Jun 132016
 

The Challenge is Over

Last week I embarked on a culinary adventure where I would limit myself to eating just $29 worth of food for an entire week. It was not to determine if such a thing is “possible” or not. Humans are very resilient eukaryotes. The average healthy person with a body fat percentage of 20% could survive multiple weeks consuming nothing but water — although it wouldn’t be very fun. 😕 But much like the “no spend days” challenge, I wanted to experience what it’s like to live on a tighter budget like so many poor people do.

Now that it’s all over, I’m going to make like a mirror and reflect on my experiences. Thankfully I managed to keep to my rules as mentioned in the original post, and didn’t eat anything outside of my basket of groceries. I even had some food remaining as of Sunday night. Woohoo! I passed the challenge. 😀

Here are some simple homemade dishes I put together last week, using the ingredients from my list.

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Breaking Down the Week

Days 1, 2, and 3

The first three days of the challenge were spent eating a little bit of everything from my food basket — although there was a heavy emphasis on fresh vegetables as the tomatoes, cucumbers, and squash had to be taken care of before they start to spoil. I put the bread in the fridge so it would stay fresh longer. During this time I ate mostly sandwiches, salads, and roasted vegetables.

Days 4 and 5

These days were more focused on a protein and carbs rich diet — literally the meat and potatoes of my basket. 🙂 I also boiled and seasoned the large white radish. Around day 4 I began to feel weary about eating the same food over and over again. By the end of day 5 I had finished consuming all the fish, crackers, and most of the produce.

Days 6 and 7

These last two days were mainly for eating leftovers from my basket. I tried out different ways to cook the remaining turkey and potatoes. At this point I felt peckish for other types of food, mainly something sweet. I realized I should have added some apples or oranges to my food basket. I tend to season lightly when I cook at home. After nearly a week of not eating salty food from restaurants my tastebuds have gotten use to consuming a lower sodium diet. On day 7 I made turkey soup, using leftover meat and produce remains. At the end of the challenge I had some bread and 2 turkey drumsticks remaining out of 14 total. A turkey drumstick is about 13 ounces, compared to a chicken drumstick which is about 4 ounces.? 

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Jun 062016
 

$29 Per Week for Food

In the United States most people who meet certain low income guidelines are eligible for the Supplemental Nutrition Assistance Program (SNAP, or the food stamp program). Last year glamorous Hollywood actress Gwyneth Paltrow challenged herself to live on just $29 worth of food for one week. According to the Center on Budget and Policy Priorities, $127 is how much the average food stamp benefit receives each month, which works out to roughly $29 per week. Paltrow wrote on her blog, goop.com, that she was doing this challenge to raise awareness for the New York City food bank. She uploaded a photo of everything she purchased for the challenge and set out to not eat anything else for a whole week. This is what her basket looked like from one of her Tweets.

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But unfortunately she only made it through 4 days before she gave in and ate some black licorice. I know, it’s shocking right? How could anyone like the taste of black licorice. ? After her challenge ended prematurely, Paltrow said that her “perspective has been forever altered by how difficult it was to eat wholesome, nutritious food on that budget, even for just a few days—a challenge that 47 million Americans face every day.”

The Internet Backlash 

Although she did not complete her challenge I have to give her props for trying. 🙂 But of course this is the internet. So when she wrote about her food stamp challenge there was no shortage of criticism and adverse response.

As one person aptly observed, “Gwyneth Paltrow bought scallions, onions, a clove of garlic, and fresh parsley. She is doing her poor people shopping wrong.” ?

Below are some other intriguing reactions from random denizens of the Twitterverse. 😀

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Yikes! Bring out the carving knife because Gwyneth Paltrow got thoroughly roasted, lol. But internet drama aside, this whole situation has inspired me to do the $29/week food stamp challenge as well. 😀 As a personal finance blogger, I want to find out if I have what it takes to live on $29 a week for food.

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Apr 042016
 

I’m not much of a hipster, but last year I started to use the Tangerine money-back credit card during its trial period before it was cool. After using this card for many months I’ve decided it’s time to blog about my experience with it. Normally I don’t review consumer products, and I’m not being paid to write this post, but I genuinely think this is a great credit card that I would recommend to my personal friends. 🙂

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About the Tangerine Mastercard 

Let’s go over the main features of the card.

  • No annual fee 😀
  • Earn 2% money back on select categories, and 1% on every other purchase.
  • No limit on the amount of money-back rewards you can earn.
  • Interest on overdue balances and cash advances is 19.95%
  • Mastercard is accepted worldwide at more than 24 million locations in over 210 countries

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May 102015
 

Some folks believe earning a higher income is a valid excuse to submit to lifestyle inflation. But I don’t think lifestyle should necessarily be tied to active income because job security is a fickle pickle. However with a strong framework of growing passive income, a little lifestyle inflation is not only acceptable, but I would even recommend it because YOLO. 😀 Due to the recent tailwinds of increasing investment gains and asset prices it appears I’m ahead of schedule by 1 year to reach financial freedom by my 35th birthday. Since my ultimate goal is to live a balanced, resourceful, and meaningful life, I have decided to succumb to lifestyle inflation and increase my expenses.

Changes to my budget:

ItemOld Monthly BudgetNew Monthly Budget
Grocery$100$150
Eating Out$25$50
Internet + Phone + Entertainment$75$100

Overall I’m now spending $100 per month more than I was back in 2010. This is not a major change to the way I spend money, but it allows me to enjoy the present a little bit more while not sacrificing too much of my financial security in retirement. The way I conduct my budget is I set an expected target, such as my $150/month for groceries. The target is more of a guideline than a strict limitation. Sometimes I spend less, other times I spend more depending on what I buy and how often I eat out.

