Oil vs Gas Furnace

  By Julie | May 19, 2012 - 6:00 am | Expense Analysis, House & Home
1 Comment

When we bought our house in 2009, it came with a 20 year old, oil furnace repair Oil vs Gas Furnacefueled furnace.  Although the furnace was old, it ran just fine and did a good job at heating the house.

After we moved in, we had other priorities in mind – painting the house, buying appliances, replacing the roof etc.  Since it was working fine, purchasing a new furnace was lower down on our “To Do” list – so we didn’t get around to replacing it until 2011.

The oil furnace came with some downfalls.  We noticed that it was costly to fill the oil tank, and we worried about the potential for environmental damage (and the huge repair bill) if the tank should ever spring a leak.  Plus, we had to check the oil level regularly and phone the oil company when the tank was getting low – being careful to never run out of oil!

In September 2011 we decided to bite the bullet and replace the furnace.  It cost us $4,800 after tax for the removal of the old furnace and oil tank, an extension of the gas line for the new furnace, installation of a new 95% high efficiency gas furnace, and installation of  a new fancy shmancy thermostat.

We knew the gas furnace would be cheaper to run, but we didn’t know how much cheaper it would be.  I pulled up our banking records to see how much we paid for furnace oil last year.  Since our hot water tank is also gas powered, I calculated the difference in gas bills between last winter and this winter in order to figure out how much gas the new furnace was using.

The results are amazing!  The savings is downright incredible…

furnace savings chart1 Oil vs Gas Furnace*** Please note that our gas meter is read every 2nd month – so every other month we are billed based on an estimate.  The gas company was basing their estimates on the amount of gas we used last year (and didn’t take into account the gas used by the new furnace)… hence the high/low/high/low pattern for gas bills this year. ***

Yes, that’s right – it cost us nearly $1,500 to heat our house with oil last winter… and just under $300 to heat the house with gas this winter.  The huge savings means that our furnace will pay for itself in just a few short years.

furnace savings 20 years Oil vs Gas FurnacePlus, we now have the convenience of not having to think about filling the oil tank, not having to pass the annual oil tank inspection, and not having to worry about potential leaks.  Plus, our new furnace uses only one filter (the oil furnace used two) – so we save in that department as well!

I was so shocked at how little we paid this year that I went ahead and compared our electricity bills as well (wondering if the furnace was using a lot of hydro instead?)  I discovered that our hydro bills totaled about $100 less this year compared to last (even though the rates went up!)… so perhaps the furnace uses less hydro too?

We’ve learned a few lessons from this experience. First and foremost – we’ll never again have an oil furnace.  If we buy a house with an oil furnace, replacing it will be at the TOP of our “to do” list.  Second, sometimes it pays (literally) to replace an old, outdated, inefficient piece of equipment with a new, more efficient model.  Yes, it may cost a lot upfront, but the long term savings can be huge.

Don’t Hesitate to Negotiate… for Cable & Internet

  By Julie | May 17, 2012 - 6:00 am | Expense Analysis, Steals and Deals
5 Comments

Cable TV and internet service are definitely “optional” expensestv remote 150x150 Don’t Hesitate to Negotiate… for Cable & Internet; however we think that they’re worth spending money on.  They provide us with entertainment and social connections, along with any kind of information you could possibly imagine.  The question is – how much should we spend for it??

From our personal experience, the cost of internet and cable has been a constant battle.  Since we first subscribed in 2003, our cable & internet provider has raised their rates every single year without fail.  That means that the price we were paying for our service went through the roof!  In 2003 we were paying $85/month – but by 2010, the rate had climbed to $117.  We felt uncomfortable paying any more than $100 each month for internet and cable (after all, they’re not REALLY necessary). We decided to research what packages the other companies were offering, and then phone our current provider and try to negotiate (our PVR only works with our current provider… so we did not want to switch companies!)computer tower and monitor 150x150 Don’t Hesitate to Negotiate… for Cable & Internet

We explained that the price of our cable and internet was just too high and that we could not continue to justify the cost.  We presented them with offers from competing companies (only the cheaper ones of course!) – and asked if they’d be willing lower our rate.

