Life after debt definitely hasn’t been exactly what I thought it would be (well obviously, I didn’t see a global pandemic coming at me). After paying off $26,500 of debt about a year and half ago, I thought we’d be saving more money than ever before. In fact we made a goal to save $10,000 last year and we fell terribly short, even though our income is higher and we have no debt. So what gives? We’re less motivated to save.

It seems to be a pretty common problem, after hustling to pay off debt, we’re likely a bit burnt out, ready to spend some money on ourselves and with the goal finally achieved, a little lost.

I thought I should go over WHY we need to save, and little tricks I’m using to make sure we save money in 2021!

Why You Need To Save Money

There’s 3 basic reasons you need to save money; an emergency fund, for a purchase or for wealth building. Let’s chat about all 3

Emergency Fund

An emergency fund is usually the next step after you’ve paid off your debt. Many financial experts suggest having 3-6 months worth of expenses in your emergency fund just in case you lose your job, or are unable to work (hello, pandemic!). You should be keeping this money in an easy place to access, like a savings account so that you don’t have to jump through a bunch of hoops to get money when you need it.

I keep ½ of mine in my regular checking account, and ½ in a TFSA. I also keep $1000 in a savings account for small emergencies. 

To be honest though, we have about 2.5-3 months of expenses saved, so we should be saving more. Although we could pull from our vacation savings in the event of a true emergency. 

Purchases

This type of savings is for planned purchasing, like a house, wedding, car, vacation, Christmas, etc. We use sinking funds and save every month for these types of expenses by setting up an automatic transfer. 

We currently have sinking funds for: travel, Christmas, utilities, and a new car.

For Christmas and utilities I added up how much we normally spent in a year and divided by 26 (the number of paychecks we get a year). For travel we have a set amount that goes in every payday, and for the car we were trying to save whatever was leftover at the end of the month. This is not a good strategy and it very clearly has not been working.

Wealth Building

The last reason to save money is to build wealth, which is usually done through investments. Usually you are building wealth so that you can retire, and possibly pass some wealth down to the next generation.

Wealth building takes time, but it’s so important. Who wants to trade time for money for the rest of their lives? Not this girl!

I’m not a financial advisor, so I won’t recommend WHERE to invest, but I definitely recommend finding an advisor you trust, so that you are set up for the future.

How To Stay Motivated To Save Money

Make A Goal

Just like when you were paying off debt, making a savings goal will help you stay focused. I remember feeling so motivated by seeing our debt payoff tracker on the fridge, so perhaps I should be using a savings tracker now! Use whatever motivates you.

Give Yourself Grace

I feel like I’ve written this a hundred times but giving yourself grace to make mistakes, go over budgets, and miss goals is so important. If you go over budget one month, stop using it as an excuse to stop budgeting altogether. Accept that it happened and go the next right thing. 

How To Stay On Budget

Ultimately, we aren’t saving money because we’re too busy overspending. Trying to save what’s left over at the end of the month won’t work most of the time (trust me, I’ve tried). Here are some tips to stay on budget & save money:

List Your Irregular Expenses

Irregular expenses will sneak up on you if you don’t pay attention. I keep a running list of all my bills and when they are due, including ones that come up once a year, or every 2-3 months. Don’t forget things like annual dues, water bills, pet annual exams, sports fees, etc.

Automated Savings Are Your Friend

I will never be able to stress this point enough. Set up automatic transfers with your online banking on payday. Every payday money automatically goes into our RRSP (for retirement), our Christmas savings, and our travel savings. I don’t even miss that money because we never really see it. It’s the easiest way to save and once you set it up you don’t have to do anything ever again!

Mix Up Your Budgeting Style

When I first started budgeting, I made monthly budgets, because I didn’t really think there was another way. Then I discovered budgeting by paycheck and that made things SO much easier for me. I am self employed and my paychecks vary. My husband is on a salary, so his stays the same every time. Budgeting by paycheck allowed me to budget money that we already HAD instead of guessing what I would make. That way if I had a month without so many clients, I wasn’t over extending my budget. 

Don’t be afraid to mix up your budgeting style: monthly, bi-weekly and weekly are all perfectly acceptable, find what works for you!

Final Thoughts

I hope this has helped you come up with some ideas to start saving again! Obviously we won’t always be motivated, but if we make saving a habit, it will happen anyway. 

Thanks for reading. I’ll chat with you again soon,

I always recommend paying for your vacation before you leave home. Why? Because no one likes to be stressed out about that credit card bill when you come back! 

