Know Your Blogger Series

Money in Your Tea

My name is Kari, and I started Money In Your Tea in May 2019. I’ve always naturally been a “numbers person” and I enjoy tracking our family’s personal finances. When I was looking for a new personal challenge in my life, I decided to focus on my strengths and interests by starting my blog. I genuinely enjoy sharing what I know about personal finances, and I have also learned a lot myself through researching my articles.
Check out our Q&A with Money In Your Tea here.

Come read about the awesome Candian personal finance blog, Money in Your Tea.

Each week at Personal Finance Blogs, we publish interviews from amazing bloggers from the personal finance space. This week, we are featuring the blog, Money In Your Tea.

During these weekly features, we are hoping to provide a way for you to interact and learn more about different blogs in the personal finance space.

Below, you can read more about the story behind Money In Your Tea, learn about the author, and learn personal finance tips from Money In Your Tea to help you improve your financial situation.

A big thanks for Money In Your Tea for this interview! Now, we will turn it over to the author for this interview.

Tell us about Money In Your Tea

What makes you and your blog unique?

I’m a Gen X, which puts me in a different stage of life than many personal finance blog writers. For example, I now have 2 children in university so we’re drawing down their education funds, which I talk about on my blog.

I’m also an economist, so I sometimes incorporate that into my articles, such as What Everyone Should Know about Economics during COVID-19.

As a Canadian, some of my writing includes Canadian government finance programs, for example Registered Retirement Savings Plans (RRSPs).

What does “being good with your personal finances” mean to you?

I believe that “being good with your personal finances” means being intentional in your financial decisions.

Be aware of how much money you make, especially if it’s coming from multiple sources or varies month-to-month.
Track how much you spend in various categories, and see if this makes sense to you. If you’re spending too much in some areas, see where you can adjust, such as buying store-brand groceries instead of shopping at high-end stores.
Only take on “bad debt” if there is a good reason, and have a plan for how you will pay it off. What I mean is, if you have lost your job and then run up your credit card in order to buy groceries, that’s a great reason for that debt. If you have no idea what you’re earning and what you’re spending and your line of credit grows every month, that’s not so good.
Invest in your future. This can include education to further your career options, as well as putting money aside for future large purchases and for retirement.

What are some habits you practice to keep your personal finances in order?

The most important habit I practice to keep my personal finances in order is tracking my spending and income. I have used Quicken for the past decade, which I love because it categorizes all my spending. I also use it to track my investments and mortgage.

What are three articles from Money In Your Tea that people should read to get to know you and your message better?

The 50/30/20 Budget Rule: A Simple Step-by-Step Guide – This is my most popular article, and it is newly updated and expanded, with a free budget tracker printable.
RESP Investing from Newborn to High School – Investing in your education fund (RESP in Canada) is very different from investing in your retirement fund. You can move your retirement date forward or backward as your finances (and preferences) allow. But post-secondary education almost always starts when your child is 18. This is why I believe it’s so important to monitor and adjust your investment strategy over the years.

Personal Finance during the Coronavirus Pandemic – I’m kind of cheating here, because this is actually a series of articles. They range from what to do in a cash flow crisis, to understanding economics during COVID-19, to paying off debt, and more.

For someone looking to improve their financial situation, what’s your best advice?

Short-term: Focus on decreasing your spending.

This is where you can get quick and easy wins. Food is one of the top 3 spending categories for most households, so start there. Eat in more often if you aren’t already. Take-out is cheaper than eating at a restaurant if you want a treat, because you don’t have to tip (as much) and you don’t have to buy drinks, which have a big mark-up. Start meal planning and buy groceries at a discount store instead of high-end, and buy store-brand instead of name-brand products.

If you’re really strapped for cash, consider selling things you no longer need. This is a source of one-time income, but it can really help with paying down consumer debt.

Medium-term: Focus on increasing your income.

Demonstrate your worth to the company do show why you deserve a raise. Or look for a job at a new company – this is typically when you get the biggest increases in income, much more than a raise. Consider a “side hustle” or income generating investment to diversify your income sources.

The second thing to look at in the medium term is transportation costs, another of the top 3 spending categories for most households. Can you reduce this by trading in the car with a big loan or lease for a car that’s a few years old. Or can you sell one of the family cars and share driving or take public transit.

Long-term: Focus on investing for the future.

Open a retirement account if you haven’t already, and start putting money aside regularly. Decide what the best mix of investments is for you, and then don’t look to closely. In the short run stocks and bonds go up and down in value, which can make you worry needlessly if there is a stock market downturn.

The second thing to look at long-term, is your housing situation. Housing is the last of the top 3 spending categories. If you feel you’re always “house poor” it may be time to consider moving to a cheaper home. Imagine the difference to your budget if you shave 20% off your rent or mortgage expense each month.

In your opinion, what’s better? Renting a place or buying a house to live?

There are clear times in your life when renting is the obvious choice, like when you’re in post-secondary education and you’re unlikely to continue living in that city when you graduate.

