Take a break from social and don’t keep up with the Joneses: Worry Free Money

Everyone, writes Canadian financial author Shannon Lee Simmons, is worried about money. But her excellent book, Worry Free Money, provides a roadmap to a life where you can enjoy your financial life – and Spend Happy — while living within your means.

She starts by citing a few examples from clients she’s worked with – “there is always something, and we can’t seem to move ahead,” says one. “I’m sick of being broke,” says another. “Why am I falling so far behind,” laments a third.

On paper, she notes, “these people are not actually, numerically `broke.’ But being broke and feeling broke are two different things.”

There’s a way out, she writes:

• Understand the underlying reasons for why you want to overspend.
• Understand what you truly can and cannot afford, without budgeting.
• Spend money on things that make you happy.
• Say no to overspending (and yes to saving).
• Stop comparing yourself to others.

She talks about the risk of the “F*ck-it Moment,” when “you feel as if there’s no point in trying to be financially responsible and you end up overspending.” Examples – “I can never actually afford a vacation, but I need one. F*ck it, life is too short. Swipe.”

In another example, a single mom who can’t afford to buy her son a PlayStation feels forced to do so when his friends come over and mock him for not having one.

Later,she talks about creating Life Checklists as a way of avoiding what she calls “the Inadequacy Influence” (keeping up with the Joneses) which in turn leads to “F*ck It Moment” rash spending. As an example, such a list might include your goals you are proud of – a job with a good pension, and owning property – and your own lifestyle expectation you yourself want to meet – a nice car, a job you like, running a marathon, travelling, getting married, etc.

You then look at the expectations on your checklist to identify goals “you’ve achieved… and where you may feel you are falling behind.” This process helps you to find “the non-negotiable goals, the ones that are truly important to you. Once you know what those goals are, you’ll also recognize the expectations that may not be financially realistic – the boxes that can sabotage your happiness.”

Further on, she talks about having a “Social Media Detox” to prevent yourself from being tempted to overspend on things you may not need. Her rules:

• Two weeks fully off social media. No cheating.
• Unsubscribing from all favourite retailers that currently send notifications to your inbox.
• Deleting credit card information from all apps and online stores.

“Ignorance is bliss when it comes to sales…. Unfollow any lifestyle brands or retailers that trigger you to overspend,” she recommends.

Interestingly, she is not a believer in traditional budgeting.

Budgets usually mean you “track your historical spending, categorize your expenses, forecast your monthly spending, set spending targets based on that historical data and then (you) try to live within those limits.” This approach is “totally unrealistic for modern life… (they) have too many rules and involve far too much work.”

She prefers the Hard Limit – four categories, including Fixed Expenses, Meaningful Savings, Short-Term Savings and Spending Money. There are charts and examples to show how you can move to this simplified, four-bucket approach. She also recommends that you consider putting your spending money in a separate bank account from any saving money, so there is less chance of overspending!

You need to be conscious about how you use your spending money, she adds.

“Your spending money is an investment in how much you enjoy your life. That’s why cutting back can feel so hard and frustrating… if you’re cutting back on the wrong expenses it can feel like you’re divesting from your happiness. It feels like none of the money you earn is for you,” she notes.

This is a great, insightful and well-written book this is thought-provoking and provides easy-to-follow self-help tips. By following the advice, you can be on the road to Happy Spending, she concludes, a place where “no one has to be ashamed about their financial choices.”

If you are saving for your long-term future – retirement – there’s a great resource open to any Canadian with available registered retirement savings plan room. The Saskatchewan Pension Plan has been helping to build secure retirements for Canadians for more than 35 years. Find out how SPP can be your retirement savings partner.

Check out SPP today!

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Holly Trantham’s Beyond Getting By sets out the possibility of developing financial habits and actions that map to your lifestyle goals.

She explains how living well and building wealth have a complex relationship. By having a job “that requires me to examine the systems we live in…. I’m constantly thinking about what actually makes us happy and, by extension, what actually makes me happy. Because the truth is… we’ve all been sold lies about wealth, work and security that are actively making our lives worse.”

As an example, she talks about “shame-based budgeting” advice from other experts that leave the reader “smacked in the face with guilt” about such things as dining out, taking trips, and so on. Instead, your spending habits shouldn’t “come from a place of internalized shame. Budgeting this way makes you believe that you must be broke or poor because you’re lazy, incompetent, or otherwise undeserving of money… (which) makes you feel bad about every single `unnecessary’ expense.”

Her recommended three-point plan is simple yet effective:

• Pay your bills on time.
• Don’t go into debt funding your lifestyle.
• Invest in your long-term financial goals.

Each chapter in this thoughtful book provides a workbook section where you can chart out your own ideas and beliefs and test them against Trantham’s key messages.

In a chapter exploring happiness, Trantham makes the point that rich people aren’t always happy. They spend more time alone than do those with lower income, as well as “26 minutes less per day with family,” the book notes. “Rich people also tend to surround themselves with other rich people,” and become “less interested in engaging with a lower-class person than with an upper-class counterpart” This, she argues, will tend to “corrode your capacity for empathy – a key ingredient to building and maintaining relationships.”

Wealth (without happiness) becomes an addiction, she concludes, like a gambling or shopping addiction.

Instead, she says, we all need to ask ourselves this – “are your current money habits aligned with your personal values and interests?”

As an example, she talks about how she does not have a “car dependent” lifestyle, and can walk most places and use public transportation, but still was a heavy user of ride-sharing services until she thought about it more carefully. “Defaulting to taking a car whenever I was mildly inconvenienced (via Uber or Lyft) was deteriorating my relationship to my community and causing me to live a less active lifestyle along the way.”

And, she notes, this is just one example – think of all the different lifestyle/money categories this sort of analysis can be applied to!

