Our Family Budget

What to Expect With Little to No Retirement Savings : Our June 2016 Budget Report

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What to expect with little to no Retirement Savings



If you’re tired hearing about how much money you should have in your retirement savings to live comfortable in the golden years and want to hide because you’re not part of this elite group of savers- you’re not alone.

Company pensions, in particular defined pension plans are becoming a perk of the past and Canadians are left will few options when it comes to retiring without living the rest of their years poking through a tight budget.

I’d love to retire early but since the birth of our son we’ve seen our life goals change significantly where we were content living mortgage free in our house and living happily ever after. Now we are talking about buying a bigger house to have more room for our son to run around along with an in-ground pool. That means we’ll need to save even more money if we hope to pay cash for the next house or face added debt of a mortgage loan once again.

Related: Retiring Early Should Never Be Expected

I received an email from a reader who asked me about his retirement savings and how on earth he was supposed to pay himself first when he can’t even afford to pay the bills. He went on to say that the only people who can afford retirements savings are the budget wealthy and that it’s depressing.

He’s not alone in his plight when it comes to retirement savings because everyone is feeling the financial pressures to firm up for their future.

Related: What should your retirement savings plan look like?


Canada Pension Plan Increase


The current Canadian Pension Plan (CPP) savings of 4.95% will gradually increase between 2019-2025 to 5.95% percent to help fund higher benefits.

That means that if you earn $54,000 a year you will see a monthly premium increases of about $9 in 2019 finishing at around $43 a month once fully phased in, according to a Globe and Mail article.

An expanded CPP is designed to address the shortfall in middle-income retirement planning that is opening up as a result of disappearing corporate pensions. Most at risk are workers under the age of 45 with middling incomes – say, families earning about $50,000 to $80,000 a year. Without the defined-benefit pensions that their parents enjoyed, many could hit retirement with little in savings.- Globe and Mail Article

Your retirement savings may not be a big deal to you right now especially if you are working but come time to retire you’ll wish you started saving earlier. All too often we hear that people don’t care about putting in the effort for retirement savings because it’s easier to believe that the government will help them over the hurdle.

Related: Worry about your financial future now and not when you retire

For many Canadians this is reality because their options are limited when it comes to extra cash to pay themselves first, time is not on their side or they don’t believe in the retirement savings system. It’s far easier to throw your hands up and put your financial future in the hands of the real estate market and current CPP but without a crystal ball it’s hard to say whether the financial impact these two options will have for retirees.


Helping Canadians survive retirement


In a way it’s easy to see why the government will increase the CPP as they don’t want generations of people living in poverty. Although the CPP increase will truly benefit the young who have time to grow their investments those who don’t qualify or seniors will continue to feel the poverty crunch of retirement without having retirement savings. It’s not unusual to see seniors continue working as long as they can just to make ends meet.

With little to no retirement savings we can expect to live on a tight budget and possibly downsizing if you live in a home to cash in on any equity you’ve built up to boost your income. My parents who live in the UK rely on their rental houses as income for retirement in part with the government pension. If they could turn back time they’d do things a bit differently even though the houses are paid in full and they earn a bit more money now than they did working. They still live a frugal lifestyle because anything can happen in the game of real estate until they sell their houses.

Ultimately though there is point where we sit at a table, present ourselves the future that we worked for to get us to that point. For some it may be bleak but for others you’ll have little to no worry about celebrating the rest of your life stress free financially.

Related: CPP Reform: We Can’t Afford Not To Make These Changes (Rob Carrick)

Whether you are opposed to ongoing CPP changes others would rather invest the money and watch it grow at the hands of an advisor or crushing the market with their own investing skills.

The Canada Pension Plan (CPP) is changing to better reflect how Canadians choose to live, work, and retire. The Government of Canada is adapting the CPP to ensure it remains fair and sustainable, and that it responds to the evolving needs of Canada’s aging population and to changes in the economy and labour market.

The changes, which the Government will gradually introduce from 2011 to 2016, will give you more options so that you can make decisions that are right for you as you make the transition from work to retirement. SourceService Canada Public Pensions

It’s never too late for retirement savings whether you invest it in a tax-free savings account or by topping up your registered retirement savings plan every year. This year will bring me to the final stages of catching up with RRSP contributions since I landed in Canada as a permanent resident. I never quite earned enough money to invest into retirement savings when I started working in Canada but since I earn far more than $40,000 a year I benefit from catching up.

Since I’m new to Canada and most would say I’m still young at age 40 I’m only left with 25 years of CPP and retirement savings potential and that’s pushing the envelope. Most often I turn to those seniors who are retired and have much to say about what they wish they did when they were younger.

Related: Senior shares trick to saving for retirement in three words

I’m surely not relying on any pension from the UK so it’s imperative that I take matters in my own hands. Like you I’m just as nervous about having enough money for our family come retirement especially since I am the sole income earner in our household.


Investing into your retirement savings


When I hear that people struggle to invest even $100 a month into their retirement savings I ask them what they can cut from their budget to make this happen. Most often I hear that there is nothing that they can cut and if that’s the case if able it’s critical to earn more income.

Related: Saving for retirement on a lower-income

That may mean a second job to make ends meet which include paying yourself first because relying on personal retirement savings will always benefit you more than playing roulette with the Canadian Pension Plan and using your house as retirement collateral that is ready for downsizing.

How important are retirement savings to you?


