How Not to Plan Your Estate!

Over the years, I have been involved with or been asked to assist with some "messed up" estates.  I often ponder how anyone who loved their spouse and/or children could ever leave their estate in such disarray?

So what is a "messed up" estate? Typically it involves:

• an outdated will
• transfers of family property in contradiction of the terms of the deceased's will
• terrible recording keeping
• investments in the wrong name
• missing tax information
• family members or second spouses, either threatening litigation or already having commenced such

Since so many people seem to ignore estate planning advice, I thought I would take a different tact and write an article on How Not to Plan Your Estate. My hope being, that if you read about the financial and emotional stress you can place upon your loved ones, you may take action.

I wrote this article during the Christmas holidays. I then asked Roma Luciw, The Globe and Mail's personal finance web editor, if she had any interest in this topic. She did and on January 15th, the article was published in The Globe and Mail business section under my byline.

If you did not read The Globe and Mail on Friday, here is the link to the article (The Globe changes the title for the online version if you were wondering). Thank you Roma for your editorial assistance and help in getting the article published in the paper.

This site provides general information on various tax issues and other matters. The information is not intended to constitute professional advice and may not be appropriate for a specific individual or fact situation. It is written by the author solely in their personal capacity and cannot be attributed to the accounting firm with which they are affiliated. It is not intended to constitute professional advice, and neither the author nor the firm with which the author is associated shall accept any liability in respect of any reliance on the information contained herein. Readers should always consult with their professional advisors in respect of their particular situation.

Wealth & Estate Planning Missteps

Wealth & Estate Planning Missteps

To help you avoid parting with your wealth, I'd like to share my article (link here) that I wrote today for the Globe and Mail Online Personal Finance Tax Section titled "Want the kids to inherit the house? Avoid these common tax mistakes." This article deals with common wealth and estate planning errors parents accidentally make because

they lack knowledge or because they listened to a tip they picked up at a cocktail party. These missteps relate to real estate transfers, probate planning and inheritance issues.

I would like to thank Roma Luciw, the Globe’s personal finance web editor, for providing me with the opportunity to write this article during Financial Literacy Month.

Long time readers will be shocked that Roma was able to have me condense my originally submitted article to only 650 words. I really appreciated Roma’s editorial expertise.

Dream Job by Richard Peddie - Book Giveaway Winners

The two winners of the autographed copies of Richard Peddie's Dream Job book giveaway are Steve K. and Imelda L.You will be contacted by email to arrange delivery.

Thanks to all the people who entered the contest. I had several women who entered on behalf of their husbands or boyfriends, since they thought they would like the book. Very interesting, I wonder how many guys would enter on behalf of their wives or girlfriends if it was a women related book giveaway. Just saying :)


 

Paying Cash to Avoid HST– What’s in it for the Contractor/Service Provider?

A few weeks ago while waiting in line at the bank, I overhead a customer in front of me bragging to his friend about how he had saved several hundred dollars in HST by paying a painter in cash. I thought to myself, besides being illegal, this guy was totally oblivious to additional tax benefits he had conveyed upon the service person by paying him the full price of the service, sans HST. So, I thought today, I would discuss the overlooked aspect of why (other than competitive pressures) any supplier, service provider, contractor, professional etc. would agree to an illegal act by accepting cash for their services?

This question brought me back to an article Roma Luciw of the Globe and Mail wrote in September, 2012, titled “Most Canadians have paid under the table to avoid tax" in which she stated that “Most Canadians have paid cash in order to avoid the sting of taxes – and they don’t feel bad about it either, according to a new poll.” Roma noted that for 2008, Statistics Canada reported the underground economy in Canada to be in the ballpark of $36 billion dollars – a staggering figure.

I was quoted in Roma’s article as saying the following: “Retailers and contractors who get paid under the table are clearly evading income tax. They would not only be subject to income tax on any sales not reported but potentially subject to penalties for tax evasion." I also suggested that "Contractors and retailers run the risk that consumers will snitch on them to the CRA, if the good or service does not meet their expectations, while consumers risk having no legal recourse without an invoice for the goods or services.”

Any cash payment for services or goods has two distinct components: (1) the avoidance of HST and (2) as I note above, the avoidance of income tax. I don’t think many people give much thought to the second issue when they pay cash for services, so that’s the area I want to key on in my post today.

