Friday, October 29, 2010

Short Takes: Discount Brokerage Comparison, Red-Tagged Furnaces, and more

Money Smarts came out with a thorough comparison of Canadian discount brokerages. There are two handy tables for easy comparison along with detailed notes on each brokerage. The column that concerns me the most is Forex fees.

Ellen Roseman finds a number of consumers complaining that their furnaces were “red-tagged” by technicians to boost sales of new furnaces. If these claims are true then homeowners need to be very careful about who they choose to clean and inspect their furnaces.

Big Cajun Man says that TD Canada Trust plans to open branches on Sundays and asks whether this service is really needed. My take is that it doesn’t matter whether it is needed; what matters is whether it is wanted and profitable.

Financial Highway looks at the wisdom or folly of using retirement funds to pay for your kids’ education.

Million Dollar Journey gives us a look inside a demi-millionaire’s wallet.

Thursday, October 28, 2010

Interest Rates on Old Lines of Credit

I have a 17-year old line of credit that has seen very little use. I have it “just in case”. A recent temporary need for money led me to use it instead of selling investments, but I never actually checked on the interest rate. The rate turns out to be prime+4.5%. Ouch.

I’m not exactly up on appropriate interest rates for unsecured lines of credit since the credit crisis, but this seems a little high. Perhaps the problem is that the bank is determining the interest rate partially on 17-year old information I gave them when I opened the line of credit. Or maybe they are just hoping that I won’t notice.

Either way, I’ll be off to the bank to try to get a better rate soon. Anyone else who has an old line of credit but hasn’t looked at the interest rate lately might do well to check it and possibly try to get it lowered.

Wednesday, October 27, 2010

Inherent Value of Businesses

A recent study of currency-hedged foreign equity funds by Raymond Kerzérho provides some explanations for why these funds tend to perform worse than we expect. This reduced performance is called “tracking error”. I believe this is related to the fact that businesses have inherent value independent of currencies.

Canadian Capitalist gave a good overview of this report, but I want to focus in on just one source of tracking error.

One major reason why currency-hedged U.S. stock funds perform below expectations is that the value of the U.S. dollar and the value of U.S. stocks tend to move in opposite directions. For technical reasons with the way these currency-hedged funds operate, this negative correlation gives rise to tracking error.

The idea that stocks and currencies tend to move in opposite directions makes perfect sense if you start from the point of view that businesses have inherent value that is at least partially independent of currency. When the U.S. dollar moves up or down, is there any reason to believe that the inherent value of Walmart has changed?

If Walmart maintains its inherent value, but the U.S. dollar goes down, it makes perfect sense that the value of Walmart measured in U.S. dollars would go up. Of course, stock values are not completely independent of currency fluctuations, but it makes sense that U.S. stock funds will tend to continue to move in the opposite direction of the U.S. dollar.

Tuesday, October 26, 2010

Thinking of Investing in China? Don’t Ignore the Past

Many people are inclined to think that the rise of China’s stock markets is happening for the first time. This isn’t true. As Jason Zweig explains, China has had temporarily successful stock markets a few times in the last 150 years.

Personally, I consider the risk of the communist party choosing to just shut down their stock markets too great to make any serious investment with my money in China. Bulls will explain why maintaining markets is in the communist party’s interests, but who is to say that the small number of people who run the country will behave rationally? And who is to say that the communist party is even competent to run a capitalist economy?

Zweig’s warnings are more nuanced than mine, but I’m content to avoid investments I don’t understand.

Monday, October 25, 2010

Number One DIY Investing Cost: Currency Conversion?

After a quick look through old brokerage statements, it seems that my number one cost is not commissions or spreads but currency-conversion charges. These charges are mostly hidden, but they are very real. I’m a little under the weather and haven’t actually studied the numbers carefully, but I plan to.

Canadian Capitalist posted two ideas for avoiding currency conversion charges on U.S. dividends. These are good ideas, but the longer-term answer is to pressure discount brokerages to do two things:

1. Allow investors to hold U.S. dollars in RRSPs. A few do this already.

2. Start charging more reasonable currency conversion percentages. The high percentages used to make sense when banks actually had to handle cash, but for electronic transactions, banks could easily make a profit charging one-tenth of what they charge now.

Feel free to give your brokerage a hard time about this.

