In Scrimp and Splurge, financial planner Rona Birenbaum looks at how Canadians make everyday spending decisions. She hopes to help Canadians feel better about the choices they make, while simultaneously exposing them to approaches they may not have thought of. She spoke with Jodi Kovitz, an entrepreneur and the founder of #MoveTheDial, an organization dedicated to advancing women in Canadian tech.
What do you scrimp on?
- Basics in the pantry. I have learned that I can save heaps of money by stocking up on basics, things like soup stock, canned beans, pasta, spices and other pantry items. I love to cook, and used to have a habit of running out to the expensive grocery store near my house to get last-minute things. I’ve found I can save a lot at Costco or No Frills by being prepared.
- Big purchases. I always try to buy big things on sale. For example, this year I needed a new winter coat and had one picked out. But I waited for the Black Friday Sale to get it at 20 per cent off. On Boxing Day I got my daughter’s winter boots at half price. It takes a little advance planning – and a willingness to enter the madness of the sale situation, which I always do very early in the morning – but it adds up to savings.
So, what do you like to splurge on?
- Travel. When I was young, I travelled on a budget. In my twenties, I stayed in hostels in Europe and $5-per-night hotels in Peru and Ecuador, alongside cockroaches and a souvenir that I brought home: bed bugs. I never minded it, and felt lucky to see the world. But what I had then when I was younger was time. Now I have limited time for rest so when I take a holiday, I want it to be in a magnificent setting. There is a beautiful hotel I love in the Mexican Mayan Riviera. It’s expensive, but the joy of looking forward to it, and then sinking into the peace of it when I arrive, is for me worth every penny.
What did your parents teach you about money?
- I was lucky growing up that my family had many wonderful experiences, yet my parents taught me the value of money. I worked from when I was 16 as a swim instructor, and at Sporting Life for a then-minimum wage of $5.15 an hour. At Sporting Life I learned customer service – what I know about building relationships and selling products. I also believe that my parents encouraging me to work from a young age gave me a strong work ethic.
- My money values have evolved dramatically over time. Building financial security so I don’t need to worry about money has become incredibly important. Over the years I’ve learned to value my time. I’m generous in spirit and nature and spend a lot of my time giving back and helping others, while understanding that life energy is very valuable. So I am respectful of the time and the energy needed to generate money, which means I respect spending it.
If you have children, what specific lessons have you tried teaching them, and why?
- To understand the value of money, to save, what investing means and that life is about choices. My daughter has four jars, and when she gets her $10 allowance she places a minimum of $1 in her charity jar, $2 in her savings jar and $1 in her gifts jar. She has another $6 to dispense between those jars and spending. It is very interesting watching her choose to put most of the money in her savings jar. I think she is developing a healthy relationship with money and understands the power of saving.
- My daughter always makes gifts. Artwork and 3D projects. These are from her heart, and the cost irrelevant. I am proud that this is how she expresses her love.
What spending lesson would you give your 25-year-old self?
- Save more often and more money. Make smarter choices about the little things – they add up. I love paper: handmade paper, high-end crafted paper, journals, cards, etc. I have accumulated many special journals, cards, books over the years. I would tell my younger self that living with less, and choosing more carefully, will feel great. I now live by the “Essentialism” philosophy and very carefully consider each item that comes into my home (paper and all). Living with less, chosen with much intention, is actually quite joyful for me. If I could, I would tell that 25-year-old self to read Essentialism and the The Life-Changing Manga of Tidying Up and live by those principles. Less stuff = more joy, clear mind, opportunities for creativity and peace.
This interview has been edited and condensed.