DON’T LET BUDGET PROBLEMS SCARE YOU FROM FINANCIAL SUCCESS
When budget issues arise there are various reasons and many users end up throwing in the towel due to financial stress.
Have you ever said to yourself, “I can’t do this” or “No one is helping me”, well you’re not alone?
If you take a closer look at the budget you are using and the elements you may find room for improvement.
Sometimes the biggest budget issues stem from using the wrong type of budget and the belief that flowers are blooming on the other side.
Home Budget vs. Business Budget Issues
I often treat our home budget like a business budget as I feel they both have distinct commonalities.
Let’s take a look at the home budget vs. business budget to see how important each factor is for success.
- They both need cash flow to work
- Both budgets are always looking for ways to reduce costs
- Return on investment is a crucial part of investing your money
- Improving profits or increased income streams
This is why we have always treated our monthly income as a business because we wanted it to be successful.
There will always be budget issues that will arise along the way and the main reason is, change.
No matter what we try and do there will never be a perfect budget and we must adapt to change that happens.
This may be cost-of-living increases, lost wages, job loss, health-related concerns and so on.
The point is that as a business owner of this blog and a father and husband who owns a home and vehicle I have to be diligent in the way I handle our money.
Yes, Mrs CBB is on board with everything but for the point of this article, I will use myself as an example.
You might not know it but I have a basic budget for Canadian Budget Binder every month that I need to balance.
There are many expenses involved with owning a business blog and it must be documented.
As you pay for blog expenses you must also earn profits which is why I work hard to build relationships with various Canadian brands.
Honestly, owning a blog is not easy but can be financially rewarding if you plan for success and failures.
How many times have you heard me rant the blog is down or something is not working?
Plenty of times and that’s because when the blog is not running it’s not earning money.
Lastly, the readers are a big part of the CBB budget because you are here with me, read the articles that I work very hard on and want to learn about finance as much as I do.
If I apply what I do in my business to our home budget not many changes are realized as we still need to follow-through with earning money, saving money, investing money and return on investment.
The audience is our family and without participation, there would be many budget issues to contend with.
You can always erase mistakes but financial success comes to those who want to fix what they erase.
6 Budget Issues Common For New Users
Below are some common budget issues that you may have experienced or might come face to face with while using a budget.
1. Budget Doesn’t Balance
I can’t balance my budget. One of the biggest budget issues next to using the wrong budget.
Most often the reason a budget won’t balance is due to inaccuracy with the numbers.
This is why it’s crucial to make sure your numbers are in the right place.
Secondly, always do your calculations twice if they don’t match up the first time and look for errors.
Thirdly, you may not have enough money to cover all of your monthly expenses which leads to further investigation.
Do you know how much money you net every month?
You should because that number is critical to the success of your budget and without it you will have budget issues.
2. Ran Out Of Money Budget Issues
If you don’t know how much money you earn each month now is the time to break out your employee wage slips.
See how much money you earn each pay as take-home and if you work a steady job then you know this is what you will earn each pay.
Add up all of your monthly expenses including your projected expenses and see if you have enough money to cover these bills.
If the answer is no then you need to do one of two things or both to correct your budget issues.
- Cut back on services or expenses
- Earn more money
With running out of money cutting back is the easiest route where finding extra income may be a struggle.
Not everyone has the ability to get a second job whether it be from working at home or outside of the home.
So, those are two areas to explore and make a decision on even if it’s not favourable such as a second job, moving, no cell phone, no television, fewer groceries etc.
If you plan to find a second job then you need to know exactly how much money your budget is short each month.
From there this number will help you to understand how much money you need to earn and the number of hours you need to work.
However, in the meantime, while you are looking for work you’ll have to take a stance and cut back in areas so you don’t fall too far behind.
Creditors won’t care if you are looking for another job to bump up your income.
They want their money and that’s all although some may consider deferring payment without interest or lowering interest if you are nice to them.
3. Irregular Income Budget Issues
Working with a budget when you have an irregular income can be challenging until you get the hang of things.
Ideally, you will want to design your budget with your lowest income month from the past 6 months to a year.
If you are just starting a new job with irregular income budgeting may be wonky for a while until you have some figures to work with.
Using your lowest net income month means that any additional income you earn can go towards debt repayment or savings.
If you budget your irregular income on your highest net income pay then you are in for budget issues.
What will you do if you don’t work as many hours?
Once you have your baseline income you will want to ensure that your critical budget categories are paid.
These are your home expenses, debts, utilities, groceries, clothing and transportation.
Building an emergency fund is also critical even if it is $5 a month.
From there you can add other budget categories as your budgeting system become easier for you.
