By Sheryl Smolkin

Today we are continuing with the 2014 savewithSPP.com series of podcast interviews with personal finance bloggers. Kerry K. Taylor aka Squawkfox is one of my perennial favorites.

Kerry started blogging in 2008 and has since been voted Canada’s Number One Money Blogger by the Globe and Mail.  She also wrote a book called “397 Ways to Save Money.” In Kerry’s own words, “Squawkfox explores frugal living topics that are sexy, delicious, and fun.”

Thank you for joining me today, Kerry.

Thanks so much, Sheryl. It’s a pleasure talking to you.

Q. How did you end up writing a personal finance blog?

A. I grew up in a very thrifty family. When I started my first job in an IT firm a lot of the engineers I was working with were just blowing through their paychecks.

Meanwhile, I was riding my bicycle to work and bringing my own lunch. They wanted to know how I managed to max out my RRSP every year. So I started creating little emails about how biking was great for your butt and good for your bank account. I also wrote about really earthy, fun things like how soaking dried beans could change your life.

They loved it and repeatedly forwarded my emails. My email list became so big that the engineers said I should have a blog so they could check it regularly and comment.  So I started the blog and my audience kept growing.

At some point I was just overwhelmed with how many readers I was getting.  And then I was voted Canada’s Top Money Blogger at the Globe and Mail and HarperCollins offered me a book deal.

Q: So who is your audience?

A. That’s a great question. I’m always overwhelmed when I see who is emailing me and commenting on my Facebook page or my Twitter posts. And it’s really people of all ages. Internet savvy seniors email me and say, “I wish my daughter or my son were more thrifty like you,” and then they forward my posts to them. I have college students who read my site because I write a lot about my student debt days.

Q: How frequently do you post? 

A: I don’t really keep a posting schedule and I think that surprises a lot of bloggers. However, the average length of my blogs is probably anywhere from 1600 words to 2100 words. And I usually include a lot of photographs or descriptions and an infographic to explain my frugal approach. So I generally aim for a few posts a month.

But, you know, if I don’t really have anything I think is worth saying to a large group of people, I just don’t say it. Because I don’t want to bug people I want to make sure I only put my really good stuff out there.  And it seems to have worked for me so far.

Q: Tell me about the range of topics you’ve blogged about. 

A: Well, anything from cutting your costs on groceries, to the cost of childcare, to the cost of raising kids. It’s really varied. I think money can touch every aspect of your life if you open your eyes and you see it.

For example, I was in a Starbucks a couple of years ago, and people were buying frappuccinos and I thought, what are they made of? I can probably make that at home. And, sure enough, I made a $4 tall frappuccino for something like 32 cents. That was a post idea right there that just happened by keeping my eyes open.

Sometimes it’s a career post; sometimes it’s a food post; sometimes it’s a tough love post. I wrote one about the real reason you have no money.  I did that kind of tough love thing because I was tired of people emailing me that they’re broke. And I said, “Well, then, do something about it.”

Q: So, how many hits does your blog typically get?

A: It depends. I’ve been on the front pages of Yahoo. I get a lot of social sharing on Facebook. I don’t usually give out the number but I’m not a teeny, tiny blog. I’m currently probably one of the higher traffic personal finance blogs on the internet.

Q: Tell me about some of your more popular blogs.

A: Well, the frappuccino one was unusually popular with readers. Anytime I knock off a product and make it cost less, it really strikes a nerve.

I wrote an article in my first year of blogging, called “Six Words That Make Your Resume Suck,” and that’s been hugely popular with people because it’s got a strong voice and a sense of humour.

People also love the tough love stuff when I kind of dish it out because I’m mean, but I’m kind of a friendly mean.  I think one popular blog that really surprised me was “how keeping your fridge well stocked and clean can really cut your costs.”

Q: What about your wedding blog?

A: Oh, my wedding blog. How to get married for 239 bucks. It was insanely popular.

I basically started with the premise, what do you need to get married? You need a marriage license and the services of a commissioner of sorts. Add those two together and it costs under 250 bucks.

So anything over that cost is really adding to your wedding expenses needlessly because the bubble machine and the horse-drawn carriage aren’t going to do diddly to get you hitched. Then I explained how I bought my wedding dress at a huge discount on eBay. I think I spend a hundred bucks on it.

