Uncover the keys to financial security through careful planning, budgeting, and reducing unnecessary expenses.
Everyone Deserves Peace Of Mind When It Comes To Financial Security
When you are financially stable, you have all your ducks lined up in a row; however, financial security offers you a grip on your ducks.
Life is not as simple as it is made out to be unless, of course, money doesn’t matter, where you can ease into daily living.
Unfortunately, that’s not the case for 99% of Canadians, which means earning a living, whether it’s through employment or receiving government benefits, is a part of life.
I find that the more I’m exposed to specific situations, the more profound my desire to leave no stone unturned for my family increases.
Last month, I blogged about improving financial stability by having a plan and goals in place for your money.
This also means you’re using a budget, eliminating unnecessary expenses, and following a pattern that helps you avoid consumer debt.
You want to build your net worth, and the goals you set forth and strive towards help to increase your overall stability.
You’re not necessarily living paycheque to paycheque, but you are comfortable with money to live for today while planning for tomorrow.
Financial Security In A Nutshell
What does financial security mean?
Financial security, on the other hand, means that you have enough money saved to take care of emergencies, future retirement, and daily living.
You’ve now reached a point where you are debt-free, your net worth is increasing, and your retirement savings are plentiful.
A dream come true for many Canadians, but not often a get-rich-quick reality, especially given the high cost of living.
Just yesterday, I read that a one-bedroom apartment in Toronto, on average, costs $2,300 a month.
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That alone is twice the cost of what our mortgage payment and property taxes were when we bought our house in 2009.
Granted, we did have a down payment, but still, that’s a substantial amount of income to be spending on rent.
However, if you want to live in Toronto, you have to be making big bucks to afford these types of housing expenses.
If you can’t, the only option is to leave and find somewhere to live that’s more affordable or face living on the streets.
It may not be the optimal approach, but to increase your chances of achieving financial stability and optimizing your financial security, you need to be proactive.
Financial Stability vs. Financial Security
To achieve financial security, you must first take control of your financial stability.
By doing so, you
This part of finance is the ‘doing’ part, where you are working on achieving financial security.
- Budget Your Money
- Own Your Debt
- Build An Emergency Savings Fund
- Save For Your Future
- Invest in Retirement
There will come a time when the above five long-term and short-term goals are complete, and you can breathe.
This is when you know you’ve reached a point where financial security is secure, and you’re going to make it through to the end.
Gosh, that really does sound like a lot of work. Most people won’t achieve their goals simply because it’s not as easy as it seems.
Unfortunately, life is costly, and financial mistakes set people back, whether in their 20s, 30s, 40s, or 80s.
The critical part of achieving financial stability and financial security is never to stop trying.
Being stable means you have a plan and are putting it into action; being secure means your plan has worked.
Financial Security
Financial security, on the other hand, means maintaining economic stability.
This part of financial security is the ‘done‘ part, essentially a system that takes care of you.
- Debt Free
- Mortgage Free
- Emergency Savings
- Long-Term Plans that include beneficiaries
- Creating A Will and Updating It as Needed
These last few years, as you know, we’ve been through lots of turmoil and grief with in-laws, with death, and mental health.
Both Mrs. CBB and I have learned a great deal about the Canadian healthcare system, retirement, pensions, savings, banking, and the importance of maintaining little to no debt to achieve mortgage freedom.
In fact, we feel as if we’ve been on a crash course about life and what happens when you don’t have financial security by the time you retire.
We also learned that you don’t need to earn a lot of money to be financially stable.
Creating debt that you cannot do without means that you put your future financial security at risk if you can’t pay it back fast.
When someone tells you that having your mortgage paid by the time you retire is smart, they are not kidding.
It’s a significant concern, especially if you become unable to care for yourself or manage your finances.
Senior financial security is the difference between getting what you need and getting it in part or not at all.
Not being in a state of financial security when you grow old or if your health fails puts a significant strain on family members who are looking after you.
Here’s the thing: not everyone has a family to look after them, which means financial security becomes far more critical.
I’m not entirely sure where the path leads from here for my mother-in-law, but we know it won’t end well.
What we can safely say is that they went from being broke to being debt and mortgage-free in the nick of time.
Too close for comfort, to be honest, and it scares me.