Saturday, October 23, 2010

And the RESP Book Winner is ...

Gene K. wins the draw for a copy of Mike Holman’s RESP Book (see my review here). Thank you to everyone who entered the draw.

Friday, October 22, 2010

Short Takes: Real-Return Bonds and more

Million Dollar Journey explains real-return bonds.

Money Smarts defends mutual fund DSCs (Deferred Service Charges). I’m not convinced, but I do see his point that they could be worse.

Big Cajun Man sums up his experiences with RESPs now that he has actually made a withdrawal.

Financial Highway has 10 ways to lower your insurance costs, but they were initially all listed as #1. I guess anything that saves money has high priority.

Thursday, October 21, 2010

RESP as a Weapon!

A big part of the work I do professionally involves thinking about how to get around security measures and how to use things for unintended purposes. An idea related to RESPs came to mind.

As I often do, I’ll explain my idea in story form:

Ken is a well-to-do homeowner who recently had new neighbours Ted and Alice move in next door. Ken is an RESP expert and the subject came up the first time he spoke to Ted. Ted and Alice saw the benefits of an RESP and they opened one for their baby daughter Emily with some advice from Ken.

The relationship between the neighbours later soured. Their squabbling escalated to the point where they were calling bylaw officers on each other for minor breaches of local ordinances.

In a spiteful mood, Ken concocted a little plan. He opened an RESP in Emily’s name and deposited the lifetime maximum of $50,000 in a single deposit. Ted and Alice hadn’t made a deposit in their RESP yet and now they would never be able to. Anything over the lifetime $50,000 limit gets hit with a 1% per month penalty tax.

Ken planned to leave the money in the RESP for 30 years and then withdraw it and pay tax on the gains. Of course, Ken had no intention of using the money for Emily’s education.

Ken will have to pay an extra 20% tax penalty on the gains when he withdraws the money but this will be partially offset by 30 years of tax-free growth. Because Ken has maxed out his RRSP and TFSA room, the RESP tax shelter is welcome. The extra 20% tax is just the price of revenge.

The question here is whether this could work. Ken would need to get Emily’s Social Insurance Number. The details of my story make it plausible that he would have seen Emily’s SIN when helping Ted and Alice open their RESP. Because Ken has no intention of applying for government RESP grant money, he avoids the need for other documentation about Emily.

Could this work? I’m hoping that the answer is no, but I see nothing in the RESP rules that prevents it. It may not work for certain institutions that offer RESPs, but Ken only has to find one where it will work.

Wednesday, October 20, 2010

Modest Investment Returns are Better than They Appear

We frequently hear that investors need to lower their expectations about investment returns. Experts say that it just isn’t realistic to expect double-digit average returns over the next decade or more. However, if we put the focus where it belongs on real returns, the future looks brighter.

The latest expert to counsel lowered expectations is TD Bank's Chief Economist Don Drummond. Drummond suggests realistic expectations are 2% inflation, 6% to 7% returns for stocks, and 3% to 4% returns for bonds.

These predictions are presented as very modest returns when, in fact, they are quite good. The important thing is to focus on real returns, which are returns after subtracting out inflation. Real returns of 1% to 2% for bonds and 4% to 5% for stocks are nothing to dismiss. I would happily accept this result.

Investors get themselves into trouble when they focus on nominal returns, which are returns without subtracting out inflation. Let’s look the decade starting in 1972 as an example. The TSX Composite index had an average gain of 11.7% per year. This may sound much better than 6% to 7%, but we must account for inflation. During this decade inflation was very high. The average real return on the TSX Composite during this period was only 2.2% per year. I’d rather have 4% or 5% real returns.

While an investment of $100,000 in the TSX in 1972 grew to $303,000 ten years later, its purchasing power grew to only $124,000. What’s worse is that an investor who had to pay say 20% taxes on the yearly gains actually lost purchasing power over this period.

Put another way, an investor who spent the gains each year thinking he was preserving his capital would have seen the purchasing power of his $100,000 in 1972 drop to only $41,000 a decade later.

I’m sure that Don Drummond and Canadian Capitalist understand all this very well, but they also know that the majority of investors tend to focus solely on nominal returns. Investors need to stop moaning about low nominal returns and start focusing on real returns.

