Friday, November 11, 2011

Another Personal Update - Financial Peace

Little by little, we are reaching our goals of reaching financial peace.  I'm very excited to share that we are completely finishes step 3, and have just over 5 months of expenses saved up in case of an emergency.  I am also excited to share that we have started looking into our next options and have decided a good course of action.

With Steve working on some side jobs, our income has seen a bit of a facelift.  It's nothing that will really make a difference yet, but it helps!

We thought about investing, and starting up my RRSPs again, and even looked into RESPs.  At this point in time though, we've decided that we want to be moving to a bigger house within the next year.  In order to do that comfortably, we are going to hold off on investments and focus on paying down our mortgage so we have a bigger down payment. 

We even considered keeping this house as a rental property and buying another one to live in, but I don't think we are ready to take on that kind of risk yet.  If the renters don't pay, or if we can't find renters, we are really in trouble!!  Also, we still owe enough on this house that if the housing market really crashed, we could still be in a situation where we owe as much or more than the house is worth.  If we turn our focus from the Emergency Fund and start piling that money into our mortgage, I think we can have it down considerably in a few months.  Then when we go to sell, we can easily come up with a good down payment and feel good that we are saving a bunch of interest. 

I have to admit, the idea of keeping this house as a rental property sounds good, and I know probably 95% of investment advisers out there would say that you want to keep a mortgage on your investment properties, because you can write off the mortgage payments on your taxes.  Those payments offset the income that you earn through the rental property, and the theory is that you save piles of money.  I just can't agree with that.  I'd rather pay the government all that tax on the extra income, than pay all that interest each month and STILL owe a whole bunch on the rental property. 

It would be much safer to have a rental property paid off, or very close to paid off, before I take the risk of having it trashed, empty, or simply not earning income. 

Anyways, the outcome of all those discussions have let to one thing.  We are going to focus on lowering our mortgage as much as we can, and once we find a new place, we'll be in a better position.  We are looking for a place hopefully near my parents, and a house that we can take from being ugly to being a dream home. 

We do know what we are getting in to, as we did that already once with this house!  When we moved in, it really didn't look like much.  After much hard work, paint, and soap, it wasn't too bad.  Then when we tore out the basement and totally started from scratch down there, it was much better.  Rebuilding the fence last year, and adding a deck this year, really helped the place to look much better too.  I planted some bushes and shrubs in the front this past summer, in hopes of making the front part of the house look much more inviting and cared for.

There are a few things left to do here before we sell, little things that will bring up the value of the home, if only because it makes people feel better and have a better impression of the place.  The last major project should be completed in February, and that is to renovate the kitchen.  We want to replace the cabinets and the flooring in the kitchen, and possibly the counter-tops.  If we can get by with replacing only the cabinets and not the counters, I'd prefer to do that.  The counter-tops are still in fine condition and look nice.  Once we do that, this house will be in great condition to sell.

I'm very excited to see our hard work pay off, but a little sad to think that the work will start all over again with the new house.  Perhaps it won't be so bad though... but if it is, there's money to be made!!

So that's the update on our own journey to Financial Peace.  One step at a time, we keep on keeping on.

Tuesday, November 8, 2011

Investment tool!

Investing has always seemed a little scary for me... so many big words and so many variables! 

We personally ended up in a bit of a pickle over some bad investment advice, and are still paying the consequences of our decision.  In order to avoid the same mistake again, we've done our best to talk to lots of different people, researched things online, and have done our best to just get a general education on what investments are and how they work. 

There is a fantastic site that we learned of in the last week, that gives you the ability to check out how funds, companies, and stocks have been doing for the last few years.  If you have bought into a stock or other fund like that, you will have an ID number of some sort on that fund.  Using The Globe and Mail's website, you can enter the name of any stock or fund into their search bar near the top of the window, and use the tabs on the fund's page to view information on the fund.  Most importantly, you can view how well the fund has performed in the last 10 years, and then make a solid decision on whether or not you want to get in. 

I'm told that when investment brokers are showing charts, they can easily (and legally) leave some information out of the picture and make their graphs look rather rosy.  The Globe and Mail tells it how it is.  Good or bad, it's the real picture.

If we had looked at those charts before we invested, we may not have been so easily convinced to buy in.  Thankfully, we are learning much more now and will not make those mistakes again. 

