Bust our budget August 2013: Save or splurge?

The Urge To Splurge Can Be Forceful

Save or splurge really wasn’t going through our minds this month only because there were certain items that we needed to get which we were putting off for a long while, if not years. It was a funny month because it seemed as if everything that could go wrong, did go wrong. My Facebook fans got to listen to me whine this month every time we spent money that was out of the blue. When we put our money in the bank we hope to see it grow but there are times when we have to spend a little to enjoy the fruits of our labour.

I won’t get into too much detail about our extreme emergency this month because I’m going to blast your computer screen in an upcoming blog post all about how I cost us $1400 in the budget this month. I also managed to take my wife out on a well deserved shopping splurge at the mall. It was national splurge month for us and we will certainly evaluate our year-end numbers to see if this is something we should add into the budget or whether it was a one-off splurge.

She has done so well with spending less on clothes, shopping at second-hand stores and making items last as long as she can that I wanted to surprise her with a shopping spree. I must add that she wasn’t the only one that was shopping as I picked up a couple of items myself.

It’s amazing the feeling you get when you are shopping at the mall and it’s easy to understand how some people can get carried away once they step foot in there. We went with a plan and knew we came out busting our budget although we did find some spectacular deals on clothing that she loved. Her favourite colour is purple so it was a purplicious day but I won’t bore you with all the lingerie and bras I had to stare at while in the shop with all the ladies staring at me.

So, although we learned the meaning of splurge this month we know it won’t happen every single month but realize that every once in a while we need to spend some money that we worked hard for. It’s like if you want to eat chocolate and you deprive yourself of chocolate eventually you’re going to eat more chocolate than you should.

Every once in a while it’s fine to splurge on yourself but the most important part to remember is that you must have the money to pay for it. There’s no point going into debt to splurge on instant gratification then have to deal with a debt load after the fact. If the instant gratification will give you a return on investment then you have to ask yourself, is it worth it? What are you going to do in order to make the money to pay back the debt? How long will it take you to pay off the debt?

Do you splurge and do you have the money to pay cash for your splurge? Should people splurge? 

How we budget our monthly expenses

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

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

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

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

Free stuff

We also make use of all the Free Money Saving Lists that I have created to help keep us on track which you can also download for free because I’ve made those lists available to you.

Canadian budget binder spreadsheet

I’ve had many fans testing our Canadian budget binder spreadsheet over the course of the year and for the most part they love the simplicity of it but they can also customize it as they see fit as I’ve left the formulas open. The good part is they have given me feedback in terms of making changes to the spreadsheet which I am working on. That’s the best part of having my team of fans test it out for me.

Budget changes

There are no changes to the budget this month but you will see some changes to our Rogers internet as we decided to add to our services since we were using too close to our max amount of usage. We spent more money on health care this month as my wife needed some medications that were not prescriptions

Budget percentages

Our savings of 25.65% includes savings and investments. I’ve also went ahead and added in our projected expenses this month at 15.05% which brings the total August 2013 Household Budget percentages to 100%. 

Expenses breakdown

This is simply a breakdown of our expenses which has helped us to understand where all of our money goes. I appreciate that you enjoy this budget update each month but I do hope you view this as an educational tool rather than comparing your own financial numbers as we are all unique. Sometimes we wish we had more money to budget with but understand that we only have what we earn and if we want more, we need to earn more. Spending less than we earn and budgeting our money has been the easiest way for us to pay down debt and save money.

1. Chequing– This is the bank account where all of our debt gets paid from.
2. Emergency Savings Account– This is a high-interest savings account.
3. Regular Savings Account– This is a savings account that holds our projected expenses.
4. Monthly Budget Total: $4459.03
5. Monthly Net Income Total: $8575.71
6. Total Coupons Used: includes every discount attained during the month = $12.25
   
7. Projected Expenses: These are expenses we know we will pay for throughout the year = $1290.40
8. Total Expenses Actually Paid Out: $5893.63
9. Total Expenses Actually Paid Out Calculated is $8575.71 (total net monthly income) – $1391.68 (total monthly savings/overspend)–Projected expenses $1290.40= $5893.63
   
10. Actual Cash Savings Going Into Emergency Savings: $1391.68 Calculated is $8575.71 (total monthly net income) – $5893.63 (actual expenses paid out for the month)–$1290.40(projected expenses)=$1391.68

Saving money

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

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

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

When we spend the money in a projected expense category we move that money to our chequing account in order to pay for that incoming expense. We pay money into the projected expenses account continually throughout the year even when bills come due as it’s revolving so as one bill gets paid the money continues to come in from the other categories all year-long. So the$1290.44 gets paid into the projected expense account every month no matter what. It seems to be easier to track our money this way but you can do what works best for you.

Projected expense example

If for example our clothing category was a projected expense we have a budget of $50 per month for the two of us. If we spend $30 on clothes for the month that means we need to pull $30 from the projected expenses account to pay for this expense or we move only $20 to projected expenses for the month and leave the $30 in your chequing account. It’s up to you how you do it as I mentioned above. I’m hoping to put together a projected expenses spreadsheet to track the expenses all year-long otherwise you need to do that to make sure you don’t overspend what you haven’t saved or will save over the course of the year.

It’s a fairly easy process and becomes a lifestyle change for your finances but the most important part is that the money is available and saved, which means potentially less stress. This means we should have $600.00 per year for clothing to spend. We have to track that expense as we spend it manually but hopefully for our 2014 budget I can incorporate that into our spreadsheet so it tallies the numbers up as we go along. That way we will be able to know exactly what we’ve spent as an ongoing total.

Budget for August 2013

If it is highlighted in blue that means it’s a projected expense. You will see that the budgeted does not include the emergency savings. This is added in last after all expenses.

Actual budget expenses for August 2013

August 2013 goals

• Guest Post for an awesome personal finance blog (if you want me, email me) -PASS
• Have a couple of awesome bloggers guest post on Canadian Budget Binder ( if you are interested read my guest post guidelines then email me with your blog post pitch)
• Fix the fence post (did you read about my fence post?) -FAIL
• Plant the cranberry tree -FAIL
• Pick the crab apples and give them away -PASS
• Roll The Back Lawn with my free lawn roller I found on the side of the road with a FREE sign! I love free stuff!- FAIL
  
• Fix the deck lights – FAIL
  
• Read 3 more chapters in my personal finance book- FAIL
  
• Sort out the mortgage- FAIL
• Reach 6120 Facebook Fans- PASS
• Reach 1810 Twitter followers- PASS
• Reach 1170 blog followers- PASS
• Install garden spotlights- FAIL
• Start to tear main bathroom for renovations- FAIL

September 2013 goals

• Plant the cranberry tree
• Roll the back lawn]
• Put in the new sod out front
• Read more in my personal finance book
• Sort out the mortgage
• Move my money to Canada
• Reach 6250 Facebook Fans
• Reach 1950 Twitter Followers
• Reach 1210 Blog Followers
• Install garden spotlights
• Fix the deck lights
• Start to tear main bathroom for renovations
• Take a 3 day holiday with the love of my life x

Year-to-date percentages 

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

• January 2013
• February 2013
• March 2013
• April 2013
• May 2013
• June 2013
• July 2013

That’s all for this month check back at the beginning of September with a new budget update and who knows maybe some good news.

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