YOUR BUDGETING JOURNEY MAY SEEM LIKE AN ENDLESS FIELD OF HARD WORK AND IT WILL BE
Without a budgeting process it’s easy to see how fast your debt free dream can crumble simply because you haven’t prepared your steps for success. In less than 7 years we managed to pay off a $265,000 home (worth $650,000), top up our retirement investments, buy a brand new $85,000 truck with cash (we got a deal of course), invest in our son’s RESP and sock away a nice savings.
All of the above sounds wonderful when you read it BUT that is years of hard work, struggle, rejection, discrimination, sleepless nights, worry, anxiety, depression, tears and NOT giving UP.
Yes, like most people we have been through it all which helps me to connect with my readers who are currently or have been in the same position. I didn’t fall into a 6 figure job, I fought for it and Mrs. CBB fights for her health without an income. The tables took a quick turn in our marriage and with only one working income it has been no walk in the park on a sunny day.
No amount of money can give you back your health so if you think about the budgeting process it becomes a step-by-step diary of how you will accomplish what you need to so you can look after yourself in good health and in bad. Those are the retirement years which I can tell you cost far more than I had ever imagined having looked into it with an ill mother-in-law.
I’ve assisted many Canadian Budget Binder readers over the years people whom I’ve never met and don’t know me not because I want them to be successful but because they took the time to reach out. Although I’d love to see everyone who came my way become debt free the first step in the budgeting process is to want to make the change and in many cases if you aren’t sure how to do it instead of guessing ask someone you trust.
I know you’re thinking, but how can they trust you Mr. CBB when no one knows who you are and to be honest I agree I could be some random guy wasting his time blogging about his dream of debt freedom, but I assure you, I’m real. I like to treat my readers as if they are good friends of mine that know me in real life because that was the reason why I set out to start this budgeting blog, accountability for our own budgeting process and to help others.
Over the years I’ve heard all the backlash about our budgeting process and how it might differ from someone who earns minimum wage has far more debt or perhaps is on government assistance. I wish I could get into greater detail with all of you but I can promise you we’ve touched all of these situations and continue to do so in our private life.
It’s easy to say we are debt free but what’s hard is to explain the suffering along the way which you often can’t put into words for your readers to understand. Moving to a new country where you are discriminated against by random people because you have an accent that is hard to understand, no income and no government funding available (not that I expected that) can cause severe anxiety in just about anyone.
I didn’t move to Canada for a better life, I moved here because I married a beautiful Canadian whom I love dearly. I know if the tables had been turned and she moved to the UK it would have been just as tough for her to start over. Perhaps if we did move back things would be different for us with her health but on the other hand, maybe not. For now we are grateful for the position we are in and I can assure you that without our budget we wouldn’t be where we are today.
The budgeting process may sound like terrifying words because a budget becomes your daily financial newspaper but it shouldn’t be fearful. That’s the great thing about budgeting you get to see that overall picture of what is happening for the month in one simple spreadsheet, at least for us. It really depends on the budgeting tools you use but since we offer our free budget here we’ll stick with the spreadsheet. I also find opening a spreadsheet on a desktop or laptop far more empowering than trying to budget using a smart phone or tablet.
Everyone is different.
Budgeting Process Tips for making our journey a bit easier
Sometimes friends of ours laugh at how weird we are but it’s these conversations that Mrs. CBB and I have about our journey together as husband and wife and now parents that make it easier. We’ve failed numerous times along the way in our budgeting journey and owned up to them every time.
This blog holds us accountable and we have nothing to hide when it comes to our failures and success. If all the finance bloggers made money seem simple then you probably wouldn’t know who to believe. I’m thankful to have such a close following of readers whether they are lurkers or chatters. Both in my books are important to our success and to their success.
After our son was born we learned a few things about our budgeting process and that was we needed to Motivate and Support each other more than ever. It’s so easy to say, “I’ll do it tomorrow” when you have been up half the night breastfeeding, changing diapers, rocking a baby to sleep. We did that numerous times and that didn’t work out so well and I can recall a time where I completely forgot to post a budget and net worth update post on the blog and was stunned to realize it.
Thankfully our budget has always been simple and can be used year after year and if any budget categories need to be updated that’s an easy fix for anyone who uses it.
