Won't be long and he'll be making me dinner

B is 4 ½ now and quite independent. He does have some responsibilities around meal time like emptying any leftover food off of his plate (yes, a couple of times the plate has fallen in – after having to retrieve it out of the “muck” a couple of times, he quickly learned to hang on tight). Once he is done this, he puts his plate and utensils in the dishwasher. 

Up until now, we’ve been reminding him to ask nicely for what he would like i.e. “May I please have a glass of juice?” rather than “I’m thirsty” or “can I have a drink?”. If he starts with the latter examples then we usually respond with “pardon me” or “what’s that?” to which he responds with the appropriate more polite line. For the most part, all of his requests these days are polite. However, at this point, the demands sometime wear on me. Some of these demands include: preparing a snack or drink, putting a movie on, getting out his art supplies, and so on.

So on the weekend when he asked for a jam sandwich, I told him he could make his own. I got the bread, jam, and butter knife (yes I said knife) out for him, along with a plate and away he went happily jamming his slice of bread. Despite having a little more jam on the bread than what I would find to be appealing, there was no damage done and no mess left behind. Even better, he was so proud of himself and actually enjoyed making the food for himself. Hmph.. wonder how many jam sandwiches I made for him when he was perfectly capable of making his own. 

The next night, DH and I were sitting on the couch and he came in the living room and, again, asked for a jam sandwich. This time I told him he could go and get the fixings and make it himself. I fully expected to hear him ask for help to get something but he didn’t. After some rustling in the kitchen he came back into the living room with his piece of bread which was loaded with jam and had some goldfish crackers scattered atop. DH was impressed. However, more critical than I, he remarked – “Yes, but did you clean up after yourself?” Without hesitation, B proclaimed that he had. He told us that he had put the bread away, and put the jam in the fridge, and put the knife in the dishwasher. Sure enough, he had!

Rest assured this little boy is well on his way to being able to feed himself when he leaves home. I actually had a roommate in university that couldn’t even make a pot of Kraft Dinner since they never had to prepare a meal at home. 

5 Big financial mistakes you can avoid because I didn't

Photo Credit: www.mint.com

Along our journey to acquiring the $64K in debt we're currently committing to tacking, we made some pretty lousy decisions. I will share some of the most lousy ones in hopes that you will remember my experiences if/when you come up on similar decisions (and you will! - I know we weren't the only suckers who have been duped into making some of these same mistakes) and make smart informed decisions. 

1. Home renovation mistake: Laying $1000 of larger tile in an old house on an unlevel floor only to have many of them crack and ultimately have to replace all of them a year later.

2. Buy in bulk and "save" scheme: Buying into a grocery program $450/month for non-perishables and freezer meat for a year. The meat sucked (in my opinion) and we didn’t really eat that many non-perishables in the first place so we ended up spending twice as much in groceries.

3. Energy price guarentee scheme: Buying into an energy savings scheme (door salesman style) was a terrible..terrible..idea that ended up costing us double our monthly electricity use for 6 months which we ultimately couldn’t afford and upon realizing we had been duped, cancelled our contract for a lovely penalty fee of $1100. Many electricity companies now send out information warning customers about these companies. 

4. Don't pay for x months: Buying our washer and dryer on a store credit card under an “interest-free don’t pay for 18 months” plan. Like most other idiots, we didn’t pay them off until well after the 18 month mark and several hundred dollars in interest. 

5. Overdraft for emergencies: Getting overdraft was a mistake for us. Though this is arguable as some people enjoy having overdraft for security. However, if you always have enough money in your account (i.e. you are living within your means with a decent cushion of savings and access to something like a low interest line of credit) you should never have a need for overdraft. A few years ago, for a whole year, we had our overdraft completely maxed out. We were operating as if the overdraft limit was the zero and paying handsomely for it too. Ever since we dug ourselves out of the hole we have never looked back. Now instead of having an overdraft we have a small savings account with roughly $1000 in it for “emergency”.  In the event that this is not enough to cover our emergency, we’d have to rely on borrowing money but hey, at least we’ll hopefully be in a better place in the debt department and we’d be well ahead of the majority (64%) of people who couldn’t afford a one week delay in pay or an $1000 emergency.

