Budget Update December 2013: Our year in review

bust-our-budget-budget-updateANOTHER YEAR HAS COME AND GONE

 

If you want to start using a budget there is no better time than now.

Stop procrastinating because no one is perfect and almost everyone has some form of debt they’d like to get rid of.

There’s no shame in taking the first step towards living a debt-free life if that is your goal.

December came in like lightning and went out just as fast because we are now 6 days into 2014 and I’m excited to share our budget update with all of you. As you will see below we ran all of the numbers for 2013 to see just how we made out using our budgeted numbers and whether we needed to make any changes.

We’ve never professed to be perfect, gosh we are far from it and our yearly budget numbers will show you that although we did budget we spent more than we anticipated. Although we had the money for the overage it still wasn’t good enough for us because if we didn’t, that money would have to come from somewhere.

 

Unexpected expenses

 

Most people have to turn to a credit card, line of credit or like us the money would have likely come from our emergency savings account. This year we were faced with many challenges from our dog getting ill to renovations around the house to other personal issues which we don’t care to discuss but the money all adds up especially when you don’t have it budgeted.

 

Where the money went

 

A chunk of the money we spent went to buying new computers for our house which we did not anticipate. We were faced with that option because of a silly error of spilling a liquid on a computer and then the problems just got worse so we decided to buy new once and for all. Let’s just hope we don’t have to visit Future Shop for a long while.

We also decided to take a last-minute trip in December which cost us some money out-of-pocket even though we had over a 50% savings for the trip.

There’s no denying lots of clothes shopping happened in 2013, the numbers don’t lie. We did purchase items that will last us a long time such as many pairs of boots for the wife (deeply discounted), lingerie, clothes, leather jacket, winter jacket and a few other odds and ends but mainly items that will last more than a year. For this reason you will see an increase in our clothing budget but not as much as we used up this year.

We also decided to update our entertainment and travel budget to allow for more eating out and saving for future trips in the event we want to take one so we aren’t pulling money from the emergency savings account.

We added the health and beauty section to our budget to allow for make-up and fragrance purchases and other odds and ends at the pharmacy that we found we used in 2013.

Our Christmas budget needed to be increased to allow for boxing day sales and other gifts that pop up but weren’t in the budget like this year but were essential purchases. You don’t always know who you will meet and who you will be buying for but this year gave us a better indication as to what to expect for the upcoming year.

Our grocery budget and stockpile budget will remain the same for 2014 since we didn’t do too bad with it in 2013. It may be a challenging year if grocery prices continue to rise and less coupons are used in our budget which seems to have been the trend for us in 2013. We simply aren’t using the vast amount of coupons as we did in 2010-2012 but we do have a stockpile that will last us many years, hence why we rarely have to stock up on household and personal items.

If you don’t already know we post our grocery shops every week in our Grocery Game Challenge which has become widely popular and many fans have joined us in the pursuit to cut-back while sticking to their grocery budget. Join Today, it’s FREE!

You will notice a huge spike in our home maintenance budget simply because we are renovating the bathrooms and that will take a big chunk of money that we don’t want to have to take from our emergency savings if we don’t have to.

We really want to try to save the money first before renovating although once the mortgage is paid in full in April there will be an extra $1300 a month we can use for further renovations such as the kitchen which will be a complete gut. We will also use some of the mortgage money to increase our personal investments such as our TFSA and RRSP’s and potentially look into other investment avenues.

We added in a hobbies category where we allowed for $120 a year since we are very active people and tend to spend money here and there on our passion for keeping fit and our health. The end of January will be 2 years smoke-free for us and spending a bit of money on keeping healthy is a no-brainer for us. Hopefully when we visit our insurance agent we will see a further drop in our insurance premium for achieving the 2 year mark.

If you don’t already know by now we are passionate about second-hand or new to us items so we love to go to garage sales in the summer. In 2013 we didn’t spend too much but we put that under the miscellaneous category but for 2014 we have budgeted in some money for garage sales so we no longer have to do that.

My work expenses weren’t as much as I had anticipated over the course of the year so I went ahead and chopped that budget leaving less than half just so I have some money waiting for any work expenses that might creep up on me.

In hopes of not putting all of our extras into the miscellaneous category you can see we’ve made many changes and that includes adding a bit more to the budgeted amount for miscellaneous each month. Even though we save for those projected expenses you know as well as I that you can’t forecast everything.

I’d rather make sure I have some money saved than nothing at all so then I don’t have to scramble to pay for bills by taking money from emergency savings when it’s not an emergency. This is where many people forget to budget money and it comes back to bite them if they don’t. We know, it’s happened to us.

