May 312012
 

This is all about grocery savings. How much do you normally spend on groceries each month? According to an OSEC report Canadians spent about 84 billion on groceries in 2010. On average that’s roughly $205 a month per person. :-) According to the US department of Agriculture, the average American in 2009 spent around $150 a month from food stores. That’s because food is generally cheaper to buy in the States.

To save money on food we have to change our spending habits, not our eating habits. What we buy is not as significant as where and when we buy them. I eat just as much food as the average person, but I only spend about half the amount as the average Canadian on grocery shopping. How? It’s as easy as pie.

For fresh produce and grown foods most consumers buy them at large grocery chains (Save-On.., IGA, Superstore, Safeway, Sobeys, etc) But these mainstream stores are more expensive than those smaller, local markets you sometimes see around town. How much can you save if you buy food from a smaller store rather than a big retailer? I carried out an experiment earlier this month to find out.

First, lettuce look at the following items I bought at Safeway. I picked Safeway because it’s an international name that most people would recognize (I hope.) Click images below to enlarge them.

The total for 1 full bag of food came to $16.73. Close up of receipt on right.

Okay, not very cheap as expected. Welcome to Vancouver. You might find a better deal from IGA or a Loblaws but it still wont cut your monthly grocery bill in half. So now let’s see what happened when I bought the same goods from a small, independent produce store.

The total for 1 full bag of food came to $5.64. Close up of receipt on right.

I know the items aren’t exactly the same. But I did my best to create a fair comparison. I tried to keep the weights the same. Looking past the minor inaccuracies of this experiment it’s easy to see that the smaller independent store is cheaper, much cheaper, like literally 1/3 of the price of a large franchise. I’m not big on brand loyalty when it comes to food. As long as there’s nothing wrong with it, celery is celery to me, no matter where I buy it from. Sometimes the quality of goods in smaller stores aren’t the best, and you have to eat them quickly before they go bad, but if you make frequent trips to the store this isn’t a big deal. The other issues some people may not like about shopping in smaller stores, is the lack of choices, lack of sanitation, and lack of customer service. But if you know exactly what you want, don’t have to ask for directions, and wash your food before eating it anyway, then be a smart cookie and support your local small food businesses. Besides, their cheap prices just can’t be beet.

This is the small store I went to for the experiment. They’re called “Consumers Produce”

The Safeway I visited is the one on 3410 Kingsway. What’s interesting though is that the small produce market, Consumers Produce (above,) is located at 3388 Kingsway. The address is actually on the receipt if you look closely.  Yes, the two stores are literally on the same city block. And yet the goods in one store is 3 times as expensive as the other and they are still able to compete with each other. Either there are a lot of loyal customers who value Safeway’s shopping experience, or they don’t know about this little store just a few buildings down the street.

WTF? Huge price difference.

So now you know my secret. Saving money on your next food bill is literally as easy as walking into a cheaper store. I’ve heard other ideas like clip coupons, plan multiple trips, price match, or prepare a list, which all takes time, commitment, and energy. But by just going into a smaller independent grocer you automatically save more than all those other shopping tips put together, without even having to think about it. Piece of cake.

Examples of a couple other independent markets around town. They exist in other cities all across North America too. There’s probably one near you!

Of course I don’t mean to turnip my nose at large grocery chains. They still have a purpose after all. They may not offer the best deals on produce or groceries, but I do sometimes buy meat products from them, especially when they’re on sale.

The DVD is to show scale only. It did not come with the food.

The best part about most meat is they can be frozen and will last a long time. But I digest. The point is by buying food from the right places, and waiting for certain things to go on sale, we can already spend less than 50% of what most people are paying for food in this country. In part 2, I’ll write about how I buy other types of groceries for cheap and share some simple meal ideas with everyone. Continue reading part 2…

 

 

May 282012
 

Last month I tried to go for 25 days without spending any money. And it worked. I passed my April no spend days challenge.  Here is a break down of all my expenses.

 

April 2nd: Paid mortgage, strata, and some other reoccurring expenses. April 1st was a weekend.
April 3rd: Paid $58.24 for internet bill using my credit card.
April 12th: Paid $1492.50 for a special levy to clean and repaint the building’s exterior. At least my condo looks newer and more modern now.
April 30th: Paid $523.19 for my credit card balance, $29.19 for electricity, and $3.95 for the bank fee.

