Keepin’ It Real - “Old Habits”

Jennifer is a Albertan single Mom on a mission – to save enough in one year to make an extra payment on her mortgage. With four kids, a modest income and a second goal of creating a buffer fund, can she eek out $1500 to make that pre-payment and if so, will she actually apply it to the mortgage or will she take herself to an all-inclusive in Jamaica instead? Follow Jenn on her “adventures in savings” as she cuts coupons, corners and possibly her own hair to prove that making an extra mortgage payment every year can be done! New to this series? Start here !

Hello friends!

Let’s review

Last week I vowed to:

a) invoke three “non-spending” days in order to tame needless spending
b) pack snacks and picnics for outing with the kids to avoid buying fast food

I learned two things:

a) it takes a little practice to break old habits
b) I need more Tupperware

First day out, “epic fail”, as the thirteen year old would say. I left the house with no back up food items and upon ducking into Subway to satisfy the three year olds washroom request I was attacked with the old, “ I’m hungry!” cry. With equal parts guilt and guilt, I realized it was indeed lunch time and there was no time to go home AND that I had promised all of you that I would not spend any money on Tuesdays, Thursdays and Sundays. Bugger.

I regrouped and did the next best thing, I limited spending. Instead of buying something for my self and the typical kids meal for my daughter, we shared a sandwich and ordered water with the promise that we’d eat more when we got home if we were hungry. Surprisingly, we were not and two lessons were learned. Pre-pack the vehicle with snacks for the week ahead on grocery day, especially if you are memory challenged, like me.

Second, re-examine your usual habits when eating out or shopping in general. Sometimes we make decisions based on habit, because we are afraid that making a change or “doing without” will invoke a sense of lack. This fear can be costly. Sure, a person doesn’t want to be thrifty all the time but on a day to day basis, you may be pleasantly surprised about what you don’t miss when you challenge your usual habits.

Week Two Challenge

Which brings me to this week’s money saving challenge! As I’ve been doing all this bank account examining lately, I’ve noticed another needless loonie sucker…bank fees. I recall an article I read years ago in which a money guru noted that big girls have “no fee” bank accounts, intoning that real grown-ups don’t pay money for having done the things the past generations have always done without question. We see this all the time with mortgages – people paying higher rates than they have to, reluctant to move to a new lender with lower rates because it’s not something they are familiar with.

In my case, I’m paying $20 a month in bank fees. Why? Because I have had that account since I was 18 and it’s what I know. Well, no more! I’ve finally opened a no fee bank account and savings account and I gotta tell you, it feels pretty mature to be all financially savvy and selective!

Why pay bank fees when you don’t have to? Paying for a comfort zone can be a very expensive habit.

One caveat here, friends. These “no fee” financial companies are fine for a basic chequing or savings account but not so great for getting high quality loan or investment advice. The individuals in the grocery store kiosks are generally not banking specialists, they are more like customer service reps, which is fine, as long as you don’t anticipating getting in-depth advice from them.

I would advise that you continue to see your banker or financial planner for investment advice and your mortgage broker for mortgages. In banking, unlike in marriage, diversification is a good thing. NOT keeping all your eggs in one basket results in you remaining attractive to each of your providers because there’s always something they want you to switch over. Confusing love and banking – another old habit worth challenging!

The Tally

Week One – $28 saved by not eating out and “non spending” days
Week Two – $20 saved in bank fees by switching to a no fee bank acccount

Total – $48 deposited in savings towards my goal of $1500

Only $1452 to go! See you next week!