It’s that time of the year again. The time for beer that is cheaper than the usual cheap. When pasta and “red sauce” 5 days a week consists of budgeting. Springtime for post-secondary students is often a lean financial period. Those savings from summer are badly depleted. Often credit cards are rung up higher than most feel comfortable with. Not only are bank accounts depleted, but that negative sign that indicates a line of credit is going lower and lower. Students everywhere are craving their income tax returns. If they are keeners they have already sent in their taxes and organized an automatic deposit system with the government to get their money as fast as possible. Who are we kidding though, most of us will always wait until the last minute right?
Yay… Tax Time
In my general experience, most people find taxes one of the least motivating subjects on the planet; however, they can make a real difference to your financial situation if you plan them properly. Students are notoriously bad for not caring about their tax situation. They know that they will almost assuredly get back everything they paid in income tax for the year, so they don’t really look at the bigger picture.
Raise Your Hand If…
Here is what I see from about 90% of students out there. They go to the nearest corner tax place which is almost always an H&R Block. H&R has a great pull in where they will give you your student tax return up front for a small percentage of the return itself, plus a $30 fee. This might actually be ok if you received some tax guidance for your money, but instead, they set you up with the lowest run on their ladder (and that ladder starts pretty low). In the eyes of a tax service, students are a long-term investment, they’re playing the long game of brand management, and hoping they can build brand loyalty in you. They know that as a low net worth student, doing your taxes isn’t going to generate a lot of profit for them; therefore, they set you up with someone who is probably only hired for the tax season, and in my experience they rarely speak fluent English. This person then asks you the same basic questions that any online tax program such as TurboTax asks you. In return for walking out with a money order, you lost a percentage of the return and $30, but you also probably lose quite a bit of future tax savings in the form of tax credits you can carry forward.
Just Because You Don’t Think About Tomorrow Doesn’t Mean It Won’t Come
Most students are not aware that they can either carry tax credits forward to a time when they can use them to their full advantage (likely the first year they work full-time) or they can choose to allow their parents to use them. Since parents are often in fairly high tax brackets, it often makes the most sense from a purely financial standpoint to allow them to use the tax credits (especially if they are cool enough to cut you in on a share of the savings in return for helping them out). Personally, I still have banked credits from my last couple years in school, and that is after I allowed my parents to use them for my first three years. Because of that, I’m looking forward to a pretty juicy return this go around.
Tax Tips For Your Student Tax Return
Really, taxes aren’t that hard guys. Take a quick look at the student tax return tips I wrote for last year. For an hour or two of work, you can fully understand your tax situation and produce your own student tax return. Justin and I both used TurboTax when we were in school and found it very user-friendly. Eventually, we decided to get a professional to take a look at our situation due to the fact we were a little nervous about taking on the new situation created by our foray into the small business world. There is something empowering that comes with knowing a little bit about how the tax system works, and there is definitely nothing wrong with a little extra money in your pocket for end-of-exam party days. Break out your dad’s beer and celebrate good times!
I’ve been doing a lot of reading recently and I have been thinking about the concept of money and how different people look at it in different ways. The main concept of these books is usually that rich people generally see money as a way to gain more assets that can in turn produce more cash flow, while the middle-class and people who struggle financially see it as a means to get what consumer items and lifestyle they want.
Is Money a Means To An End or The Goal Itself?
The more I considered these notions the more I have come to agree with them. I think the real important concept at the root of people’s relationship with money is the comparison between seeing money as a tool and seeing it as your salvation. People who think earning a little more money will make them happier because then they can afford a slightly bigger car, or 100 square feet more of house, will likely never be rich, and will also likely always complain about their current economic condition. People who view money as a tool that enables them to build their own independent streams of income have a much different relationship with it. Of course there is the third type of person who loves to work, and whose wage allows them to live exactly the type of lifestyle they want. These type of people are usually very happy, and my only concern for them would be that they are not financially independent if their company fired them, or their wages got slashed, but by and large, these type of individuals will be fine.
Money Is Just a Tool – Financial Independence
I personally love my job of teaching, but I am fairly certain that I am not meant to spend more than about 10 years in the classroom. I have begun work on a masters degree, but I am not even sure that I want to climb the administrative ladder. I may, but getting the degree just gives me more career options and allows me to learn something new that will benefit me in any number of job environments. I have also tried to find a number of streams of income outside my line of work that will allow me to become financially independent at an earlier age.