Let’s return to the person in line at the bank. It is clear he illegally saved 13% in HST and based on Roma’s article and the attitude of most Canadians, he probably did not lose much sleep over the matter. But how about the painter who provided the service, how did he make out? Let’s take a look at his situation.

Say the bank-goer paid the painter $1,000 in cash. Let’s also assume that the painter paid his assistants $400 in cash to help paint the house. 

• The painter collects $1,000 in cash.
• He then pays $400 in cash to his workers.
• He now has $600 (tax free) under his mattress.

But what if the bank-goer had refused to pay cash and the painter recorded the transaction properly in his books?

• The painter (in Ontario) would have collected $1,130 including HST.
• He would then remit $130 in HST to the CRA (it is important to note, the painter is essentially a tax collector for HST and there is no cost to actually collect HST since he receives $130 HST and then just remits it to the CRA).
• The painter now has $1,000.
• He then issues cheques totalling $400 to his assistants as either salary or subcontract fees.
• The painter would report $1,000 of income in his books and claim an expense for $400, leaving $600 to be taxed.
• Assuming the contractor is in or would be in the 35% income tax bracket if he reported all his income, he would owe $210 of income tax ($600 profit x 35%).
• At the end of the day he, the painter would have $390 left ($600 - $210 tax).

Based on the above, although illegal, the painter benefited by $210 because he accepted cash. The bank-goer saved $130 by paying cash. So essentially, the painter benefited 1.5 times the bank-goer for the risk he took in evading both HST and income tax; some would argue that is an illegal win-win for both the consumer and service provider.

What if the $1,000 cash was paid to a professional who did not require any assistance in providing his/her professional services? He or she would receive $1,000 and would keep it all. Since the professional would probably be in the 46% tax bracket, they would save $460 by accepting the cash. In this circumstance, their tax savings would be approximately three and a half times the savings of the person not paying the HST on the service provided.

It goes without saying that not paying HST and income tax is illegal. I am not in any way condoning the payment of cash. My intention in posting this blog is to point out how much money leaks out of the system when people pay for services or goods in cash and how the service provider benefits to a much greater extent than the consumer for taking the risk of evading income tax.

Stock Market Challenge for Charity

I would like to take a minute to point out an initiative that I think is worthwhile and fun for stock pickers and closet stock pickers alike. I’ve participated in the Blog for Financial Literacy Campaign and created the Bloggers for Charity Initiative … and as you know, I feel strongly that everyone should work towards financial literacy and help those less fortunate wherever and however possible.

Steps Foundation, an organization that supports financial literacy education programs in Toronto, is holding its “Bay Street Stock Market Challenge” this week (June 25-July 26) to raise money for financial literacy education. I hope you have time to check it out and test your market and investment knowledge with their virtual stock and option trading. (I’m told you are given $100,000 USD and $100,000 CAD of virtual money. The participant with the highest portfolio value at the end is the winner and claims 50% of the event’s proceeds).

As a side note, a portion of the funds raised during the competition will help Steps Foundation continue to fund a debt management clinic at WoodGreen, a charity my firm has been actively involved with. The firm and staff have donated money and one year the whole firm spent a day during the summer building furniture for the single mothers who work hard to get education and jobs to provide for their children.

So please consider entering the contest and supporting financial literacy, although it will be tough trying to beat me :).

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Stress Testing Your Finances and Your Death - The Comprehensive Test

Bloggers constantly strive for a unique idea or concept that gets people thinking, talking and even taking action. While I am not sure if my blog post on stress testing your death was unique or not (it was certainly morbid), it definitely seemed to strike a chord with many readers. I am honoured that in the weeks and months following that post a number of writers and bloggers decided to join the bandwagon to tackle this issue, adding different perspectives and expanding the concept from postmortem, to include antemortem (before death) issues.

Those articles and blogs included:

Roma Luciw of the Globe and Mail (Why you should stress-test your finances for a sudden death)
Ellen Roseman of the Toronto Star (Time to stress test your crisis readiness)
Mark from the blog My Own Advisor (Personal Finance Stress Test)
Michael James on Money (Stress-Testing your Personal Finances)

Ellen commented in her article that “Goodfield talks about the need to take precautions against sudden death. But you may be unable to take care of your finances while still alive because of illness, injury or advancing age.” The financial stress test, created by Mark, the writer behind the blog - My Own Advisor, deals with your financial well-being while alive. After considering both articles, I concluded my initial post was too limited in scope. A comprehensive financial stress test must take into account significant events that can occur while you are alive (loss of job, health and disability issues, financial loss) together with whether you have prepared your spouse postmortem to move forward financially with the least amount of stress and disruption to his/her life.

