Let me tell you, this was an eye opening exercise.

Method

I budget biweekly, and so I got out my budget binder, and first I added up 6 pay periods of  pre-pandemic totals for income, fixed expenses, and variable expenses. I also pulled out the info for groceries, eating out & gas just because I thought the comparison would be interesting.

Then I added up 5 pay periods of during pandemic totals for the same categories. I created an average for each one to compare. 

Income

Thanks to my husband getting a raise right at the beginning of the pandemic, and the CERB government program, our income is only down 4% from it’s usual. Without the CERB our income would be down 30%.

Thankfully because we live within our means, we have been able to deal with less income and we haven’t had to dip into our emergency fund at all. 

It was announced this week that massage therapists will be able to go back to work in June. It may be awhile before I’m back at 100% of my previous income, but I know we’ll be able to manage until then.

Fixed Expenses

Being that these are fixed expenses they haven’t changed a whole lot. In fact the only thing that has changed is that I have stopped our automatic savings that goes into our travel account. While that was sad for me to do, reality is that we probably won’t be traveling for a little while, and we needed that cash flow for other parts of our budget.

Our fixed expenses dropped by 16%.

Variable Expenses

Wow, variable expenses have been a struggle! At first I thought we would be spending way less, because we wouldn’t be driving far, and we couldn’t go out shopping. 

I was wrong.

Our variable expenses have increased by 9%. I’m not surprised about this (just wait until you read about our groceries!). I have definitely been ordering online more than usual, and we’ve splurged on a few things to make our time at home more fun.

Here are a few things we’ve bought that we probably wouldn’t have normally:

• Deck chair
• Paint for downstairs bathroom
• Organization bins
• Alcohol
• Art on Etsy
• Ticket To Ride board game + expansion pack

As you can see, we’ve been playing a lot of games, and doing some organizing and redecorating! I actually don’t regret any of these purchases at all. 

Groceries

Within variable expenses, I picked out a few categories that I thought changed the most. Groceries have been a huge struggle for us since starting physical distancing. We are home all the time, and eating more. Plus I have been doing some baking that I normally wouldn’t have time to do. 

I’ll be completely honest that I have been struggling to get our grocery spending under control and we’ve ended increasing our grocery spending by 38%.

It’s not the end of the world, but it’s something I want to get a handle on going forward. 

Read More: Budget Recipes!

Gas

Of course, now that I am off work and that my husband is working from home, I thought it would be funny to see how much our gas consumption has changed! We decreased our gas spending by 91%! I guess that’s what happens when you hardly leave your house ;).

Eating Out

We actually don’t eat out very often. We only eat out probably once every 6 weeks or so. I miss restaurant food so much right now though! We’ve only gotten takeout once since the pandemic started. It was delicious but I definitely missed the magic of sitting in a restaurant, since we almost always eat out with friends. 

Our restaurant budget has decreased by 67%.

Budget Percentages

I also decided to take a look at our general budget percentages. Lots of interesting info here: 

Housing = mortgage, property tax and home insurance
Transportation = gas, bus tickets, parking and car insurance
Utilities = water, power, phone, internet, and Netflix
Food = groceries and eating out
Savings = retirement savings, car savings and emergency fund
All Else = clothing, gifts, pets, personal care, entertainment, travel & Christmas sinking funds, life insurance, charity, misc spending

Overall I’m pretty happy with how our percentages fall. 

I included the recommended percentages, but of course that is just a guideline! If you have debt you’d have to work that in by decreasing spending in other areas. As long as it adds up to 100% you’re golden!

Final Thoughts

This was definitely an eye opening exercise, and interesting to see how our budget has changed over the last almost 3 months while we’ve been home more (and working less in my case!).

You can’t make changes without data! We are committing to decreasing that grocery budget, I’ll give you an update on that soon! 

Has your budget changed over the past few months? Let me know!

If you’re just starting your budget, or maybe having trouble sticking to one, you are in the right place! Even though I have been budgeting consistently for the last almost 3 years, I have struggled with going over budget, staying consistent and motivated. 

These are the budgeting tips I come back to time and time again. They’re actually incredibly simple, and when budgeting is done right, it doesn’t take a lot of time, and (hopefully) won’t leave you in tears!

Find Your Why

Most people want to start budgeting for a reason. I wanted to pay off our debt so that we could travel more often. Although it seems like budgeting would be restrictive, it actually gives us the freedom to spend on what we love. 

I’m a big believer in value based spending, meaning you get to spend your money on things that bring you joy, while cutting back on the things that don’t matter to you. We prioritize spending our “wants” money on traveling, activities with friends, and occasional date nights. We have cut back on things like cable, clothing and shoes because that doesn’t matter to us! 

