Updating the budget breakdown after paying off debt: Our family budget May 2014

budget update- budget breakdown BUDGET MONITORING IS ESSENTIAL

 

Now that we are debt free since paying off the mortgage updating the budget breakdown is something we need to consider for July.

We never gave much thought to making changes to the budget breakdown until we both sat down to put the numbers together for the budget update today.

Scratching our heads and not knowing what to do next was pretty much what we had left sitting on our financial plates.

We’ve talked about getting rid of the budget and net worth updates altogether since we no longer have a mortgage.

That may be a possibility or we will combine the two posts and have percentages instead of monthly figures or a scaled down version with less personal financial detail.

I’m not sure how much benefit the readers get from this post due to lack of feedback so if it’s not something the fans care for I won’t spend 8 hours per post putting it together. For all you readers who read behind the scenes and not comment, thanks I appreciate your support. The fans that do comment, thank you as well because this is one of the ways I can tell what you like and don’t like here at CBB.

Some people might laugh saying how difficult could it be to change the budget breakdown but it really is important to make sure that money is being saved and distributed into the proper budget categories.

 

Budget breakdown

 

You might be wondering what I mean by budget breakdown and essentially all I mean is what categories will the extra cash from not paying the mortgage be going into. What will we do with the excess amount of money each month?

We also want to think about the upcoming renovations that we want to finish before the end of summer and beyond plus another surprise which I will tell you all about very soon.

There are lots of events happening in the CBB house and to be honest it’s going to take more than one session of us sitting together as a couple to sort through the budget breakdown to make sure we are content with how our money is being spent. I’d like to say that we have made changes to our investments but at the moment that’s not tops on our lists.

I’d like to see more money going into our Registered Retirement Savings Plan (RRSP) and my tax-free savings account certainly has ways to go before I catch up to where my wife is at.

I have more RRSP room than anything since I’ve started working in Canada. I put money into my investments but every year we did our taxes I always had plenty of room to max out the RRSP but just never had the extra cash to do so. Keep in mind I did invest in my RRSP’s just not the max amount.

It was more about priorities for us and that was paying off our mortgage and having no debt whilst paying something into our retirement savings. Mission accomplished there but now is the time to act on our budget breakdown and make sure we are balancing the money so it’s working for us in terms of what our current needs are but not forgetting our future needs.

Sounds complicated I know but altering the budget breakdown isn’t that bad as long as you know how much money you will distribute to each budget category.

Next month when I do the budget update I should have our new July budget breakdown for you so you can see just what we did.

 

Where the money went

 

I wish I could say it went to putting in a new pool because every summer I wish we had a pool just not the costs involved although I heard it’s not too bad.

Lots of money this month went to paying for our bathroom vanities for the bathroom renovations. I have put them on hold for the moment so I can finish the landscaping. The outside of the house needed more attention than the bathrooms do because the bathrooms are simply upgrades as there’s nothing much wrong with them.

We spent quite a bit on plants and bushes for the front and back of the house plus I loaded up on bags of mulch for the front. Overall it was worth it to us because we won’t have to play around every year out front wasting time like we used to because our landscaping was too complicated.

I also sealed the driveway which didn’t cost me lots of money but it did come out of the home maintenance budget.

You will notice we had a mortgage payment go through this month and that was the final payment to pay the mortgage in full. Happy Dance!

Other than that I was short some parts for the central vac install so I took a drive up to a local shop and picked up the parts that I needed. That took me a couple of days to install but we’re happy with the decision to purchase the central vac. It’s quiet and does what it’s supposed to do.

Although shortly we won’t have any carpet in the house we may put carpet in the basement when I go to finish it so it’s not so cold. I’m not sure yet and need to do more research on the topic.

We do however have plenty of rugs in the house under the beds and we will in the living room and dining room as well once I rid of the ugliest carpet on the planet.

