan and a budget in place. Set aside a dollar amount each month to cover the annual IT upgrades
  • Team sports fees: many people are involved in recreational sports as an enjoyable pastime. These operate on a season basis. Do you have the money set aside to pay for 2 kids hockey fees plus your yoga subscription? What about the hockey registration that is coming up? How many tournaments will the different family members play in this year? It feels like when these expenses come up we feel “the pinch” or it’s a “tight month.” It doesn’t have to be! Include sports fees in your monthly budget, even though it is not paid on a monthly basis.

There are so many more examples, but hopefully this illustrates that a budget is best looked at on an annual basis and then broken down to a more meaningful and manageable monthly schedule. You really are going to miss out a significant amount of expenses if just looking at the monthly picture.

Also, did you know many companies offer a discount if you pay your bill up front for the year? Take insurance for example. Rather than pay the monthly premium, if you are confident in managing your cash flow, you can just pay for the entire year and possibly pay less!

Happy budgeting….

 

 

 

The Death of Tax Returns

In a previous post, I half-jokingly suggested that the government should pay us interest on our tax returns. This is because they are basically over collecting throughout the year until we are able to file for what is (usually) a return in order to make the necessary adjustments to bring us back to where we should be.

Well, they may not be paying us interest, but we could be seeing that money much sooner.

The UK, Canada and the US have been in discussion regarding replacing the current income tax system with an electronic real time one. This would reduce the year end tax return frenzy we experience, and create more reliable returns since the information would be consolidated from electronic sources rather than paper records.

I can hear the celebrating already. No tax returns?! This is great! Well, hold on….

There are most definitely pros and cons associated with this potential policy change. Here is my take on it. As the details on this new tax program have yet to be released, there are certain assumptions I’ve made in this list that could be up for debate.

Pros

  • Real time collection of information could result in less taxes paid. Assuming the new system is able to track expenses which are tax deductible, it could result in more money in your pocket each payday (we see you bought a bus pass this month for commuting, so we are going to reduce your taxes payable)
  • Faster processing of information due to electronic system
  • Less opportunity for human error, both by individuals and by the government employees processing returns
  • Electronic processing will reduce costs by eliminating postage, envelopes, printing, and labour time (assuming there is an incremental savings associated with going electronic). This means more dollars available for things like education and innovation
  • There is no doubt in my mind that productivity declines during tax return month as individuals spend sometimes hours collecting and analyzing the required information. Simplifying the process frees up time which people can spend generating more income, spending time with family or working on personal development. It also frees up time for the professionals which provide tax return services. However this is a double edged sword. More on this in the con list below.

Cons

  • Real time collection of information could result in MORE taxes paid. The government will likely not put themselves in a position where they under collect so individuals could potentially be at a disadvantage. Where there is a requirement to make an assumption regarding your financials, they will likely error on the side of conservatism
  • The demographics of the population could jeopardize the success of implementing such a program. The baby boomers are not likely to easily accept this transition, even if it is forced, they may have many additional questions and concerns which could eat up government resources (call centers, emails, that sort of thing)
  • Protection of information would be a huge hurdle for these governments to tackle. With so many stories in the news about hackers and leakage of private information, citizens will want demonstrated proof that their information is safe and secure
  • A system which tracks our lives in such detail could be viewed as too “Big Brother”
  • Those whose employment is highly correlated with tax return season could suffer from reduced earnings and reduced earnings potential. These individuals will need to determine ways to re-brand or offer different services

As with anything, proper implementation can really make or break the success of this plan. Although I welcome the movement into the digital age, I fear that the government will not be sufficiently proactive in addressing the stumbling blocks that will undoubtedly arise from such a drastic change to the status quo. In addition, although this system may work beautifully for 80% of the population, you will have the 20% that have complex situations which cannot be handled effectively by such a system which tries to capture everything in real time. The Pareto principle at it’s finest.

Do you think it’s a good idea? What can we do to make the implementation a success?