Decide On A Budget Method

I use the zero-based budgeting method, which gives every dollar we earn a job. That doesn’t mean my account ever reaches zero though! Read more about zero based budgeting, or watch this youtube video:

My way isn’t the only way however, you can also try the 50/30/20 method where you spend 50% of your income on needs, 30% on wants and 20% on savings.

Don’t be afraid to switch up methods if you try something and it doesn’t work for you!

Make A Date With Yourself (Or Your Partner)

You’ll also have to decide how often you will budget. A lot of people make a monthly budget, but that wasn’t working for us, so we started budgeting bi-weekly about a year ago. I make a new budget every payday. This method works really well if you have irregular income because you are making a budget with money you’ve already made.

No matter how often you choose, make sure that you commit to sitting down and budgeting for about an hour!

Have An Accountability Partner

If you’re married or in a committed relationship, hopefully they are on board with the new plan! If not, it’s great to have an accountability partner to encourage you.

Let your friends know you are on a budget. If you usually go out to expensive brunches with them, perhaps suggest cooking brunch together at someone’s house! You still get friend time, and it’s way cheaper to make your own pancakes and mimosas! 

Be Honest

Be honest when you’re making your budget. Don’t try to budget $20 for groceries, it’s just not realistic. The best way to determine your budget for variable spending is to look at your past spending, and then make a goal based on that.

If you’ve been spending $300 a month on groceries, and you want to cut it back, try making your budget $280, then maybe the next one is $260, until you get to your goal budget. Usually drastic budget cutting just leads to overspending.

Create A Budget Planner

Keeping everything in one place will help you stay organized, and you won’t have to go looking for things when you sit down to budget. I have created a budget planner for you, with all the worksheets you need to create a budget, make savings goals, create a debt repayment plan, and track your net worth! 

Get The Budget Binder Now!

Give Yourself Wiggle Room

This is a great way to stop yourself from spending more than you make. For example, we do zero based budgeting, meaning I assign every dollar we earn a “job” – groceries, mortgage, gas, etc. I always budget $100-$200 for surprise expenses. That way if we go over on groceries, or if we need dog food and I just forgot to put that in our budget, it doesn’t force us to spend more than we’ve earned. 

Of course if you have a truly large surprise expense, you may need to dip into your emergency fund. 

Check Your Calendar

This is one of my biggest tips from my 3 Common Budgeting Mistakes video! Always check your calendar for upcoming events when making your budget. Maybe you need to get a birthday present, or you have plans to go for dinner. 

I also put irregular expenses in my calendar, like annual dues for professional associations and yearly vet appointments. This helps me stay on track and have less budgeting surprises!

Use Sinking Funds

I love sinking funds! They are an easy way to stay organized, and you can visually see your savings goals when you sign in to your online banking. 

Sinking funds are just savings accounts for anything you may be saving up for. We have sinking funds for our car, vacations, and home renovations. You can set up a sinking fund for anything you want!

Track & Celebrate Your Progress

I have been making quarterly and yearly finance goals for the last 3 years! We have always tracked the progress and celebrated when we hit milestones. 

In July 2019 we finally became debt free after paying off over $26,500 in 21 months. That was a huge deal for us, we celebrated with a trip to Toronto to see Michael Buble! 

We had a progress tracker on our fridge, so that we could see our progress everyday, and that reminded us of our goals when we really wanted to spend that money on something else.

Don’t Strive For Perfection

Here’s the deal, your budget won’t ever be perfect, so stop trying! I used to give up whenever I would go over budget, but now I just adjust and keep going. 

Some months we spent more than we earned, and some months we didn’t. No one is perfect, and that’s okay!

The point is; don’t give up on it just because one month doesn’t go as planned. Adjust your budget for the next month, and keep going.

Final Thoughts

Just like many things in life, budgeting will get easier the more you do it.

I have a ton of resources for budgeting:

[mv_create type=”list” title=”Budgeting Resources” layout=”grid” key=”11″]Hope you’ve found this helpful! Good luck on your budgeting journey and let me know if you have any questions let me know

Many of us are finding ourselves living on one income, or living on a low income right now. I have personally been without income for almost a month, luckily my husband is still working. This is not the only time we’ve lived on one income; I worked while my husband was in school.

Losing your income isn’t the only reason! Sometimes one parent is on maternity/paternity leave, or maybe you are trying to live on one income and saving the other. No matter what your circumstances, here are my tips for living on one income.

