When should you evaluate your monthly budget? : August 2015 Budget Update

Canadian Budget Binder Monthly Budget Update Logo 2 compressedEVERYTHING TO DO WITH MONEY CHANGES

 

When should a monthly budget be evaluated? This seems to be the hot question the last few months of every year in my inbox.

I wish I had all the right answers for those fans who want to become debt free and put all their financial worries behind them. In all honesty money concerns never end but what I do have is our experiences to share.

If you haven’t realized it yet you will notice that everything to do with your money will change as will the way you think about your finances. Over the years we have found that we change the way we think about our money and how we manage it.

If you rely on a monthly budget to manage your finances a serious evaluation must be done at the end of the year. What does this mean? It means you look at every budget month for the year to see where you can make improvements. You will also be armed with numbers which is critical to the success of building a monthly budget for the new year.

The first year we started our monthly budget we realized that we were constantly making changes. It may have been because our finances changed, our bills went up or down and so on.

That first year of budgeting was hit or miss, essentially a trial budgeting year to see how it would work for us and how we could improve it. We knew we wanted to share our monthly budget with our fans but we needed to make sure it worked for us and ironed out all the kinks.

Aside from clear changes needed what we noticed the most was that category figures were jumping all over the place and that’s what will happen if you if you check month by month. Not every month is going to be the same.

This is when we came up with our projected expenses because not everything gets paid monthly. It will be clear that numbers will change but eventually even out over the course of the year if you follow your budget properly and forecast those expenses as best you can.

It took a good year before we had a grasp on our financial numbers and what our spending patterns were like. No one can really have a static budget that will work 100%.

 

Monthly Budget Health Report

 

Canadian Budget Binder fan Kendra emailed me the other day asking about our monthly budget because she has found that her budget hasn’t been balancing as well as she had hoped. She’s 6 months into her first year of budgeting and every month she is spending more than she had anticipated in her budgeted categories.

My answer:

You have to either stop spending money and sticking to that monthly budget number OR change it if you have the money to do so. You may also learn that the figures that you estimated are nowhere near the actual figures you are spending. You need to be realistic but this is why you need to evaluate your monthly budget yearly.

Example: If you budget $15 for Tim Horton’s coffees each month but go every day of the week this figure is NOT realistic. You also can’t budget more than you earn so if you net $2000 monthly you can’t have a budget with categories totalling more than that number.

You will never get it to balance if you don’t have enough money coming in and I see this all the time when I check fan budgets that are emailed to me for review. This is a huge reason your budget will never work.

I honestly believe that Kendra should have enough data after 6 months to average the numbers for her monthly budget and see what the rest of the year brings her. If you are budgeting for the first time 6 months of a monthly budget should help you forecast the following 6 months.

After that first year evaluating yearly is a great way to monitor your category spending. You can even do mini-monthly evaluations which we do. This is simply a scan of the monthly budget to see how we are doing without making any major changes.

My wife and I do a yearly budget review in December every year and assess where we need to make changes if any. This is a big deal because it sets the standard for the new monthly budget.

There are never any easy answers when it comes to a personal budget but if you want down to the wire accurate numbers you must be prepared to document everything.

How often do you evaluate your monthly budget?

 

Where The Money Went

 

August 2015 Budget totals

Where did all our money go in August?

This month was our lowest income month so far this year. Together with some extra bills this produced an average looking month as far as figures go.

The Gasoline category was much higher than usual due to travelling around Ontario. We were also presented with our biggest electricity and water bill ever.

I took a couple of weeks off of work, so that made a small difference because I wasn’t getting any overtime. I haven’t started my second job yet either but I bought a parking pass in preparation for the forth-coming season.

Nothing truly out of the ordinary happened, but extra or larger bills than average can put a dent in your budget figures.

How was your budget month? Please leave a comment.

 

About our Free budget

 

I’m currently offering 2 versions of our budget and the reason behind it is simple. Firstly, read the CBB blog 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 you asked me for in your emails. (See I do listen and read your comments and emails)

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.