In a chapter that looks at investing, she boils things down to several “most important” considerations:

• Get started as early as you can so your money has ample time to grow.
• Make sure you’re actually investing the money you contribute to (for Canadians, a registered retirement savings plan, pension plan, or Tax Free Savings Account), as the accounts are not themselves investments, they just hold investments.
• Continue contributing to your retirement regularly throughout your earning years.

“Retirement isn’t necessarily an age, it’s an amount of money. Financial independence means having enough money in the bank to stop working if you want to,” she explains. While stock markets have historically given returns in the 10 per cent range, “nothing is guaranteed… therefore, increasing the amount you’re able to invest over time is critical.”

This is especially important advice for women, she notes.

“According to the Women’s Institute for a Secure Retirement,`while the poverty rate for all women age 65 and older is 10.6 per cent (or just over one in 10), the poverty rate for single women living alone is almost twice as high at 19 per cent,’” she writes.

There’s a lot of ground covered in this great book.

On shopping, the author reminds us that “retailers do not have sales in order to save you money. They have them so they can earn more, because the more items they sell, even at a discount, the more revenue they’re going to generate overall. A $100 pair of jeans at 40 per cent off isn’t saving you $40, you’re still spending $60 you may not have necessarily spent.”

She takes a look at the idea of “manifesting,” the belief that if you “just visualize and vocalize your goals enough, they will come true.” A more realistic way to think about things is what she calls “facilitation,” a “much more pragmatic and intentional way to put the ideas behind manifestation into practice. It involves the process of visualizing not just the outcome you want, but the process it’s going to take to get there.”

Near the end of the book, Trantham makes the point that we tend to stick with what we are doing – the status quo – instead of making positive changes.

“No matter what the question is, the answer is often to choose the less convenient option,” she writes. “It is easier, in the short term, to stick to the status quo in your home life. But will that allow you to feel seen, respected, and like you’re contributing to an equitable home life in the long run?”

“Will it have been worth it (not speaking up) if things don’t change? Isn’t that a scarier thought that the possibility that they could?”

A very interesting and informative read – highly recommended!

If you’re saving on your own for retirement, the Saskatchewan Pension Plan may be just the ally you’ve been seeking. Amounts you contribute to the plan are invested in a pooled, low-cost and professionally managed fund. When it’s time to retire, your SPP options include the possibility of a lifetime monthly annuity payment or the flexible Variable Benefit.

Check out SPP today!

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Whether or not you’re his fan, Stephen King’s On Writing gives you great insight into the ins and outs of becoming a writer – and a clear, concise overview of the basic tools in the writing toolbox.

He begins the book by saying he wrote it “as an attempt to put down, briefly and simply, how I came to the craft, what I know about it now, and how it’s done. It’s about the day job, it’s about the language.”

As a young boy, his first little stories were based on comic books he liked. His mom loved what  he was doing, but advised him “write one of your own, Stevie. Those Combat Casey funny books are just junk. I bet you could do better.”

On finding what to write about, he notes that “good story ideas seem to come quite literally from nowhere; sailing at you right out of the empty sky: two previously unrelated ideas come together and make something new under the sun. Your job isn’t to find these ideas but to recognize them when they show up.”

After a tough life – he and his brother were raised by their single mom, and the family moved around a lot before settling in Maine – King found his talent was in writing. He and his older brother even put out a little local newspaper as schoolboys, buying a small copying machine to churn out copies more quickly.

In high school, he edited the school paper but also an underground one, which got him in trouble with the administration. However, the school’s solution was to get King working part-time as a sports reporter for the local paper. Protesting that he didn’t know much about sports, he was told by his editor “these are games people understand when they’re watching them drunk in bar. You’ll learn if you try.”

His editor taught him that “when you write a story, you’re telling yourself the story. When you rewrite, your main job is taking out all the things that are not the story.”

King completed college, got married, had kids, and struggled, teaching English part-time and working at a laundromat. His wife worked at a doughnut shop. But in the background, he began work on the novel Carrie, which eventually became a life-changing monster hit.

King talks about how he feels when he writes.

“You can approach the act of writing with nervousness, excitement, hopefulness, or even despair – the sense that you can never completely put on the page what’s in your mind and heart,” he notes. “Come to it any way but lightly…. You must not come lightly to the blank page.”

Vocabulary is a top tool in any writer’s tool kit. Don’t dress it up, “looking for long words because you’re maybe a little bit ashamed of your short ones. This is like dressing up a household pet in evening clothes.”

Next comes grammar. “One either absorbs the grammatical principles of one’s native language in conversation and in reading or one does not,” he says. “If you don’t know, it’s too late.” He moves on to sentence structures – nouns and verbs – and suggests avoiding passive verbs. You throw something – you don’t say “it was thrown by” someone, he explains.

King sees writers in a large pyramid – the bad ones are at the bottom, the next level contains “competent” writers, a “large and welcoming” group. Next comes a small group of “really good writers,” and at the top, geniuses like “the Shakespeares, the Faulkners, the Yeatses, Shaws, and Eudora Weltys.”

While anyone can achieve good writing by mastering “the fundamentals (vocabulary, grammar, the elements of style),” King maintains that “while it is impossible to make a competent writer out of a bad writer, and while it is equally impossible to make a great writer out of a good one, it is possible, with lots of hard work, dedication, and timely helps, to make a good writer out of a merely competent one.”

If, he continues, “you want to be a writer, you must do two things above all others: read a lot and write a lot. There’s no way around these two things that I’m aware of, no shortcut.”

Another tip from King is keeping the pedal to the metal. “Once I start work on a project, I don’t stop and I don’t slow down unless I absolutely have to.” He says that otherwise, “characters begin to stale off in my mind – they begin to seem like characters instead of real people.”