Tips For Living On One Income

Budget

If you’ve been around here for a while, you had to know this would be tip #1! Budget the income that you have. Start with determining your income, and then determine your fixed expenses. 

Hopefully you will have some wiggle room for the variable expenses like groceries, and entertainment. 

We are still following the zero-based budgeting method that we’ve been doing for the last 3 years.

The first thing I did when I had to stop working due to the current pandemic was make an “emergency budget”. This budget is a bare bones budget compared to our usual, we are not saving as much as we usually do, and will have to cut back on some “wants” but it will get us through until I can start working again.

Reduce Your Expenses

If you are used to living on 2 incomes, and now you are living on 1, then you’ll likely have to reduce some expenses in order to live within your means. You may have to downgrade (or cancel) your cable, gym memberships, and any other subscriptions. In some cases you may have to think about moving to a less expensive home if the situation is permanent.

We have cut back on eating out and entertainment to help make up for the difference in income.

We are also focusing on reducing our grocery budget, since that is the most expensive line in our variable expenses! 

Check out our Budget Bites Recipes!

Decide On Your Lifestyle

Personal finance is personal, so this looks different for everyone. Deciding on your lifestyle will help you (and your partner, if you’re sharing finances) figure out what is important to you. For example my husband and I will still be saving some money for future travel, because that is important to us. 

Pay Off Debt

Living on one income with debt will be challenging. If possible, pay off as much debt as you can before going down to one income. If you’re living on one income because of job loss, you might not get the chance, but still make payments on your debt. 

Find Cheap / Free Hobbies

Living on a lower income doesn’t mean you have to give up fun completely! Finding hobbies and activities that don’t cost a lot will help you stay sane. Things like:

• Reading
• Gardening
• playing board games
• Running
• Baking
• Writing
• Yoga
• Painting

You get the idea! Maybe you bought some craft stuff a while ago and never got around to doing it, or maybe you have a bicycle in the garage! There are always things to do!

Check out these ideas for free date nights!

Barter

Everyone is skilled at something, and you may be able to barter with someone else! See if you can barter with your friends to save money on things you would usually pay for. This will help you (and your friends) save money.

Final Thoughts

Living on one income can be scary, especially if you are used to two. I won’t lie, it has been stressful for me too. I hope these tips will help you prepare for living on one income!

PS. Now that you’re living on one income, when you’re back up to two incomes maybe you can save the other one! That’s a great way to start your journey towards FI/RE (financial independence,retire early!)

Here’s the deal; everyone has to eat! When you’re making your monthly or biweekly budget you might be wondering how much you should budget for food or groceries. The actual number is individual, but here’s how to make a grocery budget, so that the rest of your money is free to buy other things (I’m looking at you, plane tickets!)

How Much Should We Spend On Food?

It depends… I know, not helpful! Obviously what we spend as a family of 2 adults will be different from you if you are single, or if you have children. It also depends heavily on where you live. Here in Canada, food tends to be a bit more expensive than the USA, and it is different all around the world. 

In 2017 Statistics Canada released that the average Canadian household spends about $495 on groceries a month, and about $216 a month on restaurant food. 

Most financial experts recommend spending about 10%-15% of your income on food for your family. 

We personally average $168 every 2 weeks for groceries, and $38 every 2 weeks for eating out for 2 adults. This represents about 9% of our overall budget.

Some budget periods are higher and some are lower depending on the time of year and what we have planned!

How To Make A Food Budget

Step 1 – Determine Your Variable Expenses Budget

The first part of any budget is to add up your income and subtract fixed expenses like your mortgage or rent, insurance premiums and utilities. This will give you the amount you have to divide up between your variable expenses like groceries, eating out, clothing, gifts, and pets.

Read More: How To Make A Zero Based Budget

Step 2 – Review Old Purchases

Reviewing what you’ve been spending on food may be painful. Add up everything food related (groceries and takeout) that you’ve spent in the last few months to get a realistic picture. Decide if that amount is reasonable, or if you need to reduce the amount you are spending.

I recommend adjusting your budget slowly (unless you are spending more than you earn). If you try to go from spending $600 a month to $200 a month you likely won’t be successful and get discouraged. Try going from $600 to $500 and decreasing over time as you get better at budgeting and estimating costs.

Step 3 – Meal Plan

Meal planning will help you with your budget because it will help you make a list of what you need to buy! You can meal plan based on sales to save money on meat, etc. I have a master list of all our regular and fav meals, so that if I’m having trouble meal planning I can refer back to the list for some inspiration! You might want to plan meals that cost relatively little per person, in order to stay on budget!