I finally managed to use my rain check at Canadian Tire and stocked up on furnace filters. I’ve been waiting for them to stock them back up because that is the time I will go and buy in bulk so I’m good for the rest of the year. Furnace filters can get pricey and although I don’t go with the cheapest I don’t mind spending a bit more to get a better quality filter.

 

Unexpected expenses

 

Nothing out of the blue popped up this month other than the spare parts for the central vac only because I decided to re-route it and to install in the basement as well. It cost me a bit more but in the long run it will be worth the cash and effort I put in today.

One other issue that came up was issues with the blog which I paid out-of-pocket since I don’t make much money here at Canadian Budget Binder and what I do make goes back into keeping the blog hosted every year and maintenance fees. Thankfully some changes were made that you can’t see because they are behind the scenes but I’m working to make a few more in the next little while.

While shopping at Walmart in the auto department I managed to score cheap filters for when I do oil changes on the vehicles. No sense paying someone else to do a simple job if I can do it myself. There is no warranty on the vehicles now but before we had to get the book filled in which meant paying someone else to do an easy job. The price to get a good oil change is costly to the budget.

They were premium Bosch costing me $3 instead of between $5-$7 which I normally pay for at Canadian Tire. I also stocked up on oil as it was reasonably priced so that put a bit of a dent in our budget but in the long-run it will be worth it.

Do you do your own oil changes?

You will notice our lottery budget has gone up. Our partners in the lottery pool are unable to participate so we are taking the lottery costs on our own. We don’t spend much money on ourselves so this is something we enjoy doing. We buy one line of Lotto Max each week with encore. We may consider knocking it on the head eventually but for now we will leave it be.

So, that’s all that happened for us in May. How was your month?

 

Free budget

 

I’m currently offering 2 versions of our 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

 

(Click to see a larger version of the budget spreadsheet or download it for FREE)

 

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 where 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, which 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.

It doesn’t matter if you are using a cash only budget or you use your debit and credit cards throughout the month if your budget doesn’t balance then you likely have budget issues you need to review. You need to learn how to be your own money manager because no one else will care about your money more than you ever will.

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 our numbers. I’m just a regular guy just like everyone else; some might call me a budget or numbers nerd.

 

Our budgeting series

 

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 2Categories
  3. How We Designed Our Budget Step 3Tracking Receipts
  4. How We Designed Our Budget Step 4- Note-taking
  5. How We Designed Our Budget Step 55S Organization
  6. How We Designed Our Budget Step 6Who Does What and When?
  7. How We Designed Our Budget Step 7Balancing Our Budget
  8. How We Designed Our Budget Step 8Knowing our Coupon Savings
  9. How We Designed Our Budget Step 9Reading Our Bills
  10. How We Designed Our Budget Step 10- Projected Expenses

 

Budget changes May

 

Like I mentioned above we are currently in the works of making changes to our budget which you will likely see in July. I will go over any changes we made and why we decided to make the changes we did.

 

Budget percentages May

 

(Click photo to see a larger version)

 

May 2014 Household Budget PercentagesMay 2014 Household Budget Percentages

 

Our savings of  28.06% includes savings and investments. Our projected expenses this month is at 22.46% which now includes some increases due to overspend explained in the 2013 year in review. The total May 2014 Household Budget Percentages comes to 100%.

 

Budget percentages month by month

 

(Click photo to see larger version)

 

Year to Date Monthly Percentages

 

Expenses breakdown

 

Actual monthly budget figures from May 2014

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: $5352.51
  5. Monthly Net Income Total$8285.68
  6. Total Coupons Used: includes every discount attained during the month = $4.50
  7. Projected Expenses: These are expenses we know we will pay for throughout the year = $1860.68
  8. Total Expenses Actually Paid Out$4908.31
  9. Total Expenses Actually Paid Out: Calculated is $8285.68 (total net monthly income) – ($1516.69 (cash savings) + $1860.68 (projected expenses)) = $4908.31
  10. Actual Cash Savings Going Into Emergency Savings: Calculated is $8285.68 (total monthly net income) – $4908.31 (actual expenses paid out for the month) + $1860.68 (projected expenses) = $1516.69

 

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. So this means the numbers go up and down in the projected expenses account based on what we need to pay for that we saved for in the account over time.

