Saving Money – Part I

On the path to early retirement the single biggest challenge you will face is controlling your spending. I take it for granted how I handle things, so I thought it would be useful to share a few things that I found cut back on my spending.

Since this is a fairly large area to cover I’m going to break this up into sections. Part I is about cutting back on your utility bills.

Power Bill
-use CFL lights in the house and LED Christmas lights
-turn off that computer when you are done (NOT power save mode)
-unplug anything you are not using right now to reduce phantom loads (for example: if your coffee pot has a clock on it, it’s using power, so unplug it when it’s not being used)
-if it won’t drive you nuts, put all your TV, DVD players, VCR’s on power bars and turn them off when they are not being used
-when you have to replace a major appliance look at energy star models
-when the oven is heated up try to cook more than one thing
-if no one is in a room turn off the light (I’m currently treaching my son this one)

Water Bill
-use low flow shower heads (2.5 gpm or less) that allow you to turn off water while soaping up (this also saves on your natural gas if you use it for hot water)
-change your aerators on your faucets to low flow versions (1.5 gpm or less)
-consider getting a rain barrel to save on summer watering of plants
-water the lawn early in the morning to save on evaporation
-buy a front load washer (they use less water and your clothes are dryer coming out so use less power in the dryer)

Natural Gas
-get a programmable thermostat and turn down the heat over night. If you find it too cold use a a few extra blankets on the bed.
-If there is only one bedroom being slept in you might want to consider dropping your house temperature even further overnight and using a space heater for the one room.
-turn down your water heater (the idea is to have warm water not very hot)
-when you leave the house for a few hours turn down the thermostat while you are gone
-install weatherstripping around your doors and if you have old windows use that plastic sheets to stop drafts
-during the warmer months look at your attic hatch to see if it seals well and also check out the insulation in your attic if your less than R40 you might be able to make some serious savings if you upgrade it.

Well that is a few of my tips. If you have more, please leave a comment and share.

Interview with Larry MacDonald

Well today we are shifting gears a bit folks. We are leaving the world of ‘just bloggers’ and moving on to an author that happens to also be a blogger. Larry MacDonald is a former economist who now manages his own portfolio and writes on investment topics in books, magazines and his blog, Investment Ideas.

CD: You’ve written in books, magazines and your blog. What do you think blogs offer as a medium compared to other forms of writing?

LM: Blogs are a medium where you can develop a more personal relationship with readers compared to writing books and magazine articles. There is also a greater feeling of freedom in posting directly to your audience as opposed to submitting to an editor.

CD: I have to agree that bypassing an editor is nice, so what do you think your blog adds to the blog sphere?

LM: My blog offers the perspective of an economist who has knowledge of financial markets and over ten years of writing on investment topics. I also like to go beyond main stream media to get ideas and material that hopefully doesn’t repeat or rehash what the reader may already know.

CD: Out of your blog material, what is your favorite post on your blog?

LM: It’s hard to decide which post I like the best. Maybe it was the Jan.27, 2006 post-mortem on the last election entitled ‘Other Registered Parties in the Election.’ It illustrates how I try to add value by digging up material that can’t be found elsewhere yet is hopefully educational and/or entertaining.

CD: Now with all your writing work how many hours a week do you spend blogging as compared to your other writing?

LM: These days a lot of my time is spent looking after my two preschoolers. I write a couple hours in the morning before they wake up and during their nap in the afternoon, splitting my time about 50/50 between the blog and columns for Canadian Business Online and Investor’s Digest.

CD: Well Larry this has been an interesting interview, but to finish off I wanted to ask you when do you want to retire and what do you see yourself doing in retirement?

LM: I left my job as a government economist in 1999 to do what I wanted to do, which was to write books/columns, manage my own portfolio, and spend time with kids. I look on myself as retired already in the sense that I’m doing things I would choose to do in retirement.

CD: Thanks again for your time Larry and congratulations on being semi-retired and loving it. Tomorrow I turn the interview questions on myself, so if you have a question please feel free to leave a comment or send me an email.

