Budgets that work are great but remember that situations change month to month and so should your budget plan.
We started the year knowing that our budget plan would change but now that our son has arrived we are starting to see just how much it must change. Not later, but now.
I’ve read how some people create a budget plan and that’s their financial bible for the entire year.
I’m not an investment reporter or a professional money manager nor do I invest on my own but what I do know is that putting what knowledge I do have financially to work for us WILL benefit us in the long run.
Creating a budget and reviewing your budget plan is like getting a return on investment. If you just leave it and hope it works out for you then you might as well put all your money in a washing machine and hope it comes out intact. Likely it won’t happen.
Little by little someone like that might find that they run out of money before the end of the month. Why? Situations change. If they don’t save receipts and document expenses rather they just fill numbers into a budget and blow the dust off once in a while they might find that their budget has expired. Meaning, it doesn’t work for them any more and likely hasn’t for months. It’s not until someone is deep in debt that they put the brakes on and wonder what has gone wrong.
Before we put together a budget plan and designed the CBB excel budget spreadsheet we were one of those people although luckily we didn’t fall deep in debt. We didn’t even use a budget as we relied on watching to make sure our bank account stayed above a certain amount of money every month.
We knew that we were safe as long as there was money ready to be used up and whatever was left would be a make-shift emergency savings account.
Gosh… we used to believe this was perfectly fine. Considering we did spend less than we earned for those early married years we do pat ourselves on the back for not going deep into debt. That means we did have some form of financial discipline behind us.
It’s easier for some people not care and live in the moment with excuses as to why one has no time for a budget plan whether they have a good income or not. In the end it was us who had to live with the decisions we made financially over the years.
Your Budget Plan Needs You
I know that for some savers budgeting the way we used to is reassurance that they are actually putting effort into their financial future but that might not be enough. A budget is not meant to “set and forget” from the start of one year to the next.
A budget plan needs to be visited every month to make sure that your goals are aligned with the money you divide into each budgeted category. We use a zero based budget plan where all of our money is used each month until we are left with zero. You must have a direction for all of the money you earn.
Does our budget plan include paying ourselves first? Sure it does! We pay ourselves first every month and that money goes into our retirement investments and savings and what is left goes into our high interest (cough) savings account.
Our budget plan below is changing and maybe it might be slight to you these investments going towards our son motivates us to stick to the budget so he can have a financial start in life that we never got.
Do you dust your budget off once a year or do you change your budget plan as you go?
Where the money went
If you scroll down you can see the actual numbers for each budget category. Below I will chat about the budget categories that might have to be explained.
- Allowance- I didn’t spend that much of my allowance this month likely because I’m just too busy to care about spending it.
- Gas (vehicle)- I did surprisingly well with the petrol this month but I didn’t do as much driving as I did the previous month. The good news is that gas prices went down (finally!) to around $1.09 a litre in our area.
- Entertainment– What entertainment? Like that’s going to happen.
- Grocery- We went WAY over budget and you can read all about it in our last grocery game post for October. Needless to say we will buckle down the rest of 2014.
- Baby– We loaded up on formula in October that we found on sale as well as baby photos!
- RESP– This is self-explanatory although I talk about it more in detail below.
We had a couple of unexpected expenses in October with our investments. We knew that we would be setting up an RESP for new baby CBB but we didn’t know that we would be dropping $2500 in for the 2014 year.
So the 2014 year is covered and in January we will be putting the max amount into our budget plan to get the full government match so our investment will be $208.31 per month.
Other than that large expense while we were there we had a conversation about the PC bank account that we opened for our son and whether it was worth piling money into it.
We may look at other alternatives that will give better return on the investment for him. While I had the opportunity I also invested more into my RRSP. The goal is to create our budget plan for 2015 to see if we can max out my RRSP moving forward now that the mortgage is paid in full.
So, those are just a few unexpected but good expenses that happened in October.
Budget changes October
No real budget changes happened in October but will take place in the new year.
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)
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.
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. There is no one money manager in our household as we are both responsible for tracking expenses.
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. In fact we are currently debt-free including the mortgage which means all we pay for is monthly bills and expenses we create or that are fixed expenses such as the hydro and water bill etc.
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. We didn’t always earn the income we do today but what made do with what we were earning year after year so we didn’t go into debt.
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 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.
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. 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 on how we budget to break it down even further for you.
- How We Designed Our Budget Step 1– Gathering All the information
- How We Designed Our Budget Step 2– Categories
- How We Designed Our Budget Step 3– Tracking Receipts
- How We Designed Our Budget Step 4- Note-taking
- How We Designed Our Budget Step 5– 5S Organization
- How We Designed Our Budget Step 6– Who Does What and When?
- How We Designed Our Budget Step 7– Balancing Our Budget
- How We Designed Our Budget Step 8– Knowing our Coupon Savings
- How We Designed Our Budget Step 9– Reading Our Bills
- How We Designed Our Budget Step 10– Projected Expenses
Budget percentages October
Our savings of 39.35% includes savings and investments and emergency savings for this month and $2,500 for our little one going into the RESP. Technically the $2,500 isn’t our investment it’s juniors’ so it was difficult to place it in a category.
The total spend this month comes to a nicely rounded 100% which shows that we spent our income this month, invested extra and used the rest as emergency savings.