Meal planning may include eating out – and that’s totally okay as long as it’s within your budget! 

Step 4 – Estimate Costs Based On Facts

When making your budget, it’s not helpful to just write down a random number without looking at the facts. Estimate your budget based on your meal plan, and what you’ve spent in the past. 

Don’t forget to look at your calendar to see if you have any plans like dinner out, or hosting a family dinner, this will impact your budget.

Step 5 – Test And Adjust

A budget is a fluid thing, changing based on what is going on in your life. Test your budget for a few weeks or months and see if it is working. If you are always going over budget, try to see where and why, then adjust your budget (or your behavior) accordingly.

We personally follow a value-based spending philosophy, so we sometimes spend more on something like local meat, which isn’t the most cost effective, but it is based on our values. It’s okay not to buy the cheapest item available! 

Read More: How To Save Money On Groceries Without Coupons

How To Stick To Your Grocery Budget

Use Cash For A While

We used to take cash out of the bank every month when we first started budgeting. Psychologically it is harder for most people to spend cash vs swiping your debit card. It’s also easier to see how much you have remaining in your budget when you look at the cash in your envelope.

You may want to try using cash if you are consistently going over budget. 

Track Your Spending Weekly

Your budget might not be the same every month or week and that’s okay! Budgets aren’t meant to be the same every month! Tracking your spending at the end of every week will help you see how much you’ve spent and how much you have left to spend for the remaining period (month or biweekly). 

Remember Why You Are Doing It

With any budget, it’s important to remember why you are doing this in the first place. Staying within your grocery budget means that the rest of your money can be used somewhere else: to become debt free, to pay for that vacation you’ve always wanted to take, or to retire early to spend more time with your family. 

Read More: My Why – A Personal Post

Final Thoughts

I know it can be a frustrating experience to budget, especially if you go over budget, but it’s worth it! Do you have any tips for creating a grocery or food budget?

Unfortunately a financial emergency can happen to all of us, at any time. We see it all the time, people lose their job, get sick, get in an accident, or sometimes there’s an apocalypse and suddenly we can’t leave our homes. Ideally you prepare before these things happen but that’s not always the case! I’m going to walk you through what to do if you have a financial emergency and how to prepare for the next one.

Unexpected Financial Events

You know how one day everything is totally fine and then you’re hit by a truck? It happens! No one really expects these things to happen (that’s what they’re called unexpected…) but everyday people incur large expenses or income loss. Some examples:

• Car accident – need to replace or repair the car unexpectedly
• Medical emergency – hospital bills and loss of income
• Natural disaster – damage to your home & belongings
• Job loss – loss of income
• Divorce – loss of one income / lawyer fees
• Worldwide pandemic – loss of work 

See how often some of these things happen to people we know? This is how Walter White turned to making drugs… which made for great TV, but not so good if it’s your real life. 

What To Do During A Financial Emergency

There are really two types of financial emergencies: one time (large) expenses like a bill, and loss of income. Here’s what to do in each scenario. 

One Time Expense

If it’s a one time financial emergency like a car repair/replacement or a medical bill here are the steps to take:

Figure Out How Much You Owe – Add up all the bills associated with the unexpected expense

Look At Your Current Finances – How much do you have in savings that could go toward this bill? 

What Can You Do To Make Up The Difference – Can you work some overtime? Sell something that is sitting around? 

Work It Into Your Budget – If you know you need $500 by next month, then you’ll have to work on how to save $250 each paycheck (if you’re paid biweekly) Read how to biweekly budget!

If The Difference Is Substantial – If you won’t be able to make up the difference quickly, you’ll need to look into payment plan options, or in extreme cases; borrowing. 

Loss Of Income

If you’ve lost your income, or your income is reduced, here’s what to do:

Start With Your Budget

If you’ve already been budgeting then you’ll have a leg up, but if you haven’t you’ll want to start with figuring out how much your income will be in your new situation.  Read about how to make a zero based budget.

Prioritize The “4 Walls” – When starting to make your budget, make sure to prioritize the “4 Walls” first – Food, Utilities, Housing and Transportation. These are the things you absolutely need to make sure you have food on the table and a roof over your head.

Pause Sinking Funds – If you’ve been saving for Christmas, travel, etc. in a sinking fund then consider pausing to make your ends meet. Read more about sinking funds

Stop Extra Debt Payments – You may need to stop your debt snowball or debt avalanche right now in order to make ends meet. Still pay your minimum payments, or if you can’t, try the next step.

Negotiate With Lenders – Some lenders will be able to help you if you tell them your situation. You can usually defer mortgage payments (which adds them on to the end of your term), and you may be eligible for interest only payments on things like student loans.