I don’t spend much money on the blog because I’m not really making any money yet so I have to keep my expenses low. In the event Canadian Budget Binder does start to make some money you may see the budget increase but for now I’m happy with the $200 a year to pay for blog expenses as well as what I do make from affiliates to help pay for other expenses.

The rest of the categories may have gone up a tiny bit but mainly to reflect the increases over the course of the 2013 and future 2014 increases that may pop up on us.

 

Final thoughts

 

Overall, we learned that we spend more in December than any other month of the year. The holidays seem to take a big chunk of our money mainly because we are away at the relatives and shopping seems to be a fun time out of the house.

We also tend to go looking for after Christmas and Boxing Day deals as long it’s something we need. This year we also found that we did more traveling than we thought we would have done. Another surprise was our clothing budget but it’s not really since we hardly spend money on ourselves.

Not that we don’t want to but we like to keep what we buy in good condition for as long as we can but it just so happened in 2013 there were items that needed replacing. We hope that our new 2014 budget will see us through the year but we know that no budget is ever final and that visiting the numbers often will only help us to grow in terms of learning about our spending habits and how we can reach our goals in the time that we want without incurring debt along the way.

 

Get your free budget

 

I’m currently offering 2 versions of my budget and the reason behind it is simple. Firstly, read the disclaimer because what you do with it is your own business so if you mess it up you need to sort that out.

I have not closed off any cells so you can make all the changes you like to the budget to reflect your lifestyle which is what the fans wanted.

Although I would love to help every single fan with their budget I am unable to do so but I am always willing to answer any emails you send me so don’t be shy.

This was after all meant to be our personal budget and although I would love to customize it for every fan that wants to use it but, I’m afraid I cannot.

I’m not selling this budget or hope to make any money from it so enjoy this free budget and I hope that it works for you as much as it does for us.

 

Canadian Budget Binder Budget Spreadsheet

 

Canadian Budget Binder Budget Spreadsheet

You can download the free budget spreadsheets here.

  • Budget 1– You can use the pre-existing categories or you can use your own if you wish and you have the option to use projected expenses or not. Please read all notes left around the budget for tips.
  • Budget 2-Everything is pre-set so you have to use the pre-defined categories but this budget will generate year-end budget figures whereas the other one won’t but you must use the categories already in this budget. If you change anything you will mess up the formulas and year-end figures. Please read all notes left around the budget for tips.

I’m always open to feedback but be polite as you don’t want to hurt my feelings :)

Get started and don’t procrastinate. Test it out for a month and see how it goes.

There is never any harm in trying something new in life. You either love it or hate it, that is a fact with anything.

What type of budget do you use?

 

Our  budget plan

 

How we budget our monthly expenses

I often have fans ask me how to budget money and what we do in order to save so much money but the reply is that it’s not about the money it’s about the process involved. We don’t always save as much money as we would like every month but most importantly we are not going into debt because we are budgeting our money.

One of the most important things we did for our personal finances was that we never let the budget deter us from reaching our goals. Sure we’ve had crap months but we made up for it or we learned from our mistakes just like anyone else would.

Budget failure only occurs when you give up on the budget which should not happen as long as you give 100% into making sure you reach your goals. Sometimes fans email and ask me if living on a budget in Canada is any different from living in other countries. To be honest I’m going to say, probably not. If I still lived in the UK I could use this exact budget to meet all of my needs. Below are links to the budgeting series which I wrote while designing our spreadsheet.

I’m not a financial planner/advisor so I can’t tell you how you should budget but I can show you how we budget. I’m just a regular guy just like everyone else; some might call me a budget nerd. Please take the time to read through the budgeting series and I hope you take something away from the information.

  1. How We Designed Our Budget Step 1 Gathering All the information
  2. How We Designed Our Budget Step 2– Categories
  3. How We Designed Our Budget Step 3– Tracking Receipts
  4. How We Designed Our Budget Step 4- Note-taking
  5. How We Designed Our Budget Step 5– 5S Organization
  6. How We Designed Our Budget Step 6– Who Does What and When?
  7. How We Designed Our Budget Step 7– Balancing Our Budget
  8. How We Designed Our Budget Step 8– Knowing our Coupon Savings
  9. How We Designed Our Budget Step 9– Reading Our Bills
  10. How We Designed Our Budget Step 10 Projected Expenses

 

Budget changes 2014

 

Year-to-date-2013-budget-figures

The total of $6088.00 is our basic monthly Net Income based on there being 4 weeks per month. The total of $6594.00 is our basic Average monthly Net Income based on the fact that there are 26 pay periods throughout the year divided up into 12 months. None of the above figures factor in any over-time, training, or any other money received each month.