I suppose our awareness is heightened when it comes to aspects of our lives, particularly when we are placed in a situation that would otherwise be considered out of the ordinary in daily life.
It certainly puts things into perspective. I’ve especially when you imagine swapping your life for theirs and wonder how you’d want it all to go down.
Discussion: Does financial security factor into your plans? What worries you the most today that motivates you to build stability for future security?
Leave me a comment below, as I love to read your feedback.
Net Worth Losses and Gains
July 2019
What happened to our money in July?
One word for this month: renovation. To be precise, the renovation is limited to one room in the house, but because it requires more than just a new floor and walls, it’s easy to see where the money has gone.
I’ll do a more in-depth post about the costs of renovating our bathroom right from the studs when it’s complete.
We did, however, use credit card points to buy a more expensive watch, look for deals, and shop around for the same product through different suppliers, among other strategies, to make the renovation a little cheaper.
Other than that, the investment did OK. I’m sure that they won’t fare so well this coming month.
The market does not look suitable for the short term.
Understanding Net Worth
What Does Individual Net Worth Mean?
Net Worth is a snapshot of your financial health, sort of like a picture or a debt-to-asset ratio.
In simple terms, it’s the total value of your assets minus your liabilities.
Attributed the growth of our net worth to patience, perseverance, using a monthly budget, and not giving up.
Your numbers fluctuate, but don’t let them scare you. Rat, her, understand why and move on.
If you would like to use our free downloadable bud, Ewhichh Icreatede, you can use it at home just like we do.
I don’t charge for it because I want you to save money, not spend more!
There are tonnes of other free resources at Canadian Budget Binder to help you build your net worth.
Calculate Your Net Worth
Do you know how to calculate your own Net Worth?
We like to calculate our net worth every month so we know if we are still on track.
Some people calculate it yearly or quarterly, but it’s up to you and how informed you want to stay.
Net Worth is only an estimate, and not everyone uses the same type of figures to calculate it.
Some of you may not include vehicles, as we do, or leave out assets inside the home, as we have.
You might think that someone who believes that your house should be excluded.
It depends on what you want to calculate or what you can sell today and make money on for tomorrow.
Figuring out your net worth is relatively easy as long as you know your personal numbers or monthly finances, which means you need to do your homework.
Net Worth is simthe sum ofg up all your assets (what you ominusaway your liabilities (what you , owe) whgivesgive you a net worth number.
Understanding your net worth will help you determine if you are on track to meet your personal financial goals.
It doesn’t get any easier than that.
Net Worth = Assets – Liabilities
Why not go ahead and calculate your own using our Free Money Saving Tool Worth Calculator (Canadian Budget Binder 2012)
Financial numbers
When budgeting, anything is possible; we are proof of that, although we still have a long way to go on our journey.
These are our numbers and goals, not a means of comparison with others’ target goals.
We don’t care how much money others make or if they have a high net worth; it’s not a competition.
I hope our experiences will help guide you along your financial path toward debt freedom.
Not everyone has the same path in life.
Some of you may have had to start tasks like attending school again, and now have OSAP to repay.
Others may have divorced, lost money in the stock market or other investments, suffered job loss, fallen ill, or been injured on the job, and so on, but you can’t let that stop you from achieving your financial goals.
Some of you may have been given trust funds, paid-for homes, paid educations, or perks in life that give you a financial kick-start, and that’s OK, too.
Remember what I said, “It’s not about how much money you make, it’s how you save it. “
The primary reason people accumulate wealth is that they know how to save or invest it wisely, whether they inherited money or won the lottery.
The most minor improvements should mean significant strides in working towards reaching your goals.
Sometimes we have to learn, and we’ve all been there.
Money can be an evil force for some people, especially those who have a negative attitude towards their own financial situation.
I urge you to be optimistic and take it one step at a time with determination; you should also see improvements if you want to achieve this.
Canadian Budget Binder Net Worth Updates 2019
Click the links below to read our net worth updates for the year.
- December 2018 -(1.66%)
- January 2019 (+2.37)
- February and March 2019 (+2.15%)
- April 2019 (+2.63%)
- May 2019 (-0.79%)
- June 2019 (+0.87%)
That’s all for this month’s net worth update, but please check in at the beginning of September 2019 to see how we made out in August 2019 with our financial portfolio.
~Mr.CBB