When it comes to money and finance, everyone seems to be an expert or have that one piece of advice that they think is the secret sauce. Don’t get me wrong, there will always be things that are priceless and timeless when it comes to advice being passed from generations. Good manners and respect are examples of just a few. But when it comes to understanding and managing your money in 2020, not all advice is good advice. So here is some adviced that we should be sharing in 2020.
#1 Financial literacy is always a good investment - especially when it comes to money and finances. But as we have recently seen, cash is no longer king even know it should be! But let’s be honest, paper money is pretty icky if you really think about it. When it comes to how we earn, handle and move money things have really changed over the years. The old school piggy bank is now a debit card and allowance is now e-transferred right to your phone. Even the strategies on how we save, invest and purchase real estate have drastically changed, or at least they need to. As an example in 1980, the average household income in Alberta was about $55,000 a year. The average home price was about $80,000. In 2018, the average household income had only risen to $72,000 but house prices had risen to $372,000. What’s the point? Well, that old story that you should rent and save until you can pay cash or put 50% down on a house might be like the old school piggy bank. Between, the change in housing markets, interest rates, investment options, technology, taxes and longer life expectancy, financial literacy, coaching and professional advice is no longer a luxury, but probably the best investment in your future and life you can make or give to someone.
#2 Find your passion - your career passion. As I mentioned, education is important, but things have changed and there are many ways to get an education now that can create wealth which don’t always include going to university for 4 years, just to come out with a general degree, student loans and a job you hate. With remote work, the internet, technology, online classes and a new value for actual working skills and creativity like never before, the sky is endless for anyone wanting to hustle. But probably the most notable point here is that people are living healthy active lives much longer than in previous generations. And with the advancement in technology and healthcare, this will probably be a trend that continues. Getting a job, slugging away for 35 years to retire with a pension at 55-60 is no longer a reality or even a goal for most people. Pensions are going by the wayside and so is doing a job you hate just because it pays well or is stable. Work-life balance, doing what you love and working long into the typical retirement years is something that appeals to a lot of people - including me. The rush to stop working and pressure to give up living today to have a huge nest egg that you may not ever enjoy, comes at a cost that a lot of people realize, may not be worth it. Even just working part-time in retirement gives people so many more opportunities and options for their financial plan today and in the future. When you do what you love, it no longer feels so much like work and allows people to find their passion and grow their wealth at the same time.
#3 Invest in your strengths - not your weaknesses. When you focus on your strengths, you are much happier and productive, which in turn can result in higher income. This is also true when it comes to money and finance. If you are trying to save money investing in the stock market and you don’t have a solid growth plan, its costing you. If you struggle to balance your budget and are paying late fees, it’s costing you. If you are paying credit card interest and don’t have a financial strategy in place, it’s costing you. Most people don’t know their strengths and weaknesses and just keep doing the same thing over and over hoping for a different result. Yep - the definition of insanity. Figure out what you know, admit what you don’t and get help when you need it.
Oh, and remember, contrary to what social media says - everyone does not have it all together, they are not all living the dream, and there is no secret sauce!
Cheap Jo -living my passion, working my strengths and still searching for a secret sauce!
I don't know about you, but it feels to me like my summer is cancelled. I know that's an exaggeration, but it's been a long, cold winter, and summer's my time to shine. From the tall green grass to the sandy beaches, summer is calling. How do you answer the call when you can't fly, and going out of the province is not a safe option? My vote, bring back the road trip. Packing the kids into a car and driving for hours seems like a cruel and unnecessary form of torture for some parents. For a lot of others, the family road trip seems like a thing of the past generations.
We have become a destination culture, where life doesn't start until we've arrived. You hear people say things like I can't wait to retire, or I will do that once I have made it. I am often surprised about how cranky people can be about flying to their vacation destination. For us, vacation starts the minute we leave work. We enjoy the journey as much as the destination and sometimes even more! But what if we all began to think more like a journey culture? If we took some time to stop and smell the roses a little. Maybe even enjoy life before you retire or make it - whatever that means nowadays. What if this was the year of your journey vacation, and you spent time on a family road trip going - well, nowhere? After ten years and tens of thousands on KM on road trips, these are my top 3 tips to make it a memorable yet cheap family vacation.
Regardless if your trip is a success or a wild adventure, a family road trip will leave you with memories, that I can promise. Hopefully, if nothing else, everyone will gain a newfound appreciation for the journey and not just the destination.
See you on the road - Cheapo Jo
Jodie L. Stauffer, CFP®
Recently, I spent some time thinking about where I want to spend my non-essential dollars as we prepare for businesses to slowly reopen. The fact is, some of those forced to close, will never
re-open. Those that do open, face a tough 6-18 months ahead. Many of those still may not survive under the new social distancing rules without pricing increases and extreme customer loyalty.. But what if we could help them, even just a little?
Over the last few weeks, I’ve seen many people flocking to large box stores that sell both grocery and retail items. Even the big box home renovation stores are overflowing with cars in their parking lots. I understand that we need food, that contractors continue to work and maintenance still needs to be handled. And, if these stores were only selling essential items I could understand why they would be allowed to remain open But, how can clothing, patio furniture and new BBQs be essential at one place and non essential at another? Should selling groceries or lumber give you preferred treatment to also sell all your non essential items at a time when others are forced to close. This seems like a bit of a catch 22 for those smaller businesses that sell those same non-essential items, but don’t sell groceries.
You have to wonder why the big box stores get to thrive with no local competition while small businesses continue to suffer? How does it make sense to allow people to shop with hundreds of others in a big box store for non-essential items, while I can’t go to my local clothing boutique with only a few people? As a small business owner myself, I truly feel for small retailers that were already competing with the big box stores on price and selection prior to this lock down. By allowing large retailers to sell non-essential items while requiring the small retailers to close, the government has made it even harder for them to survive. The fact that this decision was forced on small businesses without even giving them the opportunity to pivot to a model that could support social distancing rules, makes this even more questionable.
I will be the first person to admit that over the years, I haven't always been conscious of buying Canadian or shopping local. Searching for a good deal and buying only exactly what I want is part of my cheap by choice strategy.. But, thanks to this pandemic I’ve had a lot of time to rethink parts of this strategy and our impact on the future economy.. When put into context, paying a little more to help small businesses survive seems like money well spent. If by passing on a big box sale to buy local or buying Canadian products saves just one person's job, then that's a deal even I can't pass up!
Cheapo Jo - patiently waiting to shop local and buy Canadian!
Jodie Stauffer, CFP is a wife, mother and Certified Financial Planner. "Being CHEAP has always been in my DNA. But let me tell you, juggling my business, household finances, financial goals with the needs or more accurately WANTS of my daughters, while staying on a budget has not always been smooth sailing." Cheap by Choice is about finding what's