He sees stories and novels consisting of three parts: “narrative, which moves the story form point A to point B and finally to point Z; description, which creates a sensory reality for the reader; and dialogue, which brings characters to life through their speech.”

“The key to writing good dialogue is honesty,” he continues. “You need to be ‘honest about the words coming out of your characters’ mouths.”

Length of an article, story or novel is also important. Early on, when he was working on an article, he got a comment that changed his writing forever. “Not bad,” the editor wrote, “but PUFFY. You need to revise for length. Formula: 2^nd draft = 1^st draft minus 10 per cent.”

He concludes the book by encouraging any of us who want to write. “You can, you should, and if you’re brave enough to start, you will,” he tells us. “Writing is magic, as much the water of life as any other creative art. The water is free. So drink. Drink and be filled up.”

This is a terrific book. It’s a great autobiography in and of itself, but as a text on how to write, it’s much more readable and direct and helpful than other books we’ve seen on the topic. Highly recommended.

Writing is something many of us take up in retirement – or perhaps, return to. If you’re saving up for life after work, a great partner is the Saskatchewan Pension Plan. SPP does all the hard work for you, investing your savings in a low-cost, professionally managed pooled fund. When it’s time to dust off the keyboard in retirement, you can choose such options as a lifetime monthly annuity payment or the flexible Variable Benefit option. Check out SPP today!

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It’s always very difficult for those of us who are in the working world to truly envision what retirement will be like. It’s like some sort of alternate universe, or at least, it seems that way.

Life After Work by P. Alexander provides a thought-provoking, detailed, and clear look into how your future could unfold. While it is intended for a U.S. readership, the fundamental concepts in the work are of interest to a broader audience.

Alexander begins by describing retirement “as a juncture in life that beckons with the promise of freedom and newfound adventures,” warning that it “can also stir up a whirlwind of emotions, leaving us grappling with uncertainties and insecurities.”

But, Alexander reassures us, “retirement is not a destination; it’s the beginning of a grand adventure, a blank canvas waiting for you to paint with the vibrant colours of your dreams and desires.” It’s a phase where you “have the privilege of redefining life on your own terms, unburdened by the constraints of a structured workday.”

Alexander stresses the importance of “staying active and fit” in retirement. “One of the most common mistakes that retirees make is to just kick back, relax, and forget about the world,” which, while fun, “can lead to significant cognitive decline.”

Alexander calls staying physically active “vital… and also a potent tool for keeping your mind sharp.” Similarly, keeping up with the housework is “conducive to mental clarity… household chores offer a sense of accomplishment and a visually pleasing environment.” Other recommendations for staying active and fit include “developing a green thumb,” and “refining your eating habits.” Set priorities around family time, which can bring “joy and emotional well-being,” the book advises.

After a chapter on tweaking your wardrobe for your new retirement lifestyle and “look,” the book talks about the importance of having routines in retirement.

“Freedom is great, but it can lose its novelty once you run out of things to do,” warns Alexander. “This is where a routine can serve as a comforting and stabilizing force…. (it) can provide structure, maintain your health and well-being, and ensure you make the most of your time.”

In a chapter discussing retirement goals, such as well-being and health, social connections, and personal growth and learning, Alexander expands on the importance of having a sense of purpose.

“Our sense of agency and utility relies on having a sense of purpose, and that’s something that passion contributes to,” Alexander explains. “Passion gives you a reason to wake up in the morning with enthusiasm and excitement. Retirement can sometimes bring a loss of purpose for those who were deeply committed to their careers. Reigniting old passions or discovering new ones can reignite that sense of direction and fulfillment.”

A later chapter in the book looks at how you can set up your own “bucket list” of “aspirations and experiences you wish to accomplish during your lifetime.” Consider your passions – “activities, experiences or places that have always intrigued you” in setting up a list that you can “devote your energy and time to.”

At the end of a chapter on the importance of developing a social network in retirement (to replace the one you had at work), Alexander writes that “it is always possible to forge meaningful connections in your retirement years… with the right mindset and a dash of proactive spirit, you can have a vibrant social life that enhances your retirement journey.”

There’s a helpful chapter on budgeting – figuring out your sources of retirement income and balancing that out against your expenses. That can help you understand how much you need to save for retirement, Alexander writes.

“The sooner you start saving for retirement, the more time your investments have to grow. Understanding your timeline is crucial for setting realistic goals.”

This fact-laden book is a great read for anyone gearing up for life beyond work.

“Planning can be your essential best friend,” Alexander concludes. “Create a roadmap for your retirement that aligns with your dreams and values. This is the best way to make the most out of the next phase of your life.”

As the book suggests, if you haven’t already started saving for retirement, there’s still time to get rolling. If you’re saving on your own for life after work, consider enlisting the help of the Saskatchewan Pension Plan (www.saskpension.com). SPP has been securing retirement for Canadians for more than 35 years.

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For many of us, running our household money can be a “learn as you go” stumble, as we find out that not paying off credit cards, or spending more than we earn all the time, are bad things.

Victoria Botvinnik’s How To Adult Money offers up insightful information on every phase of the complex world of personal finance. It’s like having a friendly accountant coaching you through.

On credit cards, she writes that “credit cards are a great thing to have if you know how to use them without being used and abused by them.” She warns that credit spending “hurts a lot less… than (to) hand over hard-earned cash,” and that making only the minimum payment each month means “you’re not really paying down the debt much, if at all.”

We should have two credit cards, not a bunch, she adds.

