A few months back my expenses started to slowly increase, there was a minor electronics disaster (power surge), and things have started to devolve. I have my budget set very tight, and things beyond my control; all my friends getting married, the increasing price of gas, and more trips to the cottage), have really stuck a hole in my budget.

I saw the total of my debt increasing instead of decreasing. For the next 6 weeks I am on a big debt decreasing kick, which should set me back on track. After that I am going to try to set things a little more straight in the new year. I want to get some specific accounts setup that will control my spending.

Here is what I am planning to setup in the coming year.

1. Savings Account (Investments) - this is going to be a true investment account. For the time being I will try to contribute enough to max out the $5000 into my Tax Free Savings Account (TFSA)
2. Necessary Expenses - This will cover things like gifts, weddings (more of those coming up), household necessities and repairs, and groceries.
3. Fun Savings - This is pretty specifically to feed my electronics fetish.
4. Planned Expenses - This will cover car payments, utilities, insurance, everything that I can budget.
5. Property Taxes - I have this account since I pay property taxes twice a year instead of monthly.
6. Emergency Account - I think I want to keep this out of my normal banking an throw money in there every pay until I have $10,000 in it. This may be redundant and may just be another example of the Necessary Expenses, but at the moment it really seems separate.
7. Pension Plan - My company has a pension plan, and will match my contributions up to 4%. Of course I will be contributing to this.
8. RRSP - I maintain my own separate RRSP program outside of my company RRSP. I make minimal contributions to this, and depending on what my taxation situation looks like come the new year, I may stop this for the time being.

I am hoping that the creation of all these account will allow me to better follow my budget. For the past 8 months I have been pretty agressively paying off my mortgage, I may slow these payments while I establish some investments, and an emergency fund.

While sitting there and staring at a large credit card bill and seeing the 20% interest charges on top of my purchases, I realized that pretty much everything I bought going forward was going to cost me roughly double what the item cost. This forced me to look at purchases differently. I am out of debt now and still force myself to look at things in the same way.

Why does it cost double?

• It takes a little less than four years at 20% interest for the amount to double.
• New purchases are the last ones paid off: Even if you only buy something that is $100 and can pay $100 on your credit card next week, that does not mean it is paid off. If you owe $5000 on your credit card, and you purchase a $100 item, you need to pay off $5000 before you can pay off the $100.
• Additionally, it’s a nice easy figure.

This rationalization worked well in a comparative sense. When looking at paying $80 or $100 on a pair of shoes it was easy to say that they were worth $20 more. But by the time they were paid off, it was a difference of $160 or $200. Hard to justify spending $40 more… Maybe the $80 shoes would do the job.

Applying this to all items, that $15 trip to the movies may not prove to be worth $30. Going out for a few drinks at $6 a piece may not look as good at $12 a drink. A $10 dinner at Subway is suddenly $20 - an inspiration to make sandwiches at home? The difference in cost between items is doubled, meaning that you pay closer attention to comparisons and really look at the value of items.

The rationalization that you will end up paying double what everything costs by the time it’s paid off got me out of debt, and I hope that looking at things that way will keep me out of debt. So before your next purchase decide if you are willing to pay double what the sticker says and decide if it’s really worth it to you.

So how do you figure out how much your car is worth? Well you need to look at features, and mileage, any repairs that need to be done. Mileage is a big factor on cars so don’t discount it. Here are the steps to approximate your car value.

1. Find 3-4 similar cars in your area. Aim for nearly identical feature sets.
2. Call and find out as much as you can about the car, similar features, and mileage is best.
3. Determine any work that may need to done, brakes, transmission, tires, etc… If there is damage to the car that wouldn’t be repaired, such as rust take off some value for that as well.
4. Call repair shops to determine the cost of repairs that will need to be done.
5. Add required repairs into the price of the cars.
6. Now calculate the price for the mileage. Just divide the price by the mileage, a car that was selling for $6,000 with 120,000km would be $0.05/km. Now take the average values of the mileage, the price, and the price per km.
7. Subtract your mileage from the average mileage. Now multiply that value by the price per KM. The value can be negative if your car has more mileage than the average mileage.
8. Add the calculated value to the average price.
9. Subtract from the calculated price any repairs you need done on your car.

