Getting Back on Track

I apologize things have gotten away from me and I was trying to hard to get this blog started and I couldn’t keep up with that pace/momentum. I promise to get back here!

Financial Management Tip Day 8: Do you know where to start in creating a budget?

Financial Management Tip Day 8: Do you know where to start in creating a budget?

I know many people see the word “budget” as a bad word but it really doesn’t have to be nor is it complicated or complex. I am a believer that the key is to start and you will work out the kinks in the plan as you go. The first month might be a little messy so it is important to keep notes, write down questions and any possible issues you encounter along the way.

Look at it carefully and frequently. Are you missing a category? Did you spend money this month that you couldn’t account for on your budget? Did you over spend in a category- why and is there a way to better control your spending or do you need to increase the budgeted amount for this category?

Budgeting is really about looking at the reality –money in and money out and making choices about your priorities. Be realistic.

Steps for beginning your budget:

1. Get Organized– Gather your spending journal information, bank and credit card statements, gather current copies of your bills *for variable costs like your power bill you might want to look at 6 months of previous bills to discover your high and low points or an average, your pay stubs, and your debt statements.
2. Be Exact– Do Not, I repeat Do Not use estimates! Write down the actual numbers down to the penny.
3. Format– Start with a form you can find online or make your own. You can do it all on the computer or paper and pen. I like to print off a form that I fill out throughout the month by hand. I keep past month’s budgets to go back over and review. It let’s me compare from month to month.
4. Don’t forget to Include Savings– Don’t forget these important categories. For example, if you start early, your retirement savings will cost you less per month. Do you want to stop renting and would rather own your own house, start saving for a house down-payment. Emergencies are bound to happen, unless you start an emergency fund, you will rely on credit during these difficult times.
5. Remember Debt Repayment– Many of us have debt repayment in our life’s and this may range from student loans, mortgage, car payments, credit cards, loans from family or friends, line of credit, payday advance stores, past due amounts on bills, or items bought on buy now pay later plan. Start with a list of all your debts (who do you owe, what is your total amount owed, monthly minimum amounts, and interest rates)- we will look at debt repayment more closely this week.
6. Try a 3 Column Approach– I like to use a three column approach to my budget sheet.                                                                                                                            1. Budgeted Monthly Amount– What I have budgeted for spending in each category                                                                                                                         2. Monthly Actual Amount– How much did we actually spend this month in each category                                                                                                                           3. Difference– Did we over or under spend?

I am going to provide a blank budget page that you can use for your family (edit the cells to work for you and your family’s needs- add categories that are relevant for you). I like lots of categories- be specific. For example, you might need to add some categories for kids or planned spending such as vacations. Blank Budget Sheet

Here is a Sample Budget Sheet for you to check out. Is this person missing categories? Think about next steps? Is this person saving enough? What about increasing payments on their debts? Why is there budgeted amounts this month that were not spent- where does this money go etc?

Financial Management Tip 7: Understanding your Fixed and Variable Expenses

Financial Management Tip 7: Understanding your Fixed and Variable Expenses

There are two distinct parts of everyone’s budget are 1. Fixed Expenses and 2. Variable Expenses 

1. Fixed Expenses: Cost the same month to month such as your mortgage or rent payment, car or house insurance (if paid monthly). These typically can not be easily changed. These are easy to track within your budget.

However, if you were in a financial crunch you might be able to change your mortgage payment by re-financing or renting out a room or basement for extra income. If you rent you could move to a cheaper apartment or get an extra room-mate.

You can shop around for cheaper car, house, and life insurance- do your research and look for discounts.

Fixed doesn’t mean set in stone, however, in general the costs are pre-determined on a monthly basis and there isn’t a lot of flexibility with these bills. Look at reducing these costs in order to

**Cell phone bills and cable bills are somewhat fixed – Do you consistently spend over your allotted minutes every month or order a movie on the tv? If so maybe look at a new contract/plan that better meets your needs and allows you to budget an appropriate amount.

2. Variable Expenses: These costs vary from month to month and are under your control. You decide what to spend on food, eating out, entertainment, clothes, coffee, among other budget categories.

Some of these categories are necessities like food; while others are discretionary. Variable costs require you to track them carefully. For example, one month you might spend $150 eating out at restaurants while the next month you might spend $300.

