How To Become Financially Secure So You Forget It’s Payday : June Net Worth Update (+0.74%)

HOW TO BECOME SO FINANCIALLY SECURE YOU FORGET IT'S PAYDAY(1)

FOCUS ON LIFE NOT JUST YOUR BANK ACCOUNT

 

I know people who count down the hours before payday when their bank account will be back in business. It’s not the best spot to be in financially because you are living payday to payday but the struggle is real for so many Canadians. It becomes a vicious circle until you find a way to put the brakes on a stress that is probably weighing you down.

Becoming financially secure is a dream for just about everyone so we can forget the daily worries of car payments, mortgage, credit card bills and a host of other debts that cause stress-related issues, relationship issues and potentially depression. No one likes to feel that they are not in control of their lives especially where money is concerned.

What does financially secure really mean?

Well, I can tell you that it doesn’t mean that you have a job that pays you big bucks. That misconception is what gets people into financial trouble in the first place.

This just happened, check it out.

 

It takes more than an income to stay away from debt

 

While chatting to a colleague at work briefly the other day he asked me what day it was. This is not unusual because just about everyone has experienced a time where their mind plays games with them. I know it’s happened to me many times.

After our son was born I forgot how old my wife was for her birthday. I think they call that dad-brain or work-a-holic brain but something along those lines where I just wasn’t getting enough sleep. This is what I was expecting from my colleague since we work such long hours at a job that is very draining physically and mentally.

Then out of the blue he blurts out damn our credit card payment is due today. I looked around to see if I was who he was talking to and that he wasn’t on any fancy technology talking to his wife. Nope, it was me he was talking to. When I questioned him he said that he was hoping payday would fall today so he could pay his credit card bill.

OH, I said with just a bit of shock especially since I know he makes well over 6 figures. If you knew this then you would imagine that he wouldn’t need to worry about when payday was. At least that’s what people assume of those who earn a large income but that doesn’t mean they aren’t in debt. Roads aren’t paved with gold my friends.

I don’t know his financial situation but something tells me he doesn’t have a beefy emergency savings nor does he budget efficiently, if at all. I mean he very well could be using a budget but I don’t think it’s working so well for him.

Related: How much emergency savings do you need?

 

Budgets CAN FAIL

 

It’s not because the budget doesn’t work but because the operator hasn’t correctly balanced it according to their debt to income ratio. Even then if you’re not earning enough money to pay your way you best be looking for a second job and steer clear of those payday loan or cash convertors shops which so many people get tangled in as a last resort for quick cash.

Related: Download the CBB Budget FREE!

When he told me that his credit card bill was only a bit over $2000 I asked him if he pays it in full every month. Most times yes he says if they have the money when payday comes around otherwise they will pay what they can and then conquer the rest the following month.

He said that his wife spends more money than she should mostly on clothes, accessories and other stuff and it’s hard to control her. He smiled at me as if he thought it was funny but I’m betting inside he was wondering how he was going to solve that relationship problem. It becomes a problem when two people can’t or aren’t communicating about financial issues or they can’t come to terms with them.

I told him that he’s not alone and many people struggle with their finances especially in relationships. His wife is a stay-at-home mother of 1 who hangs out with other women who like to spend and flash their cash around. Although he makes a good income it doesn’t seem motivating when he’s constantly hoping that pay day will come along soon.

 

Set your payday alarm

 

I have one friend who sets an alarm on his smart phone that tells him that it’s his payday. No kidding but for now it works for him and this is how he pays his bills. Once his money is deposited he goes online and makes his payments. It’s not the ideal way or one that I would suggest as I’m meticulous when it comes to financial organization but he gets the job done without paying unnecessary interest.

Some people live and breathe for their next payday and there are others who are so financially secure that they forget that it’s pay day. This is how my wife and I are. Over dinner I was explaining to Mrs. CBB my earlier conversation that day and she was not shocked. We never are. Debt can get the best of anyone and it’s hard, we get it.

What we did notice about our own financial situation is that we never worry or question payday. To be honest most weeks we forget that money was deposited in the bank from my employer until we log in to our PC Financial bank account online to check or pay bills.

That must make us feel great you’re probably thinking and the answer is, YOU BET!!

We never gave much thought to how fortunate our financial situation really was until this conversation because after we paid our mortgage off and we had zero debt life just continued as it did before. The only difference is that we weren’t huddling over the bank account waiting for a deposit like we used to do because we wanted to transfer money to pay debt or put extra payments down on the mortgage.