List them in order of importance to accommodate your needs.
The months that you earn more money than expected set it aside for the months you earn less money.
In a way, it’s an emergency saving fund for your unpredictable income each month.
As you finalize your budget over a few months time you continue to use it over and over and make changes as needed.
This still doesn’t free you from avoiding budget issues which means you have a tough budget to manage but doable.
Ideally, a zero-based budget is what you are looking for which is what we use.
Essentially all of your money has a home and the budget should balance to zero at the end of the month.
4. Too Much Debt
Almost 99% of the time budget issues stem from having too much debt and not enough money to pay for it.
I’ve already discussed what you need to do if you can’t balance your budget above.
If you find that your debt load is way too high perhaps consider a credit card balance transfer as an option.
Alternatively, you may be able to secure a loan to consolidate your debt so you have one debt and one payment.
The idea at this point is to cause your budget issues as little stress as possible which means avoid creating any more debt.
Hide or cancel your credit cards (if they have no balance) so you can no longer use them.
Always track your credit card expenses and make sure they are accurate when you get your bill.
Most consumers have way too many credit cards anyways.
Related: What is considered bad debt?
Stop falling for the one time discount or rewards points for your first purchase.
Credit Cards are good when you have the cash to pay them and evil to you when you are broke.
5. Budget Categories Too Vague
We started out with a basic budget like most people and our budget categories were pretty vague.
Over the years we broke down the categories as far as we could go and incorporated projected expenses.
WOW, what a difference that made to our overall financial picture VERY clear.
I can compare this eye-opening experience to seeing the trailer of a movie and actually watching a movie.
Yes, that’s the difference but not everyone wants to go that deep.
When you collect all of your receipts for monthly expenses you can bridge the gap with your budget categories.
I suppose the most influential part of this practice for us was showing us how the little stuff was a big part of the problem.
Perhaps your budget issues stem from needing more specific information as to where the money is going.
6. Wrong Type Of Budget
There are MANY types of budgets available to users who want to know where their money is going each month.
The idea of choosing a budget can be terrifying because not everyone manages numbers well.
Math was my wife’s worst subject in school right through high school but now she loves the challenge.
By no means is she delving into the deep of mathematics but basic math concepts that she needed one on one tutoring with.
I was the tutor by the way and she managed to go back and re-take her math credits in high school when she was in her 30’s.
Her marks were in the high 90’s which goes to show that if you put your mind to something anything is possible.
When you are just starting out with a budget consider which budget type might work for you:
- Budgeting App (TD, Mint, or check with your bank to see if they offer free budgeting apps for customers)
- Excel Budget Sheet (Free on CBB)
- Basic Printable Budget (Free on CBB)
- Using Budget Jars
- Envelope Cash System Budgeting
Keep in mind with the budget jars and cash system there is still some sort of documenting that you need to do.
Of the various budgeting systems, you may need to test them out one by one to find your best option.
The key is to stay calm and learn how to manage these budget issues as they come up.
Once you find the budget that matches your lifestyle you’re on your way to spending less than you earn.
The hallmark of our financial success came from those four words and it can work for you.
Trust me when I say budgeting is a life-long learning experience as there will always be budget issues.
Discussion: What budget issues have you had arise and how did you fix them?
I would love to read about your experiences so drop me a comment at the bottom of this blog post. I’ll be sure to respond to you.
Income Report October 2019
Where did the money go in October?
It was nice to see more money going into our emergency savings this month as it has been slim for the past few months.
Anytime you are completing renovations at your house like we’ve been doing your budget will be sent into overdrive whether you have the money saved or not.
The key is whether you have the money to pay off that debt and are not putting it on credit.
In October we were in Marshall’s Canada and decided that we needed to buy new King size bed sheets.
It wasn’t just in that moment as we’ve been looking for months for proper sheet sets.
I’m a bit picky about them especially since I do all of the laundry and a good night’s sleep is important.
Overall, we paid almost $200 for the two new sets and they are perfect and hopefully will last us a bit.
Other expenses were a few bits for the bathroom but not much.
We did do some clothing shopping for our son to get him all geared up for winter which spiked our clothing category.
A good month in the books for us. Let’s see if we can continue this until the end of 2019.
I’m looking forward to a new year and perhaps a new budget challenge.
As for the fan budget challenge at the bottom of this post I hope you all have been keeping up with their reports.
I’m so proud of these ladies as they take the time to share their financial journey with Canadian Budget Binder.
What kind of budget challenge should I do in 2020?
Leave me your ideas in the comment section below. I want to do something that involves the readers of this blog to get you involved.
Have a great month everyone.