With no resistance whatsoever – our provider offered us a 20% discount… if we’d commit to a 2yr contract.  Since we’d been with them for 7 years already, and had no plans on switching, we readily agreed.  Our new bill is $93 each month – a far cry from the $117 we were paying.savings chart 300x81 Don’t Hesitate to Negotiate… for Cable & Internet

Cable and internet can be such a costly expense.  It’s well worth it to spend five minutes on the phone and attempt to negotiate a lower rate.  What’s the worst that can happen?  They say no.  With so much competition these days, cable and internet providers are often quite willing to be flexible with their fees in hopes of gaining/retaining their customers.  We were paying $1,404 per year with the old rate, and now we pay just $1,116 for the exact same service.  That’s a savings of almost $300 each year – all because of a five minute phone call.

Our Cruise Vacation

  By Julie | May 15, 2012 - 6:00 am | Expense Analysis, Life
7 Comments

Last month, Nick and I jetted off for a little socean cruise 150x150 Our Cruise Vacationpring vacation.  We flew down to Tampa Florida, hopped on a cruise ship, and spent a week sailing around the Caribbean.

Upon returning to Tampa we rented a car for a week, drove to Englewood Florida and joined the in-laws for another fun-filled week of vacation!  This was the first time we’d ever done a “2 in 1″ vacation – and I must admit, it was pretty spectacular.

While our vacation wasn’t “dirt cheap” by any means, I do think we did well in keeping the spending under control… and shopping around to find some great bargains.

Here’s what we spent…

  • Two round-trip flights via Air Canada from Toronto to Tampa.  We paid a little bit more for a direct flight since we didn’t want the added stress of possible delays and missed connections.  Plus, to be perfectly honest, I hate take-offs and landings… and was willing to pay a bit more for a direct flight.  The flights cost us $983.50 in total.
  • We spent one night in Tampa before leaving on the cruise.  We stayed at the Ramada Westshore because it was located close to the cruise port, offered a free shuttle to and from the airport, had wi-fi internet and included a continental breakfast.  I booked the hotel through Expedia, and after taxes we paid a grand total of $84.19.cruise ship cabin 150x150 Our Cruise Vacation
  • The cruise was wonderful. We went with Holland America this time (we’ve been making an effort to try all the different cruise lines before deciding on a favourite).  We booked an inside cabin, but at the last minute they upgraded us to an outside room with a view! We paid for the full cruise and the automatic gratuity ($11 per person per day) in advance.  This totaled $1,426.90 for the two of us.
  • We purchased all of our excursions in advance (so that we could relax and enjoy our vacation without having to think about spending money).  We paid 2 x $19 for  hop-on hop-off trolley tour in Key West, Florida, 2 x $54 for a bus tour and a trip to climb Dunn’s River Falls in Jamaica, and 2 x $49 to spend the day snorkeling and attending a beach party in Cozumel Mexico.
  • Before we left on vacation, I went ahead and booked our week long car rental in Florida.  When it comes to the price of a car rental…shop around!  In the weeks leading up to our vacation I was constantly checking Expedia and Redtag to see how much it would cost.  While the pricesnorkel gear 150x150 Our Cruise Vacation did fluctuate up and down, it never dropped below $280.  The week before we were to leave I decided to do some Google work and see what other companies were offering… and sure enough, I stumbled upon a website called Tampa Airport Car Rental (unique name, eh?) that offered a full week car rental with Advantage (from the Tampa airport) for $108 after tax.
  • We spent an additional $91 on a few Christmas tree ornaments, a couple of drinks, and some tips. We always purchase a tree ornament from the places we visit because they make a great souvenir, they don’t clutter our house, and they generally cost less than $5 each.
  • We spent $50 on two taxi rides.  One from the hotel to the cruise port, and one from the cruise port to the airport (to pick up the rental car).

In Tampa we stayed with Nick’s parents’ at their winter home in Englewood, so lucky for us, it didn’t cost a thing!  We did buy groceries, gas, and a few restaurant meals, but the amount we spent was all within range of what we’d have spent at home, so I don’t consider them to be “vacation expenses”.

In the end, after all was said and done, here’s what we spent for our two weeks of paradise…

cruise expense chart Our Cruise Vacation

The Dying Days of Cash & Cheque

  By Julie | May 13, 2012 - 6:00 am | Life
2 Comments

Gone are the days when people paid cash for everything!  debit machine 150x150 The Dying Days of Cash & ChequeI think some older generations still try to hold on to that habit – but it seems the younger we are, the less likely we are to use cash.

