What’s Your Sign? Mine Is Debt Free Forever Through Financial Discipline : September 2017 Budget Update

how to teach yourself financial discipline

YOU CAN EITHER BE A DREAMER OR A DOER BUT ONLY ONE OF THEM WILL GIVE YOU THE FINANCIAL SUCCESS YOU CRAVE

 

How do you teach yourself financial discipline? Easy but let me tell you one thing, don’t waste your time if you aren’t ready to make this a life-long change. Have a look at the photo above. If you’re the person who always dreams from the background and wishes that could be you in the canoe then you need to ask yourself why you’re not and what you need to do so you can change that.

You can’t just turn on your money-saving mode one month and turn it off the next. It doesn’t work that way. What happens is you’re not being consistent and you may just find your financial hole a bit deeper. Today’s post is to remind you about the importance of a clear-mind and solid plan when beginning your money journey whether it be to pay off debt, earn more money or invest. None of this can be possible until your mindset is in drive.

Imagine for a minute that you went on a diet and you did well for the first two months loosing 25lbs. To celebrate you spent money you didn’t have on new clothes, splurged on food you gave up to get fit and stopped working out. What do you think happens then? You’ll probably gain back the weight you lost and then some if you celebrate a success for too long especially when you’re only starting your journey.

 

How to teach yourself financial discipline

 

The word discipline means “you in big trouble” but that doesn’t always mean a bad thing especially when the discipline you are getting is to better yourself or those of the lives around you. Financial discipline is about taking care of yourself because nobody else will. Today I want to share how we taught ourselves to embrace standardizing the way we use our money.  It wasn’t easy but it helped us pay off our mortgage in 5 years and has allowed us financial freedom that we are very thankful for.

 

1. Take yourself seriously or forget about it

 

If you don’t intently want to get ahead of your financial stress then don’t waste my time and yours. It can be very frustrating for me to read comments from people on news article or website posts who are negative about their financial situation especially when they aren’t doing anything substantial about it.

 

2. You need to learn to let go of what you can’t afford or continue doing

 

Cutting back slightly in one area isn’t going to make you rich or debt-free just miserable because you have to consider all aspects of your financial health in order to medicate it with the right fixes. The worst is when people assume that you have money just because of your job title, size of house or type of car you drive.

Even if you do know about someone else’s financial status, who cares? It won’t help you one darn bit sitting back whining about what someone else has especially while they’re out doing something about their financial success, working on it.

Seriously, get off your butt and forget about the stuff you can’t control nor what you don’t really know or provides you with zero motivation. Being between jobs and collecting social assistance is what it is there for but taking an extended vacation is not acceptable. You must take earning money vigorously now instead of waiting. Sometimes the older you get the harder it gets to find work or you may miss out on that one opportunity to apply for a job you really want.

 

3. As you age your views about money will change

 

For those of you who were able to figure out money from a young age and enjoy a simple lifestyle, I applaud you. We have personal experience with a family member who MUST have better than her friends or family. It’s tough to be around her at times left feeling as if we are not good enough. Not only is power important but showing bits of her success is critical to her motivation. She is not debt-free either but lives the lavish lifestyle she feels she deserves right now.

The problem with this is that she doesn’t need a mansion and will soon learn as she gets older why none of it matters to anyone else but ourselves. We are our worst enemy when it comes to success. Even though there is nothing wrong with success it can become a burden in relationships if both people are not on the same page or was but no longer wants to be.

You can’t speak about being poor if you haven’t been poor.

Remember this and I’ll only say it once, Your Poor is someone else’s wealthy. With advanced technology it has given us a bigger glimpse into the lives of the rich and famous and just about everything else. We are able to dream more about lifestyles we’d like to live and never will but try too anyways. Can we all say, debt please!

When I was young we relied on television, radio and word of mouth to find out about the movie stars and the lives they led. Now we are practically living their life day to do day as it’s presented for the world to see online. The cravings becomes stronger when we can rewind, fast-forward and replay over and over.

You may be having a conversation with someone who says, “I want to dress like (insert famous rich star” but this person doesn’t have ten dollars to rub together. He/she does have a credit card though and that’s all you need these days to screw your financial life up.

 

Being Debt-Free is our motivation

 

Debt-free feels amazing and that’s all I can really say about it. Until you are in the same position as we are you’ll never know nor can you comment on the journey as such. What you can do is share your journey and be motivated by others who have gotten to where you’d like to be.

Just recently Mrs. CBB and I had a conversation about why we don’t want a bigger house, fancy vehicles and shopping leisurely even though we would have the money to do so. It’s just not us. You would think once you become debt-free and having no mortgage would mean we’d move on from our frugal ways but that never happened.

Do you want to know why?

We know what it’s like to have limited income and more than enough for our current lifestyle. We’ve conditioned ourselves over the past almost 40 years to earn money, save money, save more money and earn more money. It becomes a cycle but somewhere between all of this if we stay true to the way we handle our money we become free from the burden money puts on so many of us Debt freedom is more than just an accomplishment it’s a new beginning.

My point is that the life you used to lead whether it be rich or poor will never leave you no matter what way your bank account tips. Although most of us will never see a lottery win I know a couple who won 4.5 million dollars and still live in the same house they built 15 years ago. It’s just money and although they no longer have financial worries (for now) they guard against going hog-wild because they know what it’s like to have a mortgage and working to make ends meet.

Unfortunately not all of us are like this and why we get ourselves into financial trouble to begin with. If you’re the person who rushes out to cash their income tax cheque to spend it on stuff you don’t need instead of re-investing or blowing a works bonus, spending money you haven’t earned on plastic cards life will only continue to throw you in and out of the pit of financial death.