I called around to see how much wedding cakes cost and discovered that as soon as you say the wedding word, you’re paying the marriage mark-up. I think my post about how I had a very frugal wedding really hit a note with people because rather than blow all that cash on one day, I saved it and bought a house. People either loved or loathed it, so it was a fun post to share.

Q: So you previously lived in rural B.C. Where exactly were you located?

A: I was in an area called Vernon, British Columbia and I lived on an organic farm with my husband’s family. We moved just recently to Toronto. I’m from Mississauga, and I wanted to come back home to live in the big city again.

Q: I understand you and your husband decided that Carl would be the primary, weekday caregiver for your daughter Chloe. Why was that decision made and how is it working out?

A: Both my husband and I work full time but for the first year when Chloe was home, Carl went on parental leave because he qualified for it at work. Because I’m self-employed, I don’t qualify, so we looked at the budget, we looked at the benefits he got at work, and we just decided that one of us is going to stay home with the baby and why not Carl? He loved it and it turned out he was the first guy in his office to take parental leave and after he did this, two other fellas from his office did the same thing.

Q: So what are some of the spin-offs from blogging? How has it changed your life?

A: Well, I never knew I had a voice that people connected to and I think that was a really big surprise for me. As a result of the blog I was asked to write books for a big publisher, which I really enjoyed.

I love talking about money in a really down-to-earth style that is very accessible to people. And I think it’s just fun to put up a post that is so different from what everyone else writes, because I kind of look at things sideways and try to be a little sassy about saving money.

Q. So how long do you think it will go on? Do you ever run out of ideas?

A: No. I have a book that’s so full of ideas it makes my head spin. It’s just a matter of finding the time to write. Ever since we became parents, writing has been really tough in the evenings and on the weekends.

Q: If you had one piece of advice for readers who want to better manage their finances so they can meet their financial objectives including a well-funded retirement, what would you say?

A: Well, I think a lot of people say focus on the small stuff, but I say you should focus on the big stuff!

Look at where you live, how much house you own, and how much house you owe to the bank. How much rent do you pay a month? All these really big decisions add up to a lot of money. The car you drive, or the car you don’t drive, that’s a lot of money as well.

We need to be more careful about these really big decisions because a couple of hundred extra bucks a month off your rent or your mortgage means that you can put that money into your RRSP or tax-free savings account. That’s real money you can retire on later.

Thanks Kerry.

It was my pleasure Sheryl.

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This is an edited transcript of the podcast you can listen to by clicking on the graphic under the picture above. If you don’t already follow Kerry K. Taylor on Squawkfox, you can find it here and sign up  to receive an email each time a new blog is posted.

If you do sign up, Kerry will send you a free ninety-two page e-book, called ‘Frugal Food and Fitness.’

By Sheryl Smolkin

RRSP season is in full swing and since the beginning of the year, we have been bombarded with a media blitz suggesting few Canadians are saving enough and exhorting us to maximize contributions to our retirement savings plans by the end of February.

If you wonder what all this retirement planning is for, anyway, take a look at Sandi Martin’s blog or boomer & echo. She says planning for that inevitable day when you stop collecting a paycheque, or invoicing clients, or collecting ad revenue is an exercise that will let you spend more money than vaguely worrying about “saving enough” or “running out” will.

In order to save enough to retire worry-free, you need to figure out how much you will need. On the Canadian Finance blog Tom Drake suggests that for every dollar of annual income you need in retirement you should plan to have $20 in savings. That doesn’t include the value of your home because it is not earning income.

You can save in many different kinds of accounts including the Saskatchewan Pension Plan, employer-sponsored pension plans and RRSPs. But Jonathan Chevreau at MoneySense says investing in a tax-free savings account (TFSA) should be a priority for most Canadians. In fact he says the moment you make your January contribution, you should start accruing for the next year’s installment, even if it means parking in short-term cash vehicles and paying a little tax for the balance of the calendar year.

Brighter Life discusses how you can pay yourself from your retirement savings when you retire. Some of the options are annuities, registered retirement income funds, and payments from several kinds of locked-in accounts holding funds transferred from locked-in company pension plans.