As I embarked on today’s post, I was startled by a simple yet seemingly evident revelation; antemortem and postmortem issues are so intertwined, that if you complete the specific set of tasks and summaries in my antemortem test, you will have almost everything in place to ensure your spouse is equipped to move forward financially in an almost seamless manner in the event of your death. Essentially, all that will remain is for you to discuss the preparations you have made with your spouse. The comprehensive stress test outlined below, ties this all together.

Antemortem Issues

The questions below make-up a relevant stress test for someone who is currently healthy, but also should be considered as Ellen noted, in the context of if you took ill, became temporarily or permanently disabled or were forced to slow down because of age. I have “borrowed” some of Mark’s stress test questions for the financial and administrative section. As noted above, many of the questions and tasks require you to put your finances in order while alive; so that you ease the burden on your spouse should you pass away.

Legal Documents

1. Do you have a will? If you have a will, is it up to date? If you own a private corporation, do you live in a province that provides for a secondary will?

2. Do you have power of attorneys for both your financial affairs and your health care?

3. Have you checked to ensure the beneficiaries of your RRSP, insurance policies etc. have been updated and are not a former spouse or someone you no longer wish to benefit from your death?

Insurance

1. Do you have sufficient life insurance to pay-off your debts, pay for your children’s education and allow for your spouse and children to live in the style, or close to the style, they are accustomed to?

2. Do you have disability insurance? Is the policy definition of disability narrow and you are paid if you can’t continue with your own occupation or is the definition wide ranging and you are only paid if you cannot work at any occupation?

3. Have you considered critical illness insurance? This is popular with many professionals.

4. Do you have shareholder buy/sell insurance if you own shares in a company?

5. Have you considered covering any capital gains your estate may incur upon your death through insurance? For example: if you have a cottage with a large capital gain and wish to keep it in the family, you may want to buy an insurance policy that is equal to or greater than the expected tax liability on the cottage.

Financial

1. Are you spending more than you earn today?

2. If your income dropped by 50% for 6 months what would you do?

3. If you needed more income what would you do?

4. Do you have access to money if you need it in an emergency (line of credit, savings account)?

5. If you had to retire today because of illness, could you financially adapt?

6. What portion of your monthly living costs are fixed such as car leases, mortgage payment, loan payments and what portion are variable/discretionary and could be eliminated or cut on short notice?

Taxes

1. Do you own U.S. property? Have you considered your potential U.S. estate liability and/or planned for it?

2. If you have a business, have you considered an estate freeze and/or how you will transition your family business?

3. Will you have a large income tax liability upon the later of your death and your spouse's death; because of unrealized capital gains on a rental property, cottage or shares in private companies? If yes and you do not buy insurance as discussed above, how will this liability be funded without a fire sale on the above noted properties?

Retirement

1. Do you have a retirement plan, even if just an excel spreadsheet? Do you have any idea of what you expect your monthly expenses to be upon retirement?

2. If you are near retirement, have you considered the various options in regard to taking CPP early or delaying it?

3. Have you considered how to smooth your income between the time you retire and you are forced to withdraw money from your RRIF?

Administrative

1. Have you prepared an information checklist for your executor(s)/spouse? Does it list all assets (bank accounts, investments, real estate, other) you own? Is the list up to date? It is essential that the list be complete, you do not want an after death game of Where are the Assets? This list can be paper, but I also suggest a back-up PDF be scanned into a secure computer directory.

2. As I discussed in my blog on Memory Overload, the use of multiple passwords is so prevalent that you should consider making a list of your key passwords for your spouse that is put into a secure, but accessible location. The objective of this exercise is to ensure your spouse will not be locked out of your various financial accounts because he/she does not know all the passwords.

3. Consider any accounts, safety deposit boxes, safes, etc. your spouse is or is not aware of. There are various reasons why one spouse does not make another spouse aware of some of these items. However, the reason for their existence is not relevant; what is important is that you somehow ensure that someone will become aware of the existence of these accounts or safety deposit boxes if you die be it your spouse, friend, family member or business partner.