I’ll admit, I’ve been caught more than once at work when there’s a collection for a baby shower or a spur of the moment group lunch… and I discover that the cash I have in my wallet is limited to a couple of dollars in change.  The fact is – we never ever use cash.  For many years, our local Dollarama was the only place we needed to pay with cash, but even they will accept debit now.

Nick and I joke about the fact that our future children may very well not be able to recognize Canadian paper currency, or know how to write a cheque.  That makes us sad though, so we’ll be sure not to let it happen.

The fact is, our society has quickly become an electronic nation. Cash and cheque has been replaced with credit card and debit card.  We can pay all of our bills online, email money transfers, and move funds between bank accounts.  We now have the ability check our bank account balance and credit card balance through our computer at any given time.

I think the movement towards more electronic sources of payment has been good – and seems to be much safer than cash.  If you drop a wad of bills on the ground, you can pretty much consider it gone for good.  If you drop your credit or debit card on the ground, it’ll likely have password protection or require a signature – which should pose a bit of a challenge to the thief who tries to use it.  Besides – you can phone your bank or credit card company and have the card deactivated in an instant.

money in wallet The Dying Days of Cash & ChequeIn addition – many credit cards offer so much more than a method of payment.  Most cards allow you to collect reward points that can later be redeemed for merchandise. So long as you pay your credit card bill in full each month, this means that you get rewarded by choosing to use your credit card! Many cards also include travel insurance, car rental insurance, and can be used in foreign countries..

Most credit cards also offer purchase protection.  If your credit card was fraudulently used or you didn’t receive the merchandise you purchased – you can file a complaint and have the charges reversed (particularly helpful when the merchant won’t cooperate).

If you look at the pros & cons of cash Vs credit card, it becomes pretty clear why more and more people are choosing to use electronic methods of payment.  With increased security, safety, coverage and rewards – it’s no wonder that cash and cheques are losing their spot on centre stage!

Are you sticking with tried & true cash?  Or have you ventured over to the electronic era?

Frugal Mothers Day Ideas

  By Julie | May 11, 2012 - 6:00 am | DIY, Holidays
1 Comment

Mothers Day is a reason for us to show our appreciation to all the mothers day flowers 150x150 Frugal Mothers Day Ideasmothers and grandmothers in the world.  It’s a great excuse to spoil them, to surprise them, and to show them just how much they mean to us.

Celebrating Mothers Day does not mean that you have to buy flowers, jewelry or chocolates, or pay for dinner at a fancy restaurant.  Instead, if you take moment or two to use your imagination… you can come up with a ton of great (and frugal) ways to celebrate mom:

  • Pack a surprise picnic for mom, and take the whole family to a local park or beach to enjoy it. Even if it’s a simple meal with nothing fancy – I can guarantee that mom will appreciate it (especially since she didn’t have to pack it!)
  • Go for a walk and collect some wildflowers (or some pretty weeds) and put together a flower arrangement – for free!  Get creative and include twigs or long grasses in the arrangement… see what you can come up with!
  • Make Mothers Day a day of “No Work” for mom.  Take care of making breakfast, lunch and dinner for her.  Take on the house cleaning, dish washing and laundry duties.  It may seem like a lot of work – but not only will mom love being spoiled…you’ll come away from it with a greater appreciation for everything that she does.
  • If you’re not up to taking on all of mom’s chores for the day – a nice breakfast in bed is a good too!  It’ll ensure that her day starts off on the right foot!
  • Sit down and write mom a letter telling her how much she means to you.  Or write a poem – about her, or moms in general.  Make her a homemade card (or a special craft) specifically for Mothers Day.
  • Put together a little photo album with all of your favourite pictures with mom.  Make it extra special by adding a little paragraph of reflections/memories to go along with each photo.
  • Since Mothers Day is right before gardening season, use the opportunity to buy things for the garden that you’d be purchasing anyways.  New gardening gloves, a book, some plants or seeds, a watering can etc. can be put together to make a garden themed gift basket.  Stay away from soil and fertilizer (especially mothers day presents 150x150 Frugal Mothers Day Ideasmanure!)… they don’t make great gifts!
  • Put the kids to work and create a Mothers Day gift!  Make a handprint craft (apron, t-shirt, artwork etc.) or paint some clay flower pots to give mom a one-of-a-kind present.
  • Pull out the camcorder and put together a little video with segments from each of the kids answering different questions (or telling stories) about mom.  Alternatively – have the kids come up with a song or a play to perform for mom – either live or on video.