 

Our Free Budget Spreadsheet

 

cbb budget screen shot compressed

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 :) Test it out for a month and see how it goes. There is never any harm in trying something new.

 

Our budget plan

 

How we budget our monthly expenses?

I often have fans ask me how to budget money on a low-income or they simply a high debt load and want to kill it like my friend Tony who got rid of over $100,000 worth of debt by using a budget.

CBB fans want to know what we do in order to save so much money and the reply I give is simple>> It’s not about the money it’s about the process involved.

We are both money managers of our finances and with our relationship compatibility we have been able to get to where we are in 2015, debt free.

It doesn’t matter if you are using a cash only budget or you use your debit and credit cards, if your budget doesn’t balance you have budget issues you should review it pronto.

Learning how to be your own money manager is important because no one else will care about your money more than YOU!.

We don’t always save as much money as we would like every month but most importantly we are not going into debt but only because we are budgeting our money. In fact we are currently debt-free including the mortgage which means all we pay for is our monthly bills and expenses.

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’ve made up for it or we learned from our mistakes just like we should. Budget failure only occurs when you give up on your budget which should not happen as long as you truly want to reach your goals.

We didn’t always earn the income we do today but made do with what we were earning so we didn’t go into debt. That my friends is called “living below your means”. The only science to becoming rich!

Sometimes fans email and ask me if living on a budget in Canada is any different from living and budgeting 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 spreadsheet to meet all of my needs however the budget needs to be reviewed monthly.

Below are links to the budgeting series which I wrote while designing our excel budget spreadsheet which will give you an idea just how we designed our budget.

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.

 

Learn How To Budget: Our budgeting series

 

Do you want to learn to budget like we do?

We explain everything we do and more in this mini-series below all about budgeting.

Please take the time to read through our budgeting series plus read Budgeting in the New Year. I hope the information will help stop you from making common budgeting mistakes that I hear of often and that you take something away from the information and apply it to your financial situation.

If you have any questions about what we do with our money tracker ie: The budget than feel free to email me. I may expand more on the topics as we go along and add some mini-series in 2015 detailing how we budget to break it down even further for you.

  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 percentages August

 

August 2015 Monthly breakdown percentages

Our savings of  37.71% includes savings and investments and emergency savings for this month.

The monthly totals comes to 100% which shows that we spent our income this month and used the rest as emergency savings.

The other categories were well within the defined percentage limits. Our projected expenses this month is at 22.20%.

 

Budget percentages month by month

 

Budget 2015 Yearly Graph

Expenses breakdown

 

This is simply a breakdown of our expenses which has helped us to understand where all of our money goes. As of May 2014 we are mortgage free so much of our money will be directed at savings, investments and renovations.

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 our situations are all unique.

Although I encourage your comments and love to hear what you have to say about our budget categories and expenses please don’t tell us to donate our money to charities because we have too much or are fortunate.

We are hardly out of the clear with finances for the rest of our lives and have worked and sacrificed to get where we are. We do plan to enjoy the money we’ve saved now since we haven’t over the years with our son.

What we do with our “extra cash” is our business and although we do donate to a charity we won’t be putting it on display for the world to see as it defeats the purpose in my eyes. It is part of the budget as you see it. I hope that clears that up for those of you who had concerns about our extra money.

Almost 7 years ago I started working in Canada making a bit over minimum wage and have since moved up the ladder. I’m now working very hard to secure my dream job with one foot in the door. We aren’t all lucky but if you do the best you can at least you can look back and say you gave it a shot.

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 Budgeted Total: $4,916.82
  5. Monthly Net Income Total$7,956.24
  6. (Check out our Ultimate Grocery Guide to see where our grocery money goes)
  7. Projected Expenses: These are expenses we know we will pay for throughout the year = $1,766.35
  8. Total Expenses Actually Paid Out$4331.17
  9. Total Expenses Actually Paid Out: Calculated is $7,956.24 (total net monthly income) – $1,766.35 (projected expenses) – $1858.72 (emergency savings) = $4,331.17
  10. Actual Cash Savings going into Emergency Savings: Calculated is $7,956.24 (total monthly net income) – $4,331.17 (actual expenses paid out for the month) – $1,766.35 (projected expenses) = $1858.72

 

Saving money

 

What are Projected Expenses? – We project expenses throughout the year so we have the money saved. PE= A projected expense is money 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.