Research Government Programs – You may be eligible for employment insurance (EI) which will pay you while you look for work. If you are off work due to a disability or sickness, there are programs for that as well. You can access local food banks to help you put food on the table. Please don’t be scared to get help if you truly need it, these programs are in place for a reason! 

Be Wary Of Loans And Credit Cards – For the love of all that is holy please do not go to a payday loan place. You will owe them forever, please please please do not go there. Also try to avoid using your credit card to make up the difference in income. You will have to pay it back eventually. 

How To Prepare For A Recession

What exactly is a recession anyway? Basically a recession is a decline in economic activity across the market for 2 or more quarters. It happens when the total value of the goods and services produced (called the Gross Domestic Product, or GDP) is in decline. Usually this comes with an increase in unemployment, a decrease in the housing market and a decrease in the stock market. 

A recession may be coming, but they are impossible to predict! If it does it may have an impact on your finances, especially if you lose your job due to cutbacks. It doesn’t have to be the end of the world, here’s what you can do to prepare yourself for a recession.

Pay Off Debt

One of the best things you can do to prepare for a recession is pay off your debt. If you can’t get it paid off, get it down as low as possible. Not having a debt payment while suffering a job loss will make life so much easier!

Build An Emergency Fund

If you don’t have an emergency fund, now is the time to think about building one. Never invest your emergency fund. If your emergency fund is invested 1) it’s hard to get to because you’ll have to wait a few days to withdraw, and 2) when the markets go down, so will your money. Keep your emergency fund in a high interest savings account where you can transfer the money to your main bank account quickly online. How much you’ll need is personal, and depends on your budget, but if you’re trying to save quickly, save as much as possible!

Remember your sinking funds that you may have paused? They can become emergency money too!

Read More About Emergency Funds

Live Within Your Means

Living within your means is how you’ll get through any financial tough times. As long as you do not spend more than you earn, you’ll be in a great place when the markets turn around. You may have to cut out things like travel, eating out and other non-necessities for a while in order to make ends meet. 

Read More About Living Within Your Means

Consider Upgrading Your Education

Now may be the time to upgrade your education or change fields. Consider fields that are in demand at the time.

Focus On The Big Picture

It can be scary to see the markets take a nosedive, but now is not the time to cash in your investments. Especially if you’re young and 10+ years away from retirement, think of it as “stocks are on sale”! You’ll be able to buy more shares which should be worth more in the future. Keep investing!

Final Thoughts

Financial emergencies and recessions can feel scary and impossible to recover from, but the reality is they happen to all of us and things can and do turn around eventually. 

If you plan in advance, you’ll be better able to respond when the next financial emergency hits. If you’re experiencing this right now, just know you are not alone!

What is Lifestyle Creep?

Basically lifestyle creep is what happens when you make more money, and you also spend more money. It often happens when people get raises because they have more income, they start spending more and more. It can start small, like going out to dinner more often, then buying more expensive clothes or shoes, then it turns into buying a fancier vehicle and possibly even a bigger house. As you can imagine buying a more expensive car and home can have a huge negative impact on your ability to save money. 

Even worse, some people use credit cards to spend more than they make. This is definitely the worst kind of lifestyle creep since you will have to pay it off eventually. 

But I Deserve It!

This is almost always the reason behind lifestyle inflation. You get a big raise, you work really hard so you deserve that (insert thing here… house, boat, fancy car, designer bag, etc.). No doubt you do work hard, but spending it on wants isn’t always the best way to use your money. You don’t have to stop shopping altogether, but balance is key.

How To Avoid Lifestyle Creep

Luckily there are so many ways to avoid lifestyle creep from negatively impacting your finances. Most of them are pretty easy to implement too!

Make A Budget

I’ve said it before and I’ll say it again, a budget is the best thing you can do for your finances. I do a bi-weekly budget and pay myself first by saving money every paycheck for retirement, travel, gifts, etc. By making a budget I know exactly how much money I am making and spending. By budgeting every paycheck I am checking in with my money often and I can make adjustments if necessary. Check out this Youtube video on exactly how I budget:

Budget In Fun

Not budgeting in any fun money is a surefire way to make sure you never stick to your budget. Every month my husband and I get some personal fun money, and we also budget in some fun activities with friends. You can make sure you budget in your coffee with friends, date nights and vacations, then you are not missing out on the fun but you are still accomplishing your money goals!