As Dave Ramsey says, "Never buy into something that you can't explain- something you don't understand well enough to explain it to a 7th grader."

Monday, November 7, 2011

Granola Recipe! (Money Saving Breakfast, and healthy too!)

When people find out that I make my own granola cereal for breakfast, a lot of people ask me for my recipe.  I haven't ever come up with an actual recipe, as I usually just guess on every amount and keep tweaking until it works... until now. 

I have officially come up with my Banana Granola recipe, that will save some money on healthy breakfasts.  I'm not sure if this recipe is actually cheaper than purchasing puffed rice or corn flakes, but I can guarantee you that it's much more healthy!  And for the price of the higher quality cereals, I think you'd be better off making your own!

This recipe has a banana base, rather than an oil base like so many other granola recipes.  If you really want to save money, check for the overripe, brown bananas that the grocery stores will sell you at a discounted price!

Banana Granola
Preheat the oven to 300

Blend the following ingredients until liquified:
  • 6 overripe bananas
  • 1 cup molasses
  • 2 tablespoons vanilla extract
  • 1 cup honey
Once those are well blended, add:
  • 1/2 cup of oil
Don't mix the oil for too long or it will make the mixture thicken into a mayonnaise texture!  I usually mix for about 10 seconds on a low speed just to incorporate the oil, and then I stop.

In a separate bowl, or directly in the roasting pan you will use, mix together the following ingredients
  • 2.25 kg of rolled oats (about 24 cups)
  • 6 cups of unsweetened coconut
  • 2 cups of ground flax seeds
  • 8 cups of unsalted peanuts
  • 1 cup of bran flakes
 Bake in a large uncovered roasting pan (the kind that you'd cook a turkey in!) for somewhere around an hour, making sure that you mix well at 10 minute intervals.  When you stir the baking granola, make sure that you scrape the bottom and sides very well as the molasses and honey likes to burn onto the corners of the pan if you aren't careful.  Thoroughly stirring the granola also ensures even baking.  The granola is done when it is  looking a medium brown color, and looks fairly crispy.  The granola needs to sit uncovered for up to 24 hours (cover with a sheer towel if you are worried about bugs) so that it can dry and crisp up nicely.

Once properly cooled and dried, this granola will keep very well for a couple of weeks (we've had it for up to 3 weeks) in a sealed, clean container stored in a cool dry place. 

Variations:
This recipe is extremely easy to change by adding and subtracting ingredients, and switching them with what your family prefers.

Raisins and other dried fruits can be added, but only after the granola is cooked and has cooled for a couple of hours.  If you add the raisins directly the recipe before cooking, they will all burn and you will have black little burnt raisins all through the granola.  It's not very tasty that way!

You can add wheat germ, oat bran or rice bran in place of, or in addition to the flax seeds and bran flakes.  If you want to add more than a couple cups of dry ingredients in this recipe, make sure you add another banana to the original blending mixture to offset the additional dry ingredients. 

Instead of or in addition to peanuts, you can use almonds, cashews, walnuts, or any other type of nut that you like.  Or, if you and your family don't do nuts, switch out the nuts for some nutritious seeds like pumpkin seeds, sunflower seeds, and/or sesame seeds.

Instead of vanilla flavoring, feel free to try some other flavors that will better match the other ingredients.  For example, if you use walnuts, try using maple extract instead of vanilla.  You can use almond extract as well to enhance the addition of almonds.

I like to limit the sugars that I use in my baking, so I am careful to use unsweetened coconut.  "Normal" coconut has icing sugar in it.  If your family prefers a sweeter taste, you can add more honey, 1/2 cup of corn syrup, sweetened coconut, or 1 cup of brown sugar to the mix. 



So there you have it!  If you have any questions or thoughts, feel free to leave a comment here and let me know what you think.

Wednesday, November 2, 2011

Frugal Edmonton Mama Ebook Special!

For a limited time, if you haven't read the guide to using coupons and saving money in Edmonton, you can get the Frugal Edmonton Mama E-Coupon class for only $4.99!
You will learn where to get the coupons, how to use the coupons and where you can start to get FREE items too. Just in time for the holiday season, you can change the way that you shop and be on your way to saving more money on your next trip to the supermarket - just by learning to time when you shop and other simple methods.

Check out Frugal Edmonton Mama's post for more info!