8 things I’ve discovered about money

In recent discussions with some folks and to play off Preet Banerjee’s blog name (where does all our money go) I was reflecting on some things I’ve discovered about spending and money – here they are.

  1. Owning a house is expensive

Heat, hydro, maintenance and property taxes are just a few housing costs.  The bigger the house, the more money it costs to own it.  Let’s not forget the mortgage either.  I figure the sooner my wife and I are debt-free the better.

  1. Paying yourself first is crucial to retirement planning

Our retirement plan would be nothing without creating a habit of paying ourselves first.  Setting up a pre-authorized monthly payment plan to fund our Registered Retirement Savings Plans (RRSPs) has been a crucial step for us.  I only hope we can keep up this saving discipline for another 10-15 years as we work towards an early retirement.

  1. There’s nothing wrong with saying “I can’t afford it”

I’ve spoken these words a few times and I’m always interested in the reactions I get when I do.  I think there’s nothing wrong with this statement yet for whatever reason I feel out of place when the words come out.

  1. Credit cards aren’t evil but they make spending money easier

We pay off our credit card bills every month but that doesn’t mean we’ve got 100% control on our spending.  It’s just too easy to pay for things with plastic and worry about it later, which we sometimes do.

  1. Don’t be afraid to ask for a deal

I’m guessing the majority of people can’t read minds.  So, if you want a deal on something, just ask, nicely.  You might be surprised how often this works.

  1. Owning a car for many years makes sense

I’ve learned that buying a car, borrowing lots of money to pay for a depreciating asset is a bad idea.  I think if you’re going to own a car, buy it/finance it ideally at 0% interest and then keep it for at least 10 years or longer if you can.  Otherwise, buying or leasing new cars every few years will be a wealth destroyer.  Buy a used car instead.

  1. Earning good money is hard work

I have nothing more to add.  Nothing comes easy.

  1. Nobody wants you to save

That’s partially true because the banks want you to save, only so the banks can lend out your money to other people willing pay for it as part of a loan.  The financial industry is largely rigged against you and I.  The reality is few people want you to save your money.  You’ll have to make that choice on your own.

I know there’s more to this list but those are starters.

What have you discovered about money?

48 Responses to "8 things I’ve discovered about money"

  1. The more I have money the more I want to keep it instead of giving it away. I have learned that if you want lots of money you first have to control your spending and then increase your streams coming in to build real wealth. I have also learned that those that really want to have money will work for it and those that just wish to be rich always complain and don’t do much about it except wish things were different.

    1. “I have also learned that those that really want to have money will work for it…” For sure Lance. I know a few successful entrepreneurs and they WORK for it. Nothing comes easy, at least over time. Thanks for the comment.

  2. This is a very true list. I am learning the hard way about purchasing a car. I just have to learn to live with the purchase, pay it off as soon as possible, and and learn from the lesson. I am getting better and better at saying I can’t afford it. It doesn’t always feel the greatest, but it has to be done.

    1. Hey PennyThots, I have lessons learned as well, many of them.

      On the topic of cars we own a 3-year old car, but our other car is almost 15-years old. Getting to be a rust bucket actually. Buying new cars are a wealth destroyer.

  3. Houses and cars can really take a chunk out of your take home pay. I wasted a lot of money on new cars in my twenties, but finally decided to drive 6-10 year old cars when I reached my thirties. That one decision alone has really helped me build wealth over the last ten years.


    1. Nice call Pipeline. To be honest, I think my wife and I spent too much on our current house but we’re aggressively killing the debt. Houses aren’t cheap.

      I hope to get another 10 years out of my current 3-year old car. The other car, well, I’ll drive it into the ground. 🙂

  4. Every one of those 8 points ring home for me. If everyone followed these rules, there would be quite a few more people at a better position to retire. But, reember, our economy requires spending and buying things we do not need to survive. Most companies sell products that we can do without. If we did not buy them, the company would not thrive and the employees would not be needed. All those new fangled gadgets also pay for lots of salaries for people who probably will never be able to afford the gadget they are making or selling. It is a viscious cycle, but our econmy requires spending and lots of it. At least that is how I see it.

    Keep cranking,

    Robert the DividendDreamer

    1. It is a cycle for sure…I’m not saying we stop spending money whatsoever…I just think I personally need to be more choosy about what I buy and when I buy it: only after money has funnelled to investments/after I have paid myself first. The money leftover I could spend on whatever I want, even stuff I don’t really need.

      Thanks for the comment Robert.

  5. Rather than “I can’t afford it”, becasue technically I can, I ask myself “Do I really NEED it?”
    I find myself shopping online and putting things into the “cart” and then waiting a few days. Nine times out of ten I cancel it as I don’t really need the stuff.

    I’m driving a 2003 PT Cruiser and a 2003 Silverado. These guys are going to get driven into the ground. Sure a newer vehicle would be nice, but do I need one? Not really.

    1. Fair point Lloyd. I have often found I buy stuff I don’t need. I’m getting better at this but still a LONG ways to go. I do like spending money now and again.

      I could likely afford a new car but that means I’m probably retiring at least 6 months later than planned.

