Give Me Back My Five Bucks

Inspiration and early retirement

I’m sure you can tell that this site has taken a backseat in my life, and while I’ve always had good intentions to write more often, I needed that little kick in the butt to do it. I got that spark recently when I met someone so financially inspirational that I couldn’t stop thinking about all of the things I needed to write about on GMBMFB.

Why was he so inspirational to me? Because, as a regular guy making a regular income, he is set to retire by the age of 40.

Early retirement has always been a huge focus on my blog, so you can imagine my delight when I met someone who was considerably more hardcore about retirement than me – and wasn’t Tim Stobbs. :) I think what surprised me most was that he wasn’t a personal finance blogger, and didn’t even read PF blogs. Yet, there he was. With a concrete long-term plan to retire in just a few years. It made me realize that if early retirement is still something I’m passionate about (and I definitely am), then I need to focus more on that goal. I’ve been slacking and not saving nearly as much as I could be saving.

Related: What does early retirement mean to you?

So with that being said, I’m going to be making some changes on this blog. I’ll be bringing back my monthly goals and recap posts (with actual numbers and not percentages – based on reader feedback), as well as my weekly spending reports. I realized that those posts (however tedious they were) really helped me focus on the bigger picture. I’m also going to increase my RRSP and TFSA contributions, with the hope of getting closer to investing $900/month.

Related: Why 20-somethings might have trouble retiring by 65

Life is funny sometimes. Short-term goals and plans will always be evolving and changing, but my financial goal of early retirement has always stayed the same. I’m 32 right now, with little financial obligation besides my mortgage. I know I’m never going to retire by the time I’m 40, or even 45. But I do want to stop working earlier than I’m able to, and I need to keep my eye on that prize.

I love this blog, and I’m really excited to start writing again.

P.S. if you haven’t already bought your ticket to the 2015 Canadian Personal Finance Conference, what are you waiting for? :)

My biggest home buying regret: not fully considering the future

I’ve made a lot of financial mistakes over the years (which is kinda why this blog exists in the first place), but I never thought I’d consider anything related to buying my first home to be a mistake.

Let me backtrack a little bit.

Just over four years ago, I found myself single, with a good job (plus lots of freelance work), and a $50,000 down payment. I had always imagined buying my first home with a partner, but when I was ready to buy and found no man by my side, I thought: why should that stop me? I worked so hard the previous 6 years to get out of $20,000 worth of debt, save up a $10,000 Emergency Fund, as well as a large enough down payment, I knew I could do it on my own. So that’s what I did. :)

I found myself a Realtor and went house hunting. Within a few weeks, I found exactly what I was looking for: a cute 1-bedroom townhouse in a great neighbourhood. After a few rounds of negotiation, we settled on a price which was well under the mortgage amount I was approved for (and the budget I had set for myself), even before my down payment.

Things moved quickly, and soon I was in my new home. I was making extra payments towards the mortgage, saving money, and having fun exploring my new neighbourhood with my new friends. My office moved to a new location, and all of a sudden, my commute to work was 15 minutes. Life was good.

Little did I know that by the end of that year (8 months after moving in), I’d be quitting my job and moving to Europe.

Moving to Europe was one of the best experiences of my life. I learned how to hustle as a full-time freelancer, and I got to explore so many different countries. However, it wasn’t good on my finances, as I had to continue paying my mortgage while I was away, and had to significantly scale back on my retirement contributions.

Now that I’ve had my home for 4+ years, I’m finally starting to think about selling it. My home, as lovely as it is, just doesn’t fit my lifestyle anymore. My plan had always been to re-evaluate my living situation after my 5-year mortgage is up, but now that I’m almost there, I find myself wondering if it was all worth it.

I spoke with my Realtor just a few weeks ago, and based on recent sales history in my area, he thinks I’ll be able to sell for more than what I paid for it. After running my own numbers, I’ll likely come out ahead over renting during the same period of time. So, that makes me happy. But I wish I had considered whether my life was really settled by the time I was ready to buy. I thought it was, but clearly it wasn’t.

That being said, I really do love my home, and I’ve had a lot of great home ownership experiences so far:

  • I borrowed a manageable amount of money for my mortgage
  • I kept early retirement goals in check
  • I kept savings in the bank
  • I’ve met a lot of really great people in my neighbourhood
  • I learned how to deal with a strata council (pros and cons)
  • I learned how to be happy living on my own
  • I went through a successful renovation project

Thankfully this “mistake” (likely) will end up as a positive outcome for me financially, but it certainly has made me re-evaluate where I want to live going forward, and that as a single female living in an insanely expensive city like Vancouver, renting is probably what’s in my future.

Why do you use a credit card?

Note: this post was sponsored by Amex Bank of Canada. The views and opinions expressed in this blog, however, are purely my own.

Over the course of my twenties, I used different credit cards for different periods in my life. When I was in debt, I wanted a card with the lowest interest rate so that I could get myself out of debt as soon as possible. And after I got myself out of debt, I focused on finding the best credit card for my spending habits; one that would give me the ability to get rewarded for responsible spending.

I did a lot of research into different types of cards, and realized that there were essentially two different kinds of credit card users – the first category of users just wanted a credit card to make purchases they aren’t able to make in cash, and the other category of users wanted to be rewarded for spending. I definitely fell into the second category.

I knew I was mainly going to use my credit card for essentials – like gas and groceries and this kind of spending pattern is perfect for a cash back card. As you know, travel is my passion, so travel rewards credit cards are also a good option (and certainly one that I’ve explored over the years), but I knew it wasn’t my only option. Many travel rewards cards came with restrictions when it came to redeeming points and I wanted to really feel the benefits and rewards in my hand from using my credit card, something a cash back card can do for you annually.

For example, these days I typically charge between $750 and $1,200 on my credit card each month. With that kind of spending on a cash back card that offers 1.25% on purchases, your annual rewards can add up pretty fast. Take a look at these examples:

Monthly Spending Cashback
$750 $112.50
$1,000 $150
$1,250 $187.50

The new Amex SimplyCash card offers 5% cash back on all eligible purchases at gas stations, grocery stores, and restaurants in the first six months (up to $250) and 1.25% after, so if half my spending went to those kinds of purchases, my first year using the card would earn me a lot more cash back. Also, most cash back cards offer perks for travelers too – such as travel assistance, car rental and theft damage insurance, among other benefits.

I remember whenever I used to receive cash back from my credit card, I’d save half of it, and put the other half towards something fun – maybe dinner out with friends in the city or even Paris? I think it’s this type of flexible earning that has helped me become successful in managing my money now, 8 years after getting my first cash back card.

How did you determine what kind of credit card you’ll use?

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