Sunday, April 23, 2017

Step 2: Know Your Total Annual and other One-time Expense

After compiling a list of monthly expense. Now it’s time to figure out my annual expense or other one-time expense that’s not included on my list of monthly expenses.


Auto Insurance: $1,380


My first annual expense is automobile insurance. Auto insurance can be a monthly charge or an annual charge depending on the payment plan you chose. I choose the annual payment because it is usually a bit cheaper and I can use my credit card to pay for it. Using credit card to pay for major expense is a great way to collect reward point or cash back. I’ll write another post on reward point and cash back letter.


Auto License: $120


Credit Card Annual Fee: $120


I signed up for the American Express SPG credit card last year because of the sign-up bonus. If you are a collector of travel reward point, you’ll know how valuable SPG points are. I tried but couldn’t get the annual fee waived so my plan is to cancel it before annual renewal. SPG point can be transferred to Aeroplan and a lot of other frequent flyer program. Even if you chose to transfer them to Aeroplan (not the greatest in my opinion), you’ll get an average of 2 cents per point. However, if you can redeem them for long haul business-class travel, those points can be worth as high as 8 cents each. This is what I did last year for my honeymoon and I’ll write another post about that later.


I am very sure there are other annual expense but I just can’t think about them right now. Once those other expenses come up, I’ll add them onto the list.


So to sum up, my annual total of monthly expense is $39,000 + $1,620 of annual expense = $40,620 in expense per year. Comparing this number to the 2015 Ontario provincial average household expense of $62,719 (current consumption) according to Statistic Canada, I am 35% below the average but my wife and I have no children at the moment.

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/famil130g-eng.htm

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