It is actually pretty straight forward.

Example

You have a 99 Civic to sell with 129,367 km.

You find 3 comparables:

The average price is $7,080

The average mileage is 144,922KM

The average price per KM is $0.05

Your car has 15,555 less KMs. Those KMs are worth $777.75. (15,555 x $0.05)

Your car with 129,367KM could then have an asking price of $7,857.75. You would then raise or lower the price based on how quickly you wanted to sell the car.

There are a good many things that can affect your credit negatively, and only long periods of perfect behaviour, can things affect it positively. In order to help you build good credit, here are some things to avoid that can negatively affect your credit:

Missing Payments - This may seem obvious, but there are some issues that should be brought forward. The first fallacy is that paying late is the same as missing a payment. Most companies do not file a full credit strike against you until you have not paid for 90 days. This does not mean that you should be skipping payments, it simply means that you do not need to get into a frenzy if you pay a credit card bill a day or two late.

Having No Credit - The fact that you have never borrowed money does not help you. In order to be able to borrow money you need to have borrowed money. I know that this sounds like a catch 22, but you can avoid this problem. Get a credit card with a low limit and make a few purchases on it, make your payments in time, and build up a credit record.

Credit Seeking - Applying for lots of loans will hurt your credit. If you keep sending in credit card applications and they keep coming back declined then you can assume that it will become increasingly less likely that your application will be approved somewhere else. Stop trying and work on improving your credit. Also important to note is that when shopping around for mortgages they will want to get you pre-approved for everything. Do your best to not have them put in the application, simply get the rate, and then narrow it down to 2 or 3 and get pre-approved through them. Important to note is that if you are pre-approved through one mortgage vendor you will be approved through all of them.

Skipping Payments - Isn’t this the same as missing payments? No. Skipping a payment is when you could make the payment but decide not to for whatever reason. A common example is getting a bill for less than $1 and deciding that its not worth the effort to pay. This can still affect you as some of the automated systems will file a credit strike for any amount outstanding. If you think the bill is too small to pay, phone the company issuing the bill and let them know such, and have them waive the bill. If they don’t waive the bill, then pay it!

So with these easy pitfalls out there, how do you know if you have bad credit? Check! There are services that will check your credit, Equifax being the most well known and works in the U.S. and Canada, and these services are exactly the same as the ones that companies use when deciding whether or not to give you a loan. It costs about $20-25 to have a credit report run, and will let you know whether you have anything to worry about, or whether anything untoward is happening. It is a good practice to run these once a year.

Other Articles

How Do I Get A Free Credit Report

Why You Should Check Your Own Credit Report

6 Ways In Which One Can Improve Your Credit Score

Does Checking Your Credit Report Hurt Your Score?

Fast forward to today, the iPhone voice & data plans are up on the rogers.com website, and the prices are almost what I was expecting. To be honest they seem a little bit on the flimsy side, but just enough to entice me to potentially switch back to the iPhone.

Plan 1: $60, 150 Minutes, 400mb

Plan 2: $75, 300 Minutes, 750mb

Plan 3: $100, 600 Minutes, 1gb

Plan 4: $115, 800 Minutes, 2gb

The greatest features about the iPhone for me was the all in one solution. I used it for email, documents, music, videos and of course as my sole phone. I could bring it to the gym, watch a video while I did cardio (entourage was just long enough for a 22 minute elliptical and 5 min cool down per episode), then listen to music while I worked out and get the occasional email.

It will be interesting to see how the public reacts to the voice and data plans, will 400mb be enough for 1 month? Seems like a lot, but you have to keep in mind that the iPhone operates like a laptop, it’s safari browser downloads the full html content including image files which are often upwards of 100k, visit a few pages like this and you’re using up data.. and fast. Visit Youtube and you can definitely count on using a lot of your bandwidth.

My 2cents is to wait until the Fall to see if the data plans change for back to school / re-peak interest.

There were a couple of things going into the visit that should be stated. I did not really know anything about DirectBuy before going, I did not read the material that they sent me prior to my visit, and I did not have a good deal of large impending purchases.