 

 

The Lie You’ve Been Told – Why Your Fixed Expenses are Not Really Fixed

A typical first step in developing a budget is to do an exercise where you identify your fixed and variable expenses. Fixed expenses are defined as expenses that do not change month to month, whereas variable can fluctuate. Fixed expenses also tend to be, but are not always, “needs.” In this bucket we would put things like mortgage or rent, insurance, and car payments. Variable expenses are defined as expenses which can fluctuate month to month. Variable expenses also tend to be, but are not always, “wants.” In this category we would put entertainment, clothing, and vacation.

The tricky part is that not all expenses fit so neatly into one of two categories. Some expenses may be variable but are needs. For example, utility bills can fluctuate month to month based on usage but these are a necessary expense, or a need. Some expenses may be fixed but are wants. An example would be a monthly subscription for a magazine.

What we are going to focus on is your monthly bills which are necessary and tend to be fixed every month, or close to the same amount. These are the expenses that routinely get ignored because the perception is they can’t be changed. Wrong! Let’s look at a list. I particularly get excited about the last one in the list.

Insurance

Insurance is one of those funny things – we pay for it, but we hope we never have to use it. Your insurance needs will depend on your lifestyle and possessions. Have a car? Need car insurance. Have a home? Need home insurance. Rent? Need tenant insurance. Own an expensive piece of sporting equipment or jewellery? You’ll want to ensure that too. How about your family? Need life insurance. There are a couple of ways to save on insurance:

  1. Combine products: combining your car and home insurance for example will give you the best quote. It’s also convenient to deal with fewer companies.
  2. Research discounts: recently graduated from a professional program? You may be eligible for a discount. Have an excellent driving record? Same thing.
  3. Pay annually: some providers will apply a discount if you agree to pay your premiums in full once per year, rather than in 12 monthly payments. If you can handle this from a cash flow perspective, it will save you money in the long run.
  4. Get multiple quotes: don’t take the first quote and run with it. Explore your options, however, makes sure you are comparing similar plans. A quote for one insurance policy may be cheaper than another because the deductible is higher or because there are several exclusions. Make sure to do your homework.

Utilities (Water, Electricity, Cable, Internet, Phone)

There is alot in this category so I’m going to try and keep it high level. An additional complication is that depending on where you live you may have more options. For example, in Canada we don’t have as many options for cell phone providers (although it’s getting better), so we pay more than our European counterparts.

Essentially it all boils down to two things. One, understanding that you have choice. Two, understanding that your needs change. Maybe a new business has entered the market and is offering discounted introductory pricing. Maybe you’ve been locked into a long term contract at a fixed price for water or heat and have noticed that prices have come down and it’s time to renegotiate or enter into a floating price arrangement.  If your teenage son has grown up and left, maybe you don’t need the premium sports cable package or ultra high speed internet. If your city provides green energy incentives, maybe it’s time to install some solar panels for your electricity needs. Maybe after reviewing your bills you realize the amount you pay for electricity is ridiculous and you need to install energy efficient light bulbs (in which case you should refer to my post about interesting ways to spend your tax return).

Mortgage/Rent

I have left this one as the last item because it requires possibly the most effort. Our housing expense is a contract, either with a bank or landlord, to pay a certain amount per month for a certain number of years. Although there is a contract involved, that does not mean change is impossible. If you are renting, look at what is happening in the market. If prices have come down, it may be beneficial for you to break your lease, pay the penalty, and obtain a new place for a reduced rent. (As a landlord, I cringe typing that, but it’s true). If you own your home, add a reminder in your phone for six months to one year prior to the end of your mortgage term. Start looking at interest rates – if you notice they have dropped significantly consider a blend and extend arrangement with your bank. This would reduce your monthly payment, and extend the contract, essentially re-mortgaging 6 months earlier than planned. Lastly regardless of whether you own your home or rent, look at your living arrangements. Are you living alone? Could you benefit from the income that a room mate would bring? Shared living accommodation is not for everyone but it can make the most significant impact to your finances.

I hope this has helped you understand how to look at your fixed expenses a little bit differently. It’s so easy to watch these things roll over into another year and auto renew, without any thought as to whether we the arrangement is still working for us.

How do you save money on “fixed”expenses?

 

Five Ways to Spend Your Tax Return Differently This Year

Building on my last post, I thought it would be a good idea to talk about what to do with that beautiful refund that comes your way in April.