But as you get established as an adult, with a career, renting can feel like “throwing money down the drain” as compared to paying a mortgage where you ultimately own a house.

However, I’d say the argument is not as clear cut. As a homeowner, I can attest that it is really expensive to own. Every time something breaks down, you have to pay to fix it, like our $10,000 hot water heater/boiler system. And inevitably there are upgrades because you want a nicer kitchen, bathroom, or whatever. Plus the property taxes. And upfront costs like land transfer tax and legal costs of buying a home.

In addition, the relative costs of buying versus renting are dependent on what city you live in. The average price of a detached house where I live is $1 million (Canadian).

If renting is cheaper, you can invest more into your retirement fund. It also gives you more freedom to move to follow your ideal career path.

Ultimately I think this is more of a lifestyle and location choice, and it’s not clear cut whether financially you are better off to own or to rent.

In your opinion, what should you do first? Pay down debt, or invest?

If you have high-interest rate debt, such as balances on a credit card or store card, I would definitely focus on paying down those first.

If you have only low-interest rate debt, such as a mortgage or HELOC (home equity line of credit), I would focus on continuing with regular debt payments, but also maximize investing. Mortgage interest rates are incredibly low right now. Financially, you’re more likely to be better off by investing for the long term than paying down that debt.

What are your favorite personal finance books?

My favorites are:

Quit Like A Millionaire: No Gimmicks, Luck, Or Trust Fund Required, by Kristy Shen and Bryce Leung.
- Kristy and Bryce retired at 31 with over $1 million, and now travel the world. But even if the FIRE movement (financial independence retire early) isn’t for you, this book is still a great read. The detailed description of how they draw down their investments in retirement while still protecting themselves from stock market declines is essential.
The 5 Years Before you Retire, by Emily Guy Birkin.
- This book covers all the important personal finance steps to take BEFORE you retire, including what to do if you haven’t saved enough. Lots of great information here, particularly with respect to American social programs and taxes. (I wish it had a Canadian version!)
Make Your Kid a Money Genius (even if you’re not), by Beth Kobliner.
- This is the book I would most recommend to parents. She covers 10 important topics ranging from saving, earning, debt, smarter spending, college, and more. In addition, each chapter is broken down into advice by age range: preschool, elementary school, middle school, high school, college, and young adulthood. For example, in the chapter called Hard Work Pays, elementary kids learn that work isn’t always fun, while high schoolers learn how to read paycheque deductions, and advice to young adults includes how to negotiate your salary at a new job.

There are a handful of very highly respected personal finance books that many people love – that I absolutely hated. I won’t name them, of course, but if you start a personal finance book and it doesn’t speak to you, find a different one that does, even on the same topic.

What are your best investing tips?

Investment classes include stocks, bonds, real estate, cryptocurrencies, precious metals, options, and much more.

I believe there are 4 main principles to investing, and this is how I meet them:

Invest based on your goals and risk tolerance.
- You can take more risk (and hopefully get higher return) with funds that are invested with a long-term horizon. In my children’s education funds, by the end of high school I have them invested in 100% GICs (guaranteed investments certificates, equivalent to a CD in the United States). When the stock market crashed 20% in early 2020, and my son was months away from graduating, can you imagine if his education fund had fallen by that much?
Diversification.
- Don’t put all your eggs in one basket. My own investments are mainly in ETFs (exchange traded funds) that track broad market indexes. As a Canadian, I ensure I invest internationally as well as at home.
Reduce the cost of investing./div>
- When we first started investing, we had mutual funds because we didn’t know much about investing and that’s what our bank recommended. As we learned more, we switched to self-directed investing with ETFs, which have much lower management fees.
Invest regularly.
- We add to our investments regularly, to ensure it grows over time. I also check our investment allocation periodically, to balance between types of investments where needed.

If you received a $5,000,000 windfall tomorrow, what would you do with the money?

I would start by hiring a fee-for-service financial advisor. $5 million is too much to manage without getting some expert advice. And I know a fee-for-service advisor isn’t going to “sell” me the wrong things to profit off me.

I think both of us would retire from our careers.

Then:

I would pay off my mortgage, because I find it annoying. Even though the interest rate is low, and financially this isn’t the best use of funds. I would also hire someone to do all the little renos to make our home perfect.
I would buy a cottage. Living in a big city as we do, it would be lovely to have a place to go where we could be in nature.
I would maximize our tax-advantaged investing accounts. Then invest more in non-registered investment accounts.
I would set up funds in trust for our children. We live in a city where buying a house or condo is very expensive, and I worry that they may not be able to afford to live here as adults.
We would travel (when COVID-19 is no longer an issue).
I would give some to family.
and, I would donate to a worthy cause.

How You can Contact Money In Your Tea for More Information

You can learn more about Money In Your Tea at https://moneyinyourtea.com/, and follow Kari on Twitter @moneyinyourtea.

Thank you for reading this interview, and thank you, My Quiet FI, for providing us with some great personal finance tips!