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Frugal: the new F word

Frugal: the new F word

What I’m reading
Some stores are scrapping self-checkouts.

Only 10% of US workers have the “optimal” characteristics to to save well for retirement.

“We frequently overestimate just how much happiness money can buy.” The pay raise people say they need to be happy.

Ranking streaming services by cost increase.

What I am thinking
I find many things come down to the fact that words can have different definitions. For example, I have discussed how people who dislike the term FIRE often choose to focus on the early retirement piece and not the financial independence piece. Same goes with people who say there is no such thing as “dividend investing.” Well, the term has been defined by the people who use it, so of course there is.

From what I can see, no word has been more maligned in the personal finance community than the word frugal. Let’s check out some history:

frugal (adj.)
“economical in use,” 1590s, from French frugal, from Latin frugalis, from undeclined adjective frugi “useful, proper, worthy, honest; temperate, economical,” originally dative of frux (plural fruges) “fruit, produce,” figuratively “value, result, success,” from PIE root *bhrug- “to enjoy,” with derivatives referring to agricultural products. Sense evolved in Latin from “useful” to “profitable” to “economical.” Related: Frugally.

PHEW. There is a LOT going on in there! What’s interesting is that on that page there is no mention of the word frugal being aligned with the word cheap but yet, it’s what frugality has come to mean to a lot of people. I think we’ve done the word frugal dirty and I am done with it!

Clearly, I consider myself a frugal person but I don’t consider myself cheap. To me, spending judiciously is what I think of when I think of the word frugal. I also think the word applies to more than just money: I want to get the maximum enjoyment out of things I spend time and energy on as well. I don’t watch a lot of movies or tv shows because I get very little value out of them. It isn’t a judgment on whether or not movies/tv are a good use of time, it’s about how I want to spend my time. I have a friend who loves movies and gets a ton of value from hitting up a theatre a few times a month. She loves it. She also loathes cooking, so she spends as few hours as possible in the kitchen. I love to cook, so I spend a lot more time cooking from scratch. We are both using our time on the things we love. That’s being frugal with our time and energy.

The same goes for your financial picture: spend money consciously on the things you love and you will get great value out of spending that money. Conversely, reaching for that credit card mindlessly every time your brain decides to have a dopamine hit for funsies and you end up broke with no money to spend on things that truly bring you joy.

Of course, people will say that frugal people focus too much on small things and ignore the larger things eating into their budgets. In some cases, that is for sure a fair assessment. For example, the easiest way for me to set up a Registered Disability Savings Plan (RDSP) was to set it up via a brick and mortar bank that had limited investment options (mostly high-fee mutual funds). It fills me with dread to know that I am paying management fees out the wazoo because of this limitation. But, the Canadian government matches my contribution 100% and those amounts grow tax free. So even with the high MER, I am still ahead. Unfortunately, many online banks don’t even offer the RDSP because there aren’t enough clients for them to deal with the hassle. Next year will be the last year that I will be eligible for the matching grant and while I hope online banks (*cough* I am talking to you Wealthsimple!) get into the game, if that doesn’t happen I will intensely research options to switch banks so I can whittle away at those crazy fees. The big things DO matter a lot – especially compounded. Large purchases such as cars, using a financial planner who takes a % of your investment, buying a home, the career you choose etc. can mean big gains and losses over a lifetime. It makes complete sense to focus on these things first.

I would argue though that making frugal choices in your everyday life also builds up your frugal muscle. Frugality becomes a habit and it contributes to your overall financial health. I am not saying that you should drive 20km to save .20cents on OJ – by definition that isn’t frugal at all! But if you shop at the grocery store near your house it takes a few short minutes to take a look at the sale items and think about buying those things and incorporating them into meals this week. It’s way better to plan ahead than end up buying a bunch of food you bought when you went to the grocery store with good intentions (or worse! Hungry!) and it ends up rotting in your fridge.

Also, most of us start our lives not making a whole lot of money. What we do have we have to use wisely if we want to balance getting our bills paid with being able to, say, have a social life. When you have less, you need to plan your money as carefully as possible. Because all the big things in your life are probably already as low as they can go you need to start cutting ruthlessly in other areas. The same goes for people who have lower incomes: telling them to not sweat about the small stuff is terrible advice when the small stuff is contributing to their inability to manage their finances and is increasing their debt. These people need to learn the skills of blackbelt scrimping until they can breathe again.

I spent years being ultra-frugal and making cutthroat decisions in how to spend. Those years allowed me to start a small business – and then to subsequently give up that business to stay at home with my kids. We rarely ate out, we mostly did the free activities available around the city and we had a YMCA membership that gave us access to fun sports classes for the kids. Most of those things were also walking or biking distance from our house. We had a really good life because we were able to access a lot of low-cost, fun stuff.