Many will advise you to invest in your RRSP! That is a great option – and creates this endless cycle. You get money back in your tax return, so you invest in your RRSP, so you get money back the next year, so you invest in your RRSP….what a great system.

Sometimes though we want to see some more immediate fruits from our labour. Rather than going on a spending spree (which will most likely result in buyers remorse), here are five creative ways to spend your tax return, without the shoppers guilt. The key to each of these options is that you are making your money work for you. Sure $2,000 is nice, but what if you could turn that $2,000 into $3,000….or $10,000?

  1. Further your education – Maybe it’s that career change you’ve always pondered but never acted on. Maybe it’s a photography class to start up your freelancing business. Maybe it’s an outdoor pursuit class so you can lead nature walks on the weekend. Whatever the reason, think about how going back to school could expand your skill set and open doors for the potential to earn additional sources of income.
  2. Home improvements – Ever wonder why your energy bills are so high? Maybe it’s time to switch to energy efficient lightbulbs, get the furnace tuned up, change filters, insulate the windows and get rid of those nasty drafts that are racking up the utility bill. Want an easy way to save $100’s of dollars next year. This is it.
  3. Buy new appliances – Nothing screams energy drain like twenty year old appliances. Technology is constantly improving and appliances are much more energy efficient than they used to be. Replacing your fridge, stove, dishwasher, washer and dryer all at once can be a bit overwhelming – try creating a schedule where you replace one of these items every 2 years. Knowing what is coming up for replacement will help you keep an eye on sales too.
  4. Buy. A. Gym. Membership!! – This one is kind of funny. I’m sure many people will disagree – how can buying a gym membership save me money?! The key is to think long term. There are so many benefits to having a healthy lifestyle! A healthier and fitter you will get sick less often, which means fewer days off of work, and fewer dollars spent at the pharmacy. Not to mention, there is a good chance that while you are at the gym, your friends are at the bar for happy hour – now your abs AND your wallet will thank you.
  5. Early Christmas Shopping! – Okay,  I can see how this one may be a bit of a stretch but just hear me out. If you put this money away for Christmas shopping, and actually do Christmas shopping throughout the year, you ARE going to save money! How? You will pick up items on sale. You will be shopping out of season. You will spend less time driving around in circles in parking lots, less money on gas, and less money on the lattes you inevitably buy because you are dog tired from walking around the mall for four hours but still have four more hours to go! phew. I’m tired just typing that.

So there you have it. For those of you itching to spend the refund, there are five unconventional yet extremely useful ways to spend your tax return, guilt free.

 

 

Don’t Be A Hero – Outsource your Tax Return

Who doesn’t love tax season? We finally get back what was rightfully ours…

Wait, did she just say ‘rightfully ours’? That’s right, I did. The government is paying us back based on eligible deductions, as well as what is frequently an over collection of income tax. The funny thing is most people think of this as a ‘bonus’ cheque in the mail. In reality, we earned that income months ago (or spent it on an eligible deduction). Problem is, it’s not logistically possible to manage all the deductions in real time so we do this catch up exercise once a year. Which begs the question…shouldn’t we be charging interest…to the government? Or what if we did a “forecasted” return based on “forecasted” amounts? That would be nice…I digress…

Where was I? Oh yes, tax season. Outsourcing.

Many people likely have what would be deemed a ‘simple’ tax return. This would consist of a T4 which reports their income, perhaps some investments, and a few deductions such as transit passes or medical expenses. For these people, a software like TurboTax is a great, efficient, affordable method for filing their tax return.

However, even simple returns can be stressful if you are uncertain as to how deductions work, or unclear on what should be reported, and what does not need to be reported. Why can I claim a monthly transit pass but not individual tickets? How do my employer paid premiums to my medical plan impact my medical deductions? The stress involved with this and the concern over making an error can sometimes justify outsourcing the task to trained individuals.

In other cases, an individual or family may have a more complicated tax situation. Income splitting, investment properties, tuition credits form children, foreign income, relocation expenses or divorce can all make the process slightly more complicated.