Automate Savings

Every payday we have money that automatically transfers into our savings accounts and retirement accounts. Making your transfers happen on payday means that you’ll pay yourself before you spend the money on wants. Automated means you don’t have to think about it!  Check out how I organize my money here: 

Take Advantage Of Employer Matching

If your place of employment has an RRSP matching program (Canada) or 401(k) matching program (USA) then you should be taking advantage of it! Usually your employer will match any contributions you make up to a certain percentage. If you contribute 6% of your income, that means any raise you get you’ll be automatically investing more as well! 

Keep Your Goals In Mind

Having a money goal helps you keep focused. When we were paying off debt we used this tracker on our fridge so that we knew we were making progress! Now that we are debt free, our big goal for 2020 is to save $10,000 for a new car! I love the charts from my friend over at Debt Free Charts, a lot of them are free! Start printing and watch your goals come true. 

Read More: How we paid off $26,500 in 21 months

Final Thoughts

Some lifestyle creep is generally okay, like going from living in an apartment with 3 roommates to living in your own home with a spouse, but the type of lifestyle creep where you are just buying more expensive items because you got a raise is going to significantly impact your ability to be financially independent and debt free. 

In reality,

It's not your salary that makes you rich, it's your spending habits - Charles A. Jaffe
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In just a few weeks it will be Black Friday, the biggest shopping day of the year! Black Friday is the day after American Thanksgiving, but for the last few years we’ve been having Black Friday sales in Canada as well. It can be a good time to get some Christmas gifts, but can also be a huge budget buster. There’s nothing wrong with getting a good deal, but make sure you do it smartly. Here are my top 4 tips for surviving Black Friday on a budget!

Pin it for later:

Is Black Friday Actually Cheaper?

Yes, and no! Some products will go on sale for a similar price all year, but those “door buster” sales meant to get you in the door are usually the lowest price you’ll see all year. You can definitely get some amazing deals with a little planning!

Tips For Black Friday Shopping

Make A List

Luckily most stores will put out flyers in the days and weeks leading up to Black Friday so you can look ahead and make a list. Get an idea of what your family / friends might want as Christmas gifts so that you know what you are looking for. Plus then you won’t be running around stores wasting time!

The biggest budget buster while Black Friday shopping will be those impulse purchases that are “too good of a deal to pass up”. You will have to have a little self control, which can be hard but it will save you from buying things that you don’t need. 

The other reason you should make a list ahead of time is that you will know the regular price, and it will help you make a decision on whether or not it is actually a good deal. 

Read More: Budget Busters & How To Combat Them!

Make A Budget

Of course you’ll also have to know your budget before you decide what you are getting. Hopefully you have a sinking fund set up for Christmas gifts, which will make budgeting a lot easier. If possible try to go to the stores with cash, as it’s easier to see how much you’ve spent. Make a deal with yourself that once your budget is spent you are done. 

Read More: How To Prepare For The Holidays Financially

Make A Game Plan

Making a plan for where you will go will make a huge impact on your shopping success. Know what you need in each store and make sure you know if each sale is a “door buster” or likely to sell out. Make sure you bring friends with you that won’t tempt you to overspend!

Stay Home

Confession: I’ve never gone out Black Friday shopping, and I’ve only gone Boxing Day shopping once or twice (Boxing Day is December 26th, a big shopping day here in Canada). Staying home will usually help you spend less money because you won’t be as tempted by impulse purchases. This doesn’t mean that you can’t buy anything at all; most stores will have an online sale, often with free shipping, plus you can do it in your PJs! Win-win!

Final Thoughts

Don’t feel like you have to spend money just because things are on sale! Too many times I’ve bought something because it was “cheap” and then ended up not using it. Try to buy things with intention. Before I buy clothing or shoes I ask myself how often I will wear it and in what situations, with home goods I ask where I will put it, how often I’ll use it and where I will store it when not in use.

I’m not against buying things you need / will use and getting a good deal, just make sure you have a plan and you’ll be set for success!

If you’ve been following along through our debt repayment journey, you’ll know that we’ve been following the zero-based budgeting method for the last 2 years. I love this method because it gives every dollar you earn a “job”. It made paying off our debt way easier and faster, and sitting down monthly allowed me and my husband insight into our spending. But we had a problem with overspending sometimes…

Read how we paid off over $21,500 in debt!

Being self employed, I have some challenges with budgeting like:

• Income is variable
• Dependant on clients to get paid
• No vacation time
• No sick time or employment insurance

I won’t know until the end of the month what my pay is, which makes it frustrating to budget. It makes it really easy to go over budget if I have a low income month.

What Is Biweekly Budgeting?

With bi-weekly budgeting you only budget money you actually already have, instead of trying to anticipate what will come. 