*** The easiest way to track even variable categories is to pre-determine what you can afford to spend each month in each category. I like to get this money out in cash and divide it among jars or envelopes for each category. When money is taken out from the food jar, the change and a receipt go back in the jar.

You can definitely cut back in this category but it requires discipline, hard work, and the ability to make decisions about your priorities.

**Heat bills can vary from month to month. Some companies will over a plan which standardizes your bill from month to month so you can budget properly. I actually use the highest bill amount for the year as the number in my budget so that in some months I am under considerably and use this under-spend for extra debt repayment or it goes into my savings account.

 We must not forget to look at savings as being an important category in our fixed expenses and debt repayment.

The two important categories of any budget are variable and fixed costs and it is important to recognize that both parts can be trimmed when needed.

How to Save Money Tip Day 7: 34 Easy Tips for Shopping Smart in the Grocery Store

How to Save Money Tip Day 7: 34 Easy Tips for Shopping Smart in the Grocery Store

Food tends to be one area of our budget we can overspend so easily. How do we control our costs in the grocery store? The key is learning to shop smart.

The number 1 suggestion I can provide is to plan!

For example, have you ever bought lots of fresh fruits and vegetables with great intentions and than have to throw out most of it because it went bad before it was eaten. Plan out your meals in advance- what do you need to make these meals? What do you already have in your house?

Here is a list of my suggestions for shopping smart for groceries:

Plan in advance:

• Plan out your meals (make a list of all ingredients you have already and what you need to buy)
• Shop with a list- don’t put items in your cart that are not on your list
• Look at the grocery flyers before hand (make a detailed list)
• Look for coupons especially on toiletries and household products
• Check out recipe books and searches online for new and interesting recipes to try

Leftovers:

• Prepare double meals and freeze your leftovers (spaghetti sauce, lasagna, and chili are great examples of foods that freeze and reheat really well) *label and date the container before putting it in the freezer
• Use leftovers in a creative way take leftover roast chicken and make chicken tacos or a chicken and rice casserole with it
• Pack leftovers for tomorrow’s lunch
• Label all leftovers
• Try to use ingredients in more than 1 meal- if tomatoes are on special this week try to use them in a couple different meals

Grocery Shopping:

• Do not shop on an empty stomach
• Consider shopping at multiple stores -look at warehouses for certain items
• Look at smaller stores (ethnic markets for example)
• Take advantage of stores that allow you to price match
• Stick to the outside edge of the market for healthier foods
• Look for alternatives to pre-packaged foods- make your own macaroni and cheese to ensure the quality of the ingredients- you can also add in extra veggies by pureeing some butternut squash to add to the cheese sauce

Fruits and Vegetables: Try to Save Money Tips

• Shop local- look at farmer’s markets for fresh produce
• Prepare your fruits and vegetables when you get home- makes for quick meal preparations and snacks on the go
• Look at alternative sources to fresh produce such as low sodium canned options or frozen fruits and vegetables
• Check out the grocery sales for different types of vegetables on sale
• Consider jarring or canning fruits and vegetables while in season
• Grow your own vegetables or herbs

General Tips:

• Shop with cash
• Use a calculator to add up your costs
• Consider your needs and wants- do you need that chocolate milk or do you want it?
• Check out the top and bottom shelves for hidden bargains
• Check unit prices not just the overall price to see which product is a better deal
• Look at store brands not just name brand items- you are paying for the label/brand
• Take advantage of store loyalty and reward cards- collect points
• Stockpile foods that don’t expire quickly such as canned goods, dry beans, and pasta
• Look for loss leaders in your store flyers
• Find out when or if your store has a clearance section or discounts products such as meat or bread (freeze immediately)
• Look at club size packs of meat and sub-divide into smaller portions at home
• Look for discounted fruits and vegetables (I often find red peppers marked down that I then roast and freeze at home).

How to Save Money Tip Day 6: Quick Ways to be a Tourist in your own Community

How to Save Money Tip Day 6: Learn How to be a Tourist in your own Community

Have you given any thought to taking a lower-cost staycation this summer instead of a pricey vacation?