Since I only spent money on 4 days out of 30, I have successfully completed my 25 no-spend-days challenge \(^_^)/ It was easier than I expected. Most of my time in April was spent either at home, or at work, so there wasn’t a lot of opportunities to spend money anyway. Below are my April bank and credit card statements so you can see the details of my spending for yourself. I had to censor some sensitive information like my account numbers obviously but I kept visible the relevant bits to this post. The only withdrawal transaction I didn’t include with my expenses was a transfer of $1,500 on April 16th, from my bank account to my brokerage account. I don’t consider that to be an expense because I haven’t used the money to buy anything yet, only moved it around between my own accounts. My credit card billing cycle ends mid month so that’s why I included two credit card statements.

Left: bank statement. Right: credit card statements. click to enlarge

If I had a family then I would have failed this challenge for sure. But as a single adult, I don’t really need to buy a lot of stuff to be happy. The basics I want are shelter, food, transportation, and internet. Once these aspects of my life are met to a certain standard, I think everything else is a luxry ( ・_・). I didn’t buy food in April because I still had lots left over in my pantry and fridge, plus there are other places to get a free bite to eat like open houses, Costco, and sometimes even on the job (my workplace has a basket of oranges and bananas, free to all employees,) I usually commute by car but since mine is really fuel efficient I only buy gasoline once every 50 days or so.

I don’t drink coffee, or smoke, or buy apps for my phone. I also don’t mind cooking all my meals at home. In fact as recent as 6 years ago when my living condition wasn’t as comfortable as they are now I had to eat almost every meals at home, couldn’t afford a car or even a cell phone, and had really slow internet. Today however, my lifestyle situation is much improved (^_^). I even have a blu-ray player now. But I think old habits are hard to change because I don’t feel overly constrained about my old ways of spending. During the no-spend month of April I also lost 8 lbs because I was eating more healthy. I didn’t eat out at all. I incorporated more fruit into my diet (from work), and had smaller meal portions in general. So the best part about this no-spend experience has been about health, not money. No spend days are a great way to save for those with a habit of frequent, but unnecessary spending, but it’s not really effective for someone who doesn’t often spend money anyway. I’m glad to have done the challenge but don’t plan to do it again any time soon.

 

May 242012
 

A recent study about youths was released by the government, and it states that last year 13% of all Canadians between the ages of 15 and 29 weren’t attending school or working. That represents more than 900,000 people. Seems like a big number, but it’s still the lowest percentage of all G7 nations.

I don’t think there’s anything wrong with not going to school or work, and just spending some time enjoying life and learning about oneself. When I was 19 years old I spent several months not working or studying. I had all the time to think about what I wanted to do with the rest of my life. The choices I made thereafter have been some of the best decisions I’ve ever made. It’s nice to relax and live with family for awhile before deciding which direction to go in life, as long as you don’t get accustomed to being lazy indefinitely.

 

image credit: imgfave.com

The study also says men aged 15 to 24 had the hardest time finding work compared to women in the same age group. Also single young adults like myself are more likely to be unemployed than married young adults. Given these statistics I would say I am very lucky to have been consistently employed since 2008. If you are between 15 and 29 and are looking for work, don’t give up. I had 5 different interviews before I landed my first job so it’s somewhat of a numbers game. Going into an industry in demand like nursing, engineering, IT, or maybe even a trade, will also help you out.

Our unemployment rate for youths aged 15 to 29 not in school is 11.8%. The study says that among young adults who are not working, 1 out of 5 said they wanted a job, despite the fact that they weren’t looking for one, (~o~). C’mon guys, we can’t expect a job to just fall into our laps in today’s labor market. I’m pretty comfortable overall with the results of this study. It means to me that if someone really wants to work, they will find a job eventually. At least we don’t have it as bad as the Europeans where the youth unemployment rate in Italy is around 30%, and in Spain it’s over 50% (゜o゜)

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G7 – An international finance group consisting of 7 industrialzed nations: France, US, UK, Germany, Italy, Japan, Canada.

May 212012
 

The following examples are recent keywords that random people have typed into their search engines, and have brought them to my freedom 35 blog. I’m posting these inquiries up because maybe other readers might be wondering the same thing, or would like to add their own comments on a subject.