Interview with Canadian Financial Stuff

Welcome back everyone from our commercial break (aka: the links to your right). Our next interview is with the Big Cajun Man of Canadian Financial Stuff. His posts are often packed full of humor and entertaining rants and I recently had a chat with him.

CD: In the personal finance blog world, you’ve been called quirky, interesting or down right eccentric. What do you see yourself as adding to the blog sphere?

BCM: Humor, a different point of view, and a small ‘c’ conservative point of view. I am not trying to tell anyone how to live, and they should really not be following my advice as “gospel” more as a guide towards what has worked and NOT worked for someone. That is the best way to view the blog sphere, as a giant water cooler where folks come and tell you stories and give you FREE advice, and you then go back, think about it, and decide whether you think it is something that makes sense to you or not.

CD: A giant water cooler that’s a good way of putting it. So what do you love about blogging?

BCM: Writing. I am not a very good writer, but I am not a bad storyteller, and I just enjoy telling stories, and vomiting my point of view on anyone who cares to read about it. Sometimes it feels like I can see the people I am talking to, and a lot of times, I am mostly looking in the mirror trying to tell myself what to do about things, that is why it is pretty easy to write, but really hard to read.

CD: Storytelling can be a lot of fun, but also a lot of work, so how many hours a week do you spend blogging?

BCM: About 7 hours a week or so (an hour a day or so). Sometimes I get ahead of myself, and will have a few topics already queued up, but usually it is a spur of the moment decision of what I am going to babble about that day. I have a family blog as well, which I tend to update at the same time.

CD: Seven hours a week isn’t that bad, but do you find the entire work/home/blog balance difficult to keep?

BCM: Right now, it’s not very hard, but my wife sometimes ask why I keep doing the blog, given the amount of time I spend on it, and how little I make doing it

CD: That kind of begs the question, what do you hate about blogging?

BCM: The technical aspects are a pain the butt. I know too much of how this whole thing works, and I wish it was easier to publish things, and figure out how to get folks to find you. I have spent two years trying to get a readership, but it is still quite small for now. Sometimes finding topics is a little hard too, but I have a large enough network now of different sites I can usually get 1 or 2 postings out a day.

CD: So moving along to my favorite question, when do you want to retire and how much do you think you need to do it?

BCM: I want to retire NOW, given I am 46, yet I know that it is unlikely that I will ever “retire”, because I have many different things that I do, that I can’t see myself stop doing. I hope to finish with my current occupation in about 15 years, if I can arrange my finances the right way, but I also have a 2 year old son, so it isn’t likely that I can do this either, given how much kids cost as well. Unless I find a huge influx of money, I will work until I can’t any more. There is a long list of things I would do if $4 Million appeared out of nowhere (this is about what I figured I’d need to stop doing my job), most of them to do with the community and sports, I’d stay very busy.

CD: So the retirement question reminds me that the Canadian government allowed pension income splitting recent and before that was announced there was also talk of income splitting for working couples. What are your thoughts on system that would finally balance large income gaps between spouses?

BCM: I make infinitely more than my spouse, in mathematical terms (she has no income right now), and I am taxed severely for this. My wife is worth about $1500 in tax rebates, and that is about it. If she and I could split my income or create a household income, I’d save over $10,000 in taxes collected from me, which astounds me. I never thought I’d be paying this much in taxes, and I pay more now in taxes than I earned (gross) my first year of working full time (by a lot). The Canadian Tax system favors dual income families who put their kids in day care, that is the bottom line, and it frustrates me that the government refuses to admit this is the case. What would happen if there was a household income, is a very good question. Maybe a lot of folks who are working, who don’t want to might find a way not to have to do that? Maybe not, I am not sure.

CD: I’m completely agree that the system does favor dual income earners. I personally get piss off over people that swear that their kids are the most important things in their lives, but then bitch about the costs of daycare. Ok, I’m getting sidetracked into a rant. I’ll save that one for another day. See you tomorrow folks when I’ll have an interview with Larry MacDonald.

A blog about early retirement and happiness