On pension plans at work (such as defined benefit or defined contribution plans), Botvinnik makes the point that if there is an employer match to your pension contributions, it’s definitely worth joining up. “The employer match happens when your employer helps contribute to your retirement. It’s generally done in the following way: you promise to contribute a certain percentage of your salary to this plan and your employer will match it up to a point. This is fantastic and you should take advantage of it as soon as you’re allowed to.”

Looking at accommodation, she raises the interesting point that renting is not always “throwing money away” as some contend. She backs that up with a chart, showing that buying a condo for $350,000 is not necessarily better than renting it for $1,800, because renters don’t pay a down payment, mortgage interest (possibly for up to 30 years), property taxes, legal fees and home inspections (this cost is incurred when you buy and when you sell), maintenance, and condo fees. Renters just pay rent and renter’s insurance.

“In this scenario, as long as the rent was under $2,350, renting is the better option,” she concludes. She says you need to think about whether you plan to stay in your current job and current community for a long time, or not, before buying. If you think you’ll be there for at least 10 years, she says buying can make sense.

She takes a look at the “whys” of debt, which when the book was written, worked out to $1.67 of debt for every dollar Canadians earn.

We go into debt, she explains, for necessities, such as “somewhere to live, a car to get you places, and potentially schooling to get a job.” Fine. But, she notes, there are other causes of debt, such as “eating out and going on expensive vacations” we can’t afford. “Some of these actions may be small but add up over time, like buying lunch every day.”

Getting married or having kids can “create higher than normal expenses for a year or so, which many households handle with debt.” Finally, “legal issues” like not paying taxes or parking tickets “can turn into a real issue if you don’t pay attention or accidentally make a mistake,” she warns.

To get out of debt requires a plan. You can use the “snowball technique,” paying minimum payments on all debts and adding extra to the lowest one. When that’s gone, apply more extra to the next lowest one.

Alternatively, you can target debt with the highest interest first, the “Avalanche technique.” Pick one, and develop a plan, a “timeline for becoming debt free using current budgeted savings per month.”

In a chapter on the 10 per cent rule (spend 90 per cent of what you earn and save the rest), she notes that the “rule of thumb” amount might not be enough for lower income earners, and may be too much for higher-income earners. “If you’re planning to retire on an income similar to the one you have right now, you’ll likely need to save more than 10 per cent. If you’re happy to retire on less than your current income, you’ll need to save less than 10 per cent.”

No matter what your retirement savings number is, the earlier you start, the better, she writes.

The book is filled to the rafters with great information. There’s a section on how to set up a budget, which looks at the “envelope system,” where you put cash aside to cover specific expenses, or the 50/30/20 system, where 50 per cent of your budget is for necessities, 20 per cent is for debt repayment/savings, and “no more than 30 per cent of the cash you take home should be spent on non-essential lifestyle items like eating out, shopping, etc.”

The very detailed investment section helps you determine your appetite for risk, and gives a detailed look at all the various savings vehicles (registered retirement savings plans or RRSPs, TFSAs, non-registered accounts) and investment types (stocks, bonds, mutual funds, ETFs, and more).

Do you want to be an active investor – picking your own investments? Or passive – someone who buys index-related investments? The book fully explains the pros and cons of each approach.

There’s a summary section near the end of the book, titled Six Months To Being Awesome With Money, that puts it all together for you.

This is a great book, highly recommended, and fully Canadian, that would make a great addition to your financial planning library.

If you don’t have a retirement savings program at work, the Saskatchewan Pension Plan may be the plan for you. Any Canadian with unused RRSP room can join, and you decide how much to contribute – less when you are facing tight times, more when times are better. SPP will invest your contributions in a pooled fund, professionally managed at a low cost. When it’s time to retire, you can collect monthly lifetime SPP annuity payment, or move to our Variable Benefit option, where you decide how much to take out, and when!

Check out SPP today!

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The classic book Never Too Late, by Gail Vaz-Oxlade, is absolutely brimming with great saving advice that still stands up today.

In the past, she begins, no one worried about saving for retirement, and for good reason. “You got to 40 or 45 and you died. No problem there. But then life got easier, health care got better, and people started living longer. A lot longer. And a new industry was born: the retirement-planning industry,” she writes.

This book, she continues, is for anyone who has “been avoiding the whole issue of planning for your future… and (who thinks) your current approach might not really be the best way to have a happy life down the road.”

Her four key points are to “stop worrying, start saving,” to “be sensible” and avoid bad plans, like carrying debt into retirement, to take action (actually doing something) about saving and to “take control” of your finances.

Vaz-Oxlade presents her “four basic rules for managing money,” which are:

• Don’t spend more money than you make.
• Save something.
• Get your debt paid off.
• Mitigate your risks.

You need to figure out, to the penny, how much you own (bank accounts, registered retirement savings plans, TFSAs, etc) versus how much you owe (mortgages, car or other loans, lines of credit, credit cards, investment loans, student loans, etc.), notes Vaz-Oxlade.

“Subtract what you owe from what you own. That’s your net worth. If you have a positive number, it means you own more than you owe and you’re on your way to building up an asset base. If your number is negative, it means you owe more than you own and you must get busy paying down your debt and building up your savings,” she writes.

To start saving, Vaz-Oxlade introduces the concept to the personal savings rate, or PSR, “a measure of how much money you save out of the money you make.” To get to this number, add up your monthly income from all sources, then tote up what you are spending each month. Subtract what you spend from what you make.

“If you come up with a positive number it means that you’re not spending more than you make and have some savings. Good for you. If you spend every penny you make, your personal savings rate will be zero… if you end up with a negative number, you’re spending more than you make,” she explains.

No matter how pressing things are with your finances, Vaz-Oxlade stresses the importance of starting to save.

“If there is a single message I want you to hear it is that YOU MUST SAVE…. You don’t have to start by saving a whack of money. If you’ve never set a penny aside, making just a small commitment today can make a huge difference to your financial future. So, it doesn’t matter how little you have to start, the important thing is to start,” she writes.