May 20th – from Hamilton, ON…
“why is gas so expensive in vancouver”
Mostly due to taxes and inefficiencies. About 40% of what we pay for gasoline is tax, which helps to pay for social services.  For example, there is lot of public support in Vancouver for making housing cheaper, especially for the financially unfortunate. The local and provincial governments need funding to provide affordable housing, decrease the poverty rate, give homeless people shelter and food, and provide skills training to the community. So I think these relatively expensive gas prices are here to stay.

May 18th – from Los Angeles , CA…
“can i liquidate my rrsp account while in student debt to buy a house”
I believe you can. You could either use the home buyer’s plan or directly take the money out of your RRSP to do anything you want.

May 18th – from New York, NY…
“can i borrow more money margin if my stocks go up”
Yes. A margin account is like a home equity line of credit. If the value of your house goes up then you can extend your line of credit and borrow more money.

May 16th – from Toronto, ON…
“what is the median net worth in Canada”
The median net worth for a Canadian adult is $89,014.

May 16th – from Hamilton, New Zealand…
“why do males have a higher net worth than females”
Because males typically make more income than females. Why this is true, is for another discussion.

May 14th – from Hummelstown, PA…
“how to avoid loans in margin account”
Don’t buy more stocks than the money you put into your account. So if you initially deposited $100, you won’t have to deal with any loans as long as you don’t spend more than $100 buying stocks.

May 13th – from Davidson, NC…
“is siemens really pronounced that way”
Not quite, the first letter “S” sounds like a “z” so the English approximation of the name sounds more like zeemens. Siemens is an German engineering company, sort of like General Electric in the US. I like what they do and currently hold some of their stocks.

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Random Useless Fact: The most common months to have babies are July, August, and September.

 

May 162012
 

When a bank says you’re over indebted it probably means you have too much debt and either have to change your lifestyle dramatically, or file for bankruptcy. Lately there’s been a lot of news coverage about the European debt crisis. I’m going to try and explain what it is and how it will affect us. In some European countries like Germany people work hard, the economy grows, and the government lives within its means. But then other countries like Greece have tax evasion problems, citizens are opposed to austerity, and the government has to overspend to keep the population happy and the economy running. Chart below is from last year.

image source: money.cnn.com

It shows that anyone could have lent money to Greece in 2011 and get paid over 20% interest every year over the next 10 years. But when something looks too good to be true, it probably is. Because earlier this year, Greek defaulted and couldn’t pay their lenders the promised amount, and investors lost half of their initial investments. Greece basically went through a mild version of a bankruptcy. Today strong European countries are still financially supporting the weaker ones. Tax payer’s dollars, or rather Euros, from Germany are being lent to heavily indebted countries like Greece and Ireland. But voters in Germany are getting tired of doing this. It’s like equalization payments in Canada, except instead of a direct payment, these transfers are just “loans” for now which may, or may not be paid back later.

Unfortunately the solution isn’t as simple as kicking Greece out of the Eurozone altogether. If they completely default and leave, then their old debts will just move around to other countries and not really solve anything. It’s like if I borrow $100 from my friends and spend it all, then file for bankruptcy and don’t pay them back, then my balance will still be zero. But it’s my friends who actually lost $100 in the end. In Greece’s case they’ve already borrowed hundreds of billions of Euros from surrounding countries. Is it fair for German tax payers to foot the bill because leaders in Greece failed to properly run their own country? Leaving the Euro zone won’t be ideal for Greece either because without ongoing loans from Germany how would they continue to pay for government services like education? It would be a massive blow to their economy and standard of living if they leave.

Global financial markets are very interconnected, and investors are worried this European debt will spread around the world. If Greece goes bankrupt entirely then bond rates in Germany will rise, slowing down their growth. Companies in the US and China with exposure to Germany will also slow down. For normal citizens like us though, it probably means we’ll see stagnating wages and lower economic demand for the near term.

But not all is bad news >^_^< This is probably one of the best stock buying opportunities of the year. Look at names like Silver Wheaton, Magna International, and Suncor. They are trading so cheap. These are top quality companies that are growing their profits. The only reason their stock price is down is because of P/E compression, which is a market sentiment, not company specific. I’m going buy some of these names soon because when the economy gets back to normal these stocks will be the winners. I’m just waiting for the TSX to turn around right now, but so far it doesn’t look like we have hit a bottom yet.