The possibilities for frugal Mothers Day gifts are endless; all you have to do is think outside the box.  While a dozen roses, a box of chocolates, or a dinner out are nice, they require no prep work – and they can cost a fair penny!  The frugal ideas listed here tend to be more personal, and require a little bit of thought.  Mom will appreciate these unique gifts even more – since she’ll know that you put some planning and effort into creating her Mothers Day surprise.

Blog Round-Up

  By Julie | May 9, 2012 - 6:00 am | Financial Blog, Round-Ups
2 Comments

blog round up Blog Round UpToday I’ve rounded up some of my favourite blog posts that I’ve read in recent weeks. I hope that you guys will enjoy them as much as I did…

• Golden financial nuggets wrote a post reminding us of how important it is to start saving early & the amazing powers of compound interest.

• Finance Fox talked about ten signs that indicate you may need help with money.

• Work Save Live detailed the importance of knowing how much money you’ll need in order to retire, and then you can calculate how much you need to save each year.

• My Personal Finance Journey questions the high cost of some weddings… and wants to know if a wedding is worth the down payment on a house?

• Yes I am cheap reveals that Spirit airlines plans to charge $100 for carry on baggage

• Out of Debt again shares four easy ways to cut spending… and save money.

• Thousandaire reveals a sad truth – just because you make money doesn’t mean you know what to do with it.

• Money Crush wants to know how you handle unexpected expenses.

The Good, the Bad, and the Fugly

  By Nick | May 7, 2012 - 6:00 am | Investments, Personal Finances, Saving Money
3 Comments

Amid this slight downtown happening in the markets, I can’t help but think back on some of the good, the bad, and the downright fugly choices that I, and other investors, have made over the years.

The Good

Apple (AAPL-q).  In the Fall of 2007 we were looking to expand our portfolio into the technology sector and felt Apple and the “iHype” they were generating was something that could really catch on.  We purchased shares at $125 and have been amazed as the stock continues to climb up into the $600 range (however I do regret having sold some of those shares at $300!)

Apple stock value The Good, the Bad, and the FuglyEnbridge (ENB-t) is another success story for us.  We originally bought shares in June of 2006 at $17.75 a piece.  This resilient company has enduredEnbridge Logo1 The Good, the Bad, and the Fugly the decline of natural gas prices for the past five plus years and has still managed to increase the share price by over 115%, as well as double their dividend.

The Bad

Smuckers (delisted JAM.UN-t). We bought some of the delicious jam makers’ shares in 2006, a day before they were to release quarterly earnings.  I felt many signals were pointing to a distribution increase, and even if there wasn’t one, the current distribution was generous.  Instead, that quarterly report was used to announce the significant cutting of the monthly distributions. During the first three hours that we owned shares the price dropped by 30%

Fonterra Environmental (delisted FTE-v), a small producer of compost fertilizer ‘diecasts’, as they called them, was a penny stock I was willing to take a chance on at 4.5 cents.  It wasn’t a lot of money, but I believed that, if successful, there was big opportunity for a profit.  Oh, how wrong I was.  We held on for a rather wild ride, but  had to cut our losses when the stock was flipping back and forth between one and one and half cents a share.

A Missed Opportunity

The one that got away – In July of 2005 I hummed and hawed over Nutrisystem Inc (NTRI-q) which was around $16/share, but had gone up a fair amount in the prior year, and Essex Corporation which was $20/share and slowly climbing.  I decided to buy Essex Corporation (delisted KEYW-q).  We held Essex for two years, until it was bought by Northrop Grumman for $24/share, which wasn’t a horrible return (20%); however, when compared to the over 400% return posted by Nutrisystem during the same time-frame, I can’t help but think what could have been.

Warren Buffet Picture 150x150 The Good, the Bad, and the FuglyBut hey, we all make ‘mistakes’, or as some prefer to say ‘miscalculations’, or more politely, ‘misjudgments’.  Even the most world-renowned investor, Warren Buffett, has confessed to making some ‘errors’.  In 1993, Buffett bought a small shoe company called Dexter Shoes. Buffett’s investment soon turned into a disaster when, according to Buffett “What I had assessed as durable competitive advantage vanished within a few years.” Buffett claims that this investment was the worst he has ever made, resulting in a loss to shareholders of $3.5 billion.