And Jim Yih on retirehappy.ca reminds us that one area of tax planning that does not receive enough attention is the designation of beneficiaries when it comes to Registered Retirement Savings Plans (RRSPs) and Registered Retirement Income Funds (RRIFs).

When you open up an RRSP or RRIF, you are opening up a special contract under the Income Tax Act, which allows you to designate one or more beneficiaries. Far too often, this is done too casually and without enough thought. More importantly, as your circumstances change, like marriage, divorce or children, you should consider reviewing your beneficiaries to make sure you have the right people designated.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere. Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

I got my first library card when I was five years old and could print my name. I was an avid library user in Cornwall, Ontario where I grew up. I also worked in the library for three summers when I was in university.

But over the last several decades I’ve been buying books instead of borrowing them. Even buying paperbacks and trading them with family members became quite expensive. When I got an eReader app for my tablet computer a few years ago, I found I was spending even more on books because it was just so easy using wifi to order and charge them to my credit card.

Then I learned that eBooks are available from the Toronto Public Library and they can be downloaded at any hour of the day or night without leaving my comfy desk chair. Of course popular titles often have long waiting lists, but I can put a hold on a book and when it’s my turn, I get an email.

The Saskatchewan Public Library system offers members the same convenience. The seven regional libraries in Saskatchewan are:

• Lakeland Library Region (North Battleford area),
• Wapiti Regional Library (Prince Albert area),
• Wheatland Regional Library (Saskatoon area),
• Parkland Regional Library (Yorkton area),
• Chinook Regional Library (Swift Current area),
• Palliser Regional Library (Moose Jaw area)
• Southeast Regional Library (Weyburn area).

However, the eBook collection is shared by the whole province. So if you take a look at the websites for these regional libraries, you will see the same collection of available titles.

You can use your library card to download eBook and eAudiobook titles from library2go for either one or two weeks. When the loan period is up, your items are returned automatically so you don’t have to worry about getting them back on time. You can have a total of ten eBooks and eAudiobooks signed out at one time from library2go. Materials can also be renewed.

Or check out Project Gutenberg on the web for a huge selection of classic eBook titles. Regardless of what part of the world you live in you can download books in the public domain on which copyright has expired from this site for free. Some of the most popular titles are Grimm’s Fairy Tales, The Importance of Being Earnest, Wuthering Heights and Moby Dick.

Recently I decided that battery life on a tablet is not adequate for long plane trips so I decided to buy a dedicated eReader. I opted for a Kobo Glow that weighs only 6.5 ounces, fits in my purse and has a screen so I can read in the dark. It is rated for around 70 hours of use with the light at 15-20 percent.

The device cost $129.95 plus tax. But I figure that I only have to borrow and read 10 library books to amortize the cost. Of course I still buy books occasionally, particularly if I’m travelling for extended periods. But because I use the library regularly, my book buying budget is now much more manageable.

Do you have any ideas for saving money? Share your money saving tips with us at http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card. And remember to put a dollar in the retirement savings jar every time you use one of our money-saving ideas.

By Sheryl Smolkin

“Best from the blogosphere” took three weeks off, but all of our favourite bloggers kept right on writing, so there is lots of great content for our first issue of 2014.

Many of you may have made financial New Year’s resolutions like paying off debt, spending less and saving more. On retirehappy.ca, Jim Yih says you will achieve your goals if you keep it simple, take responsibility and stay disciplined.

Krystal Yee’s top financial goal is to retire as early as possible. Therefore, on givemebackmyfivebucks.com she explains that she decided to divert $110 bi-weekly from excess mortgage payments to RRSP savings to ensure she saves at least $750/year for retirement. Then she will use her annual tax refund to pay down her mortgage.

Marie Engen at Boomer & Echo says you can save money by making major purchases at the right time of year. If you plan ahead you can realize substantial savings. For example, her Calendar of Saving Money suggests that January white sales are a good time to stock up on linens.

If you are looking for new ways to boost your earnings, a guest blogger on the Canadian finance blog offers 4 ways to generate income in your personal life. So if you have decided to finally clean out overflowing closets and drawers, you may be able to sell everything from good as new clothing to DVDs online.