On government retirement benefits, Vaz-Oxlade warns that “if all you will have access to are government benefits because you don’t have access to a company pension and you don’t plan to save anything while you’re working, you’ll have to lower your expectations about what retirement life will look like… in all likelihood you’ll just be making ends meet.”

At the time the book was written, Vaz-Oxlade said 11 million Canadians lack a company pension plan, “in which case you’re on the hook for all the money you’ll need to set aside for the future.”

She notes that 20 per cent of those who are eligible for a workplace retirement program “don’t participate. Really? Your employer wants to give you more money and you won’t take it?” Get to HR tomorrow and sign up if you can, she urges.

She says that a lot of what’s written about retirement focuses on the idea that “we’re gonna need a bazillion dollars if we ever hope to retire,” an argument that makes many folks depressed, or scared into “sticking their heads into the sand” on retirement saving.

All saving will be of help. She gives the example of Frank and Jeff, twins who are both 20, who know they need to save for retirement. Frank “opens up an RRSP right away, contributes $2,000 a year for 14 years, and then stops.” Jeff procrastinates, starts at 30, and puts $2,000 a year away until age 64. Both get compound gains of six per cent annually.

At 65, Frank has $283,400 and Jeff, despite having put in more than twice as much money, has just $139,200. Because “the interest he earned on the interest he earned” happens over a longer time period, he ends up with more, explains Vaz-Oxlade.

So, don’t be fazed, and start saving. “If retirement is rushing towards you like a speeding truck, do something. Find a way to cut $5 a day from your spending. Drop coffee, lunch at work…. Skip a take-out meal or night out and enjoy some good ol’ home cooking…. Invest that five bucks a day – just five bucks – using an automatic monthly savings plan in either an RRSP or a TFSA, and in 20 years at a return of five per cent, you’ll have over $61,655.”

In a section on retirement living, Vaz-Oxlade reassures us that for most people, retirement will consist of “the simple pleasures that make your life lovely to live. Think of sleeping in. Think having time to spend with friends you were always too busy to see. Think time with the grandkids or with your church pals.” Don’t expect to “completely revamp your lives” at the end of work.

A nice idea, once you have figured out what your retirement income will be from all sources, is to practice by living on that amount prior to actually living on it.

“Practising living in your future retirement circumstances lets you develop a feel for what it will be like and get ready to make the adjustments necessary. By simulating your retirement life, you not only see how you will feel, you’ll get some experience with what you’ll have to do to make it work.”

She offers a number of savings steps for those of us who haven’t started. Get started, even if you are putting a toonie away in a jar each week.

When you get a raise, “live on your pre-raise income,” and bank the raise. Tax yourself on spending – “every time you pick up a coffee, grab a burger, or hoe through a muffin, drop a buck in your bank.”

When you finally pay off a debt, put half of what you were paying each month into savings.

If you save $10 on groceries, put that $10 in the bank. Consider using a cash back credit card, as long as you pay off the balance in full each month, and bank the cash back.

There’s a rich section on how to invest on your own covering fixed interest and equity investments, mutual funds, and exchange traded funds. When investing, Vaz-Oxlade writes, pay attention to the fees you are being charged, as they “will eat into how much you end up investing.”

Vaz-Oxlade also talks about annuities, which provide monthly income for life. “During periods of high interest rates an annuity can really make your hard-earned money sing since you’re locking in that high rate for the life of the plan,” she observes.

Make sure you have thought about what you are going to do with all your newfound time before you retire, she concludes.

This is a truly great book for any of us who have yet to get started on saving for retirement. There’s lots of humour and the tone is one of a supportive coach’s advice. Definitely worth adding to your collection.

With the Saskatchewan Pension Plan, it’s you who decides how much you want to contribute. Contributions can be made automatically, and you can bump them up in future when you get a raise. And when you retire, among your choices are a lifetime annuity payment each month, or the flexibility of SPP’s Variable Benefit. 

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In What The Happiest Retirees Know, author Wes Moss highlights 10 attributes that can help you be a HROB – Happiest Retiree On the Block – and not an UROB, or Unhappiest Retiree on the Block.

He writes that data from the Financial Planning Association south of the border found that “only 18 per cent of U.S. households have enough wealth to cover pre-retirement consumption when they retire, meaning most Americans will not be able to maintain their pre-retirement lifestyle in retirement.”

As well, only half of U.S. citizens are even saving for retirement, writes Moss. “Very few people are prepared for the full retirement journey, and many don’t think they will ever be able to quit working,” he explains.

Here are the 10 habits that form the core of this humorous and well-written book.

Excellent money habits — $500K in savings

He writes that the happiest retirees “have $500,000 or more in savings, their mortgage payoff is complete (or at least in sight) and they have multiple streams of income.”

While $500,000 sounds like a lot of money, it is an attainable goal if you start young, he writes. He recommends that people save 20 per cent of their pre-retirement income.

“If you simply take $100 each month and invest it, assuming a 10 per cent return and that your investment compounds monthly, you’ll have a sweet $637,000 at the end of those four decades,” he writes. If 10 per cent returns seem high, Moss notes that the U.S. S&P index has averaged over seven per cent a year for the last 20 years.

Having more than one stream of income is key as well, he writes. For retirees, this could include “multiple pensions, (government retirement benefits), rental properties, investments, or part-time work.”

It’s essential to know in advance what your post-retirement income and expenses will be, so that that you can find, and fill, any gap between what’s coming in and what’s going out.

Curious and adventurous – at least three core pursuits

Moss writes that the happiest retirees have “3.6 core pursuits…. The unhappiest retirees only have 1.9.”

