The good, the bad, and the ugly

So I decided to get professional help. I knew a financial advisor and made an appointment. I was incredibly nervous heading in there, but I got good news and bad news. We'll start with the bad since it's always nice to end on a good note.

We started by going over my goals and deciding how much money I will need to retire comfortably at a good age (it will take a lot of savings!). Then the tough part: figuring out where I spend my money.

We went over everything I spend in a month on food, entertainment, clothing, gifts etc. For gifts and clothes we looked at how much I spend in a year and divided it by twelve to get my monthly amount. We looked at travel, sports, loan repayments, everything! We tallied that up and then looked at how much I made in a month. In the end there was about $600 unaccounted for. My advisor said "you have no idea where you spend your money, do you?" You see, it's not like I'm putting anything into savings, so that's really $600 I'm spending on "miscellaneous" things.

That was the bad... and the ugly.

Now for the good news. It turns out I'm not doing everything wrong. Here are the little steps I have taken that earned some praise from the financial advisor:

1 - I switched from a big bank with high monthly fees to PC Financial. I pay absolutely nothing each month. I have unlimited transactions, cheques etc. The only time I pay a fee is when I use an ATM at a different bank. PC Financial clients can use CIBC ATMs and there's a ton of those around! I figure I'm saving at least $30 a month by making this swich because that's about the amount I was being charged by my other bank for monthly fees and interac charges.

2 - I opened a savings account with ING and set up automatic withdrawals twice a month. I'm not putting much in, but it's more savings than I ever had before. Plus, ING has no fees and very high interest rates. That's another gold star.

3 - I cancelled one of my credit cards. I had two but I decided I didn't need two so I cancelled one.

4 - I changed my other card to one that has car rental insurance coverage on it. I save $24 each day I rent a car! I dont' own my own car so that's a lot of savings in a year.

So those are some simple steps I took and I've been told they were good moves.

My assignment: to look over my monthly bank account and credit card statements and put all the charges in categories to see where I'm spending my money.

I'll send that to my advisor and next time we meet we'll come up with a financial plan! Judging by the way she looked at me when I told her how much I spend on clothing in a year... or entertainment in a month, it's going to be painful!