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Spending Recap: November 18-24, 2013

Monday 18th
No Spend Day!

Tuesday 19th
$12.56 lunch

Wednesday 20th
No Spend Day!

Thursday 21st
$5.30 parking

Friday 22nd
+ $205.60 freelance income
$15.70 lunch
$11.77 groceries
$41.47 gas

Saturday 23rd
No Spend Day!

Sunday 24th
$5.30 parking
$20 brunch
$4 parking

Freelance Income: + $205.60
Expenses- $116.10

TOTAL: + $89.50

This was a good week for keeping my costs down. While I did go out to eat three times this week, I planned the rest of my meals fairly well (and even cooked 3 times for friends).

Saturday was my company Christmas party, and that was a pretty good time. I kept the evening free by not buying any drinks… because on Sunday morning I ran in my second half marathon race. :) I’ll do a full recap post of the race later this week. Sunday was also the day of paying for parking, apparently. The $5.30 was for parking in Stanley Park for the run, and then I had to pay an additional $4 to park at UBC for my field hockey game later that afternoon. :|

How was your week of spending?

Prize Linked Savings: combining gambling and saving

Did you know that one-third of Canadians admit winning the lottery or receiving a large inheritance is part of their financial plan? Think about that for a second. Then think about how many people you know who’ve actually won the lottery or received a large inheritance. Yeah, exactly.

Now that we’ve established that very few people will actually win the lottery or receive a large inheritance (certainly not one-third of Canadians), you’ll also likely agree with me that these 3 statements are true:

  1. We don’t save enough money.
  2. Many people are looking to make money, but don’t necessarily want to put in the effort.
  3. Canadians love to gamble (a recent study showed that low-income families spend 9% of their annual income on lotto tickets)

So what if there was a way to potentially win a huge jackpot, without having to risk losing any money at all?

Enter this thing called Prize Linked Savings (PLS). Maybe you’ve heard about it before. There was a Freakonomics podcast on it back in 2010, but I hadn’t heard about it until just recently. Basically, it’s a kind of savings account that pools the money from all depositors, and pays out a big “lottery prize” every so often based on a portion of the interest generated from that pool of money. This combines the excitement of playing the lottery, with the safety net of having your money in a legitimate savings account. The best part is, you would never be able to lose the money you originally deposited – you’d just lose out on some of the interest (and subsequent compound interest) for the duration your money is “invested.”

This isn’t a new concept; it was once run so successfully by a bank in South Africa that the government decided to sue the bank after its own lottery revenue started dropping (and this was after iniitally approving the program). In Michigan, their Save To Win program (offered by credit unions) is going strong, and awards monthly cash prizes as well as an annual prize of $100,000.

Here are some thoughts I had about Prize Linked Savings, and what it would mean in Canada:

Wouldn’t you earn more investing your money instead?

That was my initial thought when I first started doing research into Prize Linked Savings. You aren’t guaranteed a win – you might never win. So wouldn’t it make more sense to invest your money in indexed funds or even a regular savings account, and watch your money grow that way? Plus I wonder, even if you did end up winning the lottery at some point, if you would actually come out ahead over X amount of years if you carefully invested your money (and earned compound interest) instead of leaving it up to chance.

Isn’t this perpetuating gambling addictions?

I asked this to a friend, who was also interested in learning more about Prize Linked Savings. Isn’t it morally wrong of banks (or any organization) to endorse gambling as a means to make money? As stated above, low-income families spend 9% of their annual income on lotto tickets. Perhaps it would be more advantageous to teach them better money management techniques by saving and investing their money, instead of feeding into a potential addiction.

But, my friend made a good point: he said that people are going to gamble regardless of how much effort we put into informing and teaching the public about good money management. They always have, and they’ll likely never stop. So maybe we need to take that part of people’s lives seriously and find a different and unique way to help them save, instead of trying to force them to do something they don’t think they have the capacity to do. For many people, they think that the lottery is their only chance at becoming “rich” … but at least with a PLS, they’re actually saving the money they’re “gambling” away, instead of losing it all in a slot machine or playing blackjack. That’s fair.