And finally, if you are one of those lucky people who belong to a defined benefit pension plan, Sean Cooper’s blog on milliondollarjourney.com explains the financial implications of retiring early, depending on whether your pension will be reduced or you are eligible for an unreduced retirement.

Do you follow blogs with terrific ideas for saving money that haven’t been mentioned in our weekly “Best from the blogosphere. Share the information with us on http://wp.me/P1YR2T-JR and your name will be entered in a quarterly draw for a gift card.

By Sheryl Smolkin

If one of your New Year’s resolutions is to finally get serious about your family finances, How to Eat an Elephant by financial planner Frank Wiginton is a book you may want to take a look at.

For many years when Wiginton’s clients have approached him to make a financial plan he has asked them to bring in a series of documents. Clients often said that the amount of work they had to do and the quantity of information they needed to pull together was overwhelming.

To help them overcome this fear and stress, he began breaking down the required information into smaller, much more manageable bite-sized pieces – i.e., “small bites of the elephant.”

This was the genesis of the “twelve step program” in his book covering topics ranging from goal setting, debt management, and insurance to retirement savings, estate and tax planning. Wiginton suggests that by using this guide and doing about four hours a month of “homework” readers can develop a realistic financial roadmap.

Each chapter includes a breezy discussion of the topic, “Frank thoughts” from the author and anecdotes about how using these techniques have benefitted certain individuals. At the end of each brief chapter summary you are directed to easy-to-use web tools that help you to collect the information and use the strategies described in the previous section.

I particularly like that Chapter 1 asks readers to “blue sky,” prioritize and price a list of 50 things they want to do right now. Then by identifying the major things that must happen to accomplish each goal, reviewing the list regularly and sharing goals with others they have a better chance of making their goals a reality.

Chapter 2 teaches you how to create a net worth statement and by Chapter Three, Wiginton finally  deals with the dreaded “b” word – budgeting. That’s where he gets into “needs vs. wants” and ways to break “the spending habit.” Ideas like using cash only, saving 10% and re-negotiating mortgages and telecommunications bills are not new, but seeing them in one comprehensive list is helpful.

When it comes to retirement planning, Wiginton says the first step is to determine what you want to do in retirement and what it will cost. Then he presents various retirement savings options and the tax implications of each one.

Wiginton notes that you may actually need less money than you think to retire because:

1. You will pay lower taxes when you no longer are employed.
2. For many people, expenses are lower once the mortgage is paid off and the kids have left home.
3. People tend to spend less with age.

For example, when people are 60 to 70 years old they tend to be a lot more active than when they are 70 to 80 and the trend grows more pronounced with age.

As a result, in calculating what clients need, he usually reduces the amount of spending required by 15 or 20% around age 75 and by another 15 to 20% at age 85. However, he says that increasing costs of long-term care for seniors do have to be factored into the equation.

This is an engaging and clearly written book that runs to 274 pages of smallish print. There are no quick fixes but if you are prepared to work through it “one bite at a time,” by the end you will have a much better understanding of your finances and a plan that will help you achieve your personal financial goals.

The book is available in paperback or for Kobo and can be ordered for about $16.00 from the Chapters/Indigo website.

By Sheryl Smolkin

Later retirement and working longer is the new norm. That’s the message in Sun Life’s 2013 Canadian Unretirement Index report.

Over 3000 adults aged 30 to 65 years of age polled online by Ipsos Reid in late 2012 present a startlingly different picture than five years ago.

The number of Canadians who are planning to exit the workforce by age 66 has declined by nearly half since 2008. Just 27% of survey respondents expect to be retired by that age versus 51% five years ago.

As a result, there is a corresponding increase in the number of Canadians who assume they will be working retirees. And according to the study, we’re not talking about part-time work.

Twenty-six percent now expecting to be working full-time at age 66. This figure represents a 10-percentage point increase since 2008 in the number of Canadians who expect to be punching the clock for a full 40 hours or more a week.

Furthermore, most people say they will be working longer not because they want to, but because they need the money. This is apparent when we examine the order in which Canadians ranked their reasons for working at age 66 in 2008 as compared to 2012.

