let’s focus on the really important stuff!

Zwischenablage01Laughing too hard. From this article: Fears grow over Green Climate Fund Preparations on Responding to Climate Change.

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your tax dollars at work

What if the individual taxpayer could choose how she wants to allocate her taxes?

To prevent everyone funding the same thing, there could be some kind of cap on every possible project. Once the cap on her 1st preference is reached, the individual taxpayer’s remaining taxes go to her 2nd preference. Once the cap on the 2nd project is reached, the remaining taxes go to the 3rd preference, and so on.

Potential for giant imbalances? Absolutely. Say rich people pay most of the taxes. Rich people use private vehicles more than average. So they may not want to pay for buses. Instead, they want to pay for parking. Well, then keep the cap on parking very low.

I’m not saying whether it’s a good or bad idea – it popped into my head literally five minutes ago – but it is pretty wicked.

Has anyone written on this yet?! SOMEONE TAKE IT AND MODEL IT. If I didn’t already have a thesis topic this would be my baby. IT CAN BE YOURS. Unless, of course, this model already exists in a paper somewhere…

frugality, parents, tuition

Globe and Mail wrote a piece about Living frugally in your 20s: Five tips. The article itself is garbage (par for the course with G&M these days) but I was very interested in the recurring themes in the reader comments.

Living with parents during and after university

  • The object of the article is getting a LOT of flak for living with his parents during and after uni. Many readers consider it mooching to do so and exhibit pride in their independence of moving out for uni. So if parents are alive and can afford it, and if parents and adult child get along, should adult child live with parents to save money? Framed another way, is a young adult’s choice to move out while in debt a financially irresponsible decision based on a pursuit of independence that is prized and expected in North American culture, or a financially responsible decision to embrace independence despite huge debts?

The decision to go to university

  • I was privileged enough that it was never a question of if but where. My undergrad university fees + living costs were completely paid for by my parents. Most 18-year-olds in Canada aren’t so lucky: their decisions concerning university – to go; where; what to study; how long; to work during – hugely affect their financial situation. Should you choose to go to university if it will put you in $35k debt? Do you have a responsibility to make decisions based on their financial/investment value, or do you have a right to finding happiness and value in the pursuit of knowledge – no matter how useful job-wise? There are more than a few reader comments with the sentiment that racking up student loans by doing a degree with low financial return (eg. BA Philosophy maybe) is your own choice to knowingly go into debt and you should therefore not complain. Those who are worried about their financial situation should pick a high-return degree (eg. engineering; finance), they argue.

Tuition fees

  • Should tuition be free? I don’t think so. That’s not a dig at the protests in Quebec btw, since those protests are about something so much bigger (the civil and democratic right to protest and free speech). My sister put the debate this way: is university a right or a privilege? While I believe higher education should be an unquestionably objective goal for members of society – contrary to Santorum’s claim of that to think so is to be a ‘snob’ – making it free of charge seems unfair to the poor. That’s a bit counterintuitive so let me explain. If universities aren’t paid for by the students they will be by the tax base. Those who chose not to go to or did not qualify for uni will have, on average, a lower income level than graduates, but it is non-grads who will partially pay for the students to study and graduate. Graduates earn more income on average, so they will essentially be financially supported to get a leg up in society. This is naturally a bit of a circular argument, since abolishing tuition fees also allows those who otherwise could not afford it to attend uni, thus improving upward social mobility. But it’s also related to the previous paragraph: by choosing to go to uni, must you accept financial hardship if you know your degree will pay for itself once it helps you find a high-paying job? Or is that merely a second-best coping strategy because tuition fees are so high?

Parents’ responsibility for child’s education

  • Do parents have a responsibility to help their child get as much formal education as possible? One reader commented that parents who don’t contribute to their child’s RESP (registered education savings plan) are bad parents. Some parents have trouble ensuring enough food on the table, much less put away money for their child’s future education. Does this make them bad parents? Do they even have the right to give birth if they know they can’t afford to at least partially help with the child’s uni tuition? It goes to the much deeper question of what makes a good parent, or what makes an eligible parent. A parent should: Provide a good life for their children? Ensure their children are ready for adulthood?

Luxuries or necessities

  • It’s become increasingly clear that I am out of touch with the technological trends of my generation. I have never owned an Apple product and have never used a smartphone. If I was handed an iPad I would not know how to use it. My laptop weighs 3.2 kg without the battery, which has a life of 10 minutes. I haven’t had TV for two years. So it’s understandable that I wonder whether a smartphone with internet is really a necessity for the 20something’s work and social life, as one reader claimed. It’s a necessity for certain professional fields in which you need to be connected 24/7, but otherwise I’m not so sure. Same deal with cars and other items.

Value in being in debt

  • Is there an intrinsic value of being in debt by way of learning life skills (eg. how to manage finances, how to cook, how to scrimp) and empathy (being able to relate to the less well-off in society)? Is there value in frugality for frugality’s sake? Frugality is essentially delayed gratification and self-discipline, after all.

To conclude, two frugal living tips from the same reader that made me LOL:

  1. Never throw that last bit of bar soap away. Start a new bar, use both to lather and then press small into the new one. When they dry, they fuse together.
  2. If you step on the roll of toilet paper, to flatten the inner tube, before guests arrive, itss unraveling will be so lumpy that it will almost certainly break after, at most, 2 squares.

Peace.

financial records

You probably have an inkling that I am pretty sensitive when it comes to spending money. It might be because my parents were also quite sensitive to money when I was a kid. But if that had any effect it was subconsciously because I was still spoiled rotten and wanted for nothing.

Fast forward to university: I started to manage my own finances for the first time. That is not to say I was self-sufficient. But the fact that I was absolutely dependent on my parents for financial support meant that I tried to be careful with their money. Accounts have two sides: credit and debit, and since there was no credit on my part I tried to slow down the debit.

In 2nd year I started to record my daily expenditure in a spreadsheet. Currently, for every day of the month I write down what I spend money on and how much it costs. The fun part is, of course, data analysis :) We can look for all sorts of cool correlations, eg. between coffee expenditure and temperature:

This is just the beginning of a ton of analysis I plan on doing. I’m super excited about what fun insights I might find – do I spend more on Mondays, Wednesdays or Saturdays? Does total expenditure drop if I spend more on groceries, given that groceries (relatively cheap) and eating out (relatively expensive) are substitutes?

What about you: Do you keep track of your expenditures? What kind of patterns or correlations have you observed from your own experiences, or would expect, or are interested in finding out?