The Saturday weekend review #37: Stashing cash, is it worth it?

Only You Know What’s Best For Your Situation

I think stashing cash is worth it but whether people have the cash to stash is another story. I don’t think it’s hard to believe that many people do have about $10,000 stashed away for a rainy day but on the other hand I can completely agree that many people don’t have the money to do that.

Debt for Canadians is a big problem and in reading this article on Yahoo about a survey conducted by the Bank of Montreal it’s no surprise that the writer is saying that most people don’t have the means to sock away 3-6 months of income just in case an emergency would come up. You know last week we had an emergency where I managed to spill liquid on my computer.

Since I blog full-time my computer is a huge necessity in our household and that to me was an emergency where I was thankful that we had money in the bank to cover. We didn’t just hide away the money overnight either and I don’t think any personal finance blogger I’ve come across who talks about emergency savings says it has to be done in a certain time frame. Just like paying off debt a little at a time or putting down a larger amount on the principle I hold true with the emergency savings fund.

Since this past month we have spent a whopping $5000 on stuff, you read that right, “stuff” but all items that were needed in our house especially the computers. Sure we could have done without some of the clothes but we enjoy shopping the end of season sales to get the best bargains. We also didn’t need to spend so much on computers but we wanted to make sure we got quality computers with everything we needed so down the road we weren’t replacing the computer again and again.

We also needed to get new running shoes and sports bras for my wife which costs money because you want to invest in some good articles of clothing when you are working out. Sure many people are drowning in debt and I also agree that we should be paying off this debt but I prefer to tackle the debt on a balanced level if I had any which I have over the years.

The feeling you get when you know you have a bit of money put aside is hard to explain but it’s more about peace of mind if anything at all. Saving the money is always the hardest part because many of us make excuses as to why we need to use the money.

I won’t say that everything we bought in the past month was 100% needed but once we hit that mall all hell broke loose with our budget and it was a grave reminder how fast we can spend money if we aren’t mindful of how many times we are swiping the credit card.

Overall, we did well but this is the only month we will be splurging on us but it was well deserved with all the saving we have done over the years. I wasn’t shocked to read and maybe you won’t either in the article where it says the latest survey from the Canadian Payroll Association says that 42% of people are living pay to pay with 40% using up their net income each month.

That’s the way life goes and if that is the case then we have to start making some changes to our budget, our work, our experiences or simply spend less than we earn. I know it’s always easier said than done and depends on circumstances but for those not in special circumstances there is always time to make a change if even small ones

Many of my fans have accomplished significant strides over the almost 2 years I’ve been blogging and the one thing we almost all have in common is that we needed to be motivated. Sometimes depending on your life situations you may feel stuck in a rut or you may have had someone in a previous relationship say you were nothing and would never be anything. Well, don’t listen to that crap and do the best you can to be more than you can be.

It’s your life

If you have the drive inside to follow through with a hobby and make your fun times into money-making times like many of my blogger friends, then go for it. I have a friend who is pursuing his passion and its taken motivation but he is damn good at what he does and I know he will be going places. He is one of those guys who had an ex that cut him to pieces verbally over the years and is just now moving out from under the rock.

I hope that with my push that he will continue to grow and show the world what he’s made of. If you were born to lead, if you were born to motivate, inspire and share your strengths with others but don’t wait because one day that person might look back and remember what you did for them to help them succeed and pay it forward. It’s a great way to build a better world together.

Sometimes when we hear negativity towards us as an individual enough times that we are nothing or won’t amount to anything we may start to believe it, don’t. If you know you can move mountains, get out there and do it.

Don’t worry about what you should have done when you were younger or why you didn’t go to University or College or that you should have studied something different. Many people are struggling and feel stuck now especially if they have a family with young kids and a mortgage and feel trapped in a career they don’t like. Not everyone knows what the outcome of an education will be for them either. You just have to trust in your abilities.

Little by little you will see how your dreams can come true if you take steps. Just like with the emergency savings fund or using a budget all these things take time and if you are willing to put forth the effort you will start to see improvements if you stay positive and make your way to the top of your success ladder.

Best place for cash

Even though the interest in the savings accounts are crap in Canada we still will keep some cash stashed away for a rainy day. If you want to put money into a tax-free savings account maybe you will find that you get a better return on the money than you would in a traditional savings account.

