How We Avoided A Financial Crisis After Buying Our Home

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

Transform your financial outlook by implementing simple saving techniques to help alleviate your financial crisis today.

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 this Yahoo article, I 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 brilliant.

His father encouraged him to save money, and it’s something every parent should not just talk about but also put into action.

By this, I mean bringing your child to the bank to deposit money or to set up a piggy bank savings plan.

My parents did something similar with my paper route money, helping me set up a bank account to 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. 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 understands the value of money, the importance of paying bills, and the value 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 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, and there are cries.
• You support the other, and it’s a mass exodus of unfairness that 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 never shows up because they are busy frying up on the other side.

That’s the way politics works, and we can complain all we want, but that’s not making anyone rich now.

Start Small To Build Wealth

The financial industry is filled with stories of people becoming rich from the bottom up, meaning they started with nothing and are now surrounded by economic 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, which we purchased for $50 so all three of us can chill out in 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 worrying that someone would 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 when uncertainty got the best of us, and we didn’t know what 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 and our Registered Retirement Savings Plan (RRSP) contributions.

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.

Losing Everything During A Financial Crisis

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 me, or until I could get a better career, 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 to 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, 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.

Budget Restructuring During A Financial Crisis

During this period, we restructured our budget to the bare basics and increased our insurance deductible to get a lower rate.

We also took one vehicle off the road 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 over the past 7 years we’ve been living, we’ve saved over $18,200, all of which landed in our Tax Free Savings Account.

Financial Crisis and Marriage

When we were together, we talked about financial freedom and how it would make sense for us one day. We kept our relationship afloat by prioritizing what needed to be done and making time for us.

That didn’t come without bumps, though, so I don’t want to make it seem like it was a walk in the park. It was hard, damn hard, to move to a new country and 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 weren’t a big deal until this point, or at least the fear of them, so this is when we started building our emergency fund.

Not knowing whether you will 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 who 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?

Something is always better than nothing.

Just starting this blog 7 years ago as a way to share our story has turned into a small income for me each year.

Discussion: What do you say to people who say 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 during the spring and summer months, plus we bought a fish tank, fish, and food.

I will discuss the costs of a fish tank in an upcoming blog post for anyone considering buying one.

Mrs. CBB thought it was as simple as buying a bowl and putting the fish in it. Not so much.

Medical Costs

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 OHIP will cover any further steps, but we can’t be certain it will, so we may see thousands more come out of our pockets this year.

Dental Costs

There were also the final costs for Mrs. CBB’s crown that my benefits would not cover, totaling around $600, since they only cover 50%.

That seems to be standard with most benefits.

She will need more, so we’ll see a future payment similar to this in the coming months.

As always, we maxed out our RRSP and TFSA, along with my work’s defined pension, but there were no cash savings set aside this month, as expected.

Not every month will be simple, but this is life.

Renovations

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 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.

Rogers

You may notice our Telecommunications expenses were far higher this month, and that’s because we re-negotiated with Rogers, but we were a bit late.

They are crediting the money back so that you will see a discount on next month’s bill.

We are going to an Android box next month, and if all goes well, we will cancel 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 on a concert in downtown Toronto, which was a great time together.

However, it jacked up our entertainment costs for the month.

We were okay with that since we hardly ever go out as a family these days.

In our net worth update post, we’ve kept the house value at $365,000, but as you can see, it’s gone up since we bought it for $265,00.

But until we sell it, 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% include investments and any savings for this month, based on an income of $8759.48.

We set aside funds for projected expenses due in the coming months.

All the categories took more than 100% of our income, indicating we had to pull money from the emergency savings account to pay for them.

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 we’ve been able to direct much of our money toward 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 for 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 from which all of our debts are paid.
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 (costs projected) = –$647.47

Budget Results

Time for the juicy category numbers and to see how we made out with our monthly Budget.

Below are two tables: the first is our monthly budget, and the second is our annual budget for March 2019.

The budget includes 2 adults and a toddler, as well as retirement investments.

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

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 as we do? Please take the time to read our budgeting series and Budgeting in the New Year.

I hope this information will help you avoid 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 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.

That’s all for this month. Check back at the beginning of May. See how we made out with our April  2019 budget.