Tuesday, October 19, 2010

Book Giveaway: The RESP Book

Who knew that RESPs had so many rules! Mike Holman clearly explains all the ins and outs of RESPs in his book The RESP Book: The Complete Guide to Registered Education Savings Plans for Canadians. The book is only 118 pages long – the author tends to get to the point quickly.

Holman has graciously offered an extra copy of the book as a giveaway for my readers. To enter, just send an email to the contact email address in the upper right corner of my blog with the subject “Book”. Readers who subscribe to my feed will have to click through to my web site. Another benefit of going to my site when reading a post is to see the comments other readers leave on that post. All entries received before noon on Saturday, October 23 will be considered for the draw. I reserve the right to eliminate entries that I judge to be outside the spirit of the contest.

Holman covers the full range of RESP topics: contributions, grants, withdrawals, opening an account, and basic investing information. The author isn’t just a promoter, though; he also lists reasons why some people shouldn’t open RESPs.

One part of the book that struck me as amusing was the subsection titled “RESPs for adults are a waste of time.” What do you really think, Mike? This is as strong an opinion as the author expresses, though. Holman has opinions about which approaches are better than others, but they are expressed in a fair and balanced way.

Here are a couple of questions that came to mind while reading this book:

1. If two or more people open RESPs for the same child and they collectively go over the $50,000 lifetime contribution limit, which RESP gets hit with the 1% per month tax penalty?

2. RESP contents are divided into contributions and accumulated income. Accumulated income consists of government grant money and investment gains. When I start withdrawing RESP money for a child in university, my preference is to withdraw grant money first, then investment gains, and lastly contributions. The reason for this order is in case the child quits school, the grant money must be returned to the government and the investment gains will be taxed. When withdrawing accumulated income, can I request that it be entirely grant money at first, or is this restricted in some way?

In conclusion, I recommend this book to anyone planning to open an RESP. It is likely to be useful to those who already have RESPs as well.

Monday, October 18, 2010

Chasing GIC Returns

I’ve recently been trying to help an elderly GIC investor get the best possible returns on her money. While investigating different options, I discovered that the institutions offering the best rates aren’t accessible from BMO Investorline.

BMO Investorline allows investors to hold GICs from banks other than BMO in an Investorline account. They offer 15 different choices with 3-year GIC rates up to 2.3% and 5-year GIC rates up to 2.95%. As long as they are all covered by CDIC, it’s not clear why anyone wouldn’t just choose the highest rate available.

However, a Google search on “GIC rates” turned up 3-year GIC rates up to 3% and 5-year GIC rates up to 3.45%. This is a gap of 0.7% and 0.5% from the best rates available through Investorline.

In every case, the rates in the Investorline list were as good as or better than the rates shown in the search. It’s just that Investorline didn’t offer GICs from the institutions with the best rates.

Here is a list of the institutions that offered 3-year GIC rates better than the best available through Investorline:


This raises the question of why Investorline doesn’t offer GICs from these institutions. Are they covered by CDIC? Maybe they don’t offer Investorline a commission for bringing in business. Maybe some of these institutions consider GICs to be loss-leaders to bring in other business and they’re not interested if the customer is essentially retained by Investorline.

My search continues for some way to get good GIC rates from different banks without having to open separate accounts with each bank.

Friday, October 15, 2010

Short Takes: Credit Card Arbitrage, Overdraft Fees, and more

My Dollar Plan has an update on Madison’s amazing credit card arbitrage strategy. She borrows a 6-figure sum at a cost that is lower than the interest rate she can get in a savings account. Beware: there are many potentially costly traps for the unwary with this game.

Big Cajun Man has a few choice words for anyone (including himself) who complains about bank overdraft fees.

Money Smarts finds some problems with the free online financial advice service Matthew McGrath promises to address Mike’s concerns.

Financial Highway explains that friends and family are a significant risk for identity fraud.

My Own Advisor tells the story of Grace Groner, a heroine for dividend investors.

Thursday, October 14, 2010

The Futility of Mutual Fund Disclosures

According a 30-year veteran in the Canadian mutual fund industry, typical Canadian investors are either “not capable of grasping” or simply “refuse to believe” how MERs work.

Identified as commenter “MDB” on Ellen Roseman’s blog, this industry insider goes on to explain that mutual fund investors lose “60-80% of their total lifetime return because of MERs.” However, when he attempts to explain this problem to clients, they “glaze over, not wanting to understand this issue. If everyone they knew invested in mutual funds, that made it okay with them.”