The only thing you need to do is track your projected expenses each month manually as I can’t customize that for you in the excel budget spreadsheet as I don’t know what you will use for projected expenses.

For now we will have to manually track which means month after month we add up what we save in each projected expense category and minus what we spend so we know how much we have and what is left in each category. I have updated our personal excel budget spreadsheet for 2015.

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. This ensures that money is always available. It may not always be enough but having something ready is better than having nothing at all and having to use credit.

So the $1766.35 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 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 2015 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.

(Note: I am working on this but slowly as I wasn’t anticipating all the extra hours with my second job)

 

Our Actual Family Budget

 

Time for the juicy category numbers and to see how we made out with our monthly budget. Below you will see two tables, one is our monthly budget and the other is our actual budget for the month of August 2015.

This budget represents 2 adults and a baby plus all of our investments.

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.

 

Budget for August 2015

 

June 2015 Budgeted amount for the month

 

Actual budget expenses for August 2015

 

August 2015 Actual Spent for the month

 

August 2015 Goals Reviewed

 

  • Finish sanding and stain our sons kitchen table and chairs- All I have left to do now is finish the table top and it’s done. I hope to have this done in September.
  • Finish our sons free rocking horse (handle missing so I’m making one)- I’ll be working on this as soon as I can in September.
  • Reach  4500 Twitter Followers- PASS!
  • Reach  6650 Facebook Followers- PASS!
  • Reach  2200 Pinterest Followers- PASS!
  • Reach  3100 Followers The Free Recipe Depot Facebook-FAIL I haven’t put much effort into the page lately. I’ll get working on that more soon.
  • Reach 175 Followers Bloglovin- FAIL This again is not a media source I’ve put much effort into but I’d like to see it grow.
  • Finish the budget projected expenses- FAIL Eventually I will get it done. I have to!
  • Help a new blogger with a task or question- PASS!
  • Connect with a new blogger- PASS, connected with 3 new bloggers.
  • Finish the master bathroom shower- Haha…that’s my answer!
  • Pick out new tiles for bathroom and accessories (mirror, towel bar holder etc.)- Not yet!
  • Buy a new blind for the garage- I’ve looked at second-hand shops but nothing yet. I might just have to break down and buy one new.
  • Buy a used mirror for our master bathroom- PASS We Finally bought one from Canadian Tire of all places on sale too!
  • Finish the walls in the baby room- FAIL, however we will be working on getting him into his crib next so I’ll be working on sorting his room out.
  • Research and get quotes for a new fence- We’ve decided to wait until Spring 2016.
  • Start looking at kitchen designs- We’ve looked online but nothing concrete yet.
  • Start looking at pricing for a new insulated garage door- I’m working on this now.
  • Hang 2 outdoor wall hangings- Fail This will likely happen Spring 2016
  • Box old baby clothes for storage- We’ve done most of this. Now we have a few boxes to sell.
  • Sell baby stuff we don’t need- My wife will be working on this for September.
  • Buy a pressure washer- Still waiting for a specific brand to go on sale.
  • Buy an art easel for our son- PASS We got it for $5 used. It’s a gorgeous wood easel and I bought some chalkboard paint and updated one side to a chalkboard. We went to Michael’s and bought 2 rolls of paper and some chalk with the 40% off coupon.
  • Plan a couple of weeks holidays for August- We did go away for a couple of weeks, yes!
  • Start planning our sons first birthday party- PASS~ This is happening very soon!!
  • Start a new monthly writing job- PASS!! I’m writing for She Knows Canada again!
  • Do an oil change on the vehicle- PASS!