4. A digital asset many people forget to deal with are loyalty points for travel ("Heir Miles") and retail specific loyalty programs. You should ensure you have a list of all loyalty programs you are enrolled in and the number you have been assigned. Most travel programs and some retail programs allow a transfer of some kind, upon a spouse/family member death. 

5. Do you have a list of emergency contact information for your doctor, lawyer, accountant, investment advisor, banker, etc.?

6. Have you prepared a summary of all insurance policies you have? This summary should be in an excel spreadsheet and list: the policy number, the insurance company, the type of insurance as well as the value of the insurance and staple it to the front of your insurance folder. Again, you may also want to create a special password protected file on your spouse’s computer that contains this summary information.

7. Have you informed your executors they have been appointed?

Postmortem Checklist

I wrote the initial stress test post because of my first-hand experience watching my mother cope financially with my father’s sudden and early death. In my mom’s case, she was able to lean on me to help sort out many of the applicable financial issues. Luckily, my father had at least dealt with the two most important post-mortem issues: (1) having a will and (2) having life insurance. But there was no discussion between my parents about their financial affairs before his untimely death and no lists for my mother to rely upon.

The checklist below is most relevant if you were to pass away. However, if you were to be disabled or lose capacity, some of the items in the checklist would be just as relevant. Though post mortem based, I suggest you deal with the tasks and issues below while alive. Dare I say, to do otherwise is selfish. For those of you that think this is a harsh statement, check out this New York Times article detailing the financial aftermath on Chanel Reynolds after her husband was killed riding his bicycle (Thanks to the Canadian Capitalist for this timely link).

Furthermore, I suggest that you actually stress test the checklist below by physically showing your spouse the locations of lists, computer files, insurance policies, password accounts etc. You will probably want to do a bi-annual walk through. As my wife was still asking me “where did you say you put this again”, we created a safety deposit back-up.

For those keen of eye, you will note the list of questions which in my original post were "do you have", changed to "do you know where". This tweak is based on the assumption you will undertake the antemortem test and follow through with the associated tasks and summaries. Thus, heaven-forbid you pass away; your spouse will have all the information at his/her fingertips and will not need to play a game of lost and found with your important financial documents.

The List:

1. If you have prepaid your funeral or have certain wishes, your spouse must know these wishes and where any related legal documents or invoices are located.

2. Your spouse must know where to find a copy of your will and power of attorneys and the contact information for your lawyer.

3. Your spouse must know the location of the paper or computer file containing all your insurance policies and a summary of the insurance details as discussed above.

4. Your spouse must know the location of the paper or computer file containing a summary of all your assets.

5. Your spouse must have a summary of your key passwords; these must be secure, but easily accessible.

6. Your spouse must know where you have an emergency contact list.

7. Your spouse, family member or friend must know where to find the key(s) to your safety deposit box(es) or any safe you utilize.

I promise; this is the last I have to say on this topic. I strongly urge you to take this comprehensive test for the sake of your loved ones.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

The BBC and the Globe and Mail

I would like to thank Roma Luciw and Dianne Nice of The Globe & Mail for featuring me in an article and online chat respectively this past Wednesday.

I really enjoyed Roma's article on Ten tax related things that leave Canadians stumped, as there are numerous income tax provisions and tax policy decisions that really leave one shaking their heads when preparing their personal income tax return.

Do you have any head scratchers in relation to filing your personal income tax return? If so, please provide it as a comment to this post. You will feel better venting and you may provide me with a topic for a future blog post.

Dianne and I discussed Tax Tips for Investors. There were some excellent questions. The link provides a recap of the entire chat. You may want to take a quick read to see if there are any answers that are relevant to your income tax situation.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

The Blunt Bean Counter noted in The Globe and Mail

Thanks to Preet Banerjee for referencing me today in his Globe and Mail column. His column today is titled "Share your family fortune now to reap the rewards". Preet is a well-known financial expert, who writes a column for the Globe and Mail, is the money expert on the W Network and is the blogger behind the blog WhereDoesAllMyMoneyGo.com. I am not sure if he still has another real job :)

I would also like to give Preet props for participating in my Bloggers for Charity initiative, in which he raised $5,000 for charity. He is obviously an altruistic financial guy; yes, I know that term is usually an oxymoron.