We pay money into the projected expenses account continually throughout the year even when bills come due as its revolving so as one bill gets paid the money continues to come in from the other categories all year-long.

So the $1860.68 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.

 

Our numbers

 

Below you will see two tables one is our budget and the other is our actual budget for the month of March. This budget represents 2 adults and no children and includes all of our investments.

 

Budget for May 2014

 

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.

(Click photo to see larger image)

Budgeted May 2014

 

Actual budget expenses for May 2014

 

May 2014 Actual Expenses

 

 

June 2014 Goals

 

Sometimes I think I am being too optimistic about my numbers but if I don’t reach them I try harder the next month. Stay positive and that’s all you can do apart from bringing the best you can for your readers.

I’m not competing with nobody when it comes to the blog as this is my hobby and my fans are the people who keep me here.

June is going to get even busier for me since I’m working more hours at my second job which is only part-time at the moment. I’m hoping this is the career that will take me to retirement as it’s what I love to do

  • Get the backyard cleaned up and plant new bushes
  • Finish adding lighting to the front yard landscaping
  • Hide the wires on the flat screens I hung on the walls
  • Complete projected expenses tracking sheet for budget (ongoing)
  • Reach 3000 Twitter Followers
  • Reach 6420 Facebook Followers
  • Reach 1800 Pinterest Followers
  • Reach 1230 Blog Followers
  • Read a chapter in my personal finance blog
  • Finish the spare bedroom decor
  • Help a new blogger with a task or question
  • Finish the blog updates
  • Connect with a new blogger
  • Reach 2050 Followers Facebook for The Free Recipe Depot
  • Rip out the upstairs bathroom
  • Repair the fence in the back garden
  • Paint baseboard in the back room
  • Buy a new blind for the garage

 

May 2014 Goals

 

Let’s see how I did in terms of reaching my goals in May. You will notice a Pass or Fail next to each goal.

  • Fix a couple of odds and ends on vehicles- PASS
  • Get the backyard cleaned up-FAIL
  • Put the screens back in all the windows of the house-PASS
  • Put all summer furniture outside-Half done
  • Put all the plants outside on the deck- PASS
  • Buy new blinds for garage window-FAIL
  • Install window shade for spare bedroom- PASS
  • Get the potted plants ready for hanging-PASS
  • Buy the rocks to finish the landscaping-PASS
  • Buy mulch and some other bushes or shrubs for backyard-PASS
  • Seal the driveway-PASS
  • Finish hiding the wires for the televisions-FAIL
  • Redecorate the spare bedroom-FAIL
  • Search for more deals for the bathroom reno- Ongoing
  • Reach 2900 Twitter Followers-PASS
  • Reach 6300 Facebook Followers-PASS
  • Reach 1760 Pinterest Followers-PASS
  • Reach 1230 Blog Followers-FAIL
  • Reach 2100 Followers for The Free Recipe Depot-FAIL

 

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 July 2014 to review our June 2014 budget to see how we made out with our numbers and if any changes were made.

 

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Mr. CBB
I’m from the UK and now a recent permanent resident in Canada. I bought my first house at the age of 21 after University then my second at the age of 24. I’ve always been fascinated with personal finance, savings, learning to make money and watch it grow while combating debts along the way. Canadian Budget Binder is a place where I get to share my experiences with personal finance and learn about yours along the way. I hope you stick around and check me out on Twitter, Facebook and Pinterest where I am active on all social media sites. Cheers, Mr.CBB
Mr. CBB
Mr. CBB

Comments

  1. Mary F. Campbell says:

    Mr CBB, I enjoy reading the budget post but I would agree that perhaps the general readership does not invest a lot of time to track your numbers. I would hate to see this post completely disappear but perhaps a quarterly or semi-annual review would still give us the gist of the process without causing too much of an investment of your time.

