02/23/2023
๐ง๐ต๐ฟ๐ฒ๐ฒ ๐ง๐ถ๐ฝ๐ ๐๐ผ ๐ง๐ต๐ฟ๐ถ๐๐ฒ ๐ถ๐ป ๐๐ต๐ฒ ๐ฃ๐ผ๐๐-๐ฃ๐ฎ๐ป๐ฑ๐ฒ๐บ๐ถ๐ฐ ๐ฃ๐ถ๐ป๐ฐ๐ต
With companies and organizations mandating employees back to work whether part-time or full-time, you may be wondering (or a little scared) about what going back into the office will cost you financially (and timewise).
Working from home has afforded many people a few opportunities to save money--certainly, it has cut most peopleโs need for public transit or parking costs as well as coffee and eating out. Furthermore, with interest rates having risen eight times in the past 12 months, many people are feeling the pinch of budgetary constraints.
Almost two years ago, I decided to make some financial changes in my life and increase my financial literacy. I read through several personal finance books, started saving in a TFSA and RRSP, created an emergency fund, paid off all my debt, and started a side hustle. Still, as prices increase around me, Iโm also feeling the pinch, and so I thought I would share a few tips on how you can save money and make the most of it.
๐๐ถ๐ธ๐ฒ ๐๐ผ ๐๐ผ๐ฟ๐ธ. Instead of buying a bus pass or paying for parking, consider riding your bike to work. Letโs say youโre mandated to go into the office twice a week, and parking runs you $15 a day. That comes to $30 per week for letโs say 48 weeks, for five years, which is 240 weeks. If you invest that money in a 7% interest-yielding low-cost index fund, riding your bike will accumulate you $9,307.08. If you are going into the office three days a week, your investment will come to $13,960.62. Not a bad return on parking, and getting in shape.
๐ ๐ฎ๐ธ๐ฒ ๐๐ผ๐๐ฟ ๐ผ๐๐ป ๐ฐ๐ผ๐ณ๐ณ๐ฒ๐ฒ ๐ฎ๐ป๐ฑ ๐ฏ๐ฟ๐ถ๐ป๐ด ๐๐ผ๐๐ฟ ๐น๐๐ป๐ฐ๐ต. I love coffee, but buying coffee on the outside is a liability, because I like good coffee, and if Iโm without, Iโll likely splurge for a four-shot long espresso, whichโll run me $5-6. Lunch is easily $15, which makes a two-day in-office cost $21. If we put that money in our index fund, the figure comes to $13,029.91 over five years. If you are in the office three days a week, that figure is $19,544.86 invested in the same index fund.
๐ฆ๐๐ผ๐ฝ ๐ฑ๐ฟ๐ถ๐ป๐ธ๐ถ๐ป๐ด. Maybe the pandemic has increased your alcohol consumption, and youโre spending $100 a week on drinks. Given recent studies on the harmful effects of alcohol, letโs say you quit drinking alcohol in the house and only treat yourself to a glass of wine when you go out, so Iโm not completely ruining your buzz. If you put that $100 in the same investment vehicle as above, your return on investment for not drinking would come to $31,023.59 over five years.
All together, in a two-day in-the-office scenario, by cycling into work, bringing your own coffee and lunch, and not drinking at home, in five years you could accumulate $53,360.58. In a three-day in-the-office scenario, that figure comes to $64,529.07.
Thatโs a new car, a significant chunk to add to your mortgage or a pretty decent "funโ fund, considering that a trip around the world goes for about $30K. I realize that the scenario I portrayed is not for everyone. You can cut this strategy into a different size thatโs right for you.
Thereโs many different ways to cut costs and save (and make) a little extra money. Here is a list of resources to help you save money or make extra with a side hustle.
- https://www.canada.ca/en/financial-consumer-agency.html. The FCAC is Canadaโs federal agency that โworks to keep Canadaโs financial system safe and strong,โ and they offer a lot of resources free of charge to help Canadians be more financially literate.
- https://www.mrmoneymustache.com/ Mr. Money Mustache (MMM) is a well-versed finance enthusiast, whose blog and website provides a wide range of advice on what books to read, what credit cards are the best for savings or traveling, which phone plans to subscribe to, etc. Heโs been keeping a regular blog for several years and has lots of resources on how to save money. What I appreciate about MMM is how he sometimes makes his points by doing the math for us, as I did above.
- https://g.co/kgs/h7CTFa Optimal Finance Daily is an audio blog that reads financial articles to you from various other finance blogs across the internet. What I like about this is that the articles are short, on point, offer a wide variety of topics, and I can do the dishes as I increase my financial IQ.
- https://radicalfire.com/ Radical FIRE, like MMM, provides a lot of ideas on how to make extra money, how to save, what books to read and how to reach financial freedom. Though the Optimal Finance Daily podcast recommends this site, I prefer MMM mostly because itโs not overrun by ads.