That frugality also came in handy when I decided to go back to work. Being able to live off one salary allowed me to wait and take contracts for work that I enjoyed and that were at a higher salary. I didn’t have to take the first job that came along because I knew that while the money was nice we didn’t need it to survive. I doubled my salary and went from a low-level admin position to heading up a team in a high-level position in under 5 years. I was free from the constraints of having to scramble for work to keep our family afloat. That kind of freedom to pursue the type of work you want to do is worth a lot more than eating out and shopping a lot.

Our house is paid off and our incomes is more than enough to spend well beyond what we need. But with my diagnosis it has been abundantly clear how precious time is. So while we could be buying up everything our little heart’s desire, we are choosing instead to invest Mr. Tucker’s salary to buy him an early retirement. Thankfully, my disability income is more than enough to support our family – if we spend judiciously. Buying his time back is the most frugal thing we can do right now.

In the end, frugality is a skill that never leaves you. You can also administer it as much or as less as you want to depending on your circumstances. If you have little money, you will have to tighten your belt. If you have a lot of money, you can loosen the belt if you’d like. But it’s exactly like riding a bike: you never forget how to use it.

Credit cards and teenagers

Credit cards and teenagers

What I am reading
This is strangely sad: Aardman studios – makers of Shawn the Sheep, Chicken Run & Wallace and Gromit – is apparently running out of clay. EDIT: apparently it is transitioning to another supplier. PHEW!

“I wanted to understand: what kind of human spends their days exploiting our dumbest impulses for traffic and profit? Who the hell are these people making money off of everyone else’s misery?” Did SEO experts ruin the internet, or did google?

Wages are high. Jobs are plentiful. Nobody’s happy.

The case for inviting everyone to everything. I often dream of having a GIANT pool party and inviting everyone I know. Why not get to know each other before my funeral?

Morgan Housel on the full reset. I have been doing our budget for the same way for years so maybe Mr. Tucker can take a stab at a new one for 2024?

What I’m thinking about
I am letting the kids go shopping for winter clothes tonight. They are going to meet at the mall and go shopping together. The Eldest needs a winter coat and The Youngest needs new boots. I set down a few rules around budget and type (ie: they have to be waterproof winter boots with a lining, the coat must be for winter) but they are free to get the style they want. In order to do this, The Eldest will pay on her credit card.

I got The Eldest her own credit card when the kids went on an oversees trip with a relative. I was scared that they would end up getting stuck somewhere without money. It’s also been handy because it’s allowed her to make her own purchases (that we’ve agreed to) for things like back-to-school shopping and the odd lunch at school when she forgets hers. Next year when The Youngest turns 14, they too will get their own credit card. (I also want to set them up with an Uber Family profile for the exact same reason but unfortunately I haven’t been able to get that to work yet.)

To be honest: I can’t say if this is a good idea or a bad idea long term for teaching them about credit cards. I just know that as a mom with two kids (who will be in two different high schools who will go out with friends and who may ended up stranded somewhere) it makes me feel better to know that they have something to pay to get them home.

What I have done is that when The Eldest wants to spend money before she’s earned it, I let her use the credit card – with a catch. On Saturday she decided at the last minute to hit the mall with her friends and asked me if she could spend the money she would have earned on Sunday doing the housecleaning & just use the credit card. I said yes – but that she would have to “pay interest” by taking a lower amount of money than what she would get if she waited until after the work was done (payday loan style – but less aggressive). She agreed to the lower amount and happily went off to spend the rest at the mall with her friends.

Now some of you are thinking that this is horrible, some of you think it’s great and the rest of you think I probably should have made the amount higher if she so readily agreed. Overall though, I am pleased with giving her the options and allowing her to make the choice. I haven’t figured out how to navigate the actual management of a credit card as she transitions into adulthood and needs to manage her own budget. What I do know is that I plan to get her there before she encounters the predatory credit card offers with the “free gifts” that are ubiquitous all over student commons’ everywhere (if she even chooses to go to post-secondary).

She did ask me if they could buy dinner at the mall, to which I said no (we’ve eaten out too much this month) because we have food at home – the rallying cry of mothers everywhere! But I did agree that they could get a bubble tea when they were done shopping, as a little treat (hah, the irony is not lost on me).

What makes a home & chore theory

What makes a home & chore theory

What I’m reading
Children of homeowners twice as likely to own homes themselves.

Almost 40% of US homeowners own their homes outright as of 2022—many of them baby boomers who refinanced when rates were low.

The list of brain conditions that have been associated with changes elsewhere in the body is long and growing. Changes in the make-up of the microorganisms resident in the gut, for example, have been linked to disorders such as Parkinson’s disease and motor neuron disease.The brain and body are intertwined.

A thought piece
This is a FANTASTIC piece: how your house makes you miserable. “How do you make your home entirely your own — a reflection of your good taste! — while also making it wholly acceptable to the market-reflected gaze? The only solution is to make the market-inflected taste your taste. And that experience can be incredibly alienating, particularly when you convince yourself that you’re doing a remodel that you’re going to love, spend a ton of time and energy on it, and then look around and think meh.”