1. Definitely take some time to plan out your staycation. What are you going to do during this time?
2. Research possibilities within 100-150 kms from your town or city. Look at museums, art galleries, provincial parks, nature trails, aquariums/zoos, a play in a local theater, wine tours, concerts, bowling, historical sites, amusement parks, miniature golf, just to name a few possibilities
3. Look for special programs, activities, or events- often there are big celebrations for holidays such as July 1st (Canada Day) or July 4th (Independence Day)
4. Worried about putting mileage on your car- then rent a car
5. Look for discounts and coupons for entrance fees or rentals
6. Book online- compare prices for renting cars, tickets to special events, or even a hotel
7. Look at alternatives to a pricey hotel- camping outside, a log cabin, bed and breakfasts, a rental with a group could be cheaper possibilities
8. If you have kids- find fun and exciting activities for them during the day
9. Have fun at night- make sure you plan some fun date night activities for you and your partner
10. Take lots of pictures- you want to capture special memories
11. Consider your local environment- do you live near the beach or on a lake? Look at local relevant activities such as fishing or canoeing or sun-bathing. In the mountains you might enjoy hiking adventures
12. Check out your local town/city website, listen to the radio, look in the newspaper for lots of unique possibilities

Financial Management Tip Day 6: The Blurry Line Between Needs vs. Wants

Financial Management Tip Day 6: Do you understand the difference between your needs and your wants?

We live in a world full of consumerism. We get into a mindset of want, want, want but we need to work towards shifting our priorities and thoughts. It takes time to make such shifts. And you will make mistakes- slip-ups from time to time. I think its important to look at small changes before going radical.

A need is something you have to have (essential)- you need it to live. There are really 5 categories of needs: a roof over your head, healthy food and water, basic medical and hygiene products,  reliable transportation, and basic clothing. Some people consider there means of making an income as being a need. Other people consider life and disability insurance as a means of providing for their family.

Everything else is a want. A want is something you would like to have (nice to have but not essential). You want brand-name clothing, you want designer shoes, a new car, a fancy house, the newest technology, etc. I want junk food or cable.

There is a blurry line between our needs and our wants- we need a reliable cell phone but do we need the latest technology in our cell phone? We need a reliable car but do we need a fancy car?

It definitely seems like these words are now the same in advertising. There is a popular tv ad right now that uses the words “I need that” when advertising a tablet and speakers. When did we become so greedy?

Am I suggesting getting rid of all your wants, no but I am suggesting you take a look at where the bulk of your money is going and making sure that your priority (you pay first) your needs and than you can add in an appropriate amount of wants based on what you can afford.

If you lost your job today, recognizing where your wants are and that there is room for cuts within your budget helps you realize what is truly necessary and important.

For example, a few months ago we took a pay cut so we started looking at our budget and what we could cut out- we lowered our cable, internet, and home phone bill (changed companies for a better rate and better service), lowered the package on both of our cell phones, lowered the amounts we were spending on our variable spending just to name a few changes. These are small changes in our lives- do we really notice these changes? No, we don’t really notice them.

However, did we take out all our wants? No, we still have netflix, we still get the newspaper daily, we have money in our entertainment jar but we spend our money much more wisely now than before.

Every thing concerning money is a choice- some choices are easier than others to make.

Do you know where you could cut back if you had to? What ways have you tried to cut back in the past?

Financial Management Tip Day 5: Can you Spot the Missing Categories?

Financial Management Tip Day 5: Are you missing categories in your spending journal and budget? 

If we look at our spending journal in preparation for designing and implementing a budget, it is important to consider the categories of our spending. The hardest categories to include are those that do not show up every single month.

For example some spending that you might have forgotten about:

• Do you pay your insurance monthly or yearly?
• Do you pay your house tax monthly or yearly?
• What about about your water bill?
• Magazine subscriptions?
• Birthday gifts/cards or holidays and celebrations
• Vacations
• Vehicle maintenance, inspection, registration, tire changeover
• Registering children for summer camp or sports teams
• Charity contributions
• Household maintenance

I am a firm believer in the concept of planned spending (budgeted spending).

Any time you fail to plan in advance for spending than you end up short-changing yourself, stressing yourself and your budget out, relying on credit to fill in the gap, or not participating in certain events. So rather include these items in your budget on a weekly and monthly basis.