Where our money went in JUNE


June 2016 Month Income and Expenses

In June we paid yet another extortionate electricity and water bill. We conscientiously put the washing machine on at 7pm, the air conditioning also goes on after 7pm as well as every other piece of high draw equipment.

Even though we do as much as we can to reduce our energy consumption during peak hours we still have high bills. I can only imagine what some people are paying.

The city taxes came due which was quite a large chunk of our monthly expenses at over $1,000. The rest of the expenses were fairly standard monthly bills however we did spend a bit more than normal on the second hand category which is the kijiji/garage sale section.

We managed to find junior a bargain outdoor play set, though admittedly it did require a little help from me to restore it to it’s former glory. Juniors happy with it and that’s what matters.


Pick a 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.


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 month and see how it goes.


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 2016, 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 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. 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 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 JUNE 2016


 2016 Household Percentages

Our savings of 33.79% includes savings and investments and emergency savings for this month. If you include the projected expenses savings, we actually saved 57.12% of our income. That’s $4695.30 going into savings or investments of some description or another.

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 23.33%.


Budget percentages month by month


June 2016 Month by Month


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.

Almost 8 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: $5093.64
  5. Monthly Net Income Total$8220.07
  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$4778.52
  9. Total Expenses Actually Paid Out: Calculated is $8220.07 (total net monthly income) – $1,917.68 (projected expenses) – $1523.87 (emergency savings) = $4778.52
  10. Actual Cash Savings going into Emergency Savings: Calculated is $8220.07 (total monthly net income) – $4778.52 (actual expenses paid out for the month) – $1917.68 (projected expenses) = $1523.87


Saving 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 2016.

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 $1917.68 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.

Sample 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 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)


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 June 2016. This budget represents 2 adults and a toddler plus our investments.

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


Budget for JUNE 2016


January 2016 Monthly Budgeted Amounts


Actual budget expenses for JUNE 2016


June 2016 Actual Monthly Budget


JULY 2016 Goals


Here are my July 2016 goals along with whether I completed tasks from June 2016

  • Call around to lawyers to talk about getting a Will written up- Sadly we have yet to book an appointment but we’ll try to revisit this in July.
  • Finish sanding and stain our sons kitchen table and chairs Fail
  • Start revamping old blog posts (2 a month)- I completed 1 in June but getting there.
  • Finish the master bathroom shower- Fail I’ll be starting this up again now that I’m not working as much.
  • Pick out new tiles for bathroom and accessories (mirror, towel bar holder etc.)- Not yet
  • Buy a new blind for the garage- Fail but we’re looking mostly at second-hand shops. We’d rather not buy a new one if we don’t have to since it’s just going to get mucky.
  • Finish the walls in the baby room-  Work in Progress: We talked about this and we may just take the crib apart and bring his toddler bed upstairs. This is going to be some long training sessions to get him to sleep in his room. We may end up taking down the jungle theme and replacing it with a car theme.
  • Write down what we want in our new kitchen- We discussed whether we wanted to put in an IKEA kitchen or a high-end kitchen. We’re still pondering our options although most houses in our neighborhood up for sale are selling in less than a week with the original kitchen.
  • Start looking at pricing for a new insulated garage door- Fail
  • Buy a pressure washer- Fail but I’m looking and waiting for the one I want to go on sale.
  • Sort through our sons clothes and sell some- We didn’t sell any clothes this month but we did sell a baby gate that we bought for $5 for $10.
  • Research Kitchen designers in our area- Not really
  • Start researching vacation spots for 2017- Not quite yet
  • Hang paintings and wrought iron decor on the walls- Fail
  • Take out all the patio/deck and sunroom furniture- The deck stuff is out but the sunroom stuff is not. The wife and I talked about it and we might just forget the sunroom for this year as we have too many other priorities.
  • Start thinking about planting our basil- The basil looks amazing!! Photos to come in an upcoming Saturday Weekend Review post.
  • Sand and protect the deck for the year- We will be adding a pergola to the deck so I’m going to be working on this for the remainder of the summer.
  • Start planning a sand pit for our son out back- Pass I’ve been working on this the past 2 weeks now. I’m custom building a sandbox to go with the swing set I sanded and varnished for him. We paid under $100 for the set used and it looks brand new. Retail cost is over $1200 CDN.
  • Possibly making a rock pit for our son out back- I’m not sure if this will happen now
  • Purge our clothes little by little and get rid of them- Fail we bought more
  • Clean out the entire garage- The garage is a mess again even worse than it was last month with the sandbox I’ve made.
  • Get the hanging baskets ready- It’s too late in the season now so we will leave them empty for this summer.
  • Buy mulch and tidy up the front and back gardens- I have yet to do this and if I don’t get it done this year it will be a priority for next summer.
  • Wash the windows inside and out around the entire house- The downstairs windows have been done but not the upstairs as of yet. On the to-do list.
  • Kill the ants- I bought the liquid ant killer and it seems to be doing the trick for now. Bloody stuff is pricey.
  • Fix a million broken toys from my son- Pass
  • Tidy up the office (or else)- Um, nope.

In June I also fixed up a bike we got for free so that I can ride with our son on the back. The back toddler seat was brand new and generously donated to us as well. I did purchase new rims and tires for the bike to the tune of about $70 which was a small investment for some great times with the boy.


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 2016 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 August 2016 to see how we made out with our July 2016 budget.

Happy Budgeting CBB’ers!

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