Every 2 weeks on payday I add up what we got paid and use that money to budget our expenses for the next 2 weeks. I still use zero-based budgeting, I just apply it to 2 weeks instead of the whole month. 

Budgeting With Irregular Income

Budgeting with variable income can be very difficult. As someone who has been self employed for almost 10 years, I can tell you that no two months have ever been the same. My income is consistently in the same range, but for example, in July I took  ⅓ of the month off (7/21 work days in the month) for traveling. This obviously put a huge dent in my income, which made it harder to budget.

With bi-weekly budgeting you only budget with the money that you have actually been paid. This makes it easier to deal with the swings in income. 

One other way to deal with inconsistent income is to save some money on months where you make more than you need, and then in times where your income is lower, you could use this money to “top up” your income. 

Bi-Weekly Budget Planner

I’ve added bi-weekly budgeting worksheets to my Budget Binder! This will give you the option to budget monthly or biweekly depending on your income. You can also buy just the biweekly budgeting sheets. I’ve been using these worksheets for the past 3 months and they’ve been so useful to me!

Get Your Budget Binder On Etsy!

How To Make A Bi-Weekly Budget

Before You Start

I found it helpful to list all your bills and when they usually come out of your account or when they are due. This helps you figure out what bills will fall during the 2 week period that you are trying to budget for. 

Payday:

On payday (every second Friday for us) I sit down and add up the amount that we were just paid. I write that at the top of my worksheet

The next step is to write in the fixed payments for the next two weeks. For ease of budgeting I have set up my mortgage, all our retirement contributions and sinking fund contributions set up to automatically happen on payday. 

Fixed payments include things like:

• Mortgage / rent
• Cell phone bill
• Internet bill
• House insurance
• Car insurance
• Life insurance
• Car payments
• Minimum debt repayments
• Charity/ tithing
• All sinking funds
• Retirement contributions

I add this amount up and then subtract it from our income, leaving me with the amount to divide up between our variable spending

Variable spending includes:

• Gas
• Clothes
• Groceries
• Eating out
• Entertainment
• Gifts
• Personal Care
• Pets
• Car & house maintenance

If you don’t need all of your income for variable spending, I would use it for debt repayment or savings goals!

½ Way Through Pay Period

About 1 week in I add up our spending on variable expenses like groceries, eating out and entertainment to see how much we’ve spent so far and how much we have left before the end of the pay period. This helps us keep on track. If we’ve overspent already then we know to reign it in.

Day Before Next Pay

Near the end of the day before our next pay period I add up the spending to compare it to the budget we made 2 weeks prior. A biweekly budget is a lot less time consuming to add up compared to monthly budgeting! After adding up what we’ve spent I subtract it from what we’ve earned. If that number is 0 – congratulations you’ve done zero based budgeting correctly! If that number is negative, then you’ve spent more than you’ve earned and you should probably revisit your budgeting. If the number is a positive number, then you’ve earned more than you’ve made. I would recommend using that money toward debt repayment or a savings goal. Using “leftover” money from our monthly budgets is what helped us pay off over $26,500 of debt in 21 months!

Start Over

Then it’s time to start over with the new pay period.

Helpful Tips On Biweekly Budgeting

One of the most helpful tips I can give you is trying to spread out your bill due dates as much as possible. If all your bills come out at the end of the month then one pay period will be harder to budget. 

Make a master list of bills and their due dates that you can refer back to when you are making your biweekly budget. 

Don’t forget irregular bills that come every second month or quarterly – which are water and power for me. You can create sinking funds for these and save each pay, or just deal with them when they are due – either way don’t forget about them!

Keep a “float” in your main bank account, just in case you overspend due to an emergency, etc. We’ve had instances that our pay didn’t get deposited on time due to a holiday but our automatic transfers still went ahead. If we didn’t keep a float we would have gone into overdraft!

Final Thoughts On A Bi Weekly Budget

Bi weekly budgeting has helped us tremendously with my irregular income. We have been saving more and checking in on our spending more often! I definitely think we’ll keep going with this method unless my job changes to something with a salary (haha, yeah that’s not happening!).

When I posted that we became debt free in July, I had a few people ask me if we are mortgage free too. In short, no we are not mortgage free, but we have made some changes to be mortgage free faster. First I’ll rewind to getting our mortgage, and then tell you what we’re doing now to be mortgage free faster and save so much on interest.