This is the fifth time that I know of, that one of my blogs has been at least in part an inspiration for a newspaper column. Preet's column today quoted from my blog "A Family Vacation- A Memory worth not Dying for". Personally, it is self-satisfying when my blogs provide an inspirational thought or idea for others, given the time and effort required to create many of the blog posts.

I am particularly pleased that only one of the inspired newspaper columns has been an income tax based article. I look at my income tax blogs as loss leaders. I write income tax blogs since they show a professional competence (or incompetence) and they fill an information void since I think there is only one other mainstream blogger (Canadian Tax Resource) doing such that I am aware of. 

However, what I really enjoy writing are my blog posts on how money and finances impact families, relationships and the psyches of individuals. After 25 years of practice as a CA, I have seen most of what is to be seen in that regard, so I write from a perspective of experience.

Since I have severe restrictions on site advertising as a Chartered Accountant, I am not blogging for financial gain (although I do get the occasional client from my blog), but mostly because I enjoy doing so and as such, I appreciate it when columnists such as Preet, Roma Luciw, Rob Carrick and other financial bloggers, most notably Boomer & Echo, Canadian Capitalist, Big Cajunman, Michael James, Jim Yih,  My Own Advisor and Money Sense Online appreciate my blog posts whether as an inspiration for a column or as a recommended read. Thanks!

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Happy Anniversary to Me

I posted my first blog “Let’s See Where This Goes” on September 20, 2010. One year later I am still blogging away, with some people other than my family reading.

In looking back at my first year, my first break was when Seeking Alpha asked if they could publish Resverlogix: A Cautionary Tale, a blog I posted in late November 2010. Seeking Alpha published this blog in January 2011.

I was also fortunate to be recommended by such noted bloggers as Larry Macdonald, Ram Balakrishnan the Canadian Capitalist, Jim Yih of the Retire Happy blog, Michael James and Mike Holman of Money-Smarts. In addition, Jim was kind enough to provide some initial guidance and Tom Drake of the Canadian Finance Blog and Money Index provided some savvy technical advice. None of these bloggers needed to consider my blog or help me in any way, but they did and I appreciate it.

In addition, the Globe and Mail has also contributed immensely to the growth of my blog. Rob Carrick has mentioned me numerous times in The Reader and Dianne Nice and Roma Luciw have been kind enough to feature me in their columns. I would like to thank all of them for being receptive and willing to listen to some of my ideas.

Finally, I am flattered to have been asked to write guest blogs for Jim, Ram and Boomer and Echo.

Since several of my blog topics are income tax related, the blogs can sometimes be somewhat complex. I have attempted to simplify these topics and explain in non-technical terms where possible, and I hope I have made some of these more complex topics understandable to my readers.

I also strive to write original pieces where possible. Although very few topics are original to financial bloggers, I always write my blogs first, and then check to see what was written previously. In this way I at least sprinkle my blogs with some originality. I have received a few emails complementing me on the original nature of many of my blogs, which reinforces my desire to continue using my current technique. In addition, the Confessions of a Tax Accountant blogs that I posted during income tax season received some kudos for the originality of the concept.

I marvel at some of the aforementioned bloggers who blog three, four and five times a week. I don’t know where they find the time, let alone the constant flow of ideas to write so many blogs. I have settled on generally posting two blogs a week. I do however, have some concern that the income tax blogs have a finite topic list. I also wonder how long I can continue to come up with something useful to say on money, the psychology of money, families and estates and business, all of which I find more enjoyable to write about than income tax.

So as my first year of blogging comes to an end, I would like to once again thank all the people I have noted above, my marketing manager Lisa, who reviews all my blogs and most importantly, my regular readers.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Holy Black Sheep Batman

There are sheep all over the Globe and Mail today. Thanks to Roma Luciw for referencing me in her column today, Baa baa black sheep, are you in the will? Roma’s insightful column discusses estate planning for the Black Sheep child. This is often a very sensitive issue within families and requires one to navigate the family dynamic, estate and tax planning.

Roma the web editor of the Globe Investor personal finance site, also writes a weekly column on personal finance issues in the Globe and Mail. In addition, she is also one of the contributors to Home Cents which provides expert tips on how to make money and save money.