“Most of the core pursuits fell into four categories. There was part-time work, like teaching, consulting, and decorating. Then there was exercise and health – activities that included hiking, biking, swimming, walking and cooking. The arts were a big one, with painting, pottery, and music topping the list. And then there was adventure, such as travel, cruising, RVing, piloting and sailing.”

His list of Top 100 Core Pursuits includes yoga, tennis, golf, knitting, pickleball, skiing, joining social clubs, and much more.

Live close to independent kids who have their own homes

Moss writes that the happiest retirees live near their kids or grandkids, no more than two or three hours away.

He stresses, however, that the kids need to be independent – living away from home and on their own, without a lot of parental support. “Retirees were two times unhappier if their adult children still lived at home,” he writes. As well, “unhappy families average $714 a month in support of their 20-, 30, and 40-something-old `kids.’” The happier retirees spend less than $500 a month of their kids, he continues.

Times are tough these days, he concedes. As of September 2020, 52 per cent of young adults in the U.S. were “living with their parents… it’s the highest percentage since the Great Depression. No wonder parents are depressed.”

“If your children are not financially independent, you are 1.5 times more likely to be an unhappy retiree,” he warns.

They are married, and have either never been divorced, or divorced once

His research found that retirees who have never married, or have been divorced two or more times, are less happy in retirement than married couples where each partner has either never been divorced — or divorced only once.

You only get one do-over in marriage, Moss concludes.

They stay connected

Moss notes that the happiest among the retired are those with “at least three close connections/friendships.” Friends, he writes, “are a better happiness currency than money. You heard me correctly. Money can’t buy friends – but friends can buy happiness.”

You should see friends every month and belong to at least one group. An ideal way to merge the two concepts is to travel with friends.

They are healthy

“Happy retirees are fans on the `ings,’” he writes. This means “walking, swimming, biking, and hiking.” They “gravitate toward a healthy diet,” and enjoy a drink – particularly “white wine and gin.”

They have good home habits

“Happy retirees live in nice houses, but not McMansions,” Moss notes. “It’s OK to be comfortable. It’s less OK to have exotic zebras grazing on the 400-acre ecofarm you call home.”

They also tend to stay in the same neighbourhood, and “don’t downsize… this is a new habit gleaned from my most recent study. (They) don’t downsize into a smaller place, mainly because they anticipate their kids and grandkids will be coming home to visit.”

They also focus on paying off their mortgages first, not last. “It’s a surefire thing. Once that prodigious debt is off your shoulders, no one gets to take a four per cent bite out of your joy,” Moss notes.

They exhibit excellent investor behaviour

Moss writes that the happiest retirees invest more in stocks that pay dividends than bonds, and avoid trying to time the market and avoid short-term risks by taking a long view on investing. Their investment decisions are not “based on emotion… they are not fueled by fear. They take time to take stock (pun totally intended.”

They are, he says, careful when turning investments into retirement income, and on making sure they don’t run out of money in retirement through adherence to the “four per cent rule” on annual withdrawals.

They are masters of the middle

Happy retirees, Moss writes, are “smart spenders. Sure they may have had times in their lives when they were carrying a little too much credit card debt or struggling financially, But for the most part, they’ve prioritized saving over spending – and they don’t deprive themselves needlessly.”

The UROB (unhappy retirees) have a few characteristics as well, he writes, such as “the obsessing over money thing” and placing too much emphasis on status – a big house and a flashy car.

This is a different way to look at the whole retirement picture. We recommend that you find a place for this book in your retirement library.

If you are saving for retirement, as the book suggests, putting away a set percentage of your paycheque towards retirement is a smart way to pay your future self first.

The Saskatchewan Pension Plan allows you to make pre-authorized contributions from your bank account. Alternatively, you can set up SPP as a bill in your online banking app and set up automatic, monthly SPP “bill” payments. The difference is that this will be a bill that pays you back.

Check out SPP today! And, in breaking news, SPP’s Variable Benefit is now available coast-to-coast-to-coast for all SPP members!

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Money, writes author Liz Davidson, quoting from the lyrics of an old song by the O’Jays, “can drive some people out of their minds.”

But her book, Money Strong, provides a step-by-step way to put you in control of not only your money, but your life.

“When you gain control over your finances, you can ultimately spend your time doing what provides you with the most joy and fulfillment and make what Steve Jobs called `your own dent in the universe,’” she writes.

She runs through the “money stories” of her family. Her personal money axioms include an effort to “spend wisely and on things that really matter to you, ideally things that grow in value over time or that you feel are really important to your quality of life.”

Money, she adds, “is something you have to earn, and it really only counts if your own efforts generate it.”

She has developed what she brands as the START framework:

• Set yourself up for success
• Tackle your stress
• Advance towards the life you want
• Role model good financial habits
• Thrive by living your purpose

OK, so how do we START?

The book is set up in modules to explain (using examples and worksheets) how to put all the principles of START in place.

Davidson says we need to establish “your financial identity” first. Are you an investor-type, “future oriented,” focused on the big picture? Or a bargain hunter who gets “a rush out of getting a deal” and have “both a love and a skill for negotiating?” Could you be a “minimalist” who cherishes “the moments with those you love above all else?” Or a planner who loves to-do lists, and to “arrange, communicate and follow plans?” Other financial identities covered off in the book include givers (who think of other people’s needs first) and automaters, who “set money aside for (their) future.”

You should commit to one of these identities and then plan accordingly, she advises.

An interesting chapter looks at the use of “bright spots” to move forward towards financial freedom. This is basically figuring out what’s gone right for you in the past for other things, and then “taking what worked for them to achieve success in other areas of… life and applying it to their finances.”