When we bought our house a friend of mine said to me, “Yeah, we looked at that house but it needed so many renovations to make it liveable.” WHAT? This house was in perfect condition when we bought it and in the 6 years we’ve lived here we have few problems (the oven died but it was original to the house – 1962!). We did do some cosmetic work to the house such as tear up all of the white carpet and refinish the hardwood underneath. We also installed laminate throughout the basement (again, white carpet) as well as replace the vanity in the main bathroom to a two-sink Ikea one for the kids & replaced the linoleum with tile flooring. Overall though, we only spent about $1500 in those cosmetic changes. Conversely, I think this friend wanted to turn this mid-century bungalow into a modern showpiece which would have required tearing down walls, putting in marble counters etc. We liked it just the way it was.

Sure our cabinets are crappy 80s ones that have been painted white and we unfortunately have popcorn ceilings (which people apparently hate but I am neutral on the subject). I just think that not everything has to look like it’s about to be featured on HGTV. I remember my friends and I all living in a bunch of old, crummy apartments with weirdly angled ceilings and wonky closet doors. All of these places had charm because they were each vastly different from each other. We also used to decorate with a mish-mash of found items interspersed with Ikea furniture and every place was so different from another one.

I guess renovating the condo has put this to the forefront of my mind because a condo is a different beast. A friend of ours had suggested that we just sell it “as is” with all the smoke damage, the yellow paint, shitty cabinets and no appliances. But I think people expect more of a turnkey experience with a condo where a house is more of a place that you would accept some imperfections in exchange for the location, land and bones of the place. The condo cabinets and the counters *do* look dated which is a pain when you are trying to sell. But I am loathe to tear them out and do a full reno because a> it’s wasteful; b> the people who buy it may just tear it all out and reno themselves anyway. I abhor the idea of wasting all that time and money only to have it all tossed into the garbage. So we’ve mostly focused on replacing the damaged bits, did smoke remediation, tossed on a coat of fresh paint and bought new appliances.

I think as well that we view our house as our HOME and not an investment. So we don’t care to be constantly updating it. It’s also why I installed a sit-down tub instead of a roll-in shower. Yes, the tub was very expensive AND it will reduce the value of the home should we put it on the market. But so what? I plan to have my corpse dragged out of here and during my (hopefully long) lifetime I will get a lot of enjoyment out of being able to take a bath whenever I want.

Child labour
We asked the kids if they would like to clean the house on the weekend for the same amount of money we pay the housecleaner. The reason why is because The Eldest had Covid last week and so we told the cleaner not to come (clearly!) but the house still needed a good once-over. They were really excited about earning money and The Youngest was even more excited to learn that the money I offered was for EACH of them and not SPLIT between them. Haha. Crap, I could have paid them even less! 😉

The kids did a FANTASTIC job – as good or even better than our housecleaner does. I was thoroughly impressed. To be fair, we used to clean as a family and so they have had years of practice. But post-pandemic with all of the busy-ness and my health we decided that having someone come and clean every two weeks was worth the money.

My kids have always had unpaid chores. From the time they were toddlers at the end of the day we would play music, dance around and put our toys away before dinner. This was to get them into the habit of tidying, not because they were good at it. Us parents did most of the actual tidying but over time they grew into the habit of actually putting their stuff away at the end of the day and then we just built on that.

By 6 & 8 they learned how to do the basics of cleaning by doing it with us, and by 10 & 12 they knew how to clean the entire house. That isn’t to say that the adults didn’t take on the majority of the work at first but over time they slowly did more and more on their own until we did none. They still do tidying in between the housekeeper visits as well as washing the dishes every night. We’ve also taught them some basic dishes that they can cook on their own. The Youngest in particular has been asking to learn more about cooking, so we are taking the time to teach them how to cook a variety of meals.

The one chore we actually pay the kids to do is folding and putting away my laundry. Mr. Tucker’s office is right next to the laundry room so he generally washes the clothes during the week so that by the weekend it’s all clean and in baskets. So on the weekend, they have to separate and fold/put away the household stuff (ie: towels and sheets) as well as do their own. Mr. Tucker is super picky so his is left and just does it when they are done.

In a sense, being disabled has really helped with teaching kids how to do chores. Children can be the masters of strategic incompetence when they don’t want to do something. So many parents just throw up their hands and do the task because ensuring a child learns how to do a chore can take twice as long and is way more stressful. But in my situation, I had no choice. I had to work through the process of them resisting learning how to do things because I just could not physically do them anymore. Of course, we are now all better off: the kids 100% have the skills to feed themselves and maintain a home and Mr. Tucker and I don’t have to struggle doing all the house stuff.

What’s even better is that they are proud of their skills. The Youngest came home once and told me that none of their friends were forced to do chores at home*. Their friends were saying things such as, “Why do you have to do anything? I don’t have to do any chores and I still get an allowance!” & The Youngest replied, “Because I live there for free? It’s only fair that I help out. Besides, I have the skills to live on my own now and you don’t.**” I was pretty impressed with that answer because it’s an astute observation for a 13-year-old to make I live there for free and it’s only fair that I help out.

