When I first started working at CORE Digital Pictures, I got into the habit of going to Subway for lunch. Depending on the kind of sandwich, I usually had to pay between 7 and 10 dollars. One day I did the rough math on what I was spending. Let’s say it was $8.50 a day, 5 days a week, so $42.50 a week. That was $170 a month, which would be roughly $2040 a year. I was working at CORE for three years before I figured this out, so I spent $6120 on very forgettable lunches.
In last week’s look at retirement, we figured out that the government provides some assistance, but not enough for someone to comfortably live off of. As VFX artists we won’t get a company pension. That leaves the remaining amount of our retirement income to come from our savings. If you’re the average Canadian, you don’t have much savings. In fact, the average Canadian is in debt by $28,853. That number does not include mortgage debt.
Simply put, you must get into the habit of saving money. There’s many strategies you can use for this, but maybe the easiest one is what’s known as The Latte Factor. I first heard about this from one of David Bach’s books, Start Late, Finish Rich.
The basic idea is that we often engage in mindless spending, like I did with Subway sandwiches. For other people it might be a daily latte at Starbucks, or buying new clothes every weekend. It’s the repeated little purchases that seem like no big deal but add up if spent regularly.
Often these can be cut down or removed completely without too much pain. I didn’t really enjoy those Subs that much, it certainly wasn’t worth six grand of my after-tax take home pay. Shortly after I realized how much I was spending, I started to bring my lunch from home. We all work too long and too hard to piss away our money like that.
You may be in a situation where you need more than cutting back on your daily coffee. This is where you really have to sit down and figure out what are your needs, your fixed expenses. For most people it’s your mortgage/rent, property taxes, power, water, condo fees, house insurance and if you have a car, car payments and insurance. There’s not too much you can do about these, although you could always sell your house and move into a cheaper one if you bought too much house for your needs.
Your TV, Internet, home phone and cell are fixed expenses, but not needs. You can call your company and threaten to quit, or quit and join another provider to get a better price. I was getting my TV, Internet and home phone from Bell, paying around $130 a month. I cancelled my TV (hardly ever watched it) and got my internet and home phone through TekSavvy and will be paying half the price.
Most of your other expenses are variable to some degree. They aren’t needs, so you have a lot of flexibility with how much you spend on them every month. Things like food, entertainment, clothes. All of these things are under your control to some degree.
I want to stress that no matter what type of situation you’re in, you can make positive changes. Hopefully you’re doing great and you don’t need any of this advice, but I know that some people reading this are feeling like they’re totally screwed. You are not totally screwed. If you understand unpremultiplication in Nuke, if you know how to rig a character in Maya in your sleep, all of this is well within your power to change.