Examples of the use of a bright spot – “some people discovered they were at their best when they found ways to get perspective, remind themselves of their end goals, and find a way to track progress,” Davidson explains. Other “created a mantra they could keep front and centre of their mind to focus on the things they could control, and let go of those they couldn’t, sharing their mantra with their families and friends for accountability and reinforcement.”

So, figuring out what has worked for you in life, and then integrating it into your life and money plan. Interesting!

In a module on how to “tackle your financial stress,” Davidson advises us to “let go of shame and fully accept that you cannot change the past” when it comes to money. Become aware of what stresses you the most about finances, and develop a recovery plan that “is realistic… (and) trackable, so that you can see your progress and feel a sense of both accomplishment and relief, which will keep you motivated to continue the plan.”

High interest debt needs to be eliminated systematically. She suggests breaking up debt repayment into small, “to-do” list steps that can be celebrated as they are completed. Once you have cleared up your debt, build an emergency fund (start small) and avoid going back into debt. “If possible, use your credit cards sparingly… and use a debit card instead for all purchases you make at stores,” she suggests.

It’s hard to do justice to a book this detailed in a short review, but the short-form takeaway is that you can leverage things that work for you in other facets of life to develop a plan to regain control of your money – and with that control, you will be able to focus on what you want to do rather than on the struggle of staying afloat.

We particularly liked the example of replacing bad habits with good ones – she cites the example of replacing drinking after a hard day at the office with dancing, something she loves to do. Change a bad spending habit for a good one, and things will look after themselves.

It’s a good habit to put away money for your future – a time when you may not be able to work as hard. If you don’t have a pension program at work, the Saskatchewan Pension Plan may be just the partner you’ve been looking for. Let SPP invest your savings in a low-cost, professionally managed pooled fund, and at the end of work, SPP will provide you with retirement income options, including a stable of annuities and the flexible Variable Benefit option.

Check out SPP today!

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When a younger golf buddy sat us down to explain cryptocurrencies and fintech investing, a sort of grey mist seemed to form in our mind, and we strained at an imaginary leash to get back to golfing.

But The Canadian’s Guide to Modern Investing by Kiana Daniel and others clearly explains the pros and cons of these and other newer investments and approaches in a clear, easy to follow, mist-free way.

The book starts out by explaining that any investor, no matter what they choose to invest in, should be a saver first.

“One thing online investing can’t do is make something out of nothing,” the book explains. To invest, you must save money first, the book continues, adding “don’t get frustrated, though, because you don’t need as much to get started as you might fear. If you have a job or source of income, building up ample seed money isn’t too hard.”

The book says automatic withdrawals, workplace retirement plans, and making sure you put any left-over money “to work for you” (and not lying around) are ways to build savings.

In a section on figuring out how much risk you, as an investor, are prepared to take, the book recommends asset allocation. “Instead of tossing all sorts of ingredients into your portfolio pot and guessing what it will taste like, it’s best to know what needs to go into the pot to get what you want. In investing, this is called an asset allocation.”

Asset allocation’s advantages include the safety of diversification (not all eggs are in one basket), rebalancing (sticking with an asset mix and adjusting things when an asset gains or loses’), and discipline – sticking with your asset allocation choice, such as 70 per cent equity and 30 per cent stock, for example.

After talking about passive investing (index funds and mutual funds) versus active investing (doing research yourself and picking specific stocks, exchange-traded funds, bonds, and other investments), we learn about the importance of fees.

ETFs and index funds generally have far lower fees than mutual funds, the book states.

“In the world of index funds, the expenses are much lower…. Many of the more traditional ETFs cost no more than 0.06 per cent a year in management fees.” In the U.S. at least, the book says, some ETFs have no fees.

In a look at cryptocurrency investing, we learn that crypto is not an “everyday government-based currency” but one that relies “on a technology called blockchain, which is decentralized (meaning no single entity is in charge of it). Instead, every computer in the network confirms the transactions.”

A chief advantage crypto has, the book states, is that “with traditional money, every time you make a transfer, a middleman like your bank or a digital payment service takes a cut. With cryptocurrencies, all the network members in the blockchain are that middleman; their compensation is formulated differently from that of fit money middlemen’s and therefore, is minimal in comparison.”

The book warns that crypto can be very volatile, noting that in 2017, the value of crypto “skyrocketed above 1,000 per cent and then came crashing down.”

The book then takes a look at “fintech,” defined as “all parts of technology that help provide financial services and products to customers… individuals, companies, or government.”

Broadly speaking, the category consists of “capital markets tech,” where newer tech like artificial intelligence, machine learnings and blockchain is involved in investing; “wealthtech” which involves the use of digital tools for personal and professional wealth management and investing, “insurtech” which is insurance technology and “regtech” where regulatory challenges are addressed through automation.

While all of the new firms in these categories are definitely new and exciting, investors should use caution, the book advises.

“No matter how `new’ or `innovative’ any technology or offering (fintech or otherwise), always pay attention to the fundamentals of the company,” the book warns. “This means focusing on the company’s sales and net profits and a solid balance sheet…. If the company is profitable year after year, that’s the hallmark of a strong investment.”

A chapter on cannabis investing says that this relatively new category does offer investors the chance “to invest in a new industry.” But, the book warns, do your homework. There has been a lot of money flowing into the new industry which means that “even legitimate cannabis stocks are overvalued,” and growth in the sector could lead to the “commoditization” of cannabis, where the product “becomes indistinguishable from other similar products” and prices drop, as is the case with most agricultural crops.

The book concludes on more familiar ground, comparing “value investing,” where you buy stocks in companies that appear undervalued “and worth more than their share price indicates,” as well as growth investing (buying small companies in the hopes they grow larger), income investing (focusing on holdings that pay interest and dividends) and “investing in what you know.” There’s a chapter on ESG (environmental, social and governance) investing, where the goal is to invest in companies that respect the environment, do good for society, and are well run for their people.

