We have to create some kind of financial plan, whether we’re single or married to man who’s not onboard with saving money.
Remember this – nobody cares more about my money than I do!
If you need a reminder, click the banner below and learn more about emergency funds.
One of the things you’ll see on the post – nobody cares more about my money than I do – is my Covid-19 adjusted financial plan. Here’s what it looks like:
- Incur no debt
- Don’t look at the current value of my investments
- Don’t sell any stocks
- No unnecessary spending
- Build up my emergency fund
- Try to save a little for next year’s TFSA
Hopefully most of you created a simple financial plan after reading that post and have been able to stick with it.
How am I doing as 2020 is winding down?
Incur no debt
I’ve incurred no debt! Yay me! I’m not a spender so that’s fairly easy. My debt has usually been because of injury leading to unemployment, or I need to use my credit card because my car or teeth have been up to no good.
My credit cards usually sit at a zero balance, but I used one of the cards in October to buy some things on Amazon, just over $100, When the statement shows up, I can handle it!
Around here, most of us are not high income earners and advice that works for households earning $100,000 a year isn’t going to fly with us. Check out what I have to say in Taking Control of Debt on a Low Income where I talk about some of the ways I’ve worked on tackling debt.
Whether you’re getting a handle on incurring no more debt on those credit cards, or need advice and tips, I have a round up of articles on this post – How to Save Money and Bust Debt.
Don’t look at the current value of my investments
I have to go onto my online trading site Questrade a couple of times a month to transfer dividends to my bank account or buy more stocks after I’ve transferred money into my RRSP (Registered Retirement Savings Plan) on payday. The portfolio balance stares me in the face each time I log in and it’s been red since March, 2020.
Some stocks doing good.
The REIT (Real Estate Investment Trust) stocks not so much. A lot of people and businesses are struggling to pay their rent this year.
Don’t sell any stocks
In mid-October I sold one of my smaller holdings in my RRSP account, an ETF called HEA, Horizons Enhanced Income US Equity. These are purchased in Canadian dollars on the Toronto Stock Exchange. It’s a portfolio of US companies that I really wanted to buy into, but I had a dickens of a time purchasing. Just one or two measly shares here and there. Nobody was selling when I was buying. Final tally – 12 shares that cost just under $15 apiece. Pays around 8¢ a share dividends or about $10 a year. More money than I’d have made on interest if I left that cash sitting in a bank account.
Eventually I got bored with all the unsuccessful attempts to buy more stocks and found a similar ETF that tracks companies in the S&P 500 that I purchase inside my TFSA (Tax Free Savings Account). So I felt I was balanced with US investments without duplication from that measly HEA.
I sold those 12 shares of HEA in October, at a gain of around $1 a share. But whoa Nelly, Questrade takes $4.99 fee for handling the sale (very reasonable by the way compared to most brokerages), so my net profit is around $6. Plus the dividends it made over the past few years.
The proceeds will go to buying another ETF I hold shares in my RRSP, that’s sold in US dollars on the New York Stock Exchange. The “experts” say I should have some US bucks in my portfolio.
No unnecessary spending
Did I fail in the “no unnecessary spending” department because sometimes I buy a chocolate bar or cookies that I really shouldn’t be eating. Though I’m certainly spending less money on junk food than five years ago.
I had one big 2020 expense that came in around $500.
The mattress on my bed was saggy and not too comfortable. A few months ago I bought a gel memory foam mattress topper from Amazon that helped mask the problem for a few months. In September I finally decided to bite the bullet and bought a new mattress.
I went to Sleep Country and bought a hybrid Simmons Beautyrest that was on sale. I liked how the one in the store felt. The one delivered to my bed seems more firm than the one in the store, and after a couple of weeks I put that mattress topper back into action and that helps.
Maybe I was just used to sleeping on a soft, saggy mattress for too long!
Next big expense?
The springs in my couch are giving away. It’s a sectional that was in my old house, but it’s really too big for where I live now. I’m thinking I can probably throw away the long part where the sagging is and hang onto the chaise section. That’ll save buying another couch or loveseat, at least for the time being.
Guess I’ll ask my landlord the next time he might be going to the dump and if he can take another passenger!