As we arrived at the DirectBuy showroom it was largely a lot of people looking threw binders and that is one of the main selling points. I will provide some thoughts based on my visit:

Shopping By Catalog - This is how you shop through DirectBuy. They have a binder per supplier which lets you select products and buy them at the retailer cost. These prices are generally very good, but it is important to keep in mind that retailers will frequently receive a volume discount, and buy the items below this cost.

While the prices are great, I am somewhat irked by the shopping by catalog, as I think I would miss the physical presence of goods, especially in the picking of furniture and electronics as some of this stuff is based on personal tastes.

Can’t Shop Around - This is a strange rule. They do not want you to use other retailers services to demo the products with the intention of shopping through DirectBuy. This would be a major downfall if you have any intention of obeying the rule. Having said that, I have no idea how they would enforce it.

The Sales Pitch - For the better part of an hour I was subjected to the worst infomercial style sales pitch imaginable. There was about 16 of us in the room, and the woman giving the presentation was nauseating. As well some of the people in the presentation were suspect. Either they were on some sort of an upper, or they were planted to ask loaded questions. The presentation really turned me off the company.

The Prices Seem Good - During the nauseating presentation they passed around a bunch of flyers that showed sale prices, and then showed what you could get the same model from DirectBuy for. The prices were pretty good.

Handling Fees - There was an 8% handling fee tacked onto almost every price so that a DirectBuy employee could inspect the item before you receive it. This could cut into the discount by a large amount.

You May Not Save Money - DirectBuy seems to sell relatively high end merchandise. If you shop at discount stores you may not save money, but having said that, you will get better quality stuff at the same price.

It Is Expensive To Join - The cost (for Canadians at least) is $5500 for the first 3 years, then $220/year for years 4 to 10. That initial hit is quite large, so you want to make sure that you have some big ticket purchases of furniture, home renovation materials to justify it.

YOU ONLY GET ONE SHOT! - This is the real kick in the pants for me. On the day you do your visit it is the only day that you are allowed to join. They justify this by saying that they do not want people using the prices they find in the orientation to negotiate with retail stores. This is supposed to be to protect the interests of the manufacturers because they need to sell their product through retail as well.

It is my opinion that they want to make it seem like a great deal and then force you to make a snap decision. I told them that there is no way I could commit to a $5500 purchase in a matter of hours. And that it would take close to 2 months. I was told that I had until I left to join, and that if I didn’t I would be ban for 7 years. So now I’m ban.

If I were to join sometime (apparently 7 years) in the future. There is a few things I would do.

1. Bring my iPod for the presentation -so that I don’t have to listen.
2. Bring a spreadsheet of purchases I could see myself making in the next 3 years with the best price I could find
3. Be prepared to sit there for several hours with a calculator to decide whether it is worthwhile to join

From my visit I do think that DirectBuy would be something that would save me money, but I was not at all prepared for their high pressure sales tactic, and I balked. I was not prepared to make the commitment immediately, and I am left feeling uneasy about the tactics of the company.

DirectBuy can be a good deal, I am confident of this, but before you take your visit, do your homework and be prepared.

Other Articles

The Truth About Direct Buy

Direct Buy Strikes Back

Video Report: DirectBuy

DirectBuy Is A Scam

JustMyShopping.com

This was a terrible experience. Flat out I do not recommend this company. Granted I made some mistakes in my ordering process, but this was terrible service. First, I should have paid the extra money and ordered from Home Depot locally. It was about $100 more. To save the money from JustMyShopping I could have also had it shipped to the UPS store just across the border and driven down to pick it up. I did neither, and it cost me.

Here is a timeline on this terrible experience.

April 11: Placed the order. The shipping cost was not given to me because it was shipped to Canada. Shipping to the states would have been free. The online checkout process indicated I would be contacted with the shipping costs before it was shipped.

April 12: Credit card charged.

April 14: Status updated to Vendor Dropship PO. I still have no idea what that means.

April 18: I contacted them through their online chat to ask the status, they could not tell me.