We had planned to take up most of the housecleaning ourselves when Mr. Tucker retired but both kids said that they were happy to get paid to deep clean the house. So we may end up paying them to do the deep clean once-a-month instead. They like earning the money, they do a great job and since we generally manage to keep the house tidy enough in between deep cleans, it will work out for everyone. Of course, the time will come when they will be too busy with school and their own jobs. But then Mr. Tucker and I can take it back over.

Hope you are having a lovely Tuesday!

*The Eldest has also said this. It’s up for debate as to whether or not that is the truth. I am sure many kids have responsibilities.
**Ok, a bit rude and I also learned the trial by fire way when I first moved out and I wouldn’t recommend it.

Children & devices

Children & devices

Links
• How to weigh the risks of social media a conversation with Surgeon General Dr. Vivek Murthy.
• Visual Capitalist and the most popular social media apps (ranked by downloads).

Thoughts
My kids often complain that my device policy is horrible because their friends get their devices 24-7. I tell them that I don’t care what other parents do (which is the response as old as time). Of course, the internet comes with all sorts of complications – and is addictive: Social media gets teens hooked while feeding aggression and impulsivity, and researchers think they know why.

Yesterday The Eldest had a conflict with someone she knows peripherally, and this kid posted a nasty story to her Instagram about my kid – complete with pics. But my kid just took it in stride. She was upset but not bothered too much by it, which was incredibly grown up of her. We had a great conversation about how she takes some responsibility for the argument but that she felt this kid went too far. My kid has a locked-down social media presence on this platform, which I think she was grateful for as the other kid didn’t have much material to work with in terms of her public shaming.

She showed me this girl’s Instagram and I was floored: I swear it looked like an OnlyFans account (think: pic of a butt wearing only a thong with a painted handprint on one of the cheeks). Suddenly, I was just so profoundly sad for this girl who is only 15 years old and so obviously lacking in positive attention. It struck me as super dangerous for a child this age to be posting unlocked photos like that to the internet at large. As someone who grew up with ZERO parental involvement in my life, it made me wonder about what her life at home was like and if she had someone who loved her and who would find that account and put a stop to it? I did a LOT of dumb things as a teen who spiraled without adequate oversight from an adult but that was in the beforetimes. In the age of the internet whose memory is long it really makes me worry.

I will admit, a lot of these feelings come from the feelings from within me but wow, I was unprepared for how depressed seeing that account made me. I wanted to reach through the internet and scream, “That’s enough of that! I’ll be your mom!” But it’s conceited to think that her parents aren’t involved. Maybe she eludes them because they are less tech savvy than her and she has multiple accounts? I don’t know. I’m in no position to judge.

I was impressed about how The Eldest responded to this bait though: she ignored it. I am lucky that she has a core sense of self and a group of amazing friends who are incredibly supportive and kind. I would have killed to have half as much self-worth as a teen that my kid has. Of course, I did find my tribe eventually and some of those friendships are now 30 years old. But I can say I am grateful for not having to navigate the internet in my early teen years.

Just keep on keeping on

Just keep on keeping on

What I’m reading
Vanguard’s guide to retirement withdrawal strategies.

[E]very conversation takes place on two levels. The official conversation is represented by the words we are saying on whatever topic we are talking about. The actual conversations occur amid the ebb and flow of emotions that get transmitted as we talk. With every comment I am showing you respect or disrespect, making you feel a little safer or a little more threatened. The Essential Skills of Being Human.

Deep thoughts
When the kids came home last night the first thing they both said when they walked in the door (1/2 hour apart) is, “You’re dressed! What’s going on!?” UGH. I need to get out more. In my defense, it’s been a lot of bedrest for medical reasons and once that was done, Mr. Tucker had condo stuff to do in his spare time so all personal stuff was de-prioritized as we ended up in survival mode. But it’s time.

Still, I want my kids to remember having an active mother who go out as much as she could despite disability. In general, I feel like I am way more active than a lot of other disabled folks. Some it’s due to the severity of their disability and for some it’s just plain giving up. If I was a researcher I would study the health trajectories/outcomes of people who had a positive, life-affirming attitude and those who give up once they’re diagnosed. I am happy to offer support, kind words and resources to people going through a rough time – sometimes you just need to complain to other people who understand what you are going through. But I’ve had to block individuals in online PLS groups because they were posting constantly about how awful they felt and how they can’t do anything and how all of their friends don’t want to hang out with them. It was a constant barrage of pity-party posts and it just exhausted me and brought me down. I think perhaps these people should reflect on whether or not it was disability that turned people off or if it was the constant complaining?