We always remember the big expenses like plane tickets, hotels and car rentals, but there are so many smaller expenses that people forget to budget for (myself included). Here are some of the overlooked costs of traveling so you don’t forget to budget for them on your next trip.

Airport Parking / Cab To & From The Airport

I always always forget to factor this into my travel budget. As we tend to book the earliest flight possible, usually we are headed to the airport at 3am! We don’t like to ask friends or family to drive us that early so we usually drive ourselves and park at the airport. Well of course that costs money! 

Also don’t forget about the uber or cab from the airport at your destination to your hotel.Even if you are taking a $20 Uber to or from the airport, don’t forget to add that to your budget!

Public Transportation & Parking

If you’re using the local public transportation to get around, don’t forget to factor in the cost of those trips. Also look at whether or not you should get an unlimited use card or a pay per ride card!

If you’re renting a car, you may have to pay for parking either at your hotel or while you are out sightseeing. Make sure you have change for the parking meters!

Resort Fees

When looking for hotels I always consider the price, location, amenities, and reviews, I often forget to look if there are any hidden fees. A lot of hotels, especially in popular tourist destinations like Las Vegas and Niagara Falls, charge a “resort fee” per night. 

It could be as much as $20-$40 extra per night! Make sure to read the fine print when you are booking and factor resort fees into your budget.

Also make sure you use all the amenities to make those resort fees worth it!

Tips

I am notoriously bad at budgeting for food, but tips are often an overlooked travel cost. It of course depends on where you are traveling. In Canada and the USA you’ll be tipping a lot more than European countries for example. 

To be safe, budget an extra 15-20% for your food budget, and if you don’t use it, that’s great!

Snacks

On the topic of food, Don’t forget about all the snacks you’ll want to eat. Those little $3-$5 expenses can add up! 

I’m a big fan of eating the local food, so I don’t suggest missing out on all the delicious things you can get. 

Learn how to Save Money On Travel In This Podcast Episode

Cell Phone Fees

If you are leaving your home country and want to keep in touch back home, that may mean a cell phone plan or getting a local SIM card or calling card. 

I know personally my cell phone plan allows me to use my phone like normal for an extra $7-$10 a day. It’s an expense easily overlooked!

Foreign Transaction Fees

Don’t forget whenever you use your credit card you may have foreign transaction fees if you are out of your home country. Same goes for using bank machines/ ATMs. Before you leave home, find out if your bank has any affiliates in the country you will be in to avoid unnecessary fees.

Travel Visas

Depending on where you are from and where you are going to may need a tourist visa to enter the country. Normally you will have to apply for these before you even leave for your trip. Always look at your destination ahead of time to see what entry requirements are in place! You don’t want to make it to their airport only to get detained or turned around. 

Baggage Fees

Oh the dreaded baggage fees. The reason why we try to stuff everything we want to bring into a tiny carry on bag. My husband and I usually try to share 1 suitcase so we’re only paying for one.

Check out my post on how to pack efficiently! 

Departure Fees

Yes, it’s true, some countries charge you a fee to leave. Sometimes called “departure tax” it may be included in your flight tickets but it may not be. Always do your research.

Travel Insurance

If our current situation has taught us anything, it’s “expect the unexpected”. We will always have travel insurance now! 

Pet Or House Sitting

If you have pets, or even some plants that need watering, don’t forget to include kennel or pet /house sitting expenses into your budget. You may be lucky and have a friend or family member willing to do it for free, but maybe you should budget in getting them a fun souvenir, or at least a bottle of wine when you get home.

Final Thoughts

There you have it! When you’re planning your next trip, make sure to have a look at this list so you don’t forget to budget for anything.

Although, I do recommend having some wiggle room in your budget, you never know when you might stumble onto something truly fun! 

Let me know if you think I’ve overlooked any overlooked travel costs

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

Spring has sprung, and that always has me thinking about spring cleaning! Have you ever considered organizing your financial life part of spring cleaning? Finances can be overwhelming to most of us, papers can take over, and it makes us feel stressed and disorganized. I’m going to show you had to literally organize the mess, and how to set yourself up for future success! 

Clean Out The Papers

This step may be challenging, especially if you don’t have a filing system in place already! It is worth it to take a day and get your papers organized into a system that works for you. Once you do this, every other year’s Spring cleaning (and tax time) will be so much easier.

Shred Old Documents

Anything you don’t need, including tax returns over 8 years old, make sure you shred them! A lot of financial documents have personal information on them, and you don’t want that to fall into the wrong hands! Recycle the shreddings

Make A Filing System

We have a filing cabinet that I store all our old tax returns in, receipts for major purchases like appliances, debt repayment documents, and mortgage documents. They are all labeled in folders.