The Fugly

Although we haven’t made any catastrophic errors as of yet, the possibility always remains.  Even those companies we feel are a safe bet to make us money can turn drastically bad quite quickly.  American investors don’t Enron stock scandal 300x259 The Good, the Bad, and the Fuglyhave to look much further than the Enron scandal.  Thousands of investors, especially employees, were victims of Enron.  It is estimated that shareholders lost nearly $11 billion when Enron’s stock price, which hit a high of US$90 per share in mid-2000, plummeted to less than $1 by the end of November 2001.

And most Canadians will be able to recall Nortel Networks and even Bre-X in their not too distant memories.  Both companies had quick descents of 99% in share price before filing for bankruptcy.  One Bre-X shareholder, an experienced stock broker named George Diekmeyer, lost his life savings of $800,000, when he personally was invested in the company.  In total, investors lost more than $6 billion from the Bre-X scandal.

These are friendly, and sometime unfriendly, reminders that the stock market is predictably… unpredictable.  The key is to learn from your mistakes, and try to apply that knowledge the next time you need to make an investment decision.

What are some of your best and worst investment decisions?

The Duggar Family Finances

  By Julie | May 5, 2012 - 6:00 am | Personal Finances, Soapbox Response
3 Comments

You’ve all heard of the Duggar family, right?  That huge family from Arkansas featured on the TLC reality show…19 Kids and Counting.  What a lot of people don’t know is that the Duggar’s have some excellent personal finance rules – in fact, they could teach us all a lesson or two.

Duggar family photo The Duggar Family Finances

The fact is, Jim Bob and Michelle Duggar have managed to support nineteen children… all while living debt free.  It appears that the Duggars have a lot more to teach us aside from how to raise a ton of children.  This couple managed to set themselves up for financial success very early on in life (well before their TV show was aired).

How did they do it??

Jim Bob and Michelle married at the age of 19 & 17, and neither one attended post secondary education.  They started off buying and selling used cars – which Jim Bob repaired himself.  After that they launched a towing company.  In 1994 they sold their towing company and invested in real estate – renting out commercial buildings and leasing land for a cell phone transmission tower.

The Duggar family has many financial “rules” to live by – these were detailed on Shine from Yahoo Canada.

1. Get out of debt. Jim Bob & Michelle live 100% debt free – in fact, the Duggars don’t even use credit cards.paid stamp 150x150 The Duggar Family Finances (more…)

Canada Eliminates the Penny

  By Julie | May 3, 2012 - 6:00 am | In The News, Personal Finances
4 Comments

The Government of Canada recently announced that the Canadian Mint will stop produpile of pennies 300x108 Canada Eliminates the Pennycing pennies this coming fall, and banks will begin to take them out of circulation.

The truth is, one single red cent costs us 1.6 cents to produce! Although it pales in comparison to the 2.4 cents it costs our American neighbours.  In the past (when people actually paid with cash), pennies were often used… and, being a coin (rather than a bill), they lasted a long time.

However, with cash rarely being used nowadays, most pennies end up being collected in a jar, a drawer, a glove box, or are simply lost/discarded.  I kid you not, I once witnessed a young man walk out of a store, holding a handful of change, picking out each and every penny – and tossing them on the ground.  I was shocked!  Apparently these pennies were so worthless to him that couldn’t even bother holding on to them – in fact; he made an effort to get rid of them!  (more…)

April 2012 Financial Update

  By Julie | May 1, 2012 - 6:00 am | Monthly Financial Update
3 Comments

I’m sad to report that in April we made very little progress towards our goal of Freedom 48.  With a couple of big annual expenses due this month – the hope of growing our savings was dashed!

Here’s the low down on our finances for April 2012…

April2012 1 300x124 April 2012 Financial UpdateOur daily bank account is used for all of our regular living expenses.  Two mortgages, Condo fees, Hydro, Gas, Water, Cable, Internet, Vehicle gas, Credit card bills and Cash all come out of this account.

April2012 2 300x140 April 2012 Financial UpdateIn April we unfortunately had to deal with paying our income taxes and along with our vehicle insurance (we pay an annual lump sum).  Those two expenses combined wiped out all but $239 of the “savings” we’d deposited into our savings account.  Needless to say – it wasn’t a fun month in our finance department! (more…)