Some of MDB’s clients believed “that a regulated product sold by a licensed broker could do no harm.” When MDB spoke to investors from other brokerages, “despite the prospectus in hand, they thought I was misleading them in order to discredit their advisor.” They would look MDB in the eye and say they were not charged MERs.

When a seasoned veteran can’t even convince investors that they pay MERs, the prospect of improving things with better mutual fund disclosure seems completely futile.

Existing mutual fund disclosure does help some investors, but maybe fewer than I originally thought based on MDB’s comments. Better disclosure would help more investors, which is a step in the right direction even if it doesn’t reach the majority of investors.

I’m more convinced than ever that disclosures must be expressed in dollars. If I were about to invest $250,000 of my savings with an advisor who recommends some DSC funds with a 2.5% MER, I should have to sign a sheet of paper with something like the following on it:

First year fees you pay: $6250.00
Estimated first decade fees you pay: $62,500.00

Early withdrawal fees you may pay:
1st year: $13,750.00
2nd year: $13,750.00
3rd year: $12,500.00
4th year: $11,250.00
5th year: $10,000.00
6th year: $ 7,500.00
7th year: $ 3,750.00

If someone reads and understands this information and then decides whether or not an advisor’s help is worth the money, then disclosure has served its purpose. However, if MDB’s experience is any indication, even this level of disclosure may not reach many investors.

Wednesday, October 13, 2010

A Microsoft Story

In my earlier investing days I tended to make investing decisions based on short compelling stories about stocks. Some of these stories I got from others and some I created myself. These thoughts still rattle around in my head, but I no longer act on them. Consider the following story about Microsoft:

Computer speeds are not growing the way they once did. It used to be that we could count on the speed of computers to double every year or two, but no more. A result of this fact is that consumers have less pressure to replace their computers as quickly as they once did. Microsoft makes money by selling a new copy of their operating system with new computers. Fewer sales of new computers will reduce Microsoft’s sales. In addition, dropping computer prices reduces the price Microsoft can charge for their operating systems. The end result is a bleak future for Microsoft stock.

Let me begin by saying that I don’t know whether the premise of this story is correct. Even if the premise is correct, the conclusion may be wrong for other reasons. One could certainly concoct many other stories related to Microsoft stock that focus on their business in different ways. Some of these stories would be bullish and other bearish.

My real point is to illustrate the kind of reasoning that used to drive my investing behaviour. From listening to others who invest in individual stocks, I find that their reasoning for liking or not liking given stocks tends to boil down to a short story like the one above. I used to check a company's financials as well, but in the end my investing choices were usually driven by these short stories.

I’d be interested in finding out whether my story above actually affects anyone’s thinking about Microsoft stock. However, I have undermined the study by admitting that I don’t believe it myself. (I don’t believe it is wrong, either. I just don’t know.) I’ve also undermined my story’s impact by calling it a story rather than a “stock analysis”. I also failed to include a bunch of pointless charts of recent stock performance that might lend greater credibility to the story.

If I have any talent at creating such stories maybe I have a future as a stock “analyst”. It’s more important to sound compelling than it is to have a record of correct predictions.

Tuesday, October 12, 2010

Lotteries Appeal to the Poorest in Poor Countries Too

A couple in my extended family decided to leave Canada’s cold a little over a decade ago and headed off to the island of Roatan, the largest Bay Island of the Honduras. I’ll call them Bob and Jill. The two of them regularly see a mix of wealthy foreigners and very poor locals. Recently, lotteries hit the island in a big way. The results are tragically predictable.

Tickets for the twice-daily draws sell for somewhere close to 25 Canadian cents each. Bob and Jill do a lot of volunteer work with the locals providing some jobs and helping children with education both by financing it and tutoring them. The excitement among the poorest locals over the lottery looks very similar to our experience.

Bob and Jill try to explain that it is a waste of money, but the typical reaction from lottery players is “but I’m going to win so much money.” It is only the locals who are better off financially who seem able to see the new lotteries for what they are: a big waste of money.

It seems that even in a country that is very poor by our standards, the poorest of the poor find some spare money to waste on lottery tickets.

