How We Avoided A Financial Crisis After Buying Our Home : March 2019 Budget Update

SAVING STARTS FROM YOUR FIRST JOB

Stumbling around the notion of earning Fastbucks won’t solve your financial crisis and sadly neither will believing that savings options are only for the rich.

Saving starts from you first job. Paper boy was mine. My Dad asked me how many days in a week 7 yes but in saving you use 8 he said you divide the amount you made by 8 and the 8th is what you put in the bank. At 65 I never had a loan other than a mortgage I paid down by renting rooms to my friend for the first few years. – Yahoo comment (Why low-income Canadians are missing out when it comes to the TFSA)

When I read what this Yahoo reader typed for a comment I sort of felt like we were on the same page from a young age. The concept of taking a 7 day work week and adding an 8th day to save money was smart.

His father encouraged him to save money and it’s something every parent should not just talk about but put actions along with those words. By this I mean, bring your child to the bank to deposit money or buy or create a piggy bank savings plan.

My parents did something similar with my paper boy money by helping me set up a bank account where I would deposit what I earned. I hardly spent it since I was a hardcore saver but that is where my journey to financial freedom really began.

A savings mindset should start from a young age and we’ve done just that with our son encouraging him to use his piggy bank, look at price tags and talk about daddy going to work to make money.

Over time we will increase his knowledge so he grasps the realization of money, paying bills and the importance of an education.

Reach your Financial Freedom

You have to find a way to make a difference in your life so that YOU reach your financial freedom, whatever that may be. Whether you are low-income, middle-income or swimming in cash at each stage of your journey there has to be a plan.

Something, anything but not nothing.

Have you heard, “Everything is For the Wealthy” or “Everything is For the Low-Income” well it’s out there and it’s not going away. You can’t make either side happy and those in the middle are stuck being tugged in each direction.

You help one their are cries, you help the other it’s a mass exodus of unfairness and it goes on and on. It’s a political bombshell that fires back and forth.

Money is the root of all evil in this world and all I can say is fend for yourself and worry not about what others are getting because you can’t count on the top to throw you fish for dinner.

That means your financial freedom is in your hands and you’re the chef of your restaurant. Either you cook up a financial plan or you have to wait for the fish tosser who might never show up because he or she is busy frying up on the other side.

That’s the way politics works and we can bitch all we want but that’s not making anyone rich now is it?

The financial industry is filled with situations where people become rich from the bottom up, meaning that started with nothing and are now surrounded with financial freedom.

Sadly, not all of us will end up on a yacht sailing the blue ocean without a care in the world but if we take it down a notch we can still experience financial freedom.

We joke about being debt free and having a blow-up swimming pool in our backyard during the summer months that we purchased for $50 so all three of us can chill out under the sun.

We’ve been shopping at second-hand shops for clothes and just about everything since buying our house because that was part of our financial freedom plan.

Save as much as we could, wherever we could. If we could negotiate we would, barter we would or buy used we were waiting in line.

That was our financial freedom, simplicity without having to worry if someone is going to take our house away because we couldn’t pay our mortgage.

Financial Crisis Rang Our Doorbell

Like many people there was a time in our lives where uncertainty got the best of us and we didn’t know what we were going to do.

We had just bought our house and my wife got ill, was laid off from her job and I was the only person with an income. Right away we had to cancel our Tax Free Savings Account (TFSA) contributions along with our Registered Retirement Savings Plan (RRSP).

You see, Mrs. CBB was the breadwinner in the family and being laid off put a big dent in our money net income.

There was a financial emergency happening in our lives and shutting down everything that wasn’t critical had to be done and fast. Sure, we had savings but not enough to keep us going at my wage which was only $15 at the time.

You don’t expect to get critically ill, no one does and still to this day she does not work, can’t work and never will work again. That’s her reality. Imagine that, a new house only earning $15 an hour and having to pay for everything.

That was our situation until we could get some income for my wife and I could either get a better career on my plate, extra income or a wage increase from my employer. I couldn’t sit back and wait until our savings were depleted and our financial crisis became a pay or lose it situation.

Luckily, all of that happened for us which to this day is a blessing but that didn’t come without blood, sweat and tears. It was years that I worked two jobs and hardly saw my wife at all but it paid the bills. Working harder and longer hours was the only solution for us at the time to pay the bills.

Locking down a budget was crucial which we did and continue to do. We took everything we could down to the bare basics and even increased our deductible on our insurance so we could get a lowered rate. We took one vehicle off the road so we only had one since Mrs. CBB was not working which saved us money.

