Timeline Vs. Intensity

by Gabby

Timeline vs. Intensity is the theory of how much time it will take you to reach your goal of your desired retirement fund in combination with the amount of your takehome pay you will need to put away annually vs. The intensity of the actual saving, for example if your stroll and take your time it will seem as if it's taking forever to reach your goal, and if you only give yourself a very short amount of time to reach your goal, you might feel very rushed and as if you need to obsess over the program in order to succeed. This program can be condensed or stretched out, depending on your take-home pay amount and the amount of time you allow yourself, and may be used for a variety of things such as a retirement fund, buying a new car, paying off student loans and so much more.

https://affordanything.com/timeline-vs-intensity/

Saving is Sexy

by Riley

This article states that men that spend more money on first dates have better dating success but are more likely to go home alone compared to savers who are more desirable romantic partners. The article also says those who are savers are much calmer and more likely not to cheat or drink too much when at bars. This article has zero evidence to prove any of their findings are true.  I didn’t like this article it had zero financial aid it just tells you that if you want a long-term relationship be a saver if you want a short one night stand kind of thing than be a big spender. For me this is not helpful and complete irrelevant to budgeting money.

http://www.humbledollar.com/2018/04/saving-is-sexy/

The Shockingly Simple Math Behind Early Retirement (from Mr. Money Moustache)

By Giana

The higher the percent of savings you put away from your take-home income the sooner you will be able to retire. If you live on 35% and save the rest (65%) of your take home-income you can retire in 10 years. That means living on 35% in your retirement as well. The 65% savings is then invested, growing your savings exponentially.This takes care of unexpected emergencies.

Making adjustments to you daily routine such as biking, making coffee at home and using community resources can add years to your retirement. It isn’t about making more money but saving the money you do have. Spending all your money as soon as you make it is pointless, save your money and work less.

I think everyone should have the opportunity to read this article before they’re 20. It shows a clear picture on how valuable saving is.  It really is Shockingly Simple.

https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

The Four Types Of Expenses (from Budgets are Sexy)

by Alex

According to Nik Halik, there are 4 types of expenses, all of which are good, except one. The four types of expenses are as follows;

Lifestyle Expenses

Lifestyle expenses are expenses such as; eating out, vacations, concerts, entertainment, and road trips. These are practically memory building costs that involve other people. They are all good, but only in moderation.

Protective Expenses

These costs are associated with protection of important things in life, such as; health, house, cars, and businesses. This also includes all insurances; car, life, house, and disability. Also, this includes an emergency fund to protect you from falling into debt. This type is also good, but much easier to manage if you are wealthy.

Productive Expenses

These costs are those that improve your life, especially long term improvements. This includes education, career, investments, and/or anything that you need to spend money on to earn money.

Destructive Expenses

These are the worst type of costs. This includes bad habits, credit card debts, and anything else that makes you spend money for nothing in return.

All information attained from; http://www.budgetsaresexy.com/4-types-of-expenses-not-all-bad/

Buying vs. leasing a car

By Kristy

Buying and leasing a car

Both have their pros, and both have their cons. Depending on your financial income or even if you travel frequently, buying or leasing a car may be best for you.

Leasing

People often lease a car when they have a steady and reliable income. If you decide to lease a car, your monthly payments will typically be lower than an auto loan. When you lease a car, you are always protected by a warranty, and you don’t need to worry about trading or selling a car. But, if you lease a car, you can only drive so many kilometres. You also need to consistently and properly maintain the car in good condition. Overtime, you will pay more for leasing the car rather than buying.

Buying a car           

Buying a car also has its pros and its cons. When you purchase a car, you have ownership of it. Which means you can drive as far as you want to, and you can customize it however you’d like. You can build-up the trade in or resale value, and you are at no risk for lease end charges. But, there will be higher monthly payments. There is a risk of an unexpected post-warranty repair cost, and you are personally responsible for trading and selling the car if desired.

In the short term, leasing a vehicle does seem cheaper, and a better idea overall. But, in the long term, buying a car is much more beneficial for most individuals.

Link to source: http://thebalance.com/pros-and-cons-of-leasing-vs-buying-a-car-527145

Buying a New Car Vs. Buying a Used Car:

By Abbie

Buying a new car is exciting, which I'm sure most would agree with.  It's very ideal and you don't have as much to worry about.  It has a warranty, no one has used it before, it's yours.  It also has a good possibility of having little to no interest in a long-term payment plan.  With a new car, you avoid people trying to scam you into the used car and paying the bills for it.  They could also be trying to dump a bad car into somebody else's hands.  If the used car was handled badly previously, it could make it harder to get a warranty on it or even if they made modifications.  Getting a mechanic to look over your used car can also be costly.