 

You don’t need it all to be happy

 

There are people who are perfectly happy living pay to pay with very little money and no debt. It is most certainly possible to be poor and happy at the same time. It all starts with what you value and believe to be a success in your life. If that poor person can save $20 and put it in the bank and continue to do so over time that money can be invested in an RRSP or TFSA. It may be small but it’s something that some people who are earning good money aren’t doing at all.

I don’t have to tell you who the smart person would be in the above situation. Sometimes not experiencing things can be a blessing because you don’t know what you are missing. That’s why we see so many third world country children and adults smiling and dancing. That is their life and all they know.

We need to stop telling ourselves that we are suffering when in fact most of us don’t know what suffering is financially until you’ve landed on the streets with nowhere to go, no money and no one to talk too. They would be honoured to live in your tiny 1 bedroom apartment and have $20 a week for groceries, no cable or internet. You see where I’m going with this?

 

Don’t put your money management plan on hold

 

Over recent weeks we’ve heard about more businesses cutting costs or closing their doors, Sears Canada being one of them along with the Shoppers Drug Mart family. A minimum wage hike to $15.00 in full-effect by 2019 may be causing something of the stir but companies are also coming under fire for only hiring part-time employees.

By doing so employees face having no benefits, limited hours and little to no chance of getting that full-time status they need to make ends meet. Most people who work minimum wage jobs that aren’t full-time are forced to find 2 and 3 jobs just to get by and they do it.

Currently we have a College strike in Ontario in part because the ratio of full-time and part-time employees is way off. Standing up for what they want is part of their right being in the union and although the students are suffering these very teachers are working hard to make sure they too don’t get stuck in a part-time cycle when they are done school and looking for work.

They want to make sure they are getting fairly compensated etc. Employees don’t picket for nothing whilst giving up their pay to receive peanuts just to raise awareness. It’s for everyone whether unionized or not.

Are you ready to start your financial journey now?

We all have to put our best foot forward if we want to be happy and reach milestones we’d like to have in our lives. Forget about earning money you haven’t yet made and focus on what you do have and how to make it a success story. Why would you want to jump chapters in your life when you’re not supposed to be there just yet? By doing so you’re just sinking yourself further into debt.

Discussion Question: What types of financial discipline have you incorporated into your money journey?

 

Where our money went in September

 

September 2017 Month Income and Expenses

Hi CBB readers,

Our income this month was fantastic, however, it’s not always going to be that good so it’s worth making hay while the sun shines and take advantage of it by placing it in savings so we can then convert it into investments at a later date.

Expenses this month contained city taxes, more gasoline than normal due to more trips up and down the 401. Helping out the in-laws took a little money out of our budget but nothing that wasn’t worth it.

As always our actual September budget charts are available at the end of this blog post. Thanks for reading.

Mr.CBB

 

Pick a Free budget that’s right for you

 

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.

 

Get 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.

Test the budget for a few months and see how it goes. Trial and error, remember that.

 

Our family 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 have 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 2017, 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 check 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 “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. I’m just a regular guy just like everyone else; some might call me a budget or numbers nerd.

 

Learn how to budget with Mr.CBB

 

Our Simple 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 budget money tracker feel free to email me.

  1. How We Designed Our Budget Step 1 Gathering All the information
  2. How We Designed Our Budget Step 2Budget 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 September 2017

 

September 2017 Household Percentages

Our savings of 55.69% includes savings and investments and emergency savings for this month. If you include the projected expenses savings, we actually saved 68.17% of our income. The other categories were well within the defined percentage limits. Our projected expenses this month is at 12.48%.

 

Budget percentages month by month

 

September 2017 Month by Month-1

 

Breaking down expenses

 

This is simply a breakdown of our expenses which has helped us to understand where all of our money goes. Since May 2014 we have been 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.

Just 10 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: $5187.39
  5. Monthly Net Income Total$15,368.34
  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 = $1917.68
  8. Total Expenses Actually Paid Out$6433.51
  9. Total Expenses Actually Paid Out: Calculated is $15,368.34 (total net monthly income) – $1,917.68 (projected expenses) – $7017.15 (emergency savings) = $6433.51
  10. Actual Cash Savings going into Emergency Savings: Calculated is $15,368.34 (total monthly net income) – $6433.51 (actual expenses paid out for the month) – $1917.68 (projected expenses) = $7017.15

 

How to save for future expenses

 

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 2017.

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 $1967.68 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.

 

Example Projected Expense

 

If our clothing category was a projected expense we would 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. My plan is to create a projected expenses spreadsheet to track the expenses all year-long otherwise you need to do it manually which we currently do in order to make sure we don’t overspend what we haven’t saved or will save over the course of the year.

It’s a fairly easy process essentially becoming 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 when I find some time I can incorporate that into our budget 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 Results

 

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 September 2017. This budget represents 2 adults and a toddler plus our investments.

Budget colour chart

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

 

Budget for September 2017

 

September 2017 Monthly Budgeted Amounts-1

 

Actual budget expenses for September 2017

 

September 2017 Actual Monthly Budget

 

October 2017 Goals

 

  • Set up the Bunk Beds with mattresses, sheet sets and removal wall decals in our sons room
  • Fix the screw holes in our sons bedroom wall
  • Start prepping the yard for winter.
  • Get rid of more stuff in the house either donate it or sell it
  • Order roofing materials for a surprise November roof installation
  • Sell our second vehicle after I repair a few bits
  • Finish painting a lovely wood cabinet I picked up free from Kijiji
  • Review our Christmas Budget

 

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 2017 Year I will also keep track of each month below and update the monthly budgets page.

That’s all for this month check back at the beginning of November 2017 to see how we made out with our October 2017 budget.

Happy Budgeting CBB’ers!

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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

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