The term financially independent is an important one to consider when thinking about money as a tool. Whether someone wants to retire early or not is irrelevant to the idea that you don’t need to depend on a single paycheque from a single source any longer. When you have reached this point you can truly decide what you want to do with your time. There are many different ways to get there. Some people start there own side business and then sell it, or make enough profit off of it to hire someone else to do the day-to-day operations. Others invest in income-producing properties (landlords). Still other people advocate for investing in dividend-paying stocks such as Royal Bank or Wal-Mart that will pay you handsomely every quarter for being a part owner of the company. The bottom line is that earning and spending a lot of money does not make you financially independent. The only way to ensure you are eventually financially independent is to create multiple streams of income for yourself and treat money as a tool to further your overall financial position. If that means thinking like a “Rich Man” then I guess I do, but I just believe its thinking like someone who doesn’t look at money as some special goal in and of itself.
I am most definitely not a candidate for the title of ‘shop-aholic.’ I am kind of representative of the classic male stereotype of being a reluctant shopper. I hate lines, crowded aisles, and arrogant, consumer-driven people of all kinds. I dread Christmas shopping, and go with gift certificates for gifts whenever I think I can get away with it. Thank goodness, that I am a reluctant male shopper of the 21st century, and I have consequently found the answer to my shopping phobia – online shopping.
Never Leave Your PJs
By far the biggest advantage for a guy like me is the fact that I can shop without ever having to leave the house. I am a big dude and I can’t stand trying to squish in everywhere and getting dirty looks when I unintentionally bump into people. Any time I can get up, enjoy breakfast in my ‘Saturday best,’ and finish my shopping with a few clicks of the mouse, that is a major win.
Related: Tracking Your Expenses
Online Shopping Cuts Out Some Retail Costs
I honestly believe that buying products online is only just beginning to realize its potential. I have read many articles where people talk about how it is the next stage of selling in terms of keeping costs low by cutting out all of the retail expenses.
Think of all the positions and distribution costs that could be cut if product was simply warehoused in huge basic structures with easy-to-maintain records of shipping. It is a bargain hunter’s and a capitalist’s dream. This is the future of shopping for people that want to stretch their dollar a little more and the companies that want to cater to that clientele.
Comparison Shopping and Easy Couponing
Two other easy ways to save money when shopping online are to comparison shop and do a quick search for a promotional code before buying a product that you want.
Related: Groupon – A Students Best Friend
With traditional shopping you have to burn 50 dollars in gas and a whole day’s worth of time driving around or looking at fliers in order to see what the competition has. Online you simply open another 6 tabs and you can scan back and forth across the product selections you want. I have never had the mental energy to save coupons and apply them properly. It is part laziness and partly the knowledge that I think I could make money more efficiently in other endeavours than by using the time to search through coupons for products I don’t even want.
Promotional codes are more my style. A person just has to do a quick Google search for current promotional codes of the company they are buying from and the search engine will spit out a bunch of sites put together by people with way too much time on their hands. These sites will give you a bunch of easy to copy-and-past codes that will usually give you 5%+ off just for taking 30 seconds to use a search engine. I then pay with my cash-back credit card to get another 2% off! That’s a lazy man’s way to be frugal.
Related: Benefits Of Using Credit Cards
The older and more experienced I get the more I realize the reality of the cliché, “Time is money.” The idea of ‘opportunity cost’ is that you could always be doing something else instead of what you’re doing in order to further yourself. That becomes part of the cost built into doing something; therefore, shopping for me carries a huge opportunity cost (which is a fancy way of saying that it is a complete waste of time).
No lines, no crazy parking lots, no narrow aisles, not lost products, no weird extreme-hoarder person in front of you with 77 expired coupons that, “Wants to see the manager!” Instead I simply point and click. As Staples would say, “That was easy!”
Related: Time Management Tips
Whenever I purchase something major I usually do a quick online check anyway to see a fewer consumer reviews on the product. This is pretty tough to do if you’re relying on a sales associate to help you in the store. Most online shopping sites will have a page with reviews on it. Now naturally third party sites are better since selling sites have a vested interest in only allowing positive reviews since it helps them move product, but at least it is a user-friendly way to get some quick customer feedback.
Of course there are always a few cons that traditional shoppers can simply not do without. I admit to being a boring person in terms of not caring if something fits perfect or if it compliments my eyes. I just want quality basic products and I don’t really care if the color is perfectly as advertised.