The article says BMO’s “Smart Saver” account is only 1.1% annually, less than the 2% we get with Presidents Choice Financial and their Interest Plus Savings account although you still have to pay tax on that if you make over $50 in interest over the course of the year so get ready for your tax slip in the mail.

Sure you can save more if you pay down debt because the interest on consumer debt is huge but at the same time for some people who don’t have a home or a home equity line of credit or even a credit card saving a bit of cash in the bank is not so bad of an idea if they like to keep it balanced like I do.

It’s not written in stone what people should have in an emergency savings so put it in what makes you feel comfortable but if you are paying down debt be reasonable with what you are saving and how much you are killing that debt.

The goal would be to get rid of your consumer debt but have a bit of padding just to help you sleep better. Once you pay your debts you can start stashing away more and investing more. That is our plan once we actually pay the mortgage in full. In all honesty, not everyone fits in one category so we all need to custom build what is right for ourselves and stop worrying what everyone else is doing.

Spending less than you earn or making more money is the only way to go. No matter what you choose to do it may turn into a revolving door of cash and credit and the bills just keep on circling or you take the bull by the horns and do what you need to so you can get out of debt once and for all.

I think that people need to simply find what works best for them and never stop learning about ways to improve financially even if that means reading personal finance blogs, magazines, talking to professionals. Do whatever it takes to get your finances back on track. Some people cook from scratch instead of eating out, others shop at second-hand stores and many people don’t even have cable. It’s about choice not what you think you need because most times we don’t really need something.

I know that if Canadian Budget Binder fan Jen were here to comment (and I know she will) she would tell you that her life, her family and the family finances was all worth the struggle this past year and a half to get them on track towards their financial goals. You can read her financial struggles and how her and her husband Ken are working on getting out of debt fast here.

Do you have emergency savings? If not, what means would you use if there was an emergency?

Should you pay all your debts first before saving?

Do you live pay to pay and what have you done to start saving for a rainy day?

Gardening and Landscaping

Lke I mentioned last week I tore the garden apart and started my Fall clean-up. The back yard looks bare now but it also doesn’t look so cluttered like it did before. I know that next year I will keep it very simple for us as I’m just too busy to get out there all the time to weed and clean up.

Jen’s Garage Sale Finds

The garage sale season is wrapping up for us here and although many people still have indoor garage sales in the Fall and Winter it’s still a great way to find some hidden treasures at a fraction of the cost. So keep your eyes peeled online especially on Kijiji or on Facebook 24 hour auctions for your area to score some great deals.

Jen and her husband have made many improvements to their shopping habits and their budget. You can read all about it in her guest post, Budgeting With Mr. CBB Got Us Back On Track. Jen shares her weekly garage sale finds with us for the summer to show just how much she can save for her family.

My Finds

• Two hoodies for Adam $.50 for both (they were asking $1 each)
• Aeropostale sweater (brand name) $.50 (bought for a less fortunate student at my work).

I started my blog three years ago to track my own financial progress and aim to reach financial freedom by the time I’m thirty-five years old. I also want to help other people learn about money which is why I share all of my financial experiences online.

My hope is that people can be inspired by my stories and learn from my mistakes so they can become more confident managing their own money. After all, even the best financial advice in the world won’t be very useful if people don’t have the confidence to act upon it.

One way to build that confidence is to think outside the box like taking on debt to buy a farm, or leveraging stocks to potentially boost profits. These techniques are usually only used by high net worth individuals, but I want readers to realize that ordinary people can take advantage of these strategies too, as long as they understand the risks.

When I started investing five years ago my profits were quite low, but today my investment returns exceed the income from my full-time job. It’s a learning process and the only way to get better at investing is to practice doing it. Knowledge is power, and the more we know the better equipped we’ll be to reach our goals.

Related articles

• The Saturday Weekend Review #34: Canadian mortgage rates on the rise (canadianbudgetbinder.com)
• The Saturday Weekend Review #35: It was a start the car moment day today (canadianbudgetbinder.com)
• The Saturday Weekend Review #36: Video Gaming costs, children and relationships (canadianbudgetbinder.com)

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