Any remaining money left over will be placed into the Emergency Savings Fund. To keep on “Paying ourselves first” based on a figure of 20% our predicted minimum savings figure will be, $1543.82 which is approximately 25.35%.

 

Budget percentages December

 

December-2013-household-budget-percentages

 

Our savings of 10.32% includes savings and investments. I’ve also went ahead and added in our projected expenses this month at 15.19% which brings the total December 2013 Household Budget Percentages to 109.5%. This reflects the overspend for the month. Although we did not go into debt because of this overspend, it does reflect the fact that we were over our pre-defined budgeted amount.

 

Budget Percentages 2013 Year

 

2013-household-percentages-for-the-year

 

Budget percentages month by month

 

year-to-date-percentages-2013

 

Expenses breakdown

 

This is simply a breakdown of our expenses which has helped us to understand where all of our money goes. I appreciate that you enjoy this budget update each month but I do hope you view this as an educational tool rather than comparing your own financial numbers as we are all unique.

Sometimes we wish we had more money to budget with but understand that we only have what we earn and if we want more, we need to earn more. Spending less than we earn and budgeting our money has been the easiest way for us to pay down debt and save money.

  1. Chequing– This is the bank account where all of our debt gets paid from.
  2. Emergency Savings Account– This is a high-interest savings account.
  3. Regular Savings Account– This is a savings account that holds our projected expenses.
  4. Monthly Budget Total: $4396.41
  5. Monthly Net Income Total$7829.82
  6. Total Coupons Used: includes every discount attained during the month = $127.49
  7. Projected Expenses: These are expenses we know we will pay for throughout the year = $1189.14
  8. Total Expenses Actually Paid Out$7384.49
  9. Total Expenses Actually Paid Out: Calculated is $7829.82 (total net monthly income) + $743.81 (overspend) – Projected expenses $1189.14 $7384.49
  10. Actual Cash Savings Going Into Emergency Savings: Calculated is $7829.82 (total monthly net income) – $7384.49 (actual expenses paid out for the month) – $1189.14 (projected expenses) = -$743.81

 

Saving money

 

What are Projected Expenses? – We project expenses throughout the year so we have the money saved.

PE= A projected expense is money which is automatically saved each month so it is ready when the bill comes in or when you need it as in the example below. We review our projected expenses at the beginning of the year to set up our yearly budget and adjust as we go along if a new projected expense arises and needs to be added to the budget. Sometimes we remove a projected expense as well so it’s very important to keep an eye on your expenses.

This has happened on many occasions but it’s bound to happen as we can’t predict everything we have to pay for over the course of the year. The important part for us is that we are saving for these expenses and we no longer have to stress about taking money from our savings to pay for them. To learn more about projected expenses read Step 10 in my budgeting series.

When we spend the money in a projected expense category we move that money to our chequing account in order to pay for that incoming expense. We pay money into the projected expenses account continually throughout the year even when bills come due as it’s revolving so as one bill gets paid the money continues to come in from the other categories all year-long. So the $1189.14 gets paid into the projected expense account every month no matter what. It seems to be easier to track our money this way but you can do what works best for you.

 

Projected expense example

 

If for example our clothing category was a projected expense we have a budget of $50 per month for the two of us. If we spend $30 on clothes for the month that means we need to pull $30 from the projected expenses account to pay for this expense or we move only $20 to projected expenses for the month and leave the $30 in your chequing account.

It’s up to you how you do it as I mentioned above. I’m hoping to put together a projected expenses spreadsheet to track the expenses all year-long otherwise you need to do that to make sure you don’t overspend what you haven’t saved or will save over the course of the year.

It’s a fairly easy process and becomes a lifestyle change for your finances but the most important part is that the money is available and saved, which means potentially less stress. This means we should have $600.00 per year for clothing to spend.

We have to track that expense as we spend it manually but hopefully for our 2014 budget I can incorporate that into our spreadsheet so it tallies the numbers up as we go along. That way we will be able to know exactly what we’ve spent as an ongoing total.

 

Budget for December 2013

 budgeted-budget-december-2013

If it is highlighted in blue that means it is a projected expense of ours. You will also see our budget does not include the emergency savings as this is factored in at the end.