  6. # 5 rings true for every one. If you do not ask for it you will pay top dollar. I was in Edmonton and had looked up where I could buy a specific pair of snowboard binders. The shop had them and although saving provincial sales tax in Alberta I asked for an additional savings of the GST as i had come all the way from Montreal to purchase from them. They gave it to me. Don’t be afraid to ask – politely – and plead poverty LOL

  7. Brilliant list!!

    Number 8 is most accurate! A financial advisor wants you to save so he/she makes more commission. It’s a win/win but the investor needs to keep this point on her/his mind.

    Thanks for sharing.

    1. I think most financial advisors are there to help, if they are compensated by selling their firm’s products only however, that’s a challenge and likely something to watch out for!

  8. Savers have been crushed in this current economic cycle. After inflation and taxes they’re actually going broke. Seniors are being forced to go out on the yield curve and take on more risk. Personally, I hate old used cars because I get sick and tired of calling CAA. I’ll have more on my experience buying vs leasing when I get my blog up and running. I have no idea why anyone would finance a car for 7 years. Makes no economic sense.
    My favorite is bargaining the price of all items – I never pay the sticker price, everything is negotiable as you will find out by asking “Can you do better’? if not walk away and take your business elsewhere. All good points Mark, well done!

    1. I actually dislike paying $70 for my CAA membership, but I think I have no choice now that my car is 14.5 years old! I hope I can make it last another 3 years. Our current 0% financing car payments are up then. We plan to keep the newer car (3 years old) for about 12 more years, give or take.

      I actually love asking for deals. Not sure why, but I really do. 🙂

      Thanks for your comments Peter. Looking forward to seeing what you write about.

          1. I use the TD Elite along with four auxilary cards. 1% cash back, roadside assistance for me and all auxillary cardholders, bunch of other stuff. We’ve used roadside assistance three times over five years complete with tows. Used the car rental insurance once for a keying in the parking lot. Haven’t had to use the extended warranty probram. Sure it costs but with all the farm purchases, the cash back more than pays for the fees by a lot.

          2. Nice Lloyd! We have a cash back credit card that gives us travel insurance and other travel perks as well. We figure with travel at least once per year, that keeps about $200 in our pocket, a bunch more than CAA costs.

  9. Excellent list Mark!

    I would tweek #2 into “Paying yourself first is crucial to retirement planning and be committed to leaving it alone until retirement.” Far, far too often, we see folks raiding their retirement savings for vacations, renovations and yes..the home buyers plan. A retirement savings plan (whether you choose the RRSP or TFSA route) is by definition, for your retirement! Taking money out of it early for any reason completely defeats the reason you started it.

    Love #6. I drive an 08 Accord with close to 200,000k on it. Works as well as the day I bought it with 70,000k on it. Why would I mess with that?

    Keep the great posts coming…

    1. Thanks Rob, I was curious on your take. Yes, point #2 could have easily been that – save, plant the seed, let it grow and don’t cut down the tree! I intend to use both TFSA and RRSP as retirement accounts.

      As for buying the used car and keeping it, you certainly seem to practice what you preach. I have lots of respect for chefs that eat their own cooking! Thanks for the comment.

  10. I couldn’t agree more. In regards to #5, I used to be afraid to ask for a discount or better price if you will. I’ve completely changed now, as I’m more concerned with my expenses. I routinely ask for a better deal, whether it is more TV, internet and even brokerage expenses. I’ve been flat out told no on occasion, but it’s surprising how many times I have received a better deal even if it is just for a temporary basis. Every dollar counts!

    1. I think that’s the thing…sometimes you are told flat out “no”, other times, when you ask nicely and politely it can be a “yes”. If you never ask they usually don’t offer! Thanks for the comment Special Agent.

  11. Another good list, as usual! #3 and #6 stuck out at me this time. #3 was really uncomfortable to say the first few times. I was worried people would judge me, and it was also a bit of a lie, because I could really afford it, but i wanted to save my money. But as my friends began to understand my way of thinking, it became a lot less of an issue. #6 reminds me of someone who started work at the same time I did. I drive an 8 year old SUV, and hope to ride it into the ground. This guy, after working there for the same time I have, already bought a brand new Audi SUV! Thing retails for like $45K! Like, why would you ever do that? You already owned a perfectly good car before that. Oh well, people just think differently about things, I guess.

    1. Yeah, #3 is a tough one to say. I still worry people judge me actually. My good friends know I’m honest when I say I can’t afford it and they respect my decision – which is great. I hope my 14.5 year-old Mazda will make it another 2-3 years!

  12. Another item you should for have for many years is a mattress. I started looking for a box spring and mattress and realized that they are a chunk of cash and you’re supposed to have yours for 8 years.

  13. I’m in the cars used, houses new camp, too. When looking for housing, price it out. How much is a lot alone? Add $10k per utility (heat, water, sewer); now pick a price per sq ft. Say $150 per sq ft x the size of your dream house. Add the wage for the general contractor and now you have a bare bones cost to construct. Now you can make an informed decision about the costs incurred to build, and how much it is selling for. The difference would be the price of amenities. Is it worth it to you?

  14. Hi Mark
    My parents never saved money until they were older, which always unnerved me! So I learned at a very young age, any money that come my way to save at least a small percentage of it. And now i am starting to grow a very sizeable nest egg. It is great advice all of it, I hope every one listens to it.


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