Here are my thoughts behind the 3 categories.

  • Grocery: Since food inflation has been higher than the average consumer price index over the years I’ve decided to increase my grocery bill to $150 per month. Some people might think $150 is not enough, but it all depends on where you shop. A few years ago I blogged about buying some staple foods from Safeway for about $17. That’s enough produce to last me for probably 1 or 2 days. Then I walked half a block down the street to another grocery store and purchased the same food for literally 1/3 of the cost. I’ve uploaded pictures with receipts for proof. The economics of this situation needs explaining
    Since it’s been 3 years since writing that article, I think the same basket of goods would probably cost about $20 at a Safeway or equivalent big box store today due to the ever increasing price of food. How much can the same $20 buy at one of the smaller independent stores I go to? Well I recently went to a small grocer to find out. 15-05-persia-food-groceryIt’s called Persia Foods located in North Vancouver if anyone is curious. Below is a picture of everything I bought. It actually came out to $21.07 but you get the idea. There is enough produce here to last me for an entire week. (click image to enlarge.)  15-05-persia-foods-grocery-receiptI’ve also blogged before where I get cheap meat, other sources of protein, and grains. Last month I bought nearly 4 lbs of ribs in a West Vancouver supermarket for less than $8, and it took me several days to eat through it all. 15-05-lifestyle-inflation-food-ribs-osakaThe point is it’s perfectly reasonable to eat well on $35 per week for an individual adult, which works out to $150 per month. Of course if people are buying all their groceries from Safeway then they can expect to pay $300/month or more for essentially the same diet. But that’s their choice. 😛
  • Eating Out: By increasing my restaurant budget to $50/month I can spend more time to socialize with friends. 🙂
  • Internet + Phone + Entertainment: A couple of things happened here over the last year. I finally upgraded to a smart phone earlier this year. No more flip phone for me lol. So I upgraded my cellular package to include a data plan. I also subscribed to Netflix which is an additional $9/month. So I’m paying $25 more for telecom services now than before.

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Apr 222015
 

Finance Minister, Joe Oliver introduced the government’s 2015 Federal Budget yesterday. The big takeaway is that there will be tax breaks for everyone. Yay! 😀 The proposed budget is expected to get passed as the Tories hold a majority government.

It’s nice to finally see some welcomed changes in fiscal policy to address the economy rather than rely on monetary policy alone. 🙂 Federal budgets are important because it shapes the way we plan our personal finances.

Increased TFSA Contribution Room

The annual contribution limit for the Tax Free Savings Account rises to $10,000 effective immediately. This means Canadians who have already maxed out their TFSA for 2015 will now have another $4,500 of contribution room to use. The TFSA is a holding account where we can buy investments and not pay taxes on the gains.

Some people believe this change will only benefit the upper class who are already wealthy. Here’s my poor attempt at humour on Twitter from yesterday.

However, Ottawa says that individuals with annual incomes of less than $80,000 accounted for more than 80% of all TFSA holders at the end of 2013. And about half of TFSA holders had annual incomes less than $42,000, meaning the TFSA is mostly being used by the middle class. Personally I think the new TFSA policy benefits serious savers, not necessarily the wealthy.

RRSP delays taxation to a future date when we’ll likely be in a lower income tax bracket than today. Gains in a TFSA are made from after tax contributions and are not taxed, for the most part. So between the RRSP and TFSA average Canadians now have a lot more freedom and room to save and invest with preferential tax treatments.

Here’s a table showing how much someone would need to save to max out both accounts. The maximum RRSP contribution limit assumes the person earned the same income in the previous year.

Combined Tax Sheltered Savings Table 2015

Annual Gross IncomeMax TFSA RoomMax RRSP RoomCombined TFSA/RRSP Limit% of Income
$20,000$10,000$3,600$13,60068%
$30,000$10,000$5,400$15,40051%
$40,000$10,000$7,200$17,20043%
$50,000$10,000$9,000$19,00038%
$60,000$10,000$10,800$20,80035%
$70,000$10,000$12,600$22,60032%
$80,000$10,000$14,400$24,40031%
$90,000$10,000$16,200$26,20029%
$100,000$10,000$18,000$28,00028%

 

As we can see people who make $50,000 a year will have to save more than 38% of their incomes before running out of space in tax advantaged accounts. There is no point in buying GICs, bonds, stocks, mutual funds, and other investments in a regular cash account anymore, unless you’re like me and trade derivatives or buy securities on margin. 😉

Decreased Minimum RIF Withdrawal Rate

The new federal budget also gives seniors more options. When an RRSP is converted into a Registered Retirement Income Fund (RRIF) retirees will be able to leave more money in their tax sheltered account each year to help their savings last longer and can also lower their overall tax burden. The proposed new RIF minimum withdrawal rate will decrease from the current 7.38% at the age of 71, to 5.28% starting at the age of 71, and gradually increase to 20% by age 95. 😄

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In general lower income, and younger folks should prioritize saving in a TFSA before considering RRSP, and vice-versa for high income earners. I like to put bonds in my RRSP, and the more volatile, higher potential investments in my TFSA. For most Canadians I believe the TFSA has a more important role in our financial lives than the RRSP. However, both are important as the RRSP can save us money today by delaying the tax liability to future years, while the TFSA can save us money in the future. Holding the right amount of each can minimize the overall taxes we pay over time.

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