Whether you are faced with a simple but stressful tax return or a more complicated situation, sometimes it makes sense to put a price on your sanity and time and outsource the task. Although there are several great tax software programs designed for a seamless user experience, sometimes even these tools cannot be enough motivation for someone who is not comfortable with the task, or just does not have enough time.

Note: If you think you have to pay to file your tax return think again! There are several free software programs available. TurboTax has great marketing and has successfully dominated the income tax landscape, however it is NOT required to  buy their software to do your return! However, some programs are better than others at ‘optimizing’ your return. Pros and cons. For a return with only a T4, why pay for TurboTax?

H&R Block offers services at a reasonable starting price, which increases based on the complexity of your return. Although the cost may be difficult to come to terms with, just think about how much YOUR time is worth. Sure, the fee may reduce your income tax return slightly, but the time you saved can be spent earning some cash, or on a family outing, or at the gym (and you didn’t think you had time for the gym, ha!). Now, I’m not saying we should be oblivious to difficult tasks- in fact, it’s critically important to understand your tax position in any given year. For some people however, it’s just not their cup of tea to sift through receipts and interpret rules – in that case, take advantage of the services that are offered to make your life easy and simple!

BONUS: Since you left the task to the professionals, you can have peace of mind that they will work with you to ensure all documentation is appropriately compiled for potential future audits.

Are you going to file your own tax return this year or delegate the task to someone else? If you are doing it yourself, what tax software do you like? I used H&R Blocks free software this year, and I thought it was very comparable to TurboTax, without the price tag.

Resources:

Free CRA approved software: http://www.cra-arc.gc.ca/esrvc-srvce/tx/ndvdls/netfile-impotnet/crtfdsftwr/menu-eng.html

Overlooked tax deductions that can save you money! http://globalnews.ca/news/2494875/6-overlooked-tax-deductions-and-credits-that-could-score-you-a-big-return/

H&R Block: https://www.hrblock.ca/file-in-an-office/experience/

 

 

How To Spend Less Money on Clothes

How much money do you spend each year on clothes? You may be surprised at how much. Recently I’ve been cutting back as much as possible on discretionary spending and part of this includes reducing the amount I spend on clothes. This is not easy. There are constant temptations, sales, and advertisements encouraging us to spend spend spend. Add to this that the general quality for clothing is declining, especially for women’s items, and it’s tough to avoid the clothing rack.

I recently encountered three instances where I had the option to throw out the item, or repair it for increased longevity. In an attempt to curb my instinct to toss and buy new, I opted for the more environmentally friendly approaches. My wallet is thanking me.

  1. Boots: Only a few months ago, I bought a pair of ankle boots for winter. The laces on them were not great, and they have already frayed (!! Further evidence to my point above about crappy quality >:[ ). They have been sitting at the door, being looked over on a daily basis, in favour of something that will actually stay secured to my feet. I finally got around to buying a new pair of laces, and after putting those on and giving the boots a good wipe down,they look so much better and are ready to see the light again! Check out my pictures below:

 

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Boots scuffed up with old laces looking pretty darn sad!
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Old laces all frayed
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Ready to see the daylight again 🙂
  1. Jacket: My winter jacket had a hole on the inside lining which was causing the filling to fall out – not ideal in Canada’s cold climate! Not only was the lining falling out but the rip was causing the jacket to catch on items, making it worse. It was a long rip, and the lining is a finicky material, but one day I just sat down while watching another episode of the Mindy Project and got to work stitching it up. Jacket fixed, check!
  2.  Pants: I had dress pants that were in great shape but never worn as they had become too big in the waist. This is something outside my skill set, so a visit to the seamstress was required. $15 later and I had a pair of pants I could wear again. I could have gone to the mall and bought a new pair for around $50 or maybe even less if I found a sale, but this option felt way better.

Why did I go through all this effort? Well, none of the above items were cheap to replace, and knowing how much money I have for clothes, I would rather spend the money on some awesome new skirts or dresses. The below table gives an indication of how much money you should be spending per year on clothes. The recommended amount is 5%, but I have provided 2.5% for those of you who are extra thrifty, and 7.5% to represent what is likely a reality for many people. According to the latest StatsCan report The average Canadian employee makes $49,000 per year, which would indicate an annual clothing allowance of just under $2500 if you are following the recommended 5%.