Our Life Ratio which for this month was 24.39% is now a little more inline with what it should be compared to last month. Our projected expenses this month is at 20.75% which now includes some increases due to overspend explained in the 2013 year in review.
Budget percentages month by month
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.
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 a 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.
- Chequing– This is the bank account where all of our debt gets paid from.
- Emergency Savings Account– This is a high-interest savings account.
- Regular Savings Account– This is a savings account that holds our projected expenses.
- Monthly Budget Total: $4425.18
- Monthly Net Income Total: $8408.48
- Total Coupons Used to date: $64.19 (Check out our Ultimate Grocery Guide to see where our grocery money goes)
- Projected Expenses: These are expenses we know we will pay for throughout the year = $1744.85
- Total Expenses Actually Paid Out: $6100.37
- Total Expenses Actually Paid Out: Calculated is $8408.48 (total net monthly income) – $1744.85 (projected expenses) – $563.23 (emergency savings) = $6100.37
- Actual Cash Savings coming out of Emergency Savings: Calculated is $8408.48 (total monthly net income) – $6100.37 (actual expenses paid out for the month) – $1744.85 (projected expenses) = $563.26
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’ll be updating 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 $1744.85 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 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 October 2014
Below you will see two tables, one is our monthly budget and the other is our actual budget for the month of October 2014. This budget represents 2 adults and baby on the way 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.
Actual budget expenses for October 2014
October 2014 Goals
Did we carry out the tasks/goals we set forth for October? See the notes beside each task.
- Finish adding lighting to the front yard landscaping- FAIL This may have to be put on hold until Spring 2015.
- Hide the wires for the flat screen TV in the spare bedroom- FAIL but I will get to it hopefully by the end of the year as our son will be in his room for the start of the year. (that is the goal at least)
- Complete projected expenses tracking sheet for budget (ongoing)- FAIL This is a work in progress which my wife reminded me about the other day. I really need to get this done for the start of the year so we can track our PE month over month.
- Reach 3600 Twitter Followers- PASS
- Reach 6525 Facebook Followers- PASS
- Reach 1855 Pinterest Followers- PASS
- Reach 2630 Followers The Free Recipe Depot Facebook- PASS
- Reach 140 Followers BlogLovin- This is NEW!>>> Follow me HERE! – PASS
- Help a new blogger with a task or question- PASS
- Finish a page on the blog I’ve been working on- Almost done and will share it with all of you soon!
- Connect with a new blogger- PASS
- Finish the bathroom renovation- You have to be joking me.. HUGE FAIL. I’m working on it again starting next week.
- Repair the fence in the back garden- FAIL this will have to wait until Spring 2015 (hopefully it doesn’t fall over)
- Trim the trees in our back-yard and compost leaves- PASS and I cleaned the leaves from the eaves-trough and washed all the windows around the house.
- Paint baseboard in the back room- FAIL This will be completed in the Spring 2015
- Buy a new blind for the garage- FAIL This is on an ‘if I remember’ when I shop basis right now.
- Finish the walls in the baby room- FAIL but this won’t take too much time.
- Finish cleaning up the yard for Fall- PASS
- Send baby photos to the UK- FAIL I’m working on this slowly but need to get the envelope in the mail soon.
- Get baby set up for RESP- PASS
- Get Child Tax Credit set up- PASS and his first cheques were deposited!
- Open a bank account for our son- PASS
November 2014 Goals
Below are our new tasks/goals for the month of November 2014.
- Finish adding lighting to the front yard landscaping-This may have to be put on hold until Spring 2015.
- Hide the wires for the flat screen TV in the spare bedroom-
- Complete projected expenses tracking sheet for budget (ongoing)-
- Reach 3700 Twitter Followers-
- Reach 6540 Facebook Followers-
- Reach 1880 Pinterest Followers-
- Reach 2675 Followers The Free Recipe Depot Facebook-
- Reach 143 Followers Bloglovin- This is NEW!>>> Follow me HERE!
- Read a chapter in my personal finance book-
- Help a new blogger with a task or question-
- Finish a page on the blog I’ve been working on-.
- Connect with a new blogger-
- Finish the bathroom renovation-
- Repair the fence in the back garden- Spring 2015
- Paint baseboard in the back room- Spring 2015
- Buy a new blind for the garage-
- Finish the walls in the baby room-
- Hang Christmas Wreath-
- Shut off outdoor water sources and bring in garden hose-
- Undercoating of vehicle-
- Put the winter tires on the vehicle and get it ready for winter-
- Send off Christmas Cards or at least get them ready to go-
- Send off for Baby Passport-
Budget updates month by month
In case you missed our budget updates from the start of the 2014 year… here they are.
- December 2013
- January 2014
- February 2014
- March 2014
- April 2014
- May 2014
- June 2014
- July 2014
- August 2014
- September 2014
That’s all for this month check back at the beginning of December 2014 to review our November 2014 budget to see how we made out following our own budgeting rules.
Happy Budgeting CBB’ers!
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- A Payday loan cost me double time (canadianbudgetbinder.com)
- A Man’s Ego and his Budget (canadianbudgetbinder.com)
- Tic Toc…. That’s the sound of your debt clock (canadianbudgetbinder.com)
- What My Life Is Like With Terrible Credit (canadianbudgetbinder.com)
- How I Reduced Our Grocery Budget From $1100 To $600 In 6 Months (canadianbudgetbinder.com)