    What would be exciting to track now is your savings… what you do with them, how you make them grow, what effect does this have on your income tax, where do you park your funds and why you make those choices… TFSA?, RRSP?, brokerage account?, other currencies? precious metals? real estate? When do you evaluate your progress and re-balance where you are channeling your funds.

    Funny enough, I was talking to one of our bankers this morning and she’s encouraging her “20 something” children to max out their RRSPs and then take advantage of the first time homeowner loan from their RRSP. I disagreed with her and said that by mortgaging their own home, they lose the value of compounding income to pay for their retirement and still only deferring the income tax for somewhere down the line. If the point of the savings is to drop on a new home purchase, then pay the tax now while presumably incomes are lower than they will be in 20 years time and accumulate the “house” funds within a TFSA. Also contribute to an RRSP but I said that the RRSP needs to be viewed like CPP… you contribute every year but don’t draw on those funds, barring a horrible extended emergency, until you are ready for retirement.

    We all have different views on investing and it would be really GREAT to share all those ideas as a part of your new mortgage free status and the channeling of surplus funds to investments. Just my opinion though.

    • Believe it or not the posts are busy I just don’t get feedback on them. So, people are reading them. I don’t think I have a huge investing type fan base here at CBB. I’m not too sure what we will do but we did talk about what you mention, essentially updates on our how our money is being saved, investments etc. Our funds are managed by an advisor simply because we don’t know how to invest on our own. I’d like to learn more but I have no time as it is with 2 jobs and even more coming our way. I do read when I can about investing but it might be one of those things you have to do in order to understand it more. We do review with our advisor every year and we look at our investments every month to see how they are performing. Thanks for your input Mary.. here’s hoping we can make some changes that will fit our lifestyle and that of the readers. :) Mr.CBB

  2. I love how the budget changes when you get rid of the mortgage. It’s awfully nice not to code that expenditure in. Are there any specific strategies you are using to grow your followers on Twitter and Facebook? That is something on my goal list to begin to work on.
    Brian @ Luke1428 recently posted…Simple and Fun Ways Landlords Can Treat Their Tenants WellMy Profile

    • Yes, we will be making changes to the budget it just didn’t occur to us right away as we have had such a busy month. We know we have to sort it out for next month so that’s the plan. In terms of Facebook and Twitter all I can suggest is networking. Facebook has changed so much the past two years it’s difficult to get your posts shown to fans without boosting them which means you have to pay for it. If you don’t have regular fans coming to your page every day liking and commenting it’s doubtful that your reach will get very far. It’s one thing to have a large fan base on social media but another to have actual fans who interact on your pages. I aim for fans who want to be there and I have a great fan base who visits every day on Facebook. Twitter just seems to be follow me I follow you. I don’t give too much weight to those I don’t know but to the followers I interact with it’s important to build relationships with them. They are the followers that want to work with you and help you find more fans. I’ve always been a believer that helping others will come back to you, so I do that rather than compete for numbers these days.

  3. Jeeze, you’re like Mr. Money Mustache on speed!

    I need to keep more money sitting around for unexpected expenses but more importantly unexpected deals! Cash is king. I’m looking to flip a car for a fun project in the future. I’ve had deals fall through because I can’t access cash within an hour even. People are always in such a hurry.
    Will of First Quarter Finance recently posted…25 Random Facts About Me!My Profile

    • Well, I’m not sure if that’s a compliment or not lol. I wish I could say everything is dead easy and for the most part it is simple it just takes time, effort and lots of patience. You are right people are always in a hurry when it comes to money.