It was a game of time and patience back then but we’ve wiped our slate clean for now. If you really want to be financially secure you MUST invest in your financial health.

  • Start using a budget
  • Know where your money is going
  • Understand your bills and how interest works
  • Pay your bills on time
  • Fast-track your debt repayment if possible
  • Set a time-line
  • Save money where you can and as often as you can
  • Earn extra income if it’s available to you
  • Start a hobby that makes money like working from home or working online.
  • Have faith in yourself

Payday is a powerful word that most people won’t forget but when it slips your mind you can bet you’re loving debt freedom or you’re well on your way.

How often do you think about your payday?

become so financially secure that you forget that it's payday quote

 

Our net worth 2016

 

June 2016 Net Worth Losses and Gains

RESP Contribution 2016: $208.33 a month.

Changes to our Net Worth in June

What a change from last month where we had a staggering increase in one month to a measly $6,000 this month. All I can say is Brexit and the fact that my fellow countrymen took to the polls and voted to leave the EU (European Union).

I did have the opportunity to vote, but didn’t act upon it as I haven’t lived there for quite some time. It wouldn’t be right for me to vote on an issue where I won’t see the impact.

However, we did see an impact because leaving the EU was the shock result nobody was expecting. The markets took a hit and so did the pound. So our investments took a minor tumble in the fact that they didn’t grow at all. Our only increase this month was cash that we earned.

 

Understanding net worth

 

What Does Individual Net Worth Mean?

Net Worth is a snap shot of your financial health sort of like a picture or debt to net assets. In simple terms it’s a total of the value of your assets minus your liabilities.

We credit the growth of our net worth due to patience, perseverance, using a monthly budget and not giving up. Your numbers may go up and down but don’t let the numbers scare you rather understand why and move on.

 

Canadian Budget Binder Budget Spreadsheet

If you would like to use our budget I offer a FREE downloadable budget which I created and that you can use at home just like we do. I don’t charge for it because I want you to save money not spend more!

2014 Free Money Saving ToolsEnjoy and let me know what you think.

There are tonnes of other free printable lists offered at Canadian Budget Binder to help you achieve some of those financial goals and build your net worth.

Now… what you need to do is determine just how much net worth you actually have and go from there….

 

Determining net worth

 

Figuring out net worth is fairly easy as long as you know your personal numbers or monthly finances which means you need to do your homework. Net Worth is simply adding up all your assets (what you own) then taking away your liabilities (what you owe) which will give you a net worth number.

Understanding your net worth will help you determine if you are on track to meeting or beating your personal financial goals. It doesn’t get any easier than that.

How to Determine Net Worth?

Net Worth = Assets – Liabilities

 

Calculate net worth

 

Do you know how to calculate your own Net Worth?

Now you can stop asking yourself the question, how do you find out your net worth? Why? It’s easy to determine. We like to calculate our net worth every month so we know if we are still on track. Some people calculate it yearly or quarterly. It’s really up to you and how informed you want to stay when it comes to your financial health.

Net Worth is essentially an estimate and not everyone uses the same type of figures. Some people don’t include vehicles like we do or they may leave out the assets inside the home like we have. It depends on what you want to calculate or what you can sell today and make money on.

Why not go ahead and calculate your own using our Free Money saving Tool Net worth Calculator (Canadian Budget Binder 2012)

 

Why you should set goals

 

Setting goals are the only way we work towards achieving what we want to get done as a couple around the house and in our financial life. I know that without them we would be flying by the seat of our pants which wouldn’t work for us.

I find it’s much easier to be held accountable when I share what we need to do with all of you. Yes, my wife refers to the list when she asks what I plan to do next. I’m not sure if that’s a good thing for me or not.

In the graphical representation below, I have used excel to provide a prediction based on the past years monthly net worth figures.

Using figures from our actual net worth gains over the past 12 months (the solid blue line) it has suggested that by the end of this year (2016) we should be just shy of $900,000.00. This can change over the course of the year and is only a prediction based on known historical figures from our finances.

According to the chart, we should hit the million mark in June 2017.

This is nice to know but anything can happen over the next year. Hopefully with some careful planning we can achieve this goal and go beyond it.

Do you set goals for the year?