Would it work in Canada?

I don’t know. PLS kind of has an identity crisis. Is it a banking product, or is it a lottery? Still, I can see there definitely being a market for something like this. As a nation, we aren’t saving enough money. In 2012, our savings rate was 3.3% (down from 3.8% in 2011). And the projected number for 2013? Even lower, at 3%. :| Giving people the opportunity to potentially win a life changing amount of money, while still putting cash away for the future? That’s a really big incentive. Plus, if you consider how ridiculous our savings rates are these days, perhaps your money is safer in this PLS lottery system, than investing it in mutual funds or any other financial product that has an element of risk to it.

The Save to Win program in Michigan has seem tremendous growth. In 2009, the program had 8 credit unions participating, with 11,700 accounts for a total saved of $8.6 million (average account balance was $734). By 2010? They had 36 participating credit unions, 16,200 accounts, and a total saved of $27.9 million (average account balance was $1,268). That’s a huge jump. But it does make me wonder how much of that money being put into Save To Win accounts, has been potential revenue lost for the state-run lotteries.

So for that reason, I don’t see the Canadian government allowing something like this to happen if it means taking a bite out of their lottery profits. I do think it would be good for Canada to have a product like this. There’s a market for it, and it’s an interesting and unique way for non-savers to save.

Would you participate in a prize linked savings lottery?

Spending Recap: November 11-17, 2013

Monday 11th – Victoria, BC
$14.12 breakfast
$15.50 ferry
$6.49 lunch

Tuesday 12th
$22.17 groceries

Wednesday 13th
$41.78 gas

Thursday 14th
No Spend Day!

Friday 15th
+ $32.82 Great Canadian Rebates
$28 lunch

Saturday 16th
$20 shipping
$13.78 gas

Sunday 17th
$48.68 brunch
$92.65 groceries
$28.43 dinner & drinks

Freelance Income: $0 (+ $32.82)
Expenses- $331.60

TOTAL: - $298.78

This was a good week for spending. I did splurge on brunch over the weekend… and dinner/drinks with Nic, but I also did a huge grocery trip that has stocked up my pantry and I’m excited to make some meals with my slow cooker and do a bit of baking. :) For the rest of the month, I won’t need much in terms of groceries, except for fresh produce.

Other than that, it was a normal week of spending and I’m hopeful that I’ll be able to hit my budget this month. I only have two planned social commitments for the rest of the month, so as long as I’m aware of those costs, I should be fine.

How was your week of spending?

Is online grocery shopping worth it?

I first heard about online grocery shopping a few years ago when I lived in a neighbourhood without amenities within walking distance. I used to dread spending the time, energy, and gas money going to the grocery store each week. I was working 70 hours, and a trip to the store could easily take one or two hours out of my day. It didn’t seem worth the hassle, and I often bought take-out instead because it was easier – not great for my waistline or my wallet. :|

When my neighbour told me she had started ordering her groceries online, I was intrigued. For a small fee, she was able to do all her shopping on the internet, and choose the delivery time most convenient for her. It seemed like the perfect solution to my time crunch, so I decided to try it out. It was great, and I used the service a couple of times before I ended up moving into my current home – which is more conveniently located for shopping.

But, I’m feeling the time crunch again. Even though I’m only working 50-55 hours/week, I find myself busy after work almost every day of the week – field hockey practice on Tuesdays and Thursdays, and running Monday, Wednesday, Fridays. Weekends are filled with more running, field hockey games, and social commitments that I’m never able to fit in during the work week. I was finding it hard to go anywhere but Safeway for my groceries (a 5 minute walk from my house), but everything is so expensive there.

