Tag Archives: budgets

Trying to Pay for All Our Expenses Using Dividend, Distribution and Return of Capital Income Only

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Each year, I track our expenses as the bills come in and get paid. At the end of the year, I add it all up and start comparing to previous years. I’m curious about my personal rate of inflation. I’m also looking for interesting trends like the long-term drop in the price of natural gas which could lull me into a false sense of security about being able to meet that need in the future. And, recently, I’ve started looking at the numbers to see if it would be possible to pay for our expenses using only the income from our investments such as our dividends, distributions and, in the case of REITs, our return of capital.

What I Found Doing the Review of Our 2014 Expenses

Well, it looks like we have not had any leaking toilets or taps during the first three quarters of 2014. Our water consumption has stayed the same. (We don’t water lawns or gardens in the summer, by the way. Planting perennials that are suited to the climate here has paid off; and I hate grass and prefer it to go dormant so I don’t have to mow it as often.)

We won’t know if we “sprung a leak” since December, though, until the next quarterly bill arrives. (It’s too cold to try to read the meter and I can’t be bothered. You can remind me I stupidly said that if I ever get one of those $1000 water bills….)

The drop in the price of gasoline is too recent to show a big impact on our annual gasoline spending. The price of gas was so high in the early part of the year, though, that we spent about the same as if we’d made a road trip to the Maritimes from Ontario this year, even though we didn’t. Good thing this was the “stay home” year!

We have GOT to do something, almost anything, about our internet bill!

I can continue to ridicule the government when they tell me how they have forced the insurance companies to reduce my home and auto insurance rates. (Although neither rate has gone up much either.)

How Does Our Investment Income Match Up to Our Expenses?

Mark at My Own Advisor was playing this game and reminded me to try a hand.

Simple Bills to Budget For

Ok, we’d have no trouble paying for

  • Water
  • Telephone
  • Internet
  • House insurance
  • Hydro
  • Natural gas and
  • Property taxes

From our investment income.

Car Expenses to Budget For

I separated out our auto-related expenses before starting the game. And I’m glad I did.

Wow! Who knew how fast those add up? (Ok, Mr. Money Mustache does and he talks about it ALL the time.)

The costs include

  • CAA
  • Driver’s licenses
  • License plates
  • Car insurance (why does it cost the same to ensure a ’98 Corolla as a ’12 Camry?)
  • Gasoline
  • Car repairs and maintenance
  • Saving for the next cars

Somewhere down that list is where we ran out of income before we ran out of expenses.

Harder to Estimate Expenses to Budget For

Which is too bad, because the expense list continued with:

  • Dental (no coverage in retirement)
  • Eye care (almost no coverage now or in retirement)
  • Drugs and health (does your doctor tell you the only way to prevent colon cancer is psyllium fibre at $20 a bottle even though you’ve never been constipated in your life?)
  • Food and housekeeping
  • Clothes and dry cleaning
  • Gifts, hobbies, entertainment
  • Charity
  • Pre-saving for home repair and maintenance costs

And probably a few dozen other costs I forgot to include. (I know our overall annual spending so I don’t usually bother to parse it out into categories.)

Yet if we ditched the cars (not literally) we’d be quite a ways down that list. So I guess if we plan to retire early, we may have to plan on reducing our stable of vehicles, or on increasing our retirement income. (There’s no trouble meeting all of these costs if we include CPP, OAS and a few other bits and pieces that we don’t get access to until 65+.)

Anyone want to buy a ’98 Corolla? It comes with a free (partial) can of Tremclad.

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Is your investment income enough to cover your expenses? Or do you expect to have to use the capital? Please share your strategy with a comment.

Fighting the Urge to Shop Too Much

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This is a typical holiday for me: I have enough, probably more than enough, to give to everyone I will spend time with over the next week. I have a fridge that is well loaded with food and extra fruits and vegetables in a cool storage area. Yet here it is the day before the stores shut for at most two days and I am wrestling with a compulsion to go out and buy more.

Resisting the Urge to Grocery Shop On the Busiest Morning of the Grocery Year

Buy fresh mushrooms and fresh strawberries and fresher sesame and poppy seeds! A voice inside commands me. Or maybe blue cheese. Or a different flavour of vinegar. Your salad will be too normal without them.

Trying to calm my frantic brain, I flip through several online recipes. It’s obvious I can make a lovely salad using ingredients I have at hand. Still a little voice keeps piping up and saying “Yes, but not as good as….”

Fighting the Need for Another Small Gift Before the Malls Close

I don’t actually shop at Malls much for Christmas. Yet today, when they will likely close before 2 p.m. I find myself thinking things like: they have that little jewelry boutique and that handmade chocolate store. Go get another ring for that relative and a box of hand dipped orange cremes for that aficionado. Apparently the broach and stirred-with-love raspberry fudge I already have are just not good enough.

How I Beat the Need to Shop

I hate to admit it but the weather is the real reason I can defeat these little shopaholic voices. It’s very foggy out right now and obviously dangerous to drive. Having a dead mother or even just a severely injured one is not really what my kids want for Christmas. (Some other days when I’m forcing them to walk to school through a blizzard that may be another matter.)

So instead, I’ll just go frantic at home. I’ll pore over recipes and make the oddest salad possible. I’ll bake another kind of squares even though we have a half-dozen already. (Yes, but apricot squares with lemon icing are that person’s fave!)  I’ll probably even edit a few dozen photos into collages in Photoshop and send off another calendar to print before the New Year (after all, if you haven’t rendezvous’d with your loved ones yet, you don’t have to have all of their presents ready by Christmas!)

Still, it will be better than dodging through crowded parking lots and reading War and Peace including the annotations before getting to the front of the check out line.
It probably won’t hurt my finances any to stop spending either.

If you suffer from shopping-inducing voices, I wish you calm and quiet and an end to the stores. May you be able to look with love on those around you and realize everyone already has enough.

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Do you find that even after you have your list checked off you feel a nagging sense that something’s missing? How do you resist the compulsion to over-shop? Please share your experiences with a comment.