Reasons for working at age 65

2008	2012
15%: I enjoy my job or career	25%: To earn enough money to pay basic living expenses
14%: To stay mentally active	21%: To earn enough money to live well
13%: To earn enough money to live well	16%: I don’t believe government pension benefits will be enough to live on
13%: I don’t believe government pensionbenefits will  be enough to live on	13%: To stay mentally active
11%: To earn enough money to pay basicliving expenses	10%: I enjoy my job or career

SOURCE: 2013 Sun Life Unretirement Index Report

It is apparent that there is a serious disconnect between retirement dreams and retirement reality for many Canadians. According to the Sun Life study, on average Canadians anticipate needing $46,000 in annual retirement income and they expect to live in retirement for 20 years.

But the average amount they anticipate saving by the time they retire is $385,000 (not including the equity in their house). That’s well below the amount required to meet these average expectations.

In fact 58% of Canadians aim to have less than $250,000 saved for retirement. Thirty-eight percent say they will have less than $100,000 tucked away.

There is no doubt that we all have competing priorities that make it difficult to save for retirement. Paying down debt and raising our children are pretty high on the list. But small steps can make a huge difference.

A good way to start is to pay yourself first. That means arranging for automatic monthly deposits in a registered retirement savings account like the Saskatchewan Pension Plan.

And if you complete and file the Canada Revenue Agency’s T1213 form you can request permission from your employer to deduct a lower amount of taxes at source.

By reducing your withholdings at source, you are paying yourself and not the Canada Revenue Agency first, and increasing your net take home pay. You are effectively giving yourself a raise all year long, not just once at tax time.

In 2013 you can contribute up to $2,500/year to the Saskatchewan Pension Plan and contribution options include directly contributing from your bank account on a pre-authorized contribution schedule. Additional amounts up to your RRSP contribution limit can be contributed to your individual or workplace retirement savings plans.

Developing the “Pay yourself first” habit can help you build up a substantial retirement nest egg. For example, if you deposit $2,500/year in the SPP and earn five percent over a 40 year career (age 25 to 65) you will have a lump sum of about $317,000 in your account.

The value of planning and saving is that you can decide how and when you want to fully retire. Saving with SPP will help you accumulate the funds you need to enjoy your golden years on your own terms.

By Sheryl Smolkin

With this post, we are kicking off a 2014 series of interviews with personal finance bloggers. Many of the people we will be talking to are known to you already because we’ve linked to their blogs on our weekly edition of “Best from The Blogosphere.”

Our first guest is Tim Stobbs, a thirty-five-year old chemical engineer and father of two who lives in Regina and works for SaskPower. He was also a Regina School Trustee until the end of 2012.

Since 2006 Tim has blogged on Canadian Dream: Free at 45. He has also authored a book called Free at 45: How to Retire Early and Happy. In addition, in his spare time, he wrote a series of articles for the Toronto Star and has been interviewed by virtually every media outlet in the country.

Thanks for joining me today, Tim.

Thanks for inviting me Sheryl.

Q. You’re one busy guy. When do you find time to sleep?

A. I’m almost embarrassed to admit that I regularly get about eight hours of sleep. My young children go to bed early so I still have a couple hours every night to work on personal projects.

Q. So how old were you when you decided to aim for early, early retirement at 45?

A. I first came across the idea of early retirement back in my early 20s about 2001. But I really didn’t do much of anything with it until several years later in about 2005 when I did a series of online calculations and realized that I might actually be able to retired at 45. So I took that idea and started to blog with it.

Q. What response have you had to the blog? How many hits do you get?

A. Each blog post gets maybe about 600 or 700 hits. It works out to about 20,000 page views per month or so, give or take. It’s been an odd experience because I’ve had a lot of interest from various media outlets. I did a bunch of radio interviews.

The Toronto Star contacted me and asked me to write a series for them. One opportunity that was really out-of-this world was when CBC, The National, contacted me for a story on early retirement.

Q. I can understand that would be quite cool. So what blogs have resulted in the highest number of clicks or the greatest interest?

A:  I think the highest amount of interest I’ve seen on my blog has been in regards to the early retirement calculation series. About every couple years or so, I’ll dust it off and re-do the calculations just to keep them updated. People question my assumptions and share the basis of their own calculations with me.