But truth be told, while I have experienced some of that, most of my good friendships got stronger after I was diagnosed. Sure, some people will always fall by the wayside but it’s difficult to tease out how much of that is just a natural progression in friendship and what is an inability to manage someone’s diagnosis. I keep showing up for them and in turn they keep showing up for me.

But back to last night’s astute observation by my kids. If I’m honest, pre-pandemic I went to the gym 3-5 days a week, did dragon boat, walked or biked around the neighbourhood more and did physiotherapy twice a week. Since then, I haven’t been back to my usual activity levels and my return to dragon boat was thwarted by my broken foot followed by a huge pelvic surgery (that went a bit sideways). It feels like since we have been back post-pandemic with some regularity, it’s been one thing after another. Having said that, I am determined to change that even as we head into winter. I think I have been focusing too much on what I can’t do and not really focusing on what I can. In other words, while I am not whinging about it on facebook, I am falling into the same trap of the people who constantly complain. I need to show up for me.

Next weekend is pretty social with games night and heading out for dinner with friends on Friday night. The following weekend is book club. These things remind me that I am still doing things but I am just not back up to the level I once was. I plan to change that.

What I’m up to
Mr. Tucker is at the condo today as the appliances have been delivered. He sent me a picture and they look FANTASTIC! He also replaced the vent covers, replaced the shower curtainrod and now he’s putting the doors back on and measuring a few things. The last things we need to do are: fix the window, install the microwave, replace the bathroom fixture and replace a curtain on the closet.

It finally feels like we are in the home stretch and are almost ready to put it on the market!

Oh, and as for last night: we went out to buy paint for the room switch! The Eldest is moving into the office downstairs and Mr. Tucker is moving the office upstairs. He plans to do most of the painting next weekend as it is American Thanksgiving and it’s super slow at work. That will leave him energy to paint at night. Then on the weekend, we will move her stuff downstairs. Damn, it will be good to be able to have a shared office again. I have a desk tucked into a corner of the living room and quite frankly – it sucks.

Since we’ve also used almost none of our pocket money this month, afterwards we treated the kids to dinner. It was a pretty lovely evening and it felt good to be out.

Bon Vindredi à tous!

Just a pile of links today

Just a pile of links today

What I am reading
One of the most fascinating things about the current inflationary environment is how little people’s buying habits have changed. It’s interesting to see that people expect prices to either go down or stay the same but to have their salaries go up. This is not how things work. A great article on how people don’t understand how inflation works.

Inside the OnlyFans top earner empire. “Why would I spend my day doing dirty, degrading, minimum-wage labor when I can do something that brings more money in and that I have a lot more control over?”

When I was a first-time parent I was determined to keep up my beer-swigging, partying self to some extent. A lot of it had to do with facing a bunch of (what was in my head) pearl-clutching, pinched-faced parents who were uptight. In retrospect, a lot of us were feeling judged because we were judging ourselves. You never feel quite up to snuff as a parent and a lot of our feelings of being judged came from within us. Generally speaking unless it’s, say, an egregious drunken fist fight at the school fundraiser, most people don’t think of us at all. Adulthood is a mirage.

I can’t wait to the follow-up pro-buying post from this site as well: does renting make your finances more predictable? Most of my (very rich) friends rent and so we are outliers in that sense. They are also childfree, which we are not. This is kind of a Reverse Uno of the normal way of things from what I hear from the culture at large. It also means that I have a very middle-of-the-road stance on this issue. My tl;dr on this issue is that if you have money or are able-bodied, renting is almost always better.

What I am doing
It was winter tire day here and I really need to get that changeover price down now that our car is out of warrantee. It’s just way too expensive. We also should try and sell our winter tires from the old minivan as they are taking up room in our garage.

I slept in today because Mr. Tucker was off early to drop The Eldest off at band & then to the car appointment. Not having our morning coffee & convo to look forward to, I rolled over and went back to sleep. I often forget that I am retired and I don’t have to get up if I don’t want to!

Off to read! Happy Thursday to all who celebrate!

Friends of a younger generation

Friends of a younger generation

What I am reading
• A truly sweet story about the author’s frugal aunt: Everything she needed.
• BIG OOF: 1-in-10 people in Toronto rely on food banks.
• Baby Boomers are buying up all of the houses.
• I learned the hard way that I couldn’t shop my way to a new self. “But if you’re constantly taking that break when you feel unsatisfied and insecure, you are letting the muscle that deals with the negative parts of your life atrophy.”

What I need to do
I have been lucky enough to have friends who are either a little bit older than me or who had kids when they were really young – sometimes both. My friends have raised these deeply thoughtful, intelligent and amazing people and I am so grateful to have these adult kids in my life.

One of them – who we all call Miss A – reached out recently and asked me to help her with some money stuff. While she is good with her money in the day-to-day sense (no debt, has some extra etc.), she wants to learn more about investing and the various tax-advantaged accounts. Could I possibly take some time to run her through some of it?

COULD I EVER!

Luckily, I have put together some presentations already from our Money Mondays group and I just need to add the new First Home Savings Account (FHSA) to the deck but I am super excited to meet with her!