Getting Our Mortgage

We bought our house in September of 2015, just about a month and a half after our wedding. We did our home inspection a week before the wedding, and the night before I was faxing paperwork to our mortgage broker. I don’t recommend this timing! I am self employed so it can be a bit harder to get someone to lend you a lot of money. We had saved enough for a 5% downpayment and found a house we loved. Side note: I definitely would recommend saving more for a down payment. You can find all my advice for first time homebuyers here. 

We ended up getting a mortgage for $242,113.20 amortized over 25 years. Our interest rate is 2.64%, which we locked in for 5 years. If we paid monthly for 25 years we would be mortgage free in September of 2040! I would be 50 years old before becoming mortgage free. 

Changing Our Mortgage To Accelerated Bi-Weekly

The first change we made was a relatively simple one to make. In fact, if you do nothing else, I would recommend making this change because you’ll hardly notice it. We changed our mortgage frequency to accelerated bi-weekly. Meaning our mortgage payment comes out every 2 weeks, so twice a year we have 3 payments in the same month. If you get paid bi-weekly and line up your mortgage payments with payday, you’ll hardly notice the extra payment because you’ll also have an extra paycheck that month!

Just from making that small change in our payment schedule, we automatically shaved off  2 years and 8 months off our mortgage, but more importantly we saved $10,699.26 in interest! Can you imagine being debt free almost 3 years sooner plus saving over $10,000 in interest just with a simple switch to accelerated bi-weekly?! 

Need help budgeting? Read all about my zero-based budgeting method and grab a free budgeting worksheet!

Changing Our Payments

In January of this year, I decided to add a little extra onto our normal payments, by rounding it up a little bit. At that time our balance was $214,524.31. If we had kept going on our accelerated bi-weekly plan we would be debt free in 19 years from then. I decided to round our payments up approximately $50 biweekly, which brought our debt free date down by 2 whole years, and will save us $6389.38 in interest. 

If we continue paying $50 more biweekly we will be mortgage free in January 2036. Which is 4 years and 8 months sooner! 

The Future

Many people in the personal finance world are aggressively paying off their mortgage like any other debt but I felt it was more important to be saving for retirement so the magic of compound interest could work for us.

Of course interest rates will change and it’s impossible to know what the future holds, but I’m quite certain that we will be mortgage free before September of 2040. We will be renewing our mortgage in the coming year, so I’ll be sure to update you on what happens.

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Well the past few weeks I have noticed that our account was getting lower and lower. I read an article recently about the difference of living within your means, vs below your means, and I realized that we have been living within, but not really below our means. We have not gone into debt, but we haven’t been saving as much as I want to either. 

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Within Your Means vs Below Your Means

You may hear people say to “live within your means” but what exactly does that mean? Technically living within your means can mean living paycheck to paycheck. As long as you aren’t going into debt then you are within your means, however that doesn’t mean you are saving any money. Not spending more than you earn is of course very important, especially to those with financial goals, but where the magic really happens is when you live below your means.

Living below your means requires you to spend less than you earn, but also you don’t need your whole income for your budget; there is money left over for long term and short term savings.   

How To Live Below Your Means

Step 1 – Income

First off, you need to know what your means are. Add up your monthly income, and if your income is irregular, then take an average over the last 6 months. As I am self employed my income varies, so I make an income goal for the month, and I know exactly how much I have to work to achieve that. 

Step 2 – Budget

There I go again with the B word! You should know by now that I believe that budgeting is your ticket to financial freedom. Start by figuring out your fixed expenses, then estimate your variable expenses. Ideally there would still be 15%- 20% of your income not accounted for which you can add to savings! For more info about budgeting, check out all you need to know in my zero based budgeting guide!

Step 3 – Savings

This is what makes it below, instead of within your means. Saving money every single month will help you in emergencies, help you pay for large irregular expenses, and help you take that vacation you’ve been dreaming about! I suggest making automatic transfers every month to a high interest savings account that you can’t access with your debit card, then you can’t spend it on a whim!

Tips For Getting Started

If you’re having a hard time living below your means, then you’ll either need to increase your income or decrease expenses – or both! 

Tracking your spending is absolutely essential to knowing if you are living below or within your means, or maybe you’re spending more than you earn! The only way to know is to do the math.

It’s hard to live below your means with debt dragging you down. Making a debt repayment plan will help you become debt free faster and stay that way.

My bank account is lower than I want it to be, here’s what I’m doing about that:

1. Instead of spending all of our paycheck, leaving some in the account so that it builds back up
2. Reducing expenses for the next few weeks
3. Taking my credit card out of my wallet so I’m not tempted to spend.

Final Thoughts

Hope that helps you understand why you need to live below your means! If you have any questions please leave them in the comments!

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