Phew. There’s a lot here in this relatively tiny book!

The takeaway we had from reading it was this – there are many different things you can invest in. Some are risky, others, less so. Before you invest in anything, it is important to do your homework and know if the thing you’re buying into is well run and has a solid track record. Develop an approach and stick to it – be patient.

Alternatively, if you are investing for retirement and would rather focus on something else, perhaps golf, the Saskatchewan Pension Plan may be worth checking out. SPP’s investment professionals will grow your savings for you, with a diversified, pooled fund that is run at a very low cost. When work is in the rear-view mirror, SPP will help you convert your savings into retirement income, including the option of receiving a lifetime monthly annuity payment based on some or all of your savings.

Great news! SPP’s flexible Variable Benefit option is no longer limited to those members living within the borders of Saskatchewan. Now all retiring SPP members across the country can take advantage of this provision, which puts you in control of how much income you want to withdraw, and when you want to withdraw it. You can also transfer in additional savings from other unlocked registered sources. For full details see SaskPension.com.

Check out SPP today!

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Robin Ryan’s book Retirement Reinvention is key reading for any of us — once out of the workforce — who are struggling to figure out what to do with all the time. It all requires a plan.

First, she notes, the act of retiring itself isn’t always a planned thing. It’s one of four reasons “retirement can happen,” she writes — a choice, made on your own terms, or “you are burned-out, dislike, or just done with your current career, so you quit.” The other two reasons are “your career quits you because of outdated skills and/or your age,” or you are “`forced’ to retire because the company wants you gone.”

So if you have landed in the post-work reality, she writes, “the comfort of that (past) identity is lost, along with the work community you’ve been immersed in.” That’s where a plan comes in, she continues.

You need to think about, she writes:

• “What about my identity? Who will I be?
• What about my desire to be productive and important in my own eyes?
• What about my emotional well-being?
• Who will I hang out with?
• What will do with another twenty or thirty years still to live?”

The book addresses these key questions in a well-written, example-laden way, complete with worksheets, and recommends that you plan retirement as well, or better, than you planned your work career. This is not a financial plan, but a life after work plan, the book explains.

Ryan notes that a lot of people just think retirement will be like vacation. They’ll play tennis, or golf, or lie on the beach.

“That plan, then, is to do nothing. The trouble with doing nothing is that you never know when you’re done! There is so much more to consider. How will you contribute? What will you learn? Whom will you teach? You’ll have plenty of time to lie on the beach, but you will also need to think about how you will nourish your soul.”

For those of us who just can’t visualize new things to try, she includes a detailed two-page list that includes things like dancing, dating, home brewing beer, pets, philanthropy, wine tasting and yoga.

In a chapter for those thinking of relocating when they retire, she advises that “moving quickly can be a serious mistake… if you think you want to move to be near family and grandchildren, maybe a dry run, such as renting nearby for a year, is a good way to start.” Many boomers “regret the move afterward,” she warns.

In a chapter on retirement spending, she notes that retirees spend more in their sixties than in their seventies, eighties and nineties. “This makes sense, as people in their sixties are more active and likely to do more travelling, and to enjoy sports and entertainment, and thus spend more,” she writes.

However, she continues, while a rule of thumb is that your retirement income should be around 80 per cent of what you were earning prior to retiring, “Money magazine warns that new research on household spending after retirement shows there is no predictable pattern… some households spend more — way more — than they did before retirement.”

Housing costs can increase in retirement for those of us who “maintain, rather than pay off,” their mortgages, she notes. Those retirees who are frugal tend to be able to live on 80 per cent of what they made before retiring, she adds. So, you do need to pay attention to your spending and living within your means, the book says.

Many retirees don’t want to try new things, which is one of several obstacles to a successful retirement.

“People over 60 can be very good at finding the negative, making an excuse or setting up an obstacle that they’ve put in their own way. Instead of seeing that a new activity, service or job could be fun and introduce them to new people and expand their world, they only see what might be wrong with it. You must approach retirement with an `I can do it’ attitude. That is imperative. Be open and flexible. Look for opportunities — they are all around if you look for them,” she writes.

Isolation is a danger as we age, she writes. We need to “make new friends and reconnect with the old.” Be a joiner, she advises — book club, card groups, any community group may be of interest. Rekindle old friendships via Facebook. And if there’s nothing out there to join, start something, she writes. “Dinner groups… (and) movie nights are very popular,” she writes, adding that knitting groups and poker nights can also be fun. “Don’t wait for the group or activity to find you — look for people and invite them to join you,” she writes.

She concludes by advising readers to “be flexible. Your plan is just a plan. You can alter it, and you can add in new things as you test drive them. You may meet new people who take you on new adventures. If you try something and it’s not great for you, don’t do it again. Make sure any volunteer work feels rewarding. Most of all, enjoy your days!”

This is a great book. As George Harrison once sang, “if you don’t know where you’re going, any road will take you there.” As retirees ourselves, we found joining local line dancing classes — an activity neither of us had ever done before — has indeed created many new friendships, and adventures. We were on a line dancing bus trip to Nashville last year, and are going on a line dancing cruise next year. Who knew we would like line dancing? We sure didn’t, but we do now.

An important consideration for retirement is saving up for it. If you don’t have a workplace pension plan, have a good look at the Saskatchewan Pension Plan. It’s a voluntary, defined contribution pension plan — you decide how much to save, and SPP looks after the heavy lifting of investing those savings via a professionally run, low cost pooled fund. When it’s time to try something new in retirement, SPP help you turn savings into income, including the option of a lifetime monthly annuity payment. Check out SPP today!

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