Wednesday, October 27, 2010

Cut the Crap

Baby Boomers like big white underpants.
Okay Spendy Spenderson, It’s time to get real and see where you can cut out some of the crap in your life. I’m a child of parents from the baby boomer generation. The generation that told their kids that we can be whatever we want to be and have whatever our heart’s desire when we get older. The problem is that the boomers failed us in teaching us how to afford getting there and that you need to save for it. I hear all too often from my parents’ generation that we are spoiled and we feel too entitled but where the H-E-double-hockey-sticks do they think we learned that from? Why am I not a zookeeper, finishing his PhD who owns an apartment building and just won the latest election to become Prime Minister? The truth is the message was a good one, work hard and you can have whatever you want, but they didn’t lead by example (Okay Gail, you’re an exception to the rule).

As you may have read from my last post, my spending is all over the map and I’m not putting any of it where it should be – into my savings account.  As confessions_of_an_ordinary and myself highlighted in my last post, my “restaurant expense is way too high.” There’s a restaurant across the street from work (that is so effing delicious and would become a fast growing chain if Rita MacNeil ever discovers it) which I was eating at on average of 2 times per week and at $8 an order that’s freaking expensive. If you’ve tried their General Tao Chicken you would be able to understand. But really, think about it, there are 52 weeks in a year, multiplied by 2 multiply that by 8 and I’m spending $832 per year on ONE restaurant! And the worst part is that I’m paying to expedite my office-worker belly! Now the other bad news is that I also ate out every other day of the week at other restaurants and the average cost was about the same. So let’s take $8 multiplied by 52 weeks, multiplied by 5 work days for a grand total of $2,080 per year on lunches!

After doing my analysis, places that I frequented became highlighted and I was able to say “oh ffffiretruck, I’m wasting my money.” This is when you sit down with your stuff and scrap the crap. Good news is that you won’t  have to invest in any more Depend undergarments since you will no longer be $hitting your pants from the shock of your analysis. So what do you cut? Well, you need to figure out how much money you should be spending in each of the following 5 (Gail approved) categories so that you know how much you have to live on:

Savings: 10%
Debt Repayment: 15%
Transportation: 15%
Life: 25%
Housing: 35%

This is Gail’s list, but she does allow for some tweaking here and there and no offense Gail, but some of us are capable of getting into debt long before we have kids and a house payment. So here’s my single-childless-guy-living-downtown-without-a-car budget:

Savings: 15% (10% for long term, 5% for ‘wants’ and emergency fund)
Debt Repayment: 45%
Transportation: 1%
Life: 14%
Housing: 25%

Quit reading picture captions and get a Life!
I’ll go into further detail about Savings, Debt Repayment, Transportation, and Housing in future blogs so for now let focus on Life! Life cereal is delicious, and Life the board game can provide hours of family fun. Just kidding guys, Life cereal is kind of blah, and Life the board game has too many pieces for children to choke on and for me to lose. Okay, okay, Life is the category where all your groceries and personal care, clothing, gifts, entertainment, and other unplanned expenditures show up such as the dentist, doctor, meds, pets, etc. In my case, my life category works out to just $94.11 per week to spend on ALL of these things. If you’re anything like my friends, you’re all saying, “no freaking way can you live on that!” Well for the past 3 weeks, I have been. When you add in the cost of bus tickets (which I almost never use) my total allowance for 1 week is $100.83.  I rounded down to $100 for simplicity sakes. Here’s what it looks like in actual money:

Transportation: $6.00
Clothing & Gifts: $10.00
Groceries and Personal Care: $40.00
Entertainment: $38.00
Other: $6.00

Are you nucking futs?!? That’s generally what I hear (with the letters switched) when I tell people this is the amount of money I live on every week. Keep in mind that this money accumulates every week that I don’t use it all and I can dip into each amount to cover for each other. What was really nucking futs was that I was spending 87% of my income on “Life.” $2,543.66 in actual money! I reduced my “life” spending by 73%!! This journey is going to be quite arduous. In my next blog I will get more in detail about my debt, which is the reason I’m forced to live as though I’m a first year student who’s pi$$sed through their student loans in their 2nd week of university. So my generation, you so-called self-entitled spoiled brats, and all you baby boomers out there too, pay attention because you just might learn a thing or two! If you do learn something, pay it forward, you’d be surprised how grateful people are to be able to talk about their finances with someone who has lots of knowledge about it.



  1. John, did you apply for an unsecured line of credit with your Bank?

    The line of credit only charges 9.5%. Use that to pay off a portion of your credit card. And make sure you cancel the credit card insurance balance thing. I got zinged by that. it's basically life insurance, but the premium is attached to your outstanding debt. zing. Atleast mine eas. Cancel that. It's like another 2% your paying for nutin.

  2. Hey confessions, I've already done all those steps but I haven't gotten to the point where I blog about it yet. I can assure you that I am taking all the steps to get my debt under control. Thanks for all the tips. :)

  3. Hey John, loving your writing style - especially your creative use of expletives lol

    One thing, I see you have 14% set aside for life... careful you don't cut back too far otherwise you could be like the dieter who says they're only going to eat 200 calories a day. After only a day or two they're so hungry they run to the corner store and shove a bunch of chocolate bars into their mouths... Watch you don't starve yourself of fun!

  4. I can cut your transportation to zero. Just get on the back of the bus and never pay OC Transpo. Works like a charm!