April 22: Two weeks later I receive an email indicating that the package was shipped to the border. The shipping costs from the border to my house would be $53. I indicated that that was too much and I wanted to cancel. I was told that i would have to pay the shipping cost back to the warehouse, plus a 15% restocking fee. This was absolutely ridiculous. I was supposed to have the ability to approve the cost before it went anywhere. In this case I was looking at a cancellation fee that exceeded the shipping costs. I very begrudgingly accepted the shipping cost.

April 23: Credit card charged $53. I requested a tracking number when available.

May 2: I call and angrily demand a tracking number, I finally get one. I am assured I receive the unit the week of May 5th.

May 4: Another two weeks after my credit card is charged a second time the shipping information is given
to the shipping company.

May 9: The unit is finally transferred to the shipping company.

May 14: The unit arrives.

As you can see it was a full month from the time my credit card was charged to the time when the product was shipped. This is completely unacceptable. They only contacted me once, in a somewhat rude email demanding another $53 or threatening further cancellation fees. This is the worst company I have ever dealt with. I am considering filing a complaint with the BBB.

To further complicate the issue, when the cabinet arrived, it was damaged. I was terribly frightened. I did not want to have to deal with the company again.

Bush Furniture

In great fear I opened the manual and saw a note that said that if there are any issues with the product to call the 1-800 number. I phoned at 9pm and immediately got a live operator. I told them that two parts were broken. They asked for the part numbers which were clearly on stickers on each parts. They asked for some serial numbers, and an inspectors stamp. I was easily able to find all the information, they then asked for my address and told me to expect the new parts in 5-7 days.

A little less than 5 days, I had the parts I expected. Great service.

Assembling the cabinet was somewhat time consuming, the quality was more than acceptable. I am pleased with the product, and would recommend Bush Furniture.

You watch sports and movies. You buy a plasma tv.

You play video games or have natural daylight in your room. You buy an LCD (liquid crystal display) tv.

The key existing issues around both are still there, but they are less pronounced. (For the record, I have an LCD in my basement and I constantly question whether or not I should have gone Plasma.)

There are pros and cons to both, but these are much more minimized compared to older models. Here is my take on it:

Plasma

Faster Refresh - The picture is much smoother for movies or sports. All plasmas have a refresh rate of less than 1ms were as older LCDs were in the 20-30ms range. Newer LCDs with 120hz technology, motion smoothing, and < 10 ms response times have narrowed the gap. There is no reason that sports can’t look good on an LCD anymore

Higher Contrast Ratio - The contrast ratio with plasma exceeds that with LCD; however, the gap is closing with new “reflective screened” LCDs. Unfortunately the reflective screen feature also negates some of the other advantages to LCDs.

Black Levels - The black levels (how dark or inky the blacks can look) are superior on plasmas. The new Pioneer Kuro sets the bar in this test.

Image Viewing Angle - Plasma TVs, like convention CRTs (cathode ray tube televisions), do not suffer image degradation from off-center viewing. LCD image does get darker off center, although the point at which this happens is now about 178 degrees. No one would want to watch from that angle anyway.

Cost - While Plasmas were once more expensive, they seem to have dwindled into the cheaper territory, although it is so close that it really needs not be taken into account.

LCDs

Television Life - LCDs last about 50% longer than Plasmas. This factor shouldn’t really matter though because they both last longer than CRTs.

Reflection Performance - LCDs typically have matte screens, meaning that natural light in your TV room will not affect performance to the same level.

More Vibrant Colour - LCDs typically have more vibrant colour, particularly in brightly lit rooms. See above.

Less Burn-In Risk - LCD technology does not suffer from burn-in the same way that plasmas do. It should be noted that plasmas now have pixel orbiting technology that prevent burn in.

Easier to Install - LCDs are less fragile (no gas internals) and lighter. This makes them much easier to install, particularly if you are wall mounting your TV.

Better Compatibility With Computers - If you are a gamer then LCDs are the way to go. Where this factor gets fuzzy is with the incoming HTPCs. With movie downloads becoming more ubiquitous in coming years, LCD TVs may have a big advantage is this category.

