Auto garage review: Gary's Automotive, 36 Edgewater Drive Kanata, ON

I've decided that I have to start trying new garages in order to find one that fits my personality and my wishes. The first I tried, Gary's Automotive, is about 3 blocks away from my work, so I called them up and brought my car in for an oil change and an inspection as I knew I had at least some brake work to be done.

Gary's did the oil change and inspection over the course of the afternoon. They are very thorough, which I liked a lot. They also emailed me the detailed estimate, which was nice. The estimate came to $2600, which isn't really their fault (most of the work needs to be done), but was a bit higher than my liking. They are very careful, professional, and I bet they do quality work... but I wouldn't know.

Two days later I decided that out of that estimate I needed one item done immediately. I called Gary's in the morning and was told "no problem, bring it in at lunch". When I brought it in at lunch and told the guy I only wanted this one item done all of a sudden the story changed: they were now too busy to service my car today and I should come in tomorrow.

I do not take kindly to people who I'm paying for a service trying to put me into a dependent situation like this. I'm not going to wait for your shop until you have time to spare for me. If you're busy, that's fine, it's a sign of a good shop. But if you tell me you're free to work on my car this afternoon when I talk to you on the phone, you better set an appointment for me so you don't waste my time while I'm trying to pay you money to do your job. What's wrong? You don't like being paid to work on cars? Because I was going to pay you money to work on cars.

Thankfully the garage next door is happy to do so. See ya.

Car Insurance

The day you turn 25, be sure to call your car insurance provider. If you haven't had an accident yet, you are eligible for a better ranking that is only available to those older than 25.

As well, if you pay your car insurance monthly, you are actually paying interest on a loan to your insurance company. I bet they didn't tell you that, did they? Just another example of an additional cost of not having enough money.

Anyways, the numbers:
before: $1200/year broken into monthly payments
new policy: $880 paid annually
Savings: $320/year!

$2000 is the new $0

Back in my f1rst p0st one of my goals was to remove my $8.95/mo. fee TD bank charges me if my balance dips below $2000. That 8.95$/month is $107.40 a year - ridiculous! That's 5% on $2000! Having paid off all debts I am now keeping this balance at all times in order to not pay my bank a cent in fees. They already get the interest of the money in my chequing account!

Next up on the fees target is my car insurance. I currently pay it monthly instead of in advance. I'm not sure what this is costing me but ill be sure to post when I figure it out.

My sister told me that she and her husband accumulated over $300 in President's Choice points by using their PC Mastercard for all their purchases. That sounds like a great plan! Pay it off at the end of the month and earn free groceries. Awesome! For that, I think it's safe to say good-bye TD Visa!

Hot to Trot: When not to buy a house

So with no debt and a bit of money in the bank, my girlfriend and I got excited with the prospect of owning a house. Our logic was that putting money into a property instead of into rent was always the better choice. We were booked to go see some houses and were about to drop serious money onto a house when my Dad presented some logic that was irrefutable to me.

Annual interest on $270000 mortgage at 5%: $13500
Current rent: $1200x12 = $14400
Additional bills with house ownership: $3000(taxes) + $600(water) = $3600.
Total relevant annual expended money with house ownership: $17100
(left out other bills as we have to pay them regardless of ownership or not)

In other words, we're calculating how much money we pay in either living situation that does not accumulate into net worth. The logic of "paying rent is wasted money" is true, but so is "paying interest to the bank and taxes to the city". At a $270000 mortgage, you're actually spending an extra $2700 annually that does not accumulate into your net worth.

At what mortgage amount would I be saving money VS renting at $1200/month?

Good question. You start saving money at the point where (total yearly expenditure of owning) = (total rent). Let's assume taxes+heat totals $4000/year. Expanding above we get:

(interest) + (taxes and heat) = (rent)
(interest) + ($4000) = $14400
interest = $10400

So as long as your interest is less than $10,400 a year it is worth it for you to buy a house. At 5% this is a $208000 mortgage. At 7% this is a $148,571 mortgage.

Additional savings while renting
We did not address another big difference between a huge debt load (while mortgaging a home) and money in the bank (while renting): Accumulated interest on your savings. Investing that down payment (safely) helps it grow and is a benefit you will not see for a long time once you do take the plunge.

The last factor we might want to weigh in this decision is the current market. While it's true over time that house prices will appreciate, the current economic situation is unstable enough that it's quite possible that house prices will fall, in which case we're much better off renting until our dreams are affordable :)

How to quit your cell contract without paying your ETF (Early Termination Fee)

I've had a Rogers cellphone for the last year and a half. We're switching to minimal Pay as you Go cells and got a landline through our ISP Teksavvy (who I cannot say enough nice things about. They are amazing!)

So I had to cancel my cell. While I am halfway through my 3 year contract, Rogers still wanted $360 for me to cancel. I almost paid it then reconsidered, and put an ad up on usedottawa.com and craigslist. From the perspective of a person looking for a cell contract, by taking over my contract they get the phone for free and that's a year and a half less they are in their contract for. Saved me a ton of money! So it's a win-win for everyone involved.. except Rogers who doesn't get my $360 and an extra year and a half locked in on someone else.

As far as I know this is the only way I know to get rid of your phone without paying the early termination fee.

Cash Budgeting: 2 weeks in

We've completed our first cash-budgeted pay period and have learnt quite a bit!

Pros:
- Instant feedback. This is much better than card-based budgeting because personally, I find my bank's statements to always be back a few days, some vendors seem to get registered late, weekend purchases get processed seemingly on the monday, etc.
- More meaningful. Watching the mone leave your wallet and be replaced with coins and fives gives a much more realistic view on how much you have spent compared to signing your name at the bottom of a sheet.

Cons:
- A single budget isn't very realistic or fun. Saying things like "we could go for a beer but then we'd be out of budget for food" is depressing. I think I'm going to modify my plan by having a $200 monthly budget for fun that gets banked seperately than the day-to-day. It's my intent to also use that $200 for saving up for trips.
- A little dangerous.. I don't suggest you walk around all the time with all your money in your pockets. For a forgetful person such as myself it's a little sketchy!

Cash-based budgeting

So despite having cleared all of my debt I am not saving money at a rate I feel I could. My biggest issue with wesabe and the like is that while it is very very informative, it is all post-purchase analysis - IE I've already spent the money. I want to try a more proactive approach that will keep my purchases in line.

I find more often than not it is very hard to mentally add up purchases that I make over a 2 week period. If you asked me how much I spent in the last 2 weeks I would tell you a number that would be off probably by almost half. I just can't do it. I think my issue is that when I spend $30 three times in my head that adds up to "not much, oh... 50$ or so" not the near $100 it really cost. So I end up without any concept of "reduce spending this week since last week was over budget". It doesn't help that my bank account statements online are about a week too slow, so i make any financial decision on those values based on old information.

Anyways, whatever the reason for my math failures, I'm going to try a pure cash based budgeting approach. I get $450 every 2 weeks to spend on everything. That works out to me putting about $1000 in the bank every month. If I can spend less than that, that's great, my girlfriend and I get to go out or buy something we want.. but if it's a week in and we've got $100 and that's it we'd better save for some groceries!!