Of course – like most people – her first experience buying any investment products happened because she walked into her bank and asked to speak with a “Financial Advisor.”

“Let me guess,” I said. “They made you fill out a little quiz that determined what level of risk you were and then recommended one of their risk profile mutual funds.”
“That’s exactly what happened!” she exclaimed.

I guess I have to give them credit for steering her towards a TFSA but it frustrates me that this is generally where most people get their financial advice – from salespeople. I guess that is also why banks in Canada are able to pay out huge dividends (because, oligarchies!). Full disclosure: I own bank stocks (because, oligarchies!).

The thing is that it is SUPER hard to find decent financial advice unless you take an interest in it. Sure, the internet is teeming with advice but while some of it can be good (pay off debt! Save for a rainy day!) some of it is horrible and could ruin your life (use leverage to buy AirBnBs!). Schools don’t generally teach it, we are raised in families that rarely speak of it, and how do we even know what advice is right for us? There are a million and one finance books on the market and while there are some core similarities some deviate wildly or the information gets outdated quickly.

I was thinking of re-creating the path of books that changed my life but one of these has to be The Tightwad Gazette and while the core philosophy is great, the info is old. The Wealthy Barber is also a fantastic summation of the core tenets about managing an adult life but some of the content may grate on a modern audience. Most of the books about getting out of debt are definitely helpful but rely on shame – sometimes bordering on abuse – to get their point across. I wouldn’t feel comfortable recommending many of them. I also haven’t had any debt for so long that I couldn’t even tell you if there are any decent & recent reads on how to get out of it.

I could go on – and indeed I have a (wildly out-of-date) bibliography on this site – but I think I will stick with some core summations in our talk. It’s a good prompt because I want to start introducing my teenagers a variety of personal finance skills outside of just basic money management. So that is my plan for the rest of the week!

In other news, I may continue to update here weekdays but I grapple with it. I do love to write something daily and have indeed been a life-long lover of journaling, a practice I have maintained more or less since I was a teenager. Writing here daily has been fun but I don’t know what real value it has & it does consume a lot of time. I do know that I want to keep a writing practice because I enjoy it, I just don’t know if it will be here or in another format. Until I decide, I guess I will keep on keeping on!

Haus of Plague

Haus of Plague

What I am reading
• Do Early Retirement principles still work? (I was very tempted to add, “IN THIS ECONOMY?” 😂)
• Revenge of the renter. Will we see more rent strikes in Canada?
• Dave Ramsey has lost the plot and is recommending an 8% drawdown rate in retirement. I don’t know who else thinks this but I feel like the best personal finance advice authors wrote their content in a few books and then the authors quit. I am wary of people who keep churning out new books on old advice.
• HAH: my friend M sent me this right after I wrote that supernerds unite against Dave Ramsey’s 8% withdrawal rate.

I absolutely slogged through the intro of The Lost Supper: searching for the future of food in flavours of the past. I figured I’d give the first chapter a whirl and then give it up if I wanted to. But by the middle of that first chapter I was absolutely hooked! It’s a fantastic combination of history, storytelling, food and the environment and I haven’t really been able to put it down. Info-heavy non-fiction can often be difficult to get through but this book is pretty interesting for those of you who enjoy the history of food.

Stay in your rooms!

The Eldest has covid and The Youngest has a gastro so the air purifier is going at full tilt today. Poor Mr. Tucker has been running around trying to make sure everyone has their needs met. Luckily, we always keep some frozen meals around for weeks like this – we learned the hard way that it was much better to have an emergency stash of ready-to-heat-and-eat meals vs. ordering takeout. It was frozen lasagna and spinach salad to the rescue last night!

Tonight will probably also be an easy-ish dinner because Mr. Tucker is working long hours and we have a bunch of things happening this week: the contractor is coming to replace the broken front window, appliances for the condo are coming & Mr. Tucker is supposed to go out with friends this weekend…although that probably won’t happen unless we’re all testing negative.

C’est la vie.



What is our early retirement draw down plan?

What is our early retirement draw down plan?

What I’m reading & listening to
• Ok, this isn’t *reading* per se but it is a fantastic interview (podcast?) with Tim Ferriss and Morgan Housel. If you haven’t read Housel before, I highly recommend his work and his blog.
• Also in the *not reading* category is this podcast called Backlisted that I want to check out. I am not a podcast person generally but I am fascinated by old books that have fallen out of fashion.
• Walks, tech and protein: parenting your parents.
• Are you the victim of the friendship recession?
• The Best Laid Plans it is never too early to have your affairs in order, or quit working once you’ve reached your FI number.
• Is an $100000 salary enough for a comfortable life anymore? (sub)

I generally enjoyed this article as it was more measured than most pieces. People were honest with their indulgences. Of course my brain honed in on this particular section though:

“In Edmonton, one of Canada’s most affordable larger cities, Liam Hudson has no trouble fitting all his expenses, aggressive savings and some travel into his household budget. The 32-year-old civil servant, who earns $106,000 a year, lives frugally. He drives a second-hand 2006 Buick Rendezvous. He tracks his spending meticulously. And he has made it a habit to put $250 every other week into his RRSP and another $100 into a tax-free savings account, even though he already has a generous government pension.”

