The Value of Reviewing a Bank Statement

I have written before about the money that we have and don't even know about, and I came across another example this weekend. I was setting up my tracking spreadsheet for my April project, and paying some bills online when I decided to look through my last month's transactions to see what might be coming up that I could put into my spreadsheet in advance. Well, you can imagine how surprised I was to see a payment for an internet service that I haven't subscribed to since I moved in November! I had set up an automatic bill payment and paid 4 months past the end of the service!!

Needless to say I got on the phone today and spoke to them about it. I am now happily expecting a $160 cheque in a few weeks. Nice.

While I was on the internet I also realized that my slowness in selling my old car is hurting me more than just not getting the cash for the car. I somehow forgot that it is still insured and I am spending some portion (I estimate $60-80 per month) of my car insurance bill to keep it parked. Talk about a waste of money!

So to make a long story short, it pays to pay attention to your finances. If you review your bank statements regularly you may find hidden treasures or financial leaky faucets and painlessly improve your situation. Of course, if you are more organized than me, you might not have these issues in the first place!

More on Financial Habits - Your Parents

I love my parents and learned many good things from them, but they would be the first to agree that financial experts they are not. Consequently, the financial habits that I picked up are a mixed bag. Of course, kids are not exact replicas of their parents, so I also picked up some opposite behaviours to those I saw my parents do.

Here are some interesting examples of both cases:

• SAME: Frugality vs. Bargains - I used to think that my mother was frugal but I now believe that she was frugal out of necessity and a bargain hunter for the love of it. I am much the same. I love a bargain and hate to spend too much on anything, but when I feel that money is not so tight I will loosen the purse strings. I will always shop so that each item is a good deal but the overall spending habits are not always frugal.
• DIFFERENT: Credit - My parents kept credit card and overdraft balances as constant companions but I have developed a distaste of debt any generally pay my credit cards off every month. They lived too near the edge for my taste so I keep a very wide safety margin.

I believe that part of growing up includes choosing to accept, reject or modify what you bring with you from your childhood. As an adult you will be responsible for your own financial habits so there is no sense in blindly keeping what was passed on by well-meaning but possibly poorly qualified parents.

As a test, take a moment to consider your parents' financial habits. Is there anything about how they have done or still do things that you would change? Now take a look at yourself. The apple may not fall far from the tree, but with some interest or determination it can certainly bounce!

Today's billable hours: 3.5
Today's contracted hours: 1.5

Found Money and Found Debt

Recently I have had cases of both found money and found debt happen to me in large amounts: $800 and $950 respectively and it made me think about personal habits that help your finances. We tend to think more about the "finance" side (i.e., the dollars and cents) of personal finance, but there are some schools of thought out there that claim that the "personal" side can have a much larger impact. For example, books titled "Think Yourself Rich" and "Secrets of the Millionaire Mind" --neither of which I have read by the way :).

But on a smaller scale, I think that there is daily impact from your personal approaches and habits with your finances. For example, found money implies that you lost it first. Of course it's great to find it again, but what if you never did? Not so good, and you would never know that it was even missing.

Here's another example: We all know that late bill payments can affect our credit rating, but what about waiting too long to collect money that is owed to us? From my own business experience and others I have spoken to, it seems that your best chance to get someone to pay you is right away, while they remember their reason for doing so. If you wait weeks or months, then it gets harder to collect the money that someone owes you for buying their expensive theatre ticket or lending them $20 when they forget their wallet at lunch. And eventually you may become too embarassed to even ask. I know that I do.

And another one that I'm guilty of: Forgetting to use up near-cash assets like reward points or gift certificates. My estimate is that I currently have about $1,000 in such assets for a variety of places, including Shoppers Drug Mart ($75+), Superstore/PC points ($250), Holt Renfrew ($250), Starbucks ($45), PetroPoints (unknown), Amex/Telus ($300), spa ($50) and maybe even more that I can't remember. These arrive as gifts, or build up gradually, and I often forget about them until they are expired or lost. What a waste!

So to come back to yesterday's post for a moment, I'm still thinking about taking the Quicken plunge again. I would like to do one month and then see if I need to go longer (or if I can handle it). This kind of organization is also a personal habit that I feel will have a very positive effect on my finances and I'm thinking of doing it for the month of April.

But my conclusion is that we are self-sabotaging through these wasteful and counterproductive habits. Each step I can take to close holes in my personal "systems" that are money losers is a step that increases my income or decreases my spending, usually very painlessly.

And speaking of points and gift cards, maybe I should be going shopping tonight....

Today's billable hours: 2.5
Today's contracted hours: 3.5

As ye sow, so shall ye reap

As time goes by, I have an increasing amount of respect for those bloggers that turn out a post (some more than one!) every day, especially those that are delivering thoughtful posts and pouring obvious time into it. I have been blogging for less than a month now, and I have already touched upon many of the major topics that have been on my mind with respect to personal finance. I believe that I have reached the point where blogging might become more difficult to keep up.

HOWEVER.... I think that the things that you work on and put your best efforts into learning about and do as well as you possibly can always pay off. Also, when you are paying attention to something on a regular, even daily, basis it is less likely to turn into a big problem without you noticing. In other words, I see significant benefits available to those who are diligent about keeping in close touch with their finances, whether through blogging or some other means.

And I also feel that in reaching this point, I am now forced to dig deeper. I will need to examine issues that I have not considered before or go into my standard questions in more detail. Either way, I hope that I come out the other side a wiser person.

And keeping track of my hours has almost become a habit now. That is absolutely wonderful!

Today's billable hours: 5.5
Today's contracted hours: 1.5