Late last week the weather finally gave me a chance to do a quick grocery run before meeting a client for lunch. On my list at the warehouse store were the big containers of cashews for my husband. I was astounded to see that the price had gone up again to one penny less than $25. I had started buying them at $19. I didn’t have a lot of time to ruminate, but I decided my husband will have to pick another favorite nut. (He hates spending money even on himself).
I then headed over to the nearby housewares and clothing store to find my favorite chips that are only sold there. I lucked in because the store also had the breadboard I had wanted for a while. Trouble is there was a very long line at the cash. I waited impatiently while they kept calling for more cashiers. No one showed up, and I was weighing how much I really wanted those 2 items, versus speeding over to my lunch date and being stressed out when I got there. In the end I decided they were not worth keeping my client waiting. With only a few regrets I abandoned the slow moving line.
Statistics Canada recently released the numbers for 2015 on how Canadians spend their money on goods and services.
The average for the country was $60,000 and change. More surprising was that Western Canadians spend more with Alberta leading the way at $76,535. This was reported in the news, and even my dad remarked upon that number. He was very surprised that spending could be so high. Of course the question is: How much does an individual or family have to EARN to SPEND that amount?
It is always a worthwhile exercise to see where you spend your money. And that exercise can be an eye opener. Statistics Canada noted that housing was 29% of that total with transportation costs next at 19% and then food at 14%. Again Albertans were the highest spenders in the food category.
Statistics Canada also reported on medical and communication costs. Not surprisingly seniors spent the most on health care.
When you add up the percentages of the categories that were reported on, it comes to approximately 70%. Therefore 30% of spending(like the breadboard and chips) does not fall into the above categories. Also spending on goods and services does not include taxes, pension contributions, life and EI premiums, and donations.
Some of my clients do very well at tracking their spending, for example by using spreadsheets. If you feel the task too be insurmountable consider the following:
Instead of tackling your budget as a whole why not focus on one category? For example one month you bring your lunch to work 90% of the days and eat out only 10%. Or stop buying a coffee on the way to work.
Other categories that could be examined are subscription costs such as Netflix, or the gym. Bank fees are another sore spot. All these are items that clients have mentioned to me.
Statistics Canada also reported that spending increased 2.5% in a year. That coupled with the increased medical costs for seniors tells you why you must strive for financial independence when you stop working.
Future blog posts will discuss risk mitigation and the definitions of ‘retirement’.
http://www.statcan.gc.ca/daily-quotidien/170127/dq170127a-eng.htm