NoOoOoOoO!

He should be prioritizing his TFSA if he has a pension. Unless this guy plans to retire early & withdraw that money to live on, the RRSP forced draw down will be a nightmare in taxes at 71! The RRSP is a *tax deferral vehicle* which means that yes, every $1 you put into your RRSP you reduce your income (and tax payable) by $1 but eventually the government forces you to draw from it by a certain percentage every year (depending on your age) starting at 71. So if you have a full pension and suddenly find yourself being forced to withdraw from your RRSP you could potentially be pushing yourself into a higher tax bracket in retirement. Ouch!

“BUT,” you may think, “YOU PRIORITISE RRSPS!”

That is absolutely true! In fact, one of the things that is going to save us from paying capital gains when we sell the condo is that Mr. Tucker and I have a lot of contribution room left in our RRSPs. In Canada, contribution room rolls over indefinitely so you accumulate – and keep – your ability to contribute to your sheltered accounts over your lifetime. This is handy because if you make under $65000 it is generally not worth it to add money to your RRSP but since the amount rolls over and you keep it until you CAN use it, that $11700 (18% of your gross income to a max of $30780 in 2023) will stay on the books so that you can use it later and get the tax break. So when, say, you make $100000 20 years in the future, you can use it to reduce your taxes then.

Of course, some financial experts are saying that the TFSA should be prioritized first because it allows for tax-free growth over the course of your life, which makes sense for everyone. But we are leveraging the RRSP for now and the reasons are multi-fold:

– Mr. Tucker makes a good salary that is in a high tax bracket.
– Reducing his salary generally results in a high tax refund.
– The capital gains from the condo will result in pushing my yearly salary into the top tax bracket. So any reduction in that will mean less taxes go to the government.

It also helps that he plans to retire early so he can take money out of his RRSP when his income is zero and pay less taxes. There is no age penalty to draw down your retirement accounts in Canada.

So our plan is generally as follows:

When Mr. Tucker is retired and has zero income (we will be living on what I bring in), we will not touch the RRSPs until the kids are out of school. This is because of Canada’s Child Credit Benefit (CCB, colloquially known as the Baby Bonus). With his income being zero we can maximize the monthly CCB amount we get from the government until the kids are 18.

When The Youngest turns 18, Mr. Tucker will start to take out the Basic Personal Amount (BPA). This amount is currently $15000* for 2023. This is the amount every Canadian can make in income without paying taxes on it. You would only start paying taxes on $15001 and higher. Unfortunately, the BPA still lowers your monthly CCB payment as it is calculated using gross family income, which is why we are waiting until the kids are ineligible for the benefit. Interestingly enough, the TFSA maximum contribution is $7500 per person for 2023 which perfectly squares with the BPA of $15000. Yes, it will be more in the future but we will have to calculate it down the road.

The goal here is to minimize taxes down the road by moving money from the tax-deferred RRSP to the tax-sheltered TFSA when Mr. Tucker’s income is zero. Both buckets have the ability to grow tax-free over time but only the TFSA is tax-free when you take money out.

Of course, this is a generalization of the plan that will depend on the TFSA contribution room for us both, the amount of the RRSPs when we start to draw down as well as projections for the Canada Pension Plan, Old Age Security and Guaranteed Income Supplement. I suspect that we will end up drawing down the RRSPs and paying a bit of tax upfront so that we aren’t forced to withdraw minimums at 71. But because so much will change in the 20 years, it is ok to have a general plan for now and adjust as necessary.

Overall, the goal will be to reduce as many taxes as possible in retirement and maximize the benefits available. Who even knows what will happen with the TFSA and RRSP in the future? There is talk of eliminating the minimum withdrawal at 71 and so many things can happen between now and then that this is just a roadmap based on the current rules.

Life, nah, nah, nah, nah
In other news, The Eldest came down with covid over the weekend. The rest of us are all testing negative but she is holed up in her room convalescing. Thankfully, she is having an easier time of it than when she came back from Paris and was violently ill. That’s probably because she was in peak immunity due to having her booster two weeks ago!

Today, my plan is to get through some of my library books. Although I think a New Year’s Resolution should be for me to actually write down where I get book recommendations from (I always forget and so I can’t credit the source), I have surprisingly been unable to put The Lost Supper: searching for the future of food in the past down! I slogged through the intro and was worried that it would all be similarly boring but it hasn’t been! Despite being exhausted, I ripped through the first section and got through half of the second before I couldn’t keep my eyes open. He is such an engaging storyteller, interspersing fact with history. I am 1/3 of the way through it and will probably finish it today.