 

Actual budget expenses for December 2013

 actual budget-december-2013

December 2013 goals

 

  • NEW! Update 2014 Canadian Budget Binder Budget Spreadsheet- This will stay the same-Done
  • NEW! Reach 1350 Pinterest Followers- PASS (1429)
  • Get organized with blog activities- Working on this
  • Learn more about affiliate marketing and blog advertising- Working on this but did accomplish some bits with the help of another blogger
  • Complete and search out more freelance work – Will be working more on this in the upcoming months
  • Read more in my personal finance book- FAIL It’s been collecting dust I’ll be honest
  • Sort out and pay mortgage in full- This will be completed in full by April 2014
  • Move my money to Canada (watching exchange rate)- This will be completed by April 2014 to pay off the mortgage
  • Reach 6300 Facebook Fans- PASS (6350)
  • Reach 2200 Twitter Followers- PASS (2379)
  • Reach 1275 Blog Followers- (PASS)
  • NEW! Make a pin for my universal weight machine- PASS

 

January 2014 goals

 

  • NEW! Reach 1400 Pinterest Followers
  • Get organized with blog activities
  • Learn more about affiliate marketing and blog advertising
  • Complete and search out more freelance work
  • Read more in my personal finance book
  • Reach 6375 Facebook Fans
  • Reach 2400 Twitter Followers
  • Reach 1240 Blog Followers
  • NEW! Make a pin for my universal weight machine- PASS
  • Continue with bathroom renovations
  • Start laying flooring in living room and dining room

 

 Budget updates month by month

 

In case you missed our budget updates from the start of the year I will list them all here each month.

That’s all for this month check back at the beginning of February 2014 to review our January 2014 budget to see how we made out with the new figures and if any changes were made.

 

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Mr. CBB
Mr. CBB was born and raised in the United Kingdom who then moved to Canada where he is a permanent resident. He recently became a father to a very busy toddler who allows him to be a kid at heart. He bought his first house at the age of 21 after University and his second at the age of 24. Both Mr.CBB and his wife are Debt and Mortgage Free and they did it all in under 5 years using a Budget. Canadian Budget Binder is a place where he shares their financial experiences with his readers and hopes to learn about theirs. Welcome to CBB!
Mr. CBB
Mr. CBB

Comments

  1. Congratulations on making it thru the year. I have also taken a look at my budget and made changes. I hope to make it thru the year in the black, unlike this year. I found that I was overspending about $900.00 per month on average. I’m hoping that my daughter will be able to find a job after college and then I won’t be supporting her like I have been.

    • I’m glad you are staying optimistic as that is very important. Spending $900 more each month is hefty but the important part is that you are recognizing that fact and know you must make changes. What changes do you think you might make?

      • The biggest change that I will be making is not getting my daughter ready for college. That’s where most of the overspending went to, in addition to, eating out quite a bit. When my daughter finds a job, she will have to pay rent which will help my short-term budget and hopefully put me back on track. I’m actually going to pay closer attention what money goes thru the “projected expenses” account to see where I’m overspending. Once I have my shower fixed, I’ll see what’s leftover and use that to help pay down the debt (if possible).

        • Good for you Dee keeping track of your projected expenses because those are the expenses that many people forget about but add up to the most money spent in the budget aside from rent/mortgage and food.

  2. Wow! I love that you showed the process of fine-tuning your budget so that it best suits your needs. Mine looks like it’s out of the stone age by comparison. Will definitely look into putting together something that allows for more analysis with 2014.

    • We like the analysis because it does paint a pretty picture even if it’s not what we want to see. I always say it’s better to know your numbers than to guess.

    • I agree – this budget is super detailed 🙂 I don’t break mine down to quite this level of granularity. Much respect 🙂 This must take a long time to compile each month?

      • This post took a bit of work but most of it is generated quite easily. The write up takes a bit of time but that’s ok most of my posts take me a while to write.

  3. This is an awesome post, and very detailed- I think a lot of people could learn from it. One of my favorite things to do it use pie charts, so I can have a visual representation of where my money is going. I think it can really make an impression, sometimes moreso than seeing the numbers alone.

    • The charts just make it look pretty but the numbers are the icing on the cake. It’s amazing what kind of a story the numbers will paint.

  4. Christine Weadick says:

    Things are looking good!! It will be nice once the mortgage is paid off!!! I don’t envy you the renovations… I hate the mess and living in a construction zone. Are we going to get to see before/during/ and after pictures of the renovations????? Those of us living in older houses are always looking for ideas to use in our own places!!!
    I enjoy the detail on these posts but confess it is rather hard to see on the i-pad so I try to look it over on the laptop as it is a much bigger screen.
    I’ll be trying out the budget spread sheet but will likely be leaving a number of empty spots as the income is on the small side. I will fill in any ‘extras’ if there is money for them. Mine will be a bare bones budget to say the least……

  5. Good luck on your goals this month! I can’t wait to read all about your success!

  6. Holidays can completely kill a budget with all the extra travel, food, gifts, etc. Our Christmas saw us have to dip into our emergency fund to install a new heating unit for our upstairs. But there is nothing like already having the money saved when a needed expense comes. Makes you want to just kind of laugh at life and say, “Is that all you got?” – knock on wood. 🙂

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