However, buying a used car is cheaper than buying one new and less time consuming.  You can have used cars checked for any damage to lessen your worries.  You can get an extended warranty as well, but even if you don't, warranties these days can be for three to four years so depending on how old the car is when purchased you could still be covered.  Not only that, but we've come very far since the first car, so there's less reason to doubt the cars ability to function safely because it's not brand new.

It's up to you on whether or not you trust buying a used car.  There's lots of ways you can assure that it's safe, but in the end if buying a new car feels safer and you can handle all the problems that will come (because either way there's going to be a downside) then do what makes you feel more at peace.  I think that either way works, however the used car seems ideal for its cost compared to the new car.

http://www.autotrader.ca/newsfeatures/20170428/buying-new-vs-buying-used/

Present bias

by Carol-Anne


     Present bias is our natural inclination to over-value present benefits and rewards at the expense of benefits further into the future. In simpler terms,  we over-value the here and now at the expense of the future.
Here's an example:
Which would you rather:  $150 in 52 weeks or $130 in 48 weeks?  
Most people said that they’d wait the extra 4 weeks to get the additional $20.
But what about this?  Would you rather have $130 today or $150 in 4 weeks?  
A lot of people say they'd take the IMMEDIATE benefits of the $130 TODAY instead of waiting 4 weeks for the extra $20.
In both instances, you are being asked if you value $130 sooner or $150 4 weeks later.  If you prefer to wait the 4 weeks in the first scenario, you should prefer to wait the 4 weeks in the second.
But many don't.  This is present bias.

Daniel Kahneman describes human thinking as being composed of two systems. System 1 and System 2.
System 1 functions automatically, quickly and is emotional. There is very little effort involved and relies mostly on impulse. 
System 2, on the other hand, is logical and involves mental activities that do require effort, such as calculations.
Your present self, mostly uses System 1 to make decisions.  It is constantly looking to satisfy its immediate needs and desires.  It pays little or no attention to the future.
The other self is your future self.  Your future self is logical, and thinks before it acts or speaks. It’s like the old angel on one shoulder and devil on the other scenario.
The problem is, your present self seems more “real” and is much more persuasive.  This is because you know this person. You arI one in the same this person.  However, 
Your future self, is like a stranger. You don’t know that person. They’re just too distant.   So when you go to make a decision, your present self’s best interests almost always win. 
Therefore we make illogical decision. Such as choosing to opt for less money now when you get a reward immediately.

Critiquing:

Honestly, I wish I had known about this sooner.  The amount of money this could have saved me is crazy! I would have opted for the patient option a lot more if I had known.  I think the best way to get past this bias thinking would be to sit down and ask ourselves:
”What do I want my present self to be doing in x years?”  As well as the impact on those around them.  I feel as though asking yourself questions about your future self will lessen the feeling of that person being a stranger and open more thoughts about how to engage with them.  If we made the future a benefit of the present, we’d most likely feel inclined to save money and choose options that benefit us in years to come.




 https://www.google.ca/amp/s/youngandthrifty.ca/save-money-by-going-back-to-the-future-countering-present-bias/amp/

The year of no spending

by Katara

                This a challenge to not spend any money “Aside from the bare essentials (paying the mortgage, phone bills and an extremely tight food budget).” Finding other things to use, like free stuff, or go to food banks, having fun with free things. This is to help you save money for if you want something, or save it for a Childs future. It’s a hard challenge to do but many have done it. (http://time.com/money/4661049/this-british-woman-went-a-year-without-spending-heres-how/ )

   What should be changed, and what's wrong with it?       

        I feel like they don’t have to be so excessive about not spending, if you need a towel, get a towel, if you need a shower or food, take a shower, buy more food, keeping yourself at a tight budget and basically starving yourself is wrong, you have no free time what so ever because of shopping and getting around, if you only have ripped clothing or not enough, go get clothing, spending stuff to keep yourself at full health is not over spending or need to not spend on, you need that.  

              if you’re doing no spending it should be no spending of going out for food, or getting gifts, or stuff to put on the walls. You need dressers to keep your clothing, you need a good bed so that you sleep comfy, go to the doctors when you need to, and you need medication. This stuff shouldn’t be taken lightly and thrown away because of a short budget, keeping yourself healthy first.

  Quotation on why not.      

      "it forces people to re-evaluated their spending and identify the purchases they can reasonably part with. But there’s a balance between curbing your spending habits and joining the monastery, and it’s choosing a financial plan that helps you save without costing you your well-being” ( https://melmagazine.com/the-misery-of-the-no-spend-year-71117cc0e4dc )