I also have a smaller file folder where I keep receipts for everything we purchase all year. At the end of the year I get rid of everything we don’t need for tax purposes etc. I keep all our receipts just in case we need to return something, or I want to cross reference with my online banking. 

You don’t have to use the same system I do, make one that makes sense for you!

Check On Retirement Contributions

Another part of your yearly spring cleaning should be going over your retirement contributions. Are you saving enough? Should you be saving more? And has your risk tolerance changed due to your circumstances? 

These are questions you should go over with your spouse and your financial professional to make sure you are on track to retire when you want to.

Update Your Budget

Or make one if you haven’t already. Budgets should be living documents, growing and changing to meet your needs. 

We have been budgeting biweekly for almost a year now, and we budgeted monthly for about 2 years before that. 

Read more about starting a budget.

If you’re looking for a personal finance organizer, check out The Budget Binder! It will help you make a budget, track your net worth, save money and be more organized. 

Get the budget binder!

Update Sinking Funds

When updating your budget, go over your sinking funds and set some up if necessary. We have sinking funds for our power bill, travel, Christmas and a new car.

Some other sinking fund ideas are: 

• Kids sports fees
• House maintenance
• Back to school shopping
• Wedding

Basically anything that will be a large cost in your budget!

Read more about sinking funds!

How To Organize Your Bills

Spending a little time organizing your bills will help budgeting go much smoother. 

1. Write Them Down

As part of your budgeting, you should have all your bills written down and their due dates. This will make budgeting so much easier, because you won’t forget them! Don’t forget irregular bills like annual dues.

2. Change Due Dates If Necessary

I have a lot of my bills come out of my bank account every 2 weeks on payday. By having them come out on my payday, I can’t accidentally spend the money on something else and then not have enough to pay my bills.

3. Automate Savings & Bills

We also have our retirement savings, and sinking funds automated to move into different accounts on payday. It is easy to set up in online-banking. By automating our bills and savings we pay ourselves first, to make sure we don’t incur interest on our bills (and/or debt) and we are saving for the future.

Make Financial Goals

I have been making financial goals either monthly or quarterly for the past 3 years. Making goals helps you stay focused, and helps by giving you a sense of accomplishment when you finally achieve your goal.

Here are some ideas for financial goals

• Pay off debt
• Make / stick to a budget
• Save for a large expense like a house downpayment or a new (to you) car
• Sell items you don’t use
• Build your emergency fund
• Have a no spend week/month

Make A Debt Repayment Plan

One of your financial goals might be to make a debt repayment plan. We paid off $26,500 in 21 months by doing the debt avalanche method. Meaning we paid off the highest balance with the highest interest rate first. 

Some people prefer the debt snowball (the lowest balance) method. Either way, make a plan that includes paying the minimum balance on each debt, and then paying extra on one debt until it is gone.

Read more about debt avalanche vs debt snowball methods.

Get the debt repayment tracker emailed to you for free!

Final Thoughts

I know this seems like a lot of work, but it doesn’t have to be done all in one day! Spread out the tasks, and you’ll be much better off in the long run! This system will help you organize and save money. Happy Spring cleaning!

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!

The Dog

We have a sweet but kind of crazy 9 year old poodle/ spaniel mix, Ellie. 

First of all she needs grooming because of her fur type, it grows out and then we get it cut every 2 months or so. We buy food every 1.5 – 2 months, plus treats. Vet costs and flea and tick prevention are normal expenses.

From March 2019 – February 2020 

Grooming – $377 

Canned food and treats – $183.84

Regular food –  $308.13

Flea & tick prevention – $318

MISC vet appointments – $270.23

Annual vet visit and vaccines – $158.40

Dog Total: 1615.60

The Cats

We have 2 cats, one a 16 year old half maine coon and a 6 year old short hair cat. Luckily they are a lot less expensive than the dog! 

From March 2019 – February 2020 

Vet – $100.44

Food – $365.33

Cat litter – ~$108 (we buy cat litter in our grocery budget so I don’t know this exact number)

Cat Total: $573.77

Total

From March 2019 to February 2020 we spent $2189.37 on our animals! This number did surprise me when I totalled it all up, but of course they are worth it! 

Final Thoughts

I hope this helps open your eyes to the true cost of pets. Luckily in the past year we haven’t had any major expenses with the animals, but our dog will need a tooth cleaning soon which is estimated to cost us around $1000. We have also had to take the dog to the emergency vet in the past which is expensive. 

Having an emergency fund will help if you have any unexpected expenses for your animals (or for yourself!)

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!

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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!