I will have a blogs on Estate Planning for the Black Sheep Child and How your Family Dynamic can affect your Estate Planning next week.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

Budgets and underestimated household expenses

On Tuesday, Roma Luciw quoted me on "Nine expenses you underestimate" in her article in the Globe & Mail. Today, I am posting the entire blog, including those nine expenses, as I think my discussion on creating a one-month budget is important. For anyone who is a "Where's Waldo" fan, see if you can spot the obvious edit the Globe and Mail made to the original nine household expense item descriptions.

I often get calls from clients and potential clients requesting a consultation to discuss their family spending and family budget. Once we set a time for the meeting, I request that prior to the meeting, they prepare a best estimate summary of their spending. Unfortunately, I know this request will most likely not be fulfilled because; (1) most people have no tracking system for their expenses, (2) many summaries are missing so much information that they are virtually useless, or (3) the appointment will never happen.

I find it truly amazing that so many people are so averse to budgeting and tracking their spending and they remain so even after a triggering event that causes the initial phone call to set up the appointment. Not only are people averse to budgeting and tracking, they are also a little lost when it comes to their current habits. When I have the chance to meet with both spouses, I like to ask them to estimate how much they think they spend a month. Typically, one spouse has an idea of how much they are spending while the other spouse is not even in the neighbourhood.

What really drives me around the bend is that with minimal effort, it is possible to make much better decisions. Even if you track your expenses for only one month, you will have a baseline for most of your spending because 75% or more of your expenses are likely recurring monthly expenses of the same or similar amounts. If you only track significant expenditures after that one month, you will have a fairly accurate budget for the full year.

Tracking expenses is not only necessary to ensure you have enough money to pay your bills, but it is also the starting point for savings (see my blog Where did my money go? for tips on tracking expenses). Once you know what you spend, you can budget to ensure you do not spend any additional funds and you can even cut some expenses.

In general I have found people severely underestimate the following expenses:

Weekly living expenses- While each spouse may only go to the ATM one time and thus have an idea how much they spend individually, often both spouses are going to the ATM and those weekly cash expenses are significantly higher than you think.

Gifts- Most people have an idea of how much they spend for Christmas gifts as the holiday season is a condensed period of time, however, how many birthday gifts, anniversary gifts, graduation gifts, etc. do you give throughout the year? This is especially relevant for those with large families.

Charitable donations-Many people do not track their donations throughout the year. This can be problematic, especially for people who wish to give a certain percentage of their income in a particular year.

Automobile expenses- Many people fail to consider some of their car expenses. This expense quickly escalates when you include your lease, or loan principal and interest, repairs and maintenance, parking, insurance, tolls, etc.

Sin costs- The cost of beer, wine, cigarettes, funny cigarettes, is never correctly accounted for and often severely underestimated.

Kid’s programs- Today’s child is enrolled in multiple programs. In my opinion many are “over programmed,” however, notwithstanding my opinion, these programs are very expensive and add up quickly.

Cottage- Cottage costs are problematic on two accounts. Not only do you need to track the property taxes, mortgage, interest payments, repairs, maintenance, insurance and utilities, but you also often have a massive entertainment expense that even the most detailed person would be hard pressed to track.

Restaurant- For some people, these costs are not substantial, but for many double income families, these costs are substantial.

Women’s beauty costs- Often way understated, but guys, I would not even go there.

As discussed above, tracking costs is important for both budgeting and increasing your monthly savings. I strongly suggest that if you are not willing to buy an accounting program such as Quicken, you try my one month experiment and then just track your large one time expenses. It will be an eye opening experience.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.

The Blunt Bean Counter noted in The Globe and Mail- Nine expenses you underestimate

Thanks to Roma Luciw for referencing me in her column today, "Nine expenses you underestimate" in the Globe Life Money Section, page L4. Roma, the web editor of the Globe Investor personal finance site, writes an insightful column on Monday in the G&M on various personal finance issues. She is also one of the contributors to Home Cents, which provides expert tips on how to make money and save money.

Roma’column today touches on budgets and underestimated household expenses. Although a mundane task, budgeting and tracking expenses is not only necessary to ensure you have enough money to pay your bills, but it is also the starting point for savings.

The blogs posted on The Blunt Bean Counter provide information of a general nature. These posts should not be considered specific advice; as each reader's personal financial situation is unique and fact specific. Please contact a professional advisor prior to implementing or acting upon any of the information contained in one of the blogs.