I want to take a moment to talk about budget approval and budget contribution two very important parts of the budgeting process that all couples need to be aware of. Now, if you’re single you are the only person accountable which makes it easier but for couples it can be trickier especially if one partner struggles to get on board.
Budget approval means that you both approve of the categories, and financial numbers that have been set out. I know for many of you out there that have a partner who can’t help with the budget due to lack of interest or health reasons may struggle here but just do the best you can. Sometimes a simple conversation about what you have done with the budget is better than no conversation at all.
Contributing to the budgeting process doesn’t always mean you both have to work on the spreadsheet it simply means you are both accountable for it. For example if you send your spouse grocery shopping ask him or her to bring the receipt back to put into your receipt folder so you can input the information into the budget spreadsheet. It’s that easy.
Motivation and Support go hand-in-hand and although I’ve separated both of them the reason is simple, one is to motivate each other and the other is to support budget success. Motivating each other through the budgeting process until it becomes part of your daily life (and it will) is critical.
You will never forget to ask for that receipt and the budget will weigh on your mind first before making a purchase. If that sounds heavy it should be because spending money you DON’T have is a BIG issue. Even if you do have it perhaps you might spend more than you should be with that type of a mindset. In our words, everything we buy has a part in our budget and a category.
Supporting each other to budgeting success is a life-long process for everyone because once you become debt-free that is not your ticket to financial freedom. Anything at any time can happen and don’t forget that.
- Kept our budget SIMPLE
- Budget APPROVAL
- Both of us CONTRIBUTE
- MOTIVATE each other
- SUPPORT budget SUCCESS
Do yourself a favour and create a budgeting process that both of you can work with and if you are doing it alone the same goes for you. Accountability stands for more than just a slap on the wrist if your financially naughty it can have big consequences if you mess up. Hold strong and if you fail, get back up but avoid making the same mistakes over and over.
Remember, giving up would have meant I wouldn’t be here blogging about our journey, my dream and our success story.
Anything IS possible.
Money Earned In August
You might be wondering where a large chunk of our net income went in August and I’ll tell you that it didn’t go too far. I topped up my RRSP and your TFSA which amounted to around $5500 but now I’m all caught up again. I just like to keep on top of it. Mrs. CBB is caught up with her Tax Free Savings Account.
Next we will be working on life insurance policies for our son and the two of us that are permanent simply because we need somewhere to put the money we are earning rather than in the bank. With no debt and a brand new vehicle it makes sense that we need to find places to stash our cash and no under the mattress never came to mind.
Have a great month friends,
Budget percentages August 2018
Our savings of 55.23% includes investments as well as any savings for this month based on the income of $12781.66 . We put money away for the projected expenses for things that need to be paid for in the coming months. All of the categories took 100% of our income which shows that all the money we earned for the month is accounted for.
Budget percentages month by month
Our Monthly Expenses
Below is a breakdown of our expenses which helps us to understand where all of our money goes. Since May 2014 we’ve 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. Spending less than we earn and budgeting our money has been the easiest way for us to pay down debt and save money. It may be different for you.
- 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 Budgeted Total: $5,358.72
- Monthly Net Income Total: $12,718.66
- (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 = $1,621.00
- Total Expenses Actually Paid Out: $10,898.04
- Total Expenses Actually Paid Out: Calculated is $12,718.66 (total net monthly income) – $1621.00 (projected expenses) – $199.62 (savings in to emergency fund) = $10,898.04
- Actual Cash Savings going into Emergency Savings: Calculated is $12,718.66 (total monthly net income) – $10,898.04 (actual expenses paid out for the month) – $1621.00 (projected expenses) = $199.62
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 August 2018.
This budget represents 2 adults and a toddler plus retirement 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.
Monthly Budget for August 2018
Actual budget expenses for August 2018
Our FREE Simple Budgeting Series
Do you want to learn to budget like we do?
Our Ultimate Budgeting Guide from A to Z has everything you need to know about budgeting in one blog post.
- How We Designed Our Budget Step 1– Gathering All the information
- How We Designed Our Budget Step 2– Budget 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 updates month by month
Just 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.
That’s all for this month check back at the beginning of October 2018 (sometimes in the middle) to see how we made out with our September budget.
Happy Budgeting CBB’ers!
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