Forecasted Net Worth as @ end of December 2015

 

Our financial numbers

 

June 2016 Preceding 12 Months Net Worth

When budgeting anything is possible, we are proof of that although we still have a long way to go in our journey. These are our numbers and our goals, not a means of comparison towards your own goals to others target goals.

We don’t care how much money others make or if they have a high net worth or if it is lower than ours as it’s not a competition. I hope our experiences perhaps will help guide you along your financial path working towards debt freedom.

 

Different financial paths

 

Not everyone has the same path in life. Some of you may have had to start over like I did or go to school a second time and now have OSAP loans to pay back.

Others may have divorced, lost money in the stock market or other investments, suffered job loss, fell ill or was injured on the job etc. but you can’t let that stop you from achieving your financial goals.

Some of you may have been given trust funds, paid-for homes, paid educations or perks in life that give you a financial kick-start and that’s OK too. Remember what I said, “It’s not about how much money you make, it’s how you save it”.

Focus on you and don’t let the evil eye of money jealousy or keeping up with the Kardashians cloud your vision. No one cares about your money as much as you do so don’t waste your energy trying.

The only reason people accumulate wealth is because they know how to save or invest it wisely even if they did inherit money or win the lottery. The smallest improvements should mean big strides in working towards reaching your goals.

Sometimes we have to fail in order to learn and we’ve all been there. Money can be an evil force for some people especially those who have a negative attitude towards their own financial situation.

I urge you to be optimistic and little by little with determination you too should see improvements, if you want that to happen.

 

Net worth updates 2016

 

Below you can click the links to read past 2016 net worth updates to see if we were on target or if we struggled with some of our numbers.

In the last year since June 2015 our net worth according to our figures has grown $137,215.98

June 2016 $832,955.40 – June 2015 $695,739.42 = +$137,215.98

That’s all for this months net worth update but please check in at the beginning of August 2016 to see how we made out in July 2016 and what has happened to our finances since.

~Mr.CBB

Remember: “It’s Not About How Much Money You Make It’s How You Save It

Check out our past actual Monthly Budget Updates to see how much money we earned and where the money went for the month.

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. Colleen says:

    I should have added that we are seniors on a fixed income….hence the payday to payday….lol

  2. Colleen says:

    Although at the the present time….we are debt free…we still live payday to payday. Divorce, health, disabilities have all played a roll in living payday to payday. At least our home is paid for. I am struggling to make the decision to go through a hydro loan to replace the last 5 windows in our house. I just don’t want to commit to a loan. That being said…we are also contemplating financing a newer vehicle…but again…I like being debt free….May not have much…but what we do have is paid for…

    • Like you said, at least the mortgage is paid off. Do you use a budget Colleen? I know you are super savvy with your purchases which is amazing. Where does the bulk of your money go every month? Thanks for your comment. 🙂 GD.. haha! loved that.

  3. Glad you do the home value thing yearly. I’ve seen so many blog posts where the author is celebrating a net worth increase month-to-month but when you look closely at the numbers, they actually saved less, created more debt, and their investments went down. Using a monthly update from Zillow makes it look like they came out $10K ahead–and I’m sure they know this is fudging the numbers a little bit. (A seller may or may not get the book value for their house if they decided to sell it–the final value after settlement, transfer, fees, etc., may be off my thousands or tens of thousands in either direction.) Sticking to a baseline home value allows the total assets and net worth numeric values become something more meaningful.

    • Hi Edward,
      Yes we’ve undervalued our house by $100,000 but even if we put the value to what it should be it wouldn’t make much difference as it’s all relative. It’s better to undervalue then overvalue and be disappointed. Mr.CBB

  4. Mr. CBB

    I’ve been reading your posts for a while now. It’s encouraging to see the progress you made.
    My wife and I of 10 years are struggling with a 6 figure income but are putting plans in place to get us back on track.
    It’s nice to read emails like this last one and gives me hope for the future. Keep them coming and all the best in the future.

    Tyler

    • Hi Tyler,
      Thanks for being a loyal reader of the blog. I think many people like yourself want reassurance that they are not alone. Most people don’t discuss finances as it’s taboo to talk about debt and can be embarrassing to admit to being in debt. The best thing anyone can do is create a budget and stick to it. That’s what we did mate and I’ll tell you it was the best thing we ever did and still do. Best of luck on your journey!! MR.CBB

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