Many people (ok so it’s 95% women) I talk to defend their preference of going to the mall by saying that they like to try things on first, and that they enjoy the social experience. If this is the case and shopping is a fun hobby for you I think you should definitely go for it! There is also the cost of shipping, but most sites will cover that these days if you buy a large enough order, and it is probably equivalent to the auto costs you would have incurred anyway.
Finally, some people just love the adrenaline rush of being the first into stores and hunting for bargains. If you’re one of these no cure ‘shop-aholics’ just imagine how many more stores you could visit if you looked at all of them online!
In my limited experience, online shopping reaches its all time best status during ‘Black Friday’ down in the states, which lands on the third Friday of every November. The extreme competition for your online dollar means huge cuts, no shipping fees, and limited time offers. I found Boxing Day in Canada to be a bit of a let down by comparison since many of the best deals were only available in store.
Related: Black Friday and Cyber Monday Shopping Tips and Deals
So as a shout out to all of you somewhat lazy, yet somewhat cost-conscious individuals, I implore you to try ordering your next shopping list online. Just on books alone I save tons of money (Amazon versus Chapters). I still enjoy browsing at Chapters, but there is just no way they could employ all of the people they do, and create the premium store experience without some of the costs trickling down to the consumer. I don’t know about you, but I can do without the frills if it means more free time and keeping more of my hard-earned dollars.
One major hidden expense of going to university is paying for textbooks. Most people don’t realize that a full course load worth of brand new textbooks from the campus bookstore can easily run over a thousand dollars! The good news is that there are a lot of ways to bring this number down to something more reasonable. If you’re just starting university or about to, listen up, DO NOT go buy your books brand new! Save your money! Buy them used!
Related: How Much Will School Cost … and Is It Even Worth It?
1) Go To The First Class.
Often professors have to hand in their booklists for the fall semester at the end of the winter semester. This means that they often don’t care, and it is the last thing on their mind as they are getting final grades out and deciding which tropical destination to go to for their break. The end result is that professors throw down the names of all of the books they may use in the course, but when you show up the first day the professor will likely say, “This is the main textbook for the course, but theses make great supplemental reading.” This is code for, “You really only need this one book, but if you want to go from an A to an A+ you could probably read these…oh yah and I actually wrote this one, that’s the only reason it’s on the list.”
2) Never buy your books from the campus bookstore!
I’m a closet book nerd so Campus Bookstores are feel-good places to me. They have all this great knowledge packaged in shiny new vessels. It makes you feel like a real part of higher learning. Feel free to soak up the atmosphere, but if you want to save your money, don’t buy your textbooks there! If you look, the bookstore will often have some good deals on school clothing and other assorted items, but textbooks never go on sale. They realize that most students blindly will walk in with a booklist and assume that this is the only real option to buy their textbook. Once you follow their assumption they have you in their trap. (more…)
Every personal finance blogger at one point or another has to write an article about how, “The money you spend on coffee every morning could make you rich,” or, “brown-bagging your lunch every single day will save you so much money.”
The truth is that these articles aren’t lying. Basic math tells us that if you buy coffee every morning, that toonie (if you’re a Tim Horton’s person) or, five-dollar bill if you’re a Starbucks ‘elitist’ will cost you $700-$2,000 per year. Assuming that our caffeine addicted society couldn’t simply quit drinking coffee altogether, let’s say most would still spend $100 brewing cheap coffee at home. That savings will amount to over $700,000 assuming a 10% rate of return over 40 years and a $1,500-a-year cost. This is a fairly noteworthy amount of money for most individuals that I know. Some people might claim that this amount isn’t adjusted for inflation, but my counter would be that the coffee prices would also be subject to inflation over the same time, so the $700,000 in current-day-value is a worthy estimate.
Related: We Should Teach Personal Finance In High School
Cheap Coffee Keeps the Accountant Away?
I actually make the coffee at work for social reasons and so I guess I subscribe to this classic frugal tip (without really trying); however, I know that it is almost an unchangeable aspect of post-secondary culture to spend way too much money on status-specific cups of coffee. More so than the money I could save, the principle of paying so much in order to achieve a certain status through coffee is what stopped me. Plus, I just don’t have a distinguished enough palate to really notice a difference between the $5 “Super-Grande-Mocha-Frappa-Double-Tripple-Expresso-Caffeine-a-licious-Whipped/Frothed-Special,” and a cup of no-name cheap coffee with a dash of cream and a cube of sugar. (more…)