As many of you know, at the end of the month I’m moving to Brisbane, Australia, to live with my fiancee. Any Australians in the crowd likely know that interest rates in Australia are much higher than here (around 7% I believe) and most of the country also happens to be in a housing boom.

My fiancee’s lease expires at the end of June, and we’ve decided to move into something a little bit bigger with my arrival at that time. We’ve already started looking at places to rent which are currently available and one of the major things I’ve noticed is that a number of places will list the weekly price and in the description write “price to increase x number of dollars in July 2008″. This is incredibly frustrating, but so normal in the area. My fiancee’s rent went up $15/week recently, and he’s far from the only one.

I just find it horribly annoying that places are advertising the lower price then have listed that they’re increasing the rent $20-$30 in the next couple of months.

Apart from this rant, however, I will add in a lesson about renting: always search early. We are currently looking not only to see what’s generally on the market at the price we’re looking for, but also to pick out a few potential places we like. When we find one of these, we bookmark them. In a month or so, when we’re seriously ready to find a new place, we’ll be going back to these saved properties: if any are still on the market, our options for negotiation are much better. Even though the market is booming there is still a vacancy rate and some very nice places are in less desirable locations (such as near a major road) may not be filled. Since the owners want to be paid as soon as possible, if the place has been on the market for a while, they may accept a $20-$30/week discount in exchange for us moving in immediately. A $30 per week discount would save us $1500 on the year.

While it’s not always possible to know when you’ll be moving, if you do know and you’re looking to rent elsewhere, you should always look ahead of time in the hopes of finding a property that won’t be taken. It can save you a fair chunk of money every year! It’s tougher in markets like Brisbane’s, with a very high occupancy rate and virtually impossible in Vancouver, but there are a number of areas where searching ahead and then getting a discount is very feasible.

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This is without a doubt going to be one of those “preach what I don’t practice” posts, because I’m absolutely horrible at keeping receipts and just record keeping in general. So this post is not only to help you, but it’s to help me get my organizational skills in shape as well. It’s a well-known fact that we’re supposed to hang on to our receipts and other financial information, but for how long, exactly? And what’s the most efficient way to store these receipts?

First, we need to figure out how long to keep all sorts of records for. Feel free to adjust these figures for your own personal circumstances (though I would make sure that you’re keeping the tax and tax-related forms for at least as long as I recommend).

Keep for a month: ATM receipts, bank receipts, general small non-warranty purchases.
Keep for a year: Bank and credit card statements (your bank can print these off for you again if you ever need them), paycheck stubs, bills
Keep for 3 years: Warranty receipts (or longer if the warranty is longer than 3 years)
Keep for 7 years: T4s and other tax-related forms
Keep forever: Your copy of your tax returns, home improvement and home purchase-related records, large purchase receipts

Now that you know how to keep them, the question becomes where? FrugalTrader had a great post a few weeks ago about storing information for tax purposes. Well, expanding on the concept of the filing cabinet, you can keep your records extremely organized with even a relatively simple furniture set. Take for example the following simple drawer set from IKEA:

In the first drawer, you should be keeping your receipts, statements, pay stubs and bills. At the end of the month, shred the receipts (if you don’t choose to keep them longer) and put the rest of the items in an envelope. Separate your warranty receipts as well as any tax related forms in their own separate envelopes Label them, and put everything except the tax forms in the second drawer. Your second drawer should then contain everything you keep for 1 year and everything you keep for three years. The bottom section is where you should keep all of your tax information.

With this method, everything is easy to find and organized. The IKEA cabinet I posted costs $79 (Canadian), but with some frugal searching I’m sure most of us can either find something similar that we already have, or find something at a significantly reduced price which will do the trick just fine. We should all be making this effort in order to be financially responsible people.

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It is extremely important to teach kids about money, but equally important is to ensure they get the most they possibly can from their education. I grew up in a small town of around 30 000 people, and saw far too many of these kids I grew up with decide by the time they hit grade 10 that they wanted their first job so they could buy a car, and then proceed to have their grades drop as they were neglecting school. So the question becomes: when should kids be allowed to get their first job?

