Apple time

Today is the day a lot of people have been waiting for. In a few hours, Apple shall (hopefully) unveil the latest version of the iPad. Every Apple product launch is awaited with bated breath. There are tons of rumours and leaks leading up to the launch. Its like an industry in itself - the rumour machine.

Anyways, this blog is not about the device itself. What I am going to talk about is the product and the cost. The iPad has thus far been priced from $499 ($519 here in Canada). And a ton of people have bought it. For themselves. For their kids. And in some cases even for their significant others.

And this has kind of surprised me. Even if you go for the cheapest iPad, after taxes and basic accessories, it sets you back by at least $600. And then you go ahead and spend more on apps. In my opinion, that's a good chunk of money. Especially for a device that very few people really need.

The iPad is the perfect example of a want. There is very little that you can do on the iPad that you couldn't already do with other devices that you already have (i.e. the laptop or desktop, your smart phone, your DVD player, your game console etc). Yes it does makes stuff more convenient but we don't actually need it.

And then in exactly one year a newer version is released and we want the latest one all over again. Of course Apple products tend to hold their value fairly well in the resale market. iPad 2s were apparently fetching around $375 as of a few days back. So you could sell the one you have for that amount and go ahead and get the latest and greatest.

Cost of ownership - ~ $225 / year

Of course this is for the base level WiFi model. If you splurged for the 3G model you have a data plan to pay for as well so the cost for the year would go up accordingly.

Is $225 a big amount to spend each year? Maybe. Maybe not. 

I have not yet succumbed to the calling. I would sure love to have one. But my frugal brain holds me back. Will it continue to win? I don't know. 

Have you already bought the iPad? Are you planning on buying one? or more? Is it an upgrade? What are you doing with the older one? Please do tell.

Can you live on $50K a year?

I was reading and article on MSNBC today talking about the fact that $50,000 is the median income in the US.

It got me thinking about whether $50K a year is sufficient income to life comfortably. I actually went back and checked my expenses this past year so see where I landed.

I also did a quick check using the tax calculator on TaxTips.ca to see what the take home income would be with a gross income of $50K. Here is what I found.

- With a single earner, 4 member family (couple + 2 kids), a $50K income would translate to a net, after-tax income of just over $40K.

- $40K net income translates to about $3300 per month.

- This should allow the family to lead a comfortable middle class lifestyle without giving considerations for RRSP, RESP, TFSA etc. Depending on the family's priorities, they may actually be able to invest in the plans to some extent.

So in my opinion $50K should be sufficient for a family.

And in case you are wondering, I did come in under the $40K threshold as well - not counting the RRSP, RESP, TFSA etc. But if $40K was all I had to work with, I am sure that I would have managed my expenses better (maybe there would not have been the 2 vacations or the 2 cars etc)

What about you? Is a $50K income sufficient for you?

Temptations all around

For someone trying to watch their spending, Christmas time is the worst time of the year. There are sales all around. All those pretty looking flyers with things that you would love to have. The temptation is just too much. So how does one survive this glut of temptation?

A few simple rules ...

1. Decide before hand how much you can afford to spend all season. And then ... most importantly ... stick to that budget. No matter what.

2. Identify the items you need. Maybe these are things for your loved ones. Or maybe they are for yourself. Either way, make a list of the things you need. And stick to needs.

3. Once you have your list identified, you need to figure out how much you will pay for each item. The total for all the items has to be within your budget identified in #1 above.

4. Now watch out for sales. If the items on your list go below you "expected" price, grab them. Most stores will price-match through till Christmas day in case the price drops further. So its a no-risk buy.

5. If the items are for yourself, consider waiting for Boxing day (and week).

6. Finally if you end up with some left-over dough after all items on your list have been accounted for ... Hold on to the rest. Its tempting to spend it all since you have been good all season. But a penny saved is 2 earned. Hang on to it for a rainy day.