Anything and everything including quitting smoking which we both did. I’m sure I calculated that in over the past 7 years that we quit we’ve saved over $18,200 all of which landed in our Tax Free Savings Account.

Financial Crisis and Marriage

The times we were together we talked about financial freedom and how all of this would make sense one day for us. We kept our relationship afloat by prioritizing what needed to be done and making sure we took time for us.

That didn’t come without bumps though so I don’t want to make it seem like was a walk in the park. It was hard, damn hard to move to a new country and have to start over but I did it.

There’s never an easy answer to getting ahead financially because it’s not easy, it’s tough as hell but for most of us it’s the only way. Financial problems in our lives wasn’t a big deal until this point in time or at least the scare of having issues so this is when we worked on building our emergency fund.

Not knowing if you are going to lose everything you worked for should scare anyone into doing whatever it takes (legally) to bring in more money.

In our case, I was the only person who could do that so I understand anyone out there that says they are unable to increase their net income due to health reasons or personal reasons.

When the time comes and you have a financial crisis and no one to turn to but yourself that’s when you will say, “Did I do enough?”

So before you go and say you have nothing to save in the event of a financial crisis ask yourself that question but say, “Am I doing enough?” that way when and if the time comes you can answer to yourself, “I did something” and you have money set aside.

Something is always going to be better than nothing.

Just starting this blog 7 years ago as a means of sharing our story has turned into a small income for me each year. If I can do it, so can you.

Discussion: What do you say to people who voice that they are unable to save money in today’s Canadian economy?

Money earned in March 2019

Where did all the money go?

Oh boy, this was a bad month for expenses as we had to pay for 3 sports activities for our son for the spring and summer months plus we bought a fish tank, fish and food.

I will talk more about the fish tank expenses in an upcoming blog post for anyone contemplating buying fish. Mrs. CBB thought it was as simple as buying a bowl and putting the fish in it. Not so much.

Also, I mentioned at some point that Mrs. CBB was going to be getting laser hair removal for a follicle problem she was having. Maybe I didn’t, I can’t remember now. Anyways, through plenty of research she found where she wanted to go and it’s not cheap as you can imagine.

Almost $3500 later she will have hair free legs with the finest technology in Canada but her journey is not over yet. We’re hoping any further steps will be covered by OHIP but we can’t bet on that so we may see thousands more coming out of our pocket with-in the year.

There were also the final costs with Mrs. CBB’s crown that my benefits would not cover which ended up costing us around $600 as they cover only 50%. That seems to be standard with most benefits. She will be needing on more so we’ll see a future payment similar to this in the coming months.

Like always we maxed out our RRSP and TFSA along with my works defined pension but there were no cash savings put aside this month as expected. Not every month will be simple but thus life. I’ll be starting more home renovations this summer which will eat up some cash but we have more than enough saved up for this.

It’s always hard to see the savings go down but sometimes you just have to spend money to make money. That’s the way life goes. No, we don’t plan to sell our house any time soon but we are updating it as much as we can, when we can.

You may notice our Telecommunications expenses was far higher this month and that’s because we re-negotiated with Rogers but we were a bit late. They are crediting us back the money so we will see a drop for next month’s bill. We are going to an android box next month and if all goes well we will be cancelling our cable and home phone next year.

On a good note a house almost identical to ours up the street finished top to bottom is on the market for $749,000 so we will be interested to see how that sells.

Finally, we spent money taking in a concert downtown Toronto which was a great time together but it jacked up our entertainment costs for the month but we were fine with that since we hardly ever go out.

On our net worth update post we’ve kept the house value at $365,000 but as you can see that has gone up since buying it for $265,00 but until we sell it’s just a number and even then unless we spend less on living arrangements it’s all going back into the housing pot.

Have a great month everyone.

Mr.CBB

Budget percentages March 2019

Our savings of 23.03% includes investments as well as any savings for this month based on the income of $8759.48.

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 more than 100% of our income which shows that we had to pull money from the emergency savings account to pay for it.

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.

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: $4792.05
5. Monthly Net Income Total: $8759.48
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 = $213.01
8. Total Expenses Actually Paid Out: $9193.94
9. Total Expenses Actually Paid Out: Calculated is $8759.48 (total net monthly income) – $213.01 (projected expenses) –$0 (savings from emergency fund) = $9193.94 Spent too much -$647.47
   
10. Actual Cash Savings going into Emergency Savings: Calculated is $8759.48(total monthly net income) – $9193.94 (actual expenses paid out for the month) – $213.01 (projected expenses) = –$647.47

Our 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 March 2019.