Friday, October 8, 2010

Short Takes: Credit Reporting Headaches and more

Ellen Roseman shines a bright light on problems with credit reporting agencies. Imagine not being able to get a mortgage because some credit reporting agency has your name spelled incorrectly. You’d think that such a simple mistake would be easy to get fixed. Think again.

Preet Banerjee explains that the S&P/TSX index isn’t the same thing as the Canadian stock market. This illustrates that “passive management” is best thought of as a matter of degree rather than a binary condition. It is impossible to own a portfolio that exactly reflects a country’s investment opportunities. However, it is possible to come reasonably close.

Big Cajun Man got tricked into signing up for a service and Bell is acting as the enforcer to make him pay the third party service provider.

Million Dollar Journey did a net worth update. He’s more than half-way to a million dollars. Does this mean that this blog is nearing its end? Perhaps hiding assets in a shell company could keep this blog alive longer. I’m sure that there are plenty of corporate accountants around who are skilled at hiding assets and liabilities.

Financial Highway tells us how to overcome fears about money.

Money Smarts reviews the book Pensionize Your Nest Egg.

Thursday, October 7, 2010

Barriers to Portfolio Rebalancing

As my own investment portfolio has shifted from individual stocks to index ETFs, I've given more thought to portfolio rebalancing (see my earlier post on a rebalancing trap). I've discovered a number of barriers to the seemingly simple act of rebalancing a portfolio.

Life would be simpler if we had fewer accounts. Here are some common investment account types:

– Regular taxable
– Locked-in RRSP (withdrawn from a former employer's pension)
– Spousal RRSP

For a couple there would be two of some of these accounts.

When there are so many accounts, rebalancing can become quite complex. What starts in theory as a single sell order and a single buy order may become multiple trades in practice.

We have reason to prefer holding certain assets inside or outside an RRSP for reasons such as taxes on interest or dividends. If rebalancing requires buying a particular asset, but the available cash is in the wrong account, then tax planning becomes more difficult.

Another complication is the desire to avoid selling investments in taxable accounts. If we can limit trading to within RRSPs, then we avoid paying capital gains.

However, trying to limit rebalancing trades to within RRSPs doesn’t solve all problems. If we have assets in U.S. dollars and have accounts with an institution that doesn’t permit U.S. dollars in RRSPs, trying to avoid excessive currency conversion costs can be challenging.

I have a spreadsheet that calculates when it makes sense to rebalance our family portfolio, but the problems I’ve mentioned have always complicated the process. It seems that it should be possible to develop a purely mechanical strategy that takes into account all relevant factors, but I'm not there yet.

Wednesday, October 6, 2010

Two Judgments of Over a Billion Dollars Against Individuals

It’s not every day that you hear of a court ordering an individual to pay over a billion dollars in damages. I just heard of two separate cases.

Adam Guerbuez of Montreal was ordered to pay Facebook just over a billion dollars for sending spam messages.

Former Société Générale SA trader Jerome Kerviel was convicted of trading fraud and ordered to pay his former employer US$6.7 billion in damages.

It’s hard to understand the purpose of judgments that are so far beyond the means of these people. I suppose it sends some sort of message. Unfortunately, the message I hear is “we’re not very good at math.”

Tuesday, October 5, 2010

A Portfolio Rebalancing Trap

The idea behind rebalancing a portfolio is to maintain your intended asset allocation percentages. A side benefit is that rebalancing involves selling one asset when its price is high and buying another when its price is low. I’ll show that this process can actually lose money if you’re not careful.

It is tempting to rebalance whenever assets differ from their target amounts by some fixed dollar amount. However, this doesn't always work well. Portfolio size matters. Larger portfolios should wait for larger deviations from target levels when the deviations are measured in dollar amounts.

I’ll use a very simple example to illustrate the problem. In a real portfolio, there are many factors that mask what is going on making it difficult to judge whether rebalancing is profitable or not.

A Fictitious Portfolio

Suppose that Jim’s portfolio consists of just two ETFs: BND and STK. Jim’s intended asset allocation is 50/50. Initially Jim has 1000 shares of each and they trade at $20 per share for a total portfolio value of $40,000.

A few months later, BND is down to $18 and STK is up to $22. Both assets are $2000 away from their target amounts in Jim’s portfolio. So, Jim decides to rebalance. He sells 100 shares of STK and buys 100 shares of BND. Before costs, this leaves an extra $400 in his account.