For example, your daughter wants to play soccer this summer. You need to save $400.00 for registration and new cleats. You get the reminder to register at the beginning of May and you have 4 weeks to find $400.00 -that is $100.00 a week which is a lot to find. What if you had 6 months to save this money? How much would you need to save every month? $67.00 a month or $16.75 a week. These numbers are much more attainable.

What if you decided to go on a family vacation next summer? You know you need money for flights, hotel, food, souvenirs, and outings/activities. You decide you need $5000.00 for this adventure. That means you need to save $417.00 a month or $104.25 a week for the entire year to save up that money.

How to Save Money Tip Day 5: Cheap and Simple Ways to Pamper Yourself

How to Save Money Tip Day 5: Cheap and Simple Ways to Pamper Yourself

Spending time and money on yourself doesn’t have to be expensive. Really the key is finding things that you enjoy and find relaxing.

Some ideas for pampering yourself include:

• Beauty rituals at home (for example, facials, body scrubs just to name a couple examples). This website provides some recipes http://www.sheknows.com/beauty-and-style/articles/1023399/20-diy-beauty-recipes-for-at-home-pampering
• Pedicure and manicure
• Bubble bath (try setting the mood with candles, relaxing music, aromatherapy)
• Hair cut or dye your hair
• Cup of tea or coffee
• Reading a book or magazine (Can’t afford these treats, check out your local library)
• Listen to music
• Watch a movie
• Play a quiet sport such as golf or tennis
• Play a favorite video game
• Catch up on a favorite tv show
• Some creative pursuit such as scrapbooking, card-making, quilting or knitting, painting, jewelry making or anything else you love doing
• Window shop at the mall
• Go for a walk
• Walk through the grass, watch the clouds, enjoy some time in nature
• Photography (take some pictures of nature)
• Meditate
• Write in a journal or diary

I am thinking about lots of ideas that involve spending time alone and relaxing. Recharging your own batteries will allow you to be more present in your other roles!

How to Save Money Tip Day 4: Cheap Ways to Entertain Family or Friends

How to Save Money Tip Day 4: Cheap Ways to Entertain Family or Friends

Having your friends or family over doesn’t have to cost a lot of money. There are lots of fun activities that you can do that that are inexpensive. Cheap is often seen as a negative word but I think we need to change our perception. I think we should look at frugal ways to entertain both at home and elsewhere.

Involve your kids in planning fun activities such as games like tag, hide and go seek, jump rope etc, artistic ideas like drawing with chalk. Kids can help make inexpensive decorations for parties or holiday celebrations.

Be honest with your friends and family- tell them expectations need to change and that you value their friendship but that your pocketbook needs help. They might also feel the same way but find talking about it difficult.

Cheap doesn’t mean less fun.

Alternatives to expensive nights or activities include:

• Potlucks
• Cooking parties (freezer meals, cookie swaps, etc)
• Clothing swaps (trade no longer worn clothing with your friends)
• Day trips to a local beach
• Beach party- bon fire, roasting marshmallows
• Movie and popcorn at home
• Picnics
• BBQ’s
• Pool parties
• Board or card games
• Wine and cheese parties (everyone contributes food and a bottle of wine)
• International food nights (everyone brings a different dish)
• Coffee date
• Manicure or facials at home
• Video games
• Etc.

Remember to think outside the box for different and unique ideas. After all it isn’t about the amount of money being spent but rather time spent together and all the fun experiences we share.

Financial Management Tip Day 4: Categorize Your Spending

Financial Management Tip Day 4: Categorize Your Spending

Yesterday’s tip was on the importance of tracking your spending and today’s financial management tip is to take the information/numbers you gathered from yesterday’s tip and now you must categorize your spending. This take’s it beyond a mix of numbers and rather organizes them so that you can begin to see the bigger picture of where your money is going on a daily and monthly basis.

Now there are a few different ways to do this- you can write right beside your notes in your spending journal especially if you only spending money from one category in each shopping trip. For example, do you have a shopping trip that you spend money on groceries, toiletries, kids, and clothing all on 1 receipt?

If you are extremely visual, you could also use different color highlighters or markers to show each different category.

So the first question you are going to ask is…..What are the categories? I believe there isn’t a one fits all system for categories of spending. I like to have more categories because I make them very specific.

Also no miscellaneous category!