This budget represents 2 adults and a toddler plus retirement investments.

Budget colour chart: If highlighted in blue that means it is a projected expenses      

Note: We’ve decided to keep our grocery budget at $410.

Actual Budget Amounts

Our FREE simple budgeting series

Do you want to learn to budget like we do? 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.

Our Ultimate Budgeting Guide from A to Z has everything you need to know about budgeting in one blog post.

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

2019 Budget Challenge- 7 Monthly Budget Reports

When I was looking for people to join the CBB 2019 Budget Challenge back in December I had over 20 people interested in joining.

It looks like we are missing one of the 7 budget update reviews so we are down one person for the year. That’s ok, it happens but I’ll certainly look into it perhaps an email was sent and not received.

As our budget challengers go along you may see their budget reports increase in data which I expect especially because it’s a learning experience for everyone. The more you do a task the better you get at it and the more you learn about what you are doing.

The budget reports below will remain anonymous unless the writer chooses to use their name and each one will be unique. They get to choose how they report their budget back to us.

Here we GO!!!

Budget Report #1

March is a nasty month in my mind…there’s far too much accounting to be done, not to mention the personal and corporate income tax returns that need to be filed. Sigh.

On the plus side, I am too darned busy in March to spend any money! If it’s not a “required” monthly payment that I have to make…whoosh, off to the savings it goes!

My 34 quart pot has arrived but I don’t have either the time or energy to deal with making borsch this month. Hopefully I’ll tackle a batch next month – assuming I have more energy and less work! LOL

For now, it makes me happy just knowing the pot is here when I am ready for it. 2019 is starting off as a year of things breaking, dying and needing replacement. One of our battery back-up systems died a very noisy death right at the start of March. So, we are watching for a good sale to replace the box.

In the interim, we moved things around to cover all the computer equipment but the television in our family room is without a back-up right now.

Hubby says he really doesn’t care (it’s an old tv) and it will need to be a real screamer of a sale before he’ll replace the box that died as it would be cheaper to replace the tv if it gets fried during a power bump.

When we do find a deal he likes. I have an account named “Repair, Replace or Renovate” that we can tap for the costs.

When I got out of the hospital after my near death experience in 2015, I re-named all of our accounts…just in case.

I handle the day-to-day finances and if hubby suddenly had to start…at least I have things set up in a manner that’s very simple to understand exactly what each account is intended for.

The tellers always giggle when I give them the “names” of the accounts to make deposits to.

Part of my process includes downsizing the number of accounts that we have, the number of institutions that we deal with and setting things up so that all RRSP/RRIF and TFSA accounts can easily be rolled directly into the surviving spouse’s accounts without having to transfer them to another institution…with the simple presentation of a certified true copy of the death certificate and the will.

I have a lot of funds that will be moving between institutions over the course of 2019 and the two final transfers to be completed in 2020.

It’s just one more thing for me to monitor, at this busy time of year, not to mention checking to make sure all of our invested funds are invested in such a way that both the Principal and Interest have 100% CDIC coverage.

Now that the “indicators” have turned red in both the US and Canada markets…this is more important than ever.

The cheque arrived from our 2018 extended health claim. The Car Replacement account is enjoying that top-up as it was just a wee bit short of $1,000.00. That’s a pretty darned sweet deposit in my world!

I also had a couple of dentist appointments this month and it took a full week before my mouth quit hurting after each one.

Consequently, two weeks out of the month our meals were devoted to all things either soft or liquid…soups, pancakes, gluten free pasta and egg dishes were heavily featured.

March has my favorite holiday of the year…St. Patrick’s Day! It’s a great excuse to celebrate all things Irish with lots & lots of root vegetable dishes and soups. It also adds a celebratory light

at the end of the long winter tunnel! It’s almost time to switch from soups to salads!

I have stayed on track with our budget during March, mostly because I had no time for shopping, and we will finish the month with $550 in our vacation accounts. BUT….

Hubby has requested that we return to California on his vacation this year…oh no…I’m really going to have to pinch and squeeze every nickel that I can come up with to cover the cost of all our travels this year!

As usual, I don’t pay for hotels or villas stays as I use my Marriott Bonvoy, Vistana Signature Experiences or Hilton points. I do have to cover a car rental, gasoline, food/dining out, entertainment and any shopping we do.