So, I decided to try ordering groceries from my preferred store, Thrifty Foods. They charge a flat rate of $7.95 for next day service (same day is $9.95), which I thought was reasonably priced considering it would cost me $4.60 in gas to drive there and back, plus at least an hour of my time.

It took me about 15 minutes to order all of my groceries online (I did it over my lunch break at work), and I was impressed. I felt like I was able to stop my impulse purchases (which were almost always junk food), and I could see the total amount of my order as I shopped – which helped me stay on budget.

Online grocery shopping at Thrifty Foods

Online grocery shopping at Thrifty Foods

 

What impressed me about Thrifty Foods is their customer service, although I shouldn’t be surprised. I’ve shopped with them for as long as I can remember, and it’s always been top notch. Their customer service reps will call you if anything you’ve ordered is out of stock, and suggest replacement items for you instead. Their delivery drivers are extremely friendly, and I feel really happy with how I was treated.

Related: 30 days as a pescetarian – what I learned

However, even though I’ve had some really positive experiences, and the service fees are reasonable, there are definitely cons to having groceries delivered.

For example, even though I was able to leave a note attached to each product I put into my online shopping basket, I almost never got the fruits the way I would have picked them out myself. “Slightly green bananas” can mean different things to different people, I guess. :) Additionally, it’s kind of inconvenient to have to wait at home for the delivery to arrive (a 1.5 hour window), and every other week I end up having to make a supplementary trip to the local Asian market anyway to pick up produce and other perishables.

I don’t think this is something I would do on a weekly, or even a bi-weekly basis. But I do think it’s something I would do every few months when I have a big shopping trip ahead of me.

In theory, anyone with a busy schedule can benefit from ordering groceries online. I can’t believe it’s taken me this long to use the service again! However, it might only be worth it on a regular basis for the following types of people:

  • People who don’t have vehicles, and cannot make big trips to the grocery store for regular staples.
  • The elderly, disabled, or injured, who find it difficult getting out of the house.
  • Those who live far from any reasonably priced stores.

Have you – or would you – ever go online grocery shopping?

These mini-condos are built with flexible living space

I love small space living so much. If you’ve been around for a while, you’ve noticed I’ve profiled a bunch of different places around the Vancouver area (like Burns Block in downtown Vancouver and Balance in Surrey). Well, I just came across a new development, also in Surrey, called BosaSPACE. (BTW, I’m not getting paid to write about these homes. I just find them really, really fascinating.)

BosaSPACE is a bit different than the other micro lofts or small space apartments because these units are built to transform space, and become functional for the type of lifestyle people in Vancouver are looking for.

Related: Welcome to our 215 sq. ft. apartment

For most people, small space living might be affordable, but it isn’t practical. How will you host dinner parties, keep clutter out of the way, and just have enough space to live in on a daily basis? There’s nothing worse than inviting people over, only to have them sit on your bed to eat dinner. :) I really like BosaSPACE because it’s different and unique.

The bedroom can be separate from the rest of the living area by pulling out a wall that bisects the unit lengthwise.

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In the kitchen, a long dining room table can be pulled out from the island, and 8 chairs can be brought out from a built-in storage space.

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The living room is also extremely transformable. Once the bedroom wall is tucked in and the bed folded up, the space converts into a sofa.

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AND he built-in flat screen TV panel can slide across the wall, revealing additional seating, a daybed, or a home office space to fold out of the wall. Amazing.

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Yeah, these furniture pieces are not unique. You can get them custom-designed or purchased from a specialty store. But these are standard pieces that come with the condo, and come much cheaper than if you had to buy them all separately. Anyway, here’s a short video I found on a recent CBC article about the development:

The tower will located in the Central City neighbourhood of Surrey. It’s expected to be ready in 3 years, and units will range from 500 to 750 sq. ft. One-bedroom suites start at $199,900, while two-bedroom suites will start at $300,000.

What do you think of this apartment? Could you live in one?