 

 September 2015 Goals

 

  • Finish sanding and stain our sons kitchen table and chairs-
  • Finish our sons free rocking horse (handle missing so I’m making one)-
  • Reach  4600 Twitter Followers-
  • Reach  6660 Facebook Followers-
  • Reach  2240 Pinterest Followers-
  • Reach  3100 Followers The Free Recipe Depot Facebook-
  • Reach 175 Followers Bloglovin-
  • Finish the budget projected expenses-
  • Help a new blogger with a task or question-
  • Connect with a new blogger-
  • Finish the master bathroom shower-
  • Pick out new tiles for bathroom and accessories (mirror, towel bar holder etc.)-
  • Buy a new blind for the garage-
  • Finish the walls in the baby room-
  • Start looking at kitchen designs-
  • Start looking at pricing for a new insulated garage door-
  • Sell baby stuff we don’t need-
  • Buy a pressure washer-
  • Prepare for Fall Clean-up-
  • Think about Halloween Costume-

 

Budget updates month by month

 

In case you missed our budget updates and want to do a quick search I’ve compiled them all on one handy page: monthly budgets.

For the 2015 Year I will also keep track of each month just below.

I will start the list off with our end of year budget update from 2014 just in case you missed it.

That’s all for this month check back at the beginning of October 2015 to see how we made out with our September 2015 budget!

Happy Budgeting CBB’ers!

Are You New To Canadian Budget Binder?

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. Chrsitine Weadick says:

    I sat down a few years ago with some full check books from the drawer (we keep them for 2-3 years) and added up everything we spent for a good 12 months worth. Each utility, vehicle maintenance/repair bill, and each store we shopped at to see where the money went. There was also the cash advances we made, usually $20.00 a time for those little things. It was a good starting point to work things out with. A lot of things are fairly easy with the bills as we have things paid every month, like insurance and taxes. The option for that is available so we took it. Hubby has tried to work out a budget a few times but those items that are not monthly or the ones you have projected for threw him every time. I have a ballpark budget worked out as much as I can. Hubby’s health will always be the wildcard, so far he is good right now but we both know how fast that can change and not in a good way. I keep trying to have things work out on a very limited income….it is a work in progress and always will be. But I keep trying……

    • Hi Christine,
      Budgeting is always going to be a work in progress because life changes all the time. The most important thing you can do is know where your money is going and know how much you have to spend every month. Never give up. 🙂 Thanks for commenting Christine. Mr.CBB

  2. Good advice, I’m not good when it comes to budgeting too. I usually spent more than I set for one month. I just created a simple budgeting spreadsheet for me to review daily and I’m hoping that this one will work.

  3. You’ve given some great resources and advice for setting up a budget. We check in on ours quarterly. We’re not quite ready for annual reviews yet 🙂

  4. I really enjoyed looking over your breakdown, and reading through your budgeting series. I have been trying to adopt your spreadsheet for my wife and I, and I think starting in September I have finally managed to organize a system to make tracking purchases less daunting.
    What I was wondering is how you would recommend tracking any employer matched RRSP contributions. Both my wife and I contribute the max that our companies will match, and as a result we never see this as income to be input in the spreadsheet. We could add OUR contributions onto our income each pay period, and then record the savings as our payment + employer contribution, but I don’t know if this will be truly reflective.
    I appreciate any thoughts on how others keep tabs on these “expenses” that never we never really see in the first place. Thanks again for all you do!

    • We don’t add in our employer matched RRSP into the budget at all. We do add it into our Net Worth update as you will see in my monthly posts. Your employer matching RRSP is not an expense it’s free money but what you put out is an budget expense even though it’s your money. I hope that helps. You can email me if you want to talk more. Mr.CBB

  5. Budgeting has been something that my husband and I have always done. I have always found budgets exciting (I love to save). I agree with you that budgets need to be revisited regularly to make sure you are on track and being realistic. My husband and I do a financial check in quarterly. We review our daily budget, and make sure we met our savings goals (we make commitments at the check in before) and decide how that savings gets invested based on our investment plan. It is pretty satisfying and keeps us really motivated.

    • Hi Jess,
      Good for you. We have been budgeting so long now that we check in often as well but we do a big overhaul at the end of the year too. I agree budgets are motivating. What budget do you use or did you create one?

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