Q. So that’s your own calculations, as your projections evolve towards your own retirement?

A. Yes. Realistically everyone can make assumptions, but inevitably life happens and things kind of veer off a little bit. So you’ve got to go back and correct them periodically.

Q. So how much do you and your wife figure you need to pay your bills after taxes?

A. Well, we kind of did an odd thing with our retirement planning. We actually aimed for a very barebones kind of basic spending level of $27,000 a year and then we figured we’d probably, for incidental income and other things,  that we would pull in another $5,000  for more fun stuff.

Q. What lump sum savings do you think it will take to support your lifestyle once you retire?

A. A grand total of about 1.1 million net worth, but the majority of that is going to be investments. So about $700,000 in investments, I figured would probably pull that off.

Q. Is the rest the value in your house?

A. Yes, the rest would be the equity in the house.

Q.I see that your mortgage is paid off and you figure you’ll be able to retire at age 42 now. The numbers dropped again?

A. Yes.

Q. How did you do it? What did you give up in order to meet this objective?

A. Everyone is always asking that but I’ve never actually sacrificed anything. I could have decided to spend more money or do other things. But instead, I kind of ended up doing a little exercise and went through my life and my spending and went, “What things do I really not care about?”

Like, my power bill, I really, really don’t get excited paying off my power bill every month. So what I decided to do was to see, “How low can I make that?” So I looked at ways to save energy around the house and dropped that bill down and repeated that across all of my various bills.

As a result, what I managed to do was really customize my spending to be heavily tailored toward my particular interests. So I’ll spend money on books or DVDs that I like, but I don’t spend a lot of money on gas or power bills.

Q. I presume your wife is on board with the program?

A. She is, but in a different context than me. I’m more driven by the freedom to do what I’m interested in. She’s more about the whole concept of security. For example, we had a car accident last week and she knows without any doubt that we’ll have the money for the deductible for the car. So, she just loves that as a result of our financial plan that we are financially secure.

Q. Do you still go on vacations, go out to restaurants and upgrade your phone every now and then?

A. Oh yes, we still do all that stuff. Like, for example, this summer, my sister-in-law moved out to Newfoundland. We decided to go out there for a visit. So we took a month long vacation and spent over seven and a half thousand dollars. We drove all the way out and back. Seven provinces with two little boys in the back seat, but we survived.

Q. So what does retirement mean to you? How do you plan to spend your time once you don’t have to go to work?

A. Well, as I talked about earlier, we aimed for bare bones because I really think I’m retiring too early to stop working entirely. It’s just nice to be able to work on what interests me rather than what pays me most. Right now, I’m doing engineering because, well, it’s my degree and I’m quite good at it. As an engineer I also make quite a bit of money. However I enjoy writing a lot. But unfortunately, unless you’re really good at writing, it’s pretty hard to earn as much as I do as an engineer.

Q. Are you saying that might at some stage leave your engineering job and take a chance at working on something else?

A. Yes. I’ll probably switch over to just writing novels or non-fiction projects, stuff where I don’t have to worry about a profit margin, as long as I do it because I’m interested in it.

Q. Your wife currently operates a home daycare. I understand she has some ideas about what she’d like to do when you are more financially secure.

A.  She kind of has her hobbies she enjoys and is looking forward to expending those a little bit or even maybe going back to school and learning a bit more about a few other topics that interest her rather than having to go get a degree because it’s something economically viable to do.

Q. If you had one piece of advice for readers who want to manage their finances so they can retire early, what would it be?

A. I think the biggest piece of advice I’d offer people is don’t worry about what everyone else is doing about spending. Look at your own spending habits and kind of customize your budget . It’s really possible to live on a lot less than people think if you’re not so caught up in doing what everyone else is doing.

So if you don’t really care about the newest phone, don’t drop the money every three years to get it. It’s sort of as simple as that in some regards. By minimizing your spending on stuff you don’t care about, you’ll have more spending money for future things like retirement or even just things that interest you more.

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You can follow Tim’s progress on his blog and also read interesting posts from several regular guest bloggers.

This is an edited transcript of an interview conducted on November 25^th.