After another few months, BND and STK have both returned to $20. Jim decides to rebalance again by selling 100 shares of BND and buying 100 shares of STK. Jim’s portfolio is now back to exactly what it would have been if he had never done any rebalancing, except that he has an extra $400 (less costs).

Trading Costs

Suppose that each trade costs Jim a $10 commission and the bid-ask spread is 4 cents. This means that Jim pays an extra 2 cents per share on each buy order and receives 2 cents less per share than the going price on each sell order. In total, Jim made 4 trades and traded 400 shares. He paid $40 in commissions and $8 in spread costs. His profit from rebalancing twice is $352.

A Larger Portfolio

Suppose that Sue’s portfolio is very similar to Jim’s except that hers is 20 times larger. She starts with 20,000 shares of each of BND and STK at $20 per share each. Sue plans to rebalance her portfolio whenever BND and STK differ from their target levels by $2000 or more, just as Jim did. The big difference here is that it will take a much smaller move in ETF prices to trigger Sue to rebalance.

After a couple of days, BND is down to $19.90 and STK is up to $20.10. Both assets differ from their target amounts in Sue’s portfolio by $2000 and Sue rebalances by selling 100 shares of STK and buying 100 shares of BND. The big difference from Jim’s case is that this leaves only an extra $20 (less costs) in Sue's account.

After another couple of days, BND and STK return to $20 triggering Sue to sell 100 shares of BND and buy 100 shares of STK. Sue’s costs will be the same as Jim’s: $48. But her profit before costs is only $20. She actually lost $28 doing this rebalancing. Sue would have been better off to have done nothing.

Even though both Sue and Jim traded the same number of shares, Sue lost money and Jim made money. The lesson is that the threshold for rebalancing can’t be just some fixed dollar amount of deviation from target amounts.

Real Portfolios

It’s important to keep in mind that while this problem is fairly easy to see in this example, it is difficult to see it in a real portfolio. Equity prices don’t behave simply the way they did in this example. They move around randomly and rarely sit at nice round figures.

However, losses from rebalancing are still a real possibility. Hyper-active rebalancing can make you lose money whether you realize it or not. This is particularly true when rebalancing between assets denominated in different currencies. Currency conversion charges effectively raise spread costs by roughly a factor of 10 to 100.

One of the best ways to rebalance is to put new money into whichever asset class is below target. When percentages get far enough away from target that this doesn’t work and you plan to rebalance by buying and selling, make sure that trading costs don’t eat up your gains.

Monday, October 4, 2010

Negative Option Billing at Schools

My son tells me that there is a big debate going on at his school over whether more student services should be included in tuition bills. This is a form of negative option billing where students who don’t want the service have to pay for it and later line up to get their money back. This kind of change creates some financial winners and some losers.

Let’s take a simple example. Suppose that a one-term bus pass costs $300. Suppose further that the students fall into three equal-size groups:

1. Those who use the bus.
2. Those who don’t use the bus and will get their money back.
3. Those who don’t use the bus but won’t bother to get their money back.

By switching to negative option billing, twice as many students pay for bus passes. Thus authorities only need to charge each student $150 for the bus pass fee part of the tuition bill. With this change, students who ride the bus win $150 and students who don’t bother to get their money back lose $150.

Of course, the real situation would be more complex. The three groups wouldn’t be of equal size. Some students who don’t bother to get their money back will probably use the bus at least a few times. Not all of the cost savings would be passed along in the form of lowering the bus pass charge on the tuition bill.

Even when we take the more realistic conditions into account, students who use the bus should get their passes cheaper under the new system. If this doesn’t turn out to be the case, then someone isn’t negotiating very well on the students’ behalf.

Friday, October 1, 2010

Short Takes: Mortgage Fine Print, a New RESP Book, and more

Canadian Mortgage Trends shows us what to look for in the fine print of a mortgage agreement. I would definitely read a mortgage agreement before signing one.

Money Smarts announced the launch of Mike Holman’s RESP book.

Big Cajun Man managed to stop short of making the same mistake twice on purchasing home exercise equipment. Exercise equipment is the type of thing that far more people have than use. This makes for low prices on second hand equipment.

Financial Highway explains CRA’s voluntary disclosure program and how it differs from U.S. tax policies.

Million Dollar Journey looks at the different ways you can track your spending.