I got the new schedule for the condo fees today and so I am glad that the appliances are coming Friday and we can get the condo on the market. I know I say this every time I mention it but we are so done!

Have a lovely Monday, kids!

*Yes, he will have to pay taxes upfront on the amount that comes out of his RRSP that we will get back at tax time so he will actually be withdrawing more money here. But to simplify things for this example, I’ve stuck with that BPA amount.

Do I can Instagram?

Do I can Instagram?

What I’m reading
• In completely non-shocking news, the rich are getting richer.
• Visual Capitalist on 20 most common investing mistakes.
• Death by 1000 small fees: hidden charges are getting ridiculous for sure.
• Early retirement in England, mostly the preserve of the wealthy. This is discussing ER in your 50s and 60s, which is more of the traditional ER definition.

On the tail of yesterday’s post, I am really trying to stay off social media and as we head into the end months of the year. It is one of the reasons I started writing here again regularly: it keeps me from doomscrolling social media (or what I have left of it namely, Instagram). I was saying to Mr. Tucker last night that I keep thinking about the quote by Tom Eastman:

I’m old enough to remember when the Internet wasn’t a group of five websites, each consisting of screenshots of text from the other four.

It really stuck with me because the algorithm keeps serving me up tweets, fb and tumblr posts that keep getting shared and shared. I have seen many of them myriad times as they get recycled and the algorithm picks old ones back up again and cycles them through people’s feeds. While I enjoy them – after all the algorithm does a great job of determining what I like & what I will share (thus continuing the cycle) – it’s not adding much value to my life and so it is time to cut another app out. I admire Mr. Tucker and his complete disdain for social media. He will just delete the app and move on with his life. I need to learn from him, to be quite honest.

Over our morning coffee, I said to Mr. Tucker that it’s weird that socially it is totally normal for people to pick up their phone during a conversation but not say, pick up a book and start reading. There is an urgency in checking one’s notifications that makes scrolling acceptable. Even when Mr. Tucker and I sit down in the mornings, I feel sheepish about picking up a magazine and reading that I don’t feel that if I pick up my phone and start to scroll Instagram. It’s such an odd phenomenon.

I loved the idea behind Mouse Books which sadly now looks defunct. Dutton has a more modern pocket series of books as well that you can still buy. I feel that this would be a good solution for the in-between times: in the doctor’s office, waiting for the bus, in line practically anywhere and in the bathroom (remember reading the back of a shampoo bottle? My children will never know the suffering of forgetting to bring a book to the washroom).

I’ve discovered that I scroll the most under two conditions: when I feel bored or when I feel anxious. Anxiety happens when I watch movies and there is tension in the story, for example. I pick up my phone as a way to alleviate it even though building tension is a crucial part of the movie watching process. I also pick up my phone when the boredom settles in to alleviate that feeling, which is probably just anxiety from the fact that my brain is stuck with its own thoughts. BUT then I complain that I don’t do enough creative work on the projects I want to accomplish (ie: writing here, painting, knitting and video work). But the most rewarding projects require you to sit with the boredom. If I did, I would eventually resolve to pick up a project that is a bigger hurdle to start. The phone is an easy win, settling down to do a creative project requires you to push through that boredom and anxiety.

I am glad that facebook has stopped allowing Canadians to post news articles because 80% of my usage was posting news articles and then discussing them with my friends. A friend recently told me that this blog reminds her of my old livejournal because I would constantly be posting news roundups in the morning. At the time I did a news link email for my organization as part of my job so it was a natural extension of that work. So thanks for being cheap, facebook! It’s kept my eyeballs off of your ads because I no longer enjoy your site! So it’s good to be back to more long form writing.

It’s about 1.5 months until the end of the year and this is when I typically review:
1 – My mailing lists: what am I still receiving that I don’t read or that doesn’t add value to my life? I need to stop spending so much time deleting junk email or mailing lists I don’t really want to be on.
2 – My online paid subs: do I still enjoy the content from X creator enough to keep paying?
3 – The media subs: digital and print. While I think I will never be able to get away with canceling Spotify or Netflix (thanks, children), I do need to probably stop the New Yorker. I love the magazine but it’s way too much and I never get around to reading them. I often don’t read every Saturday newspaper but I do want to support journalism and I also get a tax credit for supporting Canadian content (which is why I will also keep The Walrus). I canned Canadian Notes & Queries and The Canadian Literary journal as well.
…and finally…
4 – Do I give up Instagram? Do I make rules around its consumption? It is really my last hold out from random scrolling (praise Jeebus I never got into TikTok) of stories.

Finally, I got together with The Americans* last night and we chatted and played Trivial Pursuit. Because I was imbibing some Greyhounds (vodka/grapefruit/soda) I feel confident enough to tell you that I won the game**! Despite the fact we chat every day on Signal I do miss their faces quite a bit. It was nice to pick up a game and just hangout.

Have a great weekend!

*these ones are mine, get your own
**I most certainly did not