So let’s look at yesterday sample

Sample (7 days): Sally recorded the in’s and out’s of her money for 1 week….let’s examine it more closely

Date / Amount / Store / What you bought

June 9th/ +$450.00 /pay cheque (IN)

June 9th/ -$55.50 / monthly cell phone bill (OUT- UTILITIES)

June 9th/ -$3.40 /local coffee shop /coffee and brownie (OUT- EITHER ENTERTAINMENT OR EATING OUT)

June 9th/ -$24.80/grocery store/ milk, eggs, bread, bananas, apples, cream cheese (OUT- GROCERIES/FOOD)

June 9th/ -$7.90/drug store/magazine (OUT- LEISURE-MAGAZINE)

June 10th/ -$40.00/gas station/gas (TRANSPORTATION- GAS)

June 10th/ -$6.75/pizza/pizza for lunch (OUT- EITHER ENTERTAINMENT OR EATING OUT)

June 10th/-$75.00/vet bill for Fluffy (OUT- PETS)

June 10th/-$17.90/grocery store/ fried chicken for supper (OUT- GROCERIES/FOOD OR ENTERTAINMENT/EATING OUT)

June 11th/-$21.49/walmart/kitty litter, birthday card, new shirt (OUT- PETS, GIFTS, CLOTHING)

June 11th/-$5.40/coffee shop/coffee and a treat (OUT- EITHER ENTERTAINMENT OR EATING OUT)

June 11th/-$9.80/book store/new book (OUT- LEISURE/HOBBY)

June 12th/-$30.00/walmart/new toy for Johnny (OUT- KIDS)

June 12th/-$7.80/sandwich shop for lunch (OUT- EITHER ENTERTAINMENT OR EATING OUT)

June 12th/-$15.40/grocery store/supper (ground beef, spaghetti sauce, spaghetti, garlic bread) (OUT- GROCERIES/FOOD)

June 13th/ -$80.50/car maintenance (oil change) (OUT- TRANSPORTATION- MAINTENANCE)

June 13th/ -$120.00/ costco/ toilet paper, laundry soap, steak, salad mix, box of oranges, multivitamins, box of cereal (OUT- GROCERIES/FOOD, HOUSEHOLD, TOILETRIES, MEDICAL)

June 13th/ -$33.50/movie theater/ movie tickets and concession treats (OUT- EITHER ENTERTAINMENT OR EATING OUT)

June 14th/ -$8.80/chinese food for lunch (OUT- EITHER ENTERTAINMENT OR EATING OUT)

June 14th/-$56.70/clothing store/new shift and pants (OUT- CLOTHING)

June 14th/-$20.30/drug store/conditioner, shampoo, body wash, nail polish (OUT- TOILETRIES)

June 15th/-$11.30/drug store/prescription (OUT-MEDICAL)

June 15th/-$6.45/coffee and donut (OUT- EITHER ENTERTAINMENT OR EATING OUT)

June 15th/-$78.90/ car insurance (OUT- TRANSPORTATION-INSURANCE)

Today we will look at examining where Sally’s money went in a 7 day span.

• Is she in the red or the black? RED Sally overspent by -$287.59
• Did she under or over spend? Over spent
• What hasn’t Sally paid this month? Just to name a few items missing but what about rent, heat, lights, house or apartment insurance, debt repayments, television/internet/home phone, savings just to name a few missing aspects that Sally hasn’t paid
• Where has Sally’s money gone- what did she spend money on? Sally spent considerable money on her wants this month including toiletries, clothing, entertainment/eating out
• What were Sally’s needs vs. wants? Needs: Food/Groceries, Vet Bills -preventive or curative for Fluffy, insurance on her vehicle, regular and preventable maintenance on her vehicle, a basic cell phone package so Johnny can reach her   Wants: Magazine, books, entertainment/eating out, non basic toiletries such as nail polish, clothing
• What patterns do you see? Sally likes to shop. Sally doesn’t meal plan- supper seems spur of the moment. Maybe Sally doesn’t like to cook. Sally could bring her lunch with her rather than eating out all the time. Sally might go with the crowd from work for lunch and coffee (could she go but not spend money)
• How could Sally save money? Sally could meal plan- shop the sales, have a specific grocery list, coupon. Sally needs a more concrete plan for her money- what is essential? Sally could brown-bag her lunch (a plan for lunches)