Personally, I don’t think kids should get a job before they’re at least 16. By the time they’re 16 they will have fully understood the fundamentals of school and many will have the mental capacity and life experience to understand the importance of working at school to ensure they have a bright future. However, there are some limits I would impose, were I a parent:

1. No more than 10 hours per week. Minimum wage in Ontario is $8 per hour, and in BC it is $6 per hour. That gives kids around $110-150 of take-home pay every two weeks. For a 16-year-old, who for the most part should be only needing to spend money on things like new clothes, this is enough. They’ll learn the importance of working for their money while not having to spend so much time at it that it detriments their schoolwork. If they’re saving for a new car and want more hours, that’s what the summer holidays and spring break are for.

2. No working after school. One of the major problems I noticed in high school was a number of students would take weekday shifts, working from 3-9pm, and then not doing their homework. By only letting school kids work on the weekend, they have time during the week to finish their work.

3. If the grades drop, the job is the first thing to go. This is a fairly obvious one: students need to make sure school comes first, and if their grades drop, taking away their job is normally a good way to give them more time to focus on schoolwork.

This might seem strict, but I have seen a number of people’s futures ruined by overworking in high school for minimum wage. I didn’t get my first job until after I left high school, in part because my mom recognized this and wouldn’t let me get a job. I don’t necessarily think this was the best way to go about things, as I feel there is value in having teenagers learn about working for spending money, but at the same time I strongly believe it should really be secondary to school.

Popularity: 6% [?]

I’ve seen a number of people in a variety of forums recently mention “well I could buy a house, the mortgage payment would only be a few hundred dollars more than my current rent”. Unfortunately, what many people don’t realise is the associated costs of home ownership. Here are some of these costs which you should consider in your pre-purchase budget:

Before you move:

• Down Payment: While it is very possible to get a home loan without a down payment these days, having one brings a number of advantages: first of all, you’ll pay less. If you purchase a house at $250 000 with no down payment, you’ll be paying $1600 per month (at 6% interest). However, with a $25 000 down payment, you’ll only be paying $1439 per month, saving almost $200. This will save you an enormous amount of money. Also, the bank is more likely to give you a better rate if you have a large down payment, which can reduce your costs. Having a down payment is definitely a good idea. I would strongly recommend having at least $5000 to put down.
• PMI: However, if you don’t have a 20% down payment, you’ll likely have to pay PMI Insurance, which essentially insures the loan for the bank if you are unable to make the repayments. This will have to be factored in to your budgeting as well.
• Closing costs. These are generally 2-7% of the value of the home you’ve purchased, and have to be paid before you move into the home. This includes taxes, title insurance, financing costs and other settlement costs.

While you move:

• Furniture. If you’re going from a bachelor apartment to a 2-or-3 bedroom house, chances are you’re not going to have enough furniture to fill the place. You will most likely end up in IKEA, trying to find some stuff to fill up the space, and it will cost you money. If you do have the willpower to not purchase anything else, that’s excellent! You’re part of the minority and you can ignore this part.
• Moving costs: If you’re moving across the country this can get expensive, especially if you’re not the type to rent a budget truck and hire actual movers.

After you move:

• Property taxes: Many people completely forget that they have to pay taxes on their property. Furthermore, as your home’s value increases, so do your property taxes. While there may not be a huge risk of that if you’re in the USA, in certain parts of Canada you can be paying a significantly larger amount of money in the future for your property taxes.
• Maintenance costs: Things break down in houses. Unfortunately, now that you own yours, it’s not up to your landlord to pay those costs anymore. You’ll need to be able to spend a little bit of money when something inevitably goes wrong, and you need to budget for that scenario.
• Insurance: you need fire insurance, flood insurance, etc. These costs can add up, and they are required. Be sure to shop around and make sure you do some research before purchasing any sort of home insurance.

There are a number of costs involved in home ownership on top of the actual mortgage payment. You need to be sure that you had adequate savings to be able to afford a home and that you will be able to continue the repayments in the future. It’s entirely possible: millions of people have done it. You just need to step back, look at the big picture, and perhaps buy a townhouse instead of a house, or a smaller one which in ten years you can upgrade from. Just consider all of the costs, for your financial security’s sake.

Popularity: 10% [?]