  4. Christine Weadick says:

    I can understand the confusion with the budget now. For so long the focus has been on paying off the mortgage and now it is done! You need to find the next big focus item to go forward. Upping your RRSP’s and the TFSA is a good thought to consider. You are also doing the work on the house and the gardens. I agree, the gardens should be done while the weather is good enough to work outside. The inside stuff can be done on the rainy days or later.
    We get the better filters for our furnace as well. We get the ones that run a 2 pack for 9.99 or thereabouts. It’s what the guys that installed the furnace recommended so that what we use. If we can get the filters on sale then that is all the better for us.
    Hubby and the older boy did an oil change on the truck…once. They failed to think ahead about what they were going to the used oil and it sat in a pan in the garage until he stepped in it. Then tracked it around. So the boys at the shop do it for me when the truck is in for other things. They can drain it while it’s up on the hoist while they are switching out the tires or what ever needs to be done. Last time the truck was in to switch out the tires they boys at the shop noticed the brake line to the back brakes was starting to corrode so we got a heads up on that future problem, since fixed.
    The idea to carpet the basement can be good so long as you have no issues with dampness down there or put something down to keep the floor dry. Can’t think of the name of the product but friends used it in their basement under carpet and were happy with it. Dry-core??? I’ve seen it at the hardware store and building centre. Another thought is to carpet the stairs at the least as it will improve traction on the stairs, a very good thing when there are small fry around the place… yours or visiting.
    I do enjoy reading how things are going with the budget for you. It’s nice to see the success’s and even the mess-ups. We are all human and none of us are perfect. Much less discouraging for the rest of us to make the mistakes and know we are not the only one and we can overcome!!! I look forward to seeing how things go from here now that the mortgage is history!!!

    • Hi Christine,
      Thanks for your comment. I guess if one doesn’t know how to do a job it’s best to take it to the pros, that’s what I do. In terms of the budget thank you for your feedback. That is what I’m looking for. I know it’s a busy post but I’m not sure if people want to see it or not or if it does help or motivate them. I’m not sure what I will do with the basement but what I do know is that we no longer have a hoover that does nothing but suck air (thank goodness) and that it will be a long while before I get to the basement. Is your basement finished? If so what do you have in terms of flooring?

      • Christine Weadick says:

        Our basement is not finished although previous owners put in a plywood subfloor……the bugs and other creepy crawlies love it but we have watch our heads down there that we don’t bang into the ductwork with our heads. There are also issues with dampness down there. Lets face, it the house is over 100 years old so best guess is the foundation isn’t great. Plus we are the bottom of the hill and water flows downhill. I was thrilled when we moved the washer and dryer to the main floor and out of the basement. I was tired of having an audience of critters watching me fold clothes. The only reason I go down there at all is the older of the two freezers is down there. We don’t even let the cat down there as part of it is a dirt crawl space, don’t want Stuart getting his nice white paws dirty!!! Our vaccuum cleaner isn’t worth much either for cleaning ability. We need all new floors in here and that includes the carpets. I love the idea of hardwood floors…..

  5. Nice job for being a debt free Mr. CBB, I can imagine you’re doing a happy dance! :) We really had a crazy unexpected expense last Monday, my husband missed his flight and so he bought a new ticket during the day of his flight, the plane ticket was almost triple the price of the original ticket!

  6. Hi Mr. CBB, I am also a numbers geek with a 2-adult household and no mortgage, so I look forward to seeing your next budget. Also, what your percentage for household expenses will be post-mortgage. This year I switched over to a “projected expenses” budget with all the irregular bills accounted for, instead of using savings. It feels like a weight lifted off my shoulders!
    Dar @ anexactinglife recently posted…When to Say WhenMy Profile

    • Hi,
      We do the projected expenses built into our budget now and like you it was a huge weight off of our shoulders because the money was always waiting when needed to pay for that bill that was coming down the road. Not many people think about that when putting a budget together and that’s where problems can happen. The free budget spreadsheet I have here to download has one with projected expenses built in and the other has no projected expenses. Good for you!! How’s things for you since paying off your mortgage?

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