Build up my emergency fund
The main reason I needed to build up my emergency fund was due to two large vet bills in the past year.
I had $2,000 to make up in my emergency fund and gave myself a year to do so. With my account at EQ Bank (affiliate link), I can attach a goal setter to any of my savings accounts, so I added it and let the countdown begin.
I managed to get a big boost towards building my emergency fund back up thanks to the BC government. All residents affected by Covid-19 who lost their jobs or had their hours cut back were eligible for a one-time payment of $1,000. My plan was to put it towards beefing up the emergency fund.
Also, thanks to collecting the CERB and living a frugal lifestyle, I was able to get my emergency fund back to where it should be. Since that time, my emergency fund has grown a little with interest every month. Also, I’m on the refer-a-friend program at EQ Bank, so a big thank you to all my readers who’ve opened a bank account and made both of us a little money!
I just got an email from EQ Bank and they’ll be adding TFSA and RRSP accounts to their bank! Yay! If you like to keep a bit of cash in your TFSA account, EQ Bank might be a good place to park it. Can’t recommend it until I know more about it, but I know their rates will be competitive or better than bricks and mortar banks. As for your basic high interest savings accounts, it’s been good for me, which is why I recommend this bank to my readers.
Saving a little for next year’s TFSA
In 2021, Canadians can add another $6,000 to their TFSA. Saving $500 a month is something that really seemed out of reach for me in normal times. Due to frugal lifestyle, I’ve usually been able to put aside the money. Also no longer being a homeowner and being sucked down with a mortgage, taxes, and everything else that goes wrong with a house, I’m able to invest money in a TFSA instead of a money pit.
After Covid-19 and struggling with unemployment, I really didn’t think I had any hope of putting aside $500/month. And for the most part I was right! However, some months I ended up with extra money and no dental work or major car bills have plagued me this year. I’m happy to say I’m on track to saving $6,000 before the end of 2020. I have less than $800 to go – yay me!
How was I able to scrape money together through unemployment and cut back hours? Once again I have the government of British Columbia to thank. They put together a grant for renters whose employment was affected by the pandemic. As long as I could prove I was receiving the CERB, I was eligible. In this case, renters received $300/month that was paid directly to the landlord. For five months!
Due to my frugal lifestyle and able to survive on the $2,000/month from the CERB, I was able to put most of that $300 savings from rent into my TFSA account that I’m saving for 2021.
It’s always good to check in with my readers on how I’m doing. Earlier this year when I said I had a Covid-19 adjusted financial plan, I made a commitment to stick with it as best as I could.
The thing with financial plans is that they can constantly change depending on your current circumstances.
I’m a real person who’s putting my money where my mouth is! I’m not like some of these finance writers who tell you what you should be doing but have never been in a position where they’ve put it in action. I’m talking about being unemployed, low income, and wondering if there will be enough money to pay the rent and buy groceries. Many finance writers don’t suffer from those problems, but they sure give advice to those of us who do!
Reading between the lines of their financial advice: In theory this should work, but I’ve never practiced what I preach.
Advice disclosure: I’ve never used a fast cash/payday loan shop. These places prey on low income people, charge high fees, and can be a never-ending vicious cycle. When I worked at the head office of a financial institution, I dealt with these fast cash shops looking for assistance in collecting money from their clients who hadn’t paid them back. I don’t have to have been a customer to know these places are bad news and should be avoided.
If you haven’t yet come up with a financial plan, it’s never too late. There’s no time limit here except the one you impose on yourself.
If you write down your financial plan, you have a better chance of following through.
Keep it as simple as you can:
- pay off debt
- start an emergency fund with $1,000
- find a higher paying job or get a second job
- open an account with an online broker and invest in stocks
- put $50 a month into a Christmas fund
When you write down your plan, or if you put it out there online for all the world to see, you’ve got a better chance of holding yourself accountable to following through! That’s why I come back with updates.
Write down your financial plan and dream about what your life will be like when you no longer have the stress of credit card debt and can pay cash for your Christmas shopping.
If you can dream about a better financial future for yourself, you can do start by putting a simple plan into action!
There’s a big difference between a dreamer and a doer.
Take the first step by writing down your financial plan. Let’s turn that dream into reality.