With Mother’s Day less than two weeks away, it may be time to start thinking about a gift for her! While I know many of us, myself included, are tempted to go all-out for our mothers, we needn’t forget that there are a number of ways we can show her we care without breaking the bank. Here are just a few of those ways, none of which should cost more than $30:

• Live plant: flowers are a traditional mother’s day gift, but boquets are expensive and don’t last a long time. Why not buy your mother a beautiful plant which will last much longer with only little care required? Rhododendrons are usually a good bet, as well as tulips and orchids. Try to buy a perennial plant, which will survive through a number of years, rather an an annual or biannual plant which won’t last as long.

• Breakfast in bed. This is a traditional one, and why not continue it? It will cost you at most $20 to buy all of the ingredients at the grocery store to make her an amazing breakfast. One website I absolutely adore for finding great recipes is tastespotting.com. You’ll be bound to find something amazing to make her there.

• T-shirt and mug. This one works especially well if you have children, as you can put their photos on the items. There are a number of print shops that will take your photos and print them on t-shirts and mugs, so why not give your mother something sentimental like that? If you haven’t got children of your own, I would recommend you use one of your own childhood pictures because, well, lets face it, we were all much cuter when we weren’t full-grown! Wrap it up nicely and this sentimental gift shouldn’t cost more than about $25.

• A few high-quality chocolates. Giving your mom a little indulgence is a great way to make her feel special. Make sure you’re buying very good quality however: think Godiva as opposed to Purdy’s. You don’t need to buy many: at Godiva 8 chocolates costs around $16 after taxes, and the high quality means you don’t need to buy many. Most moms don’t treat themselves to such things, so it will be twice as special for her.

• A nice fruit basket. You can make these yourself for relatively cheap. You just need to do it pretty close to Mother’s Day. Find some fruit that’s just ripe one or two days before mother’s day. A pineapple is a must, as well as kiwis, magoes, cantelope and honeydew if you can find them. Small fruits, such as strawberries, go well in a little bowl as well. Wrap it up nicely, add a nice card and (if you’ve got one) frame a photo of yourself and your mom.

Just because it’s mother’s day doesn’t mean you have to spend a fortune. Most mothers appreciate the sentimental stuff even more so than they do the material. Let your mom know you love her with one of these ideas and you won’t be breaking your budget either.

Popularity: 10% [?]

I’m sure when we all created our budgets (and if you haven’t yet, you may want to learn how to create a budget) we were easily able to identify a number of major expenses, and get rid of them accordingly. However, we don’t often pay attention to the little specifics which can accumulate to a huge amount. Here are ten things which, while they may seem harmless, can really add up to quite a bit.

Coffee. Lets say you spend $2 on a coffee every weekday. Since there are about 260 weekdays in a year, you’re spending an extra $520 every year on coffee. Have you considered brewing at home and brining it in a travel mug to work to cut down on those costs? Or maybe consider cutting the habit altogether!

Take-out Breakfast. They’re so tempting, as they’re just sitting right there when you order your coffee and who wouldn’t like to enjoy a nice muffin along with the morning brew? You can add another $520 per year if you’re one who succumbs to these cravings! By making your coffee at home or cutting the habit entirely, you also reduce your chances of making one of those impulse breakfast buys.

Alcohol. If every weekend you’re spending $20 on a pack of beer, a bottle of Jim Bean, etc, you’re spending over $1000 per year. The price everybody spends on alcohol varies differently, but if you’re finding that you’re spending that much, try cutting back a little bit. Maybe cut down on the number of drinks you have on the weekend, or drink the same amount but every other weekend, or once per month.

Convenience Store Snacks. They’re named that way for a reason. They are very convenient. Unfortunately, they’re also quite pricey, especially compared to supermarket items or making snacks at home. If you spend $2 a week at a convenience store on food you really don’t need, there’s an extra $100 gone over the course of the year.

Bottled water. While I realize people do have their own reasons for drinking the stuff, you’re generally spending around $1 per bottle. If you’re drinking 2 bottles per day, that’s an extra $600. Try investing in a high quality water filter instead.

Unused gym memberships. The average membership for a gym is $40 per month. While intentions may have been noble in January, lets face it: a lot of us let our gym memberships go unused. Unfortunately, this is costing you $480 per year, so you should just cancel your membership. Your pride may take a small blow, but at least your wallet won’t!

These are just some of the examples of little things which cost us a lot. If you fall victim to all of the above, you’re spending over $3200 per year more than you could be if you cut the above out of your habits. By further analyzing your spending, you’ll find places where you spend more than you should and you’ll be able to save yourself a lot of money as well.

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