Salary vs Clothing Budget

This works out to $200 per month. In order to make a realistic budget for yourself, here are some things to consider:

  1. Climate: Do you live in an area that experiences drastic changes in temperature throughout the year? If you do, you will need to have clothing for each season. Being a Calgarian, I need coats that can withstand minus 40 C temperatures, and also lighter coats for a spring evening where the temperature may be 15 C.
  2. Lifestyle: Do you have a lifestyle that requires specialized clothing? Maybe you cycle to work, or are an avid horse back rider, or yogi. In these cases, part of your clothing budget should be allocated to maintain this part of your life.
  3. Job: What type of job do you have? A construction worker who is outside for the majority of their time will require clothing that can withstand wear and tear. An office worker may need to buy suits and accessories that are appropriate for the customers they are interacting with.
  4. Fashion Trends: How important is image to you? Keeping up with the latests trends comes with a cost, and it’s great to have an idea of what items you would like to keep up to date, and where to go to get the best deal.

It’s easy to be tempted by a sale when you are not clear on your wants. That sweater may be a great deal, but is it something you really want in your wardrobe or are you better off waiting for that great pair of boots to go on sale, and spending the money there? A few small shopping sprees can quickly add up and eat into your 5% budget.

When making a budget, break it down to the following:

  1. Necessities: Allocate some money for things like new underwear, socks, bras (ladies know those things aren’t cheap!!), basic T shirts, etc
  2. Replacing key items: Whether it’s a worn out pair of sneakers, a new winter coat, or jean jacket, set aside some money for these items. Also, writing them down will help you focus and be on the look out for these items! Also for every item that comes into your closet, one should come out. Think of it as the adult version of “one toy in, one toy out” that some kids have to live by! Why are you buying another knee length A line black skirt when you already have two that fit?
  3. Wardrobe updates: Allow yourself some funds for updating your wardrobe with a fun new pattern, texture, colour, whatever
  4. Splurge: Allow yourself to splurge. Being constrained by too many restrictions is a recipe for disaster. Permit yourself to pick up the occasional scarf or tie that catches your eye!
  5. Find a good seamstress: This will pay huge dividends. As many fashion experts advise, it’s just as much about fit as it is about style

Happy shopping 🙂

How to Find Free (or nearly free) Entertainment

Boredom. It happens to all of us. The number one cure for boredom is to turn on the TV. What if you want to do something other than chill and watch Netflix? Sometimes living in a big city, it can feel like any attempts at going out will cost you next week’s food budget.

I’m here to share with you that there are SO many opportunities for free or cheap entertainment, all that is required is a little detective work!

Examples:

-Last week I went to a free hockey game. I had no idea this existed until I received a email from the university I attended. Once a year the two major universities in town face off in the “Crowchild Classic.” A free game, open to the public. Seating is first come first served. This hockey game was MORE intense than the professionals – the crowd was wild, the players were fierce. All in all, a great night. Typically to attend a hockey game could cost up to $150 per ticket. Good deal!

-Lululemon holds a free yoga class on Sundays at some of their retail store in the mall – all you have to do is sign up!

-Many theatrical groups in town hold free plays during the summer at various city parks

-Brew a coffee or tea at home, grab a friend, and take a stroll along your community paths and parks

-Want to play organized sports but can’t afford the fees? Some organizations offer free playing time to individuals who are willing to volunteer to help set up equipment, perform some admin tasks, or keep score

-Grab your skates and some friends and hit up an outdoor rink in your community

-Sign up for loyalty programs. I was a customer at Scotiabank for years, who has teamed up with Scene to offer customers great perks at the movies. By signing up for the Scene card, every debit purchase qualified me for points at the movie theatre. I haven’t paid for a movie in years

-Help out start up businesses in your community. Many of them will offer discounted workshops or seminars in an attempt to drum up interest. Maybe someone is offering a class on how to grill the best steak, or make exceptional cupcakes. Consider going to a start up class for $25 instead of the $100 that the established cooking schools are charging

So there you go, just because you are living on a budget, doesn’t mean you have to be a couch potato. What activities have you found in your community that don’t break the piggybank?