• Bike To Work: This has many bonuses for your fitness and pocketbook. When I ride to work and pass a gas station, I always smile!
• Track Your Bike To Work Savings: Figure out how much money you save by biking to work. Calculate your litres per km (or gallon per mile) and multiply that by the total distance and cost per litre for gas. It is another great motivator.
• Find Discount Gas Stations: Not all gas stations are the same price. In my area I can see the current local prices at http://www.OttawaGasPrices.com/ . There very well might be a similar website service in your area.

• Gas Up At Night: I don’t know why, but gas prices are often reduced at night. It is not abnormal for me to go out and gas up at 11pm in my pyjamas.
• Plan Your Trips: Take a few minutes before you use your car and figure out exactly what you are doing. Going to Home Depot then home, then to grocery store, then home again, then to the dry cleaner then back to home just does not make sense. Figure it out and do one trip.
• Slow Down: Gas mileage gets a lot better if you drive a little slower. Shocking but true!

There are lots of gas consumption myths out there, but the previous six have certainly worked for me. Don’t forget to explore other common options, such as public transit and carpooling as well!

It should be stated that this article will speak of upgrades and home improvements, and what should be considered in that respect. What won’t be discussed are structural integrity issues, new roofs, cracks in foundation, cracks in driveway and other critical issues that should be addressed well before any cosmetic issues.

As I was part way through the purchasing of my first home, which was new construction, I had to start making upgrades. i was very surprised to find that there were a large number of upgrades that the builder did not offer in their town homes. I was surprised that they wouldn’t sell people whatever they wanted, but after some research I realized they might have been saving buyers from making some big mistakes.

As I went through the process there were 4 things that I considered when making upgrades:

1. How much more will I enjoy the house after the upgrade?
2. How much will this increase the value of the house?
3. How much will this aid in the sale of the house?
4. What is the cost of the upgrade?

All four factors are very important when making the decision to upgrade, but I would argue that none is more important than Number 1, which of course is tied closely to Number 4. Cost is always a factor.

Unfortunately there is no magic coefficient to discern whether or not the upgrade is a good idea.

In order to be able to easily convey these four ideas, I will demonstrate them through examples.

Finish the basement - One of the best upgrades you can make to the house is to finish the basement. A games room, home theatre or rec. room is a great addition to any home. Depending on how the work is performed, it can be done favourably in relation to all four of the factors listed above. For a family, having another area for the house allows the living room to become more formal while giving the children (both young and old) a place to play. A finished basement can greatly increase the joy of owning the house by creating extra livable space. The extra square footage can also increase the value of the house and its salability. If the work to be completed is relatively simple and does not involve major plumbing and electrical work, it can be accomplished quite economically. Finishing the basement is easily one of the best upgrades that can be made.

Granite countertops - This “mixed bag” upgrade is very dependent on your house and the kitchen in which you wish to renovate. The most important thing to take note of is if you are not in an expensive neighbourhood (i.e. you live in a townhouse) then this is not an upgrade to make. When it comes to increasing the value of your house one of the cardinal rules is: Do not have the most expensive house on the block. This upgrade is a great idea if you live in a larger single family home, but not if live in a less expensive home.

Front porch - Putting a front porch on your house can be a great upgrade particularly if you live in a neighbourhood where all of the houses look the same. It increases curb appeal by differentiating your house from the rest of the neighbourhood making the house easy to see. If you are the type of person who likes to sit outside and read in the morning or evening, then this upgrade may substantially increase your enjoyment of the house.

Exterior paint/new roof line - If you paint is peeling and looks absolutely dreadful, exposing the wood underneath, then yes do this; if not, it’s not going to add much to your investment. I saw one example where an individual spent over a year slightly modifying this roof line. I will concede that the house looks better, but for the effort there was almost no value added to the house. As well, I highly doubt that it increased the enjoyment in the house.

If you take from these examples and look at increasing the value of your house, increasing your enjoyment of it, decreasing your operating costs, and making your house more attractive, you will have made a good upgrade. Of course there are other upgrade options to consider, including new windows, fireplaces, and flooring - just follow the four simple considerations demonstrated above to determine if they really are worth your while.