Hubby did the trip solo last fall and all in he spent $1,740.00. If I have any hope of covering that as well as our other get-aways this year…I am really going to have to watch everything we spend.

So the new travel budget required for 5 trips this year is an estimated $4,500.00. I have $550 and know where I’ll find $1,600 in August so I just need to squeak out another $2,400.00 by the end of the year…over the course of 9 months that’s about $267 a month. I think I can do it…wish me luck!

It will be worth it since we’ll have 2 weekend trips to Bellevue, WA (one of our favorite spots to relax & unwind), a 10 day trip to Portland, OR, our 10 day “25th anniversary” trip to Whistler and a month long extended stay in California. I’m motivated, would you be?

Budget Report #2

Budget report. Have you ever felt like you are doing everything wrong and can’t seem to catch a break?

That was our March. Renovation month went okay, nothing major there to report because I think we planned it out pretty well.

We didn’t jump into the renovation until we were ready. We purchased supplies as we could afford and no major mis-steps happened. Luckily, that was first the week of March as we were both off for March break.

Then everything began to drown us. Literally. We have only been in this house since July 2018 so we are still figuring it all out. When we found some moisture in the basement in the fall we investigated and found a crack in the foundation.

We had that repaired and everything seemed ok. Until the second week of march. We had a major raim storm out here when the ground was still very frozen.

Then we woke up and went to change the laundry in the basement only to find 3 inches of water across the whole basement. Luckily we haven’t put much energy into the basement since the fall flood so most of it was concrete with some walls still in place.

Funny enough the crack we repaired was dry so we had to investigate after we sucked up gallons and gallons of water. We started by taking the walls down and ripping styrofoam insulation down trying to find the source.

When we found the source it wasn’t nearly what we were expecting. No it wasn’t a crack in th wall but rather a chimney hidden behind framing insulation and wood panel decor. Also, the chimney was full of water. That put a ding in the budget.

The house fund (that we just basically emptied for our renovation) and our emergency fund was cleared out. Then week three of March comes around and our van dies. Having gone down to one vehicle would leave us with zero vehicles which would not work in our rural NB town.

The cost of fixing the 2003 caravan with 350k km on it just didn’t seem worth it. And we had cleared out our big savings funds last week.

So we added a debt.

We financed a van with the promise to pay it in half the scheduled time. For the month of April we are dedicated to rebuilding our $1000 emergency fund and going back to the basics.

A strict cash only budget envelope system a la Dave Ramsey.

We probably will have to continue this into May until we get our feet back down.

Have you ever had a major budget fail?

I would love to hear how you came back from it in the comments. Could really use that inspiration this month!

Budget Report #3

I wish I could say I did a good job in March but I didn’t. I didn’t track anything

So, I went into my bank account and checked where my savings accounts and visa balances were, and compared them to how much I was paid. I have $127 left over that I did not spend.

All my money went into savings that was supposed to as I have it set up to go automatically. I really fell off the wagon in terms of managing my budget last month so I need to get back on track.

One positive thing is that we got a well cap built with friends and family and even with supplying beer and pizza, it was still a lot cheaper to buy the food/drink and materials and do it ourselves than to get a contractor in – plus I feel I learned a ton and hope this makes me feel more confident towards home repairs in the future

Budget Report #4

Budget Report #5

Note: We are missing a report which means we are down one person for 2019.

Budget Report #6

Hi Mr. CBB,

We had an increase in our income this month, because my husband sold an old car that he had stored for years. We decided to use the money towards a long over due bathroom renovation. In other news, we found a local butcher that sells grass-fed & chemical free meats, so I’m happy about that.

It will slightly increase our grocery budget, but I knew it would. I am still trying to see if and how we can cut back on groceries though. Making the choice to eat healthier is not without it’s draw backs, but I’m satisfied with our decision.

Maybe we will just eat less meat to compensate for the increase in cost. We have a few weekend getaways planned, so I’m working that into our summer budget now.

I’m curious, how do others plan vacations into their monthly budget? Do you save every week all year long, knowing you might take a vacation or do you start saving once you’ve planned one?

Our ‘Everything Else’ category this month included household items, pharmacy, birthday gifts, eye care, chiropractic care and some miscellaneous shopping items. Overall, we had a good month!

Budget Report #7

Here’s my submission for March!

P.S- Don’t forget to leave them a comment about their budget challenge report.

Welcome to our Budget Challengers for 2019 above.

That’s all for this month check back at the beginning of May 2019 (sometimes in the middle) to see how we made out with our April  2019 budget.

Happy Budgeting CBB’ers!

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