Some time after we had rid ourselves of overdraft and were finally on our way to building our $1000 emergency fund, we had about $800 saved and our dog got loose and got hit by a car. We had to take him to the emergency animal hospital on a holiday weekend. He ended up being fine but the cost was $680. It hurt so much more to hand over that money from our savings. In many ways, it would’ve been far easier to charge it to a credit card or to use an overdraft and say we’d pay it off later. I really think there is something psychological there. This event really did reaffirm our decision that overdrafts are not for us and instead that having an emergency savings (however small) is our preferred option.  

Our Household Budget

Without further ado... below is our monthly budget. Note there is no "spending" allocation. DH buys coffee in the mornings and this is built into his gas budget so if he conserves gas, he gets more "spending money". He does car pool often so this helps in that department. Same goes for savings in other areas. Usually we decide together where the savings will be spent - sometimes it is a given, like this month, we needed to buy costumes for the boys for Halloween. We also have some cushion built into our budget since DH's income can be variable with overtime and bad weather days. 

Current Monthly Household Budget

Housing Expenses	Amount	Explanation
Mortgage	$1,521	We make weekly payments (DH gets paid weekly).
Property Tax	$442	Our city has quite high property taxes. We also have a fairly large lot by city standards, back onto "ravine", and are in a desirable location.
House Insurance	$77
Water Bill	$30	This bill comes quarterly so this is a monthly average.
Electricity Bill	$125	Average
Natural Gas (furnace, stove, hot water heater)	$125	Average
Insurance (Car Insurance, Life Insurance)	$360	Currently we have a significant life/disability insurance policy. We wanted to have this because we don’t have our mortgage paid off and at the time we got the policy, DH was the sole earner. He also works in a field where injury rates are quite high. We plan on scaling back/eliminating the life insurance once our house is paid off and we have some investments.
Investments
RESPs	$75	For both kids. It is not much but if we stay with this contribution, they would each have enough money for approx. 3 years of tuition at a local university. We’re comfortable knowing we could at least help them with this. We also want them to play some role in contributing to their own education.
TFSAs	$216	DH and I each have one. This money is only used for “emergencies” and is therefore not a substantial amount.
Household Expenses
Home Phone, Cable TV, Internet, Cell phone	$230	Note: Includes long distance package, some specialty tv channels, and a PVR (rent-to-own - $40 more over the term than to purchase flat out). Cellphone is a  smart phone on a pretty good student plan $60/month
Cell phone	$70	Note: Cellphone is a smart phone on a pretty good student plan $60/month – yes this is under my name too...
Groceries	$520	Includes all household cleaning supplies, diapers, personal hygiene items, etc.
Gas	$465	DH travels approx. 120km round trip to work. I travel about 30 km.
Childcare	$600	Family member watches kids (1 f/t, 1 p/t)
Debt payments	$1,540	Another post.
Total Monthly Budget	$6,396

The Numbers

My short version of "open book finances":

DH brings in, on average, $4000 (working in Construction Industry)

My work (contract) brings in $2800 (working in Government)

My modest Graduate Assistantship Income is $250 (after tuition payments for grad school)

Government Child Care Benefits are $200 ($100 for each child)

Total monthly income after taxes: $7,250

Total current monthly income (after taxes): $7,250

Gross Annual Household Income from Tax Returns for last 5 years:

2007 - $32,950

2008 – $56,895

2009 – $73,122

2010 – $91,818

2011 – $ 101,208

In 2010 and 2011, I contributed just under $30,000 each year to the household. Prior to this, I was mostly in school or being a SAHM. Note: the average family household income in the Region where we live is about $98,000. In our City in particular, it is just over $70,000. 

According to Mr. Money Mustache, our current level of income could be more than enough for early retirement if we started living off of 25% of our income excluding the mortgage payment. I’m definitely convinced that our 4.5 year goal to being debt-free is more than possible. Maybe even achievable in less time, so long as I keep working and we dramatically reduce our spending.