Budget Percentages October 2019
Our savings of 55.20 % includes investments as well as any savings for this month based on the net income of $8395.93.
We put money away in our 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 we accounted for all of the income in October.
Monthly Budget 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 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: $5902.63
- Monthly Net Income Total: $8395.93
- (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 = $324.98
- Total Expenses Actually Paid Out: $6230.55
- Total Expenses Actually Paid Out: Calculated is $8395.93 (total net monthly income) – $324.98 (projected expenses) –$1840.40 (savings to emergency fund) = $6230.55
- Actual Cash Savings going into Emergency Savings: Calculated is $8395.93 (total monthly net income) – $6230.55 (actual expenses paid out for the month) – $324.98 (projected expenses) = $1840.40
Monthly 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 October 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 expense.
10 Step Mini Budgeting Series
Do you want to learn to budget as 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.
Over the years we’ve created a 10 Step Mini Budgeting Series that will help you understand how to start using a budget.
CBB 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
When I was looking for people to join the CBB 2019 Budget Challenge in December I had over 20 people join.
October 2019 Budget Challenge Update:
And then there were 4!
We started the year with 20 participants and are down to 4.
I’m so proud of these budgeteers!
As our budget challengers ventures 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 Challenge #1
This month I moved 2 more of our RRSPs to our brokerage firms.
I have invested the funds and we’ll only have 2 remaining TFSA transfers left to do in January 2020 and our 5-year process of moving our accounts will finally be over.
I have been working on this since I got out of the hospital back in 2015 and I can almost see the light at the end of the tunnel.
It will be a lot easier in terms of the recordkeeping once all the transfers are complete in case anything happens to me.
We also had 4 other RRSP maturities this month that I re-invested.
October is the calm before the maturity storm on November 1st when we have oodles & oodles of Canada Savings/ Premium bonds coming due!
Back in the days when we had a hard time scraping together $100, the Canada Premium / Canada Savings Bonds worked nicely even though the rates weren’t exactly stellar.
What it did do though was get us in the habit of saving all year long, as much as we could manage to scrape together, from the time we were little children.
When we went back to school in September, it was time to count the money in my piggy bank and start looking forward to buying more bonds at the bank.
My Mom was a great role model, even though she did not work outside the home after her children were born, she still managed to save!
Every time she used a coupon, got a sale item etc. she put those savings in the envelope in her purse marked for her annual bond purchase.
That lady nickel and dimed her way to having $25,000 worth of Canada Savings and Canada Premium bonds just by being frugal!
She was a major inspiration to me.
My father may have been a banker with loads of “credit experience” but Mom could sure squeeze a penny ‘til it squealed for mercy!
Does anybody else get excited about saving?
I can still remember how happy I was every time I reached another $100 threshold because it meant I could get another bond in the fall.
I can’t even describe the thrill I felt on the days that I reached a $500 or $1000 denomination.
Do you remember clipping coupons?
OMG, in my little child’s eyes it was like having FREE money to invest in that year’s series!
Ahhh, the power of compounding income being taught to children even with those teeny little bond purchases.
When I was old enough to have an RRSP, I certainly had no great big wad of cash sitting around just waiting for me to contribute nor did I have the kind of salary that would allow me to save up a big amount of cash.
I was self-employed and only earning $10,000 a year before business expenses.
Enter my childhood CSB’s to my rescue I deposited my bonds into my RRSP and started the ball rolling on receiving annual income tax refunds.
Those refunds would be contributed to my RRSP as soon as they arrived to keep those tax refunds coming.
More lessons from the CSB’s how tax sheltering the income brought an increase in my bond yield and also how to defer income tax by using an RRSP.
I have to say, I am sorry to see the CSB/CPB bonds go.
They were a terrific teaching tool for millions of Canadian children.
But, it will be all over but the cheering on December 31, 2021, when all the currently outstanding bonds have matured. Sad.
I suppose the same lessons can be taught today using other investment vehicles but none with such small cash outlays required to get started nor are they guaranteed by the Government of Canada.
I used to love giving a $100 CPB as a gift when my friends had baby showers…money they never grow out of nor tire of playing with.
October is the time of year that our landscapers come and close down our garden for the season and trim all the bushes and hedges.
Towards the end of the month, I also renewed both the house insurance and our annual travel medical insurance for another year.
Those 3 items roll in at an approx. $5,500 total expense and were handled by our FUTURE PAYMENTS ACCOUNT where we stash money every single payday towards these big annual payments.
Thank goodness we do because I certainly could not cover that much, in addition to all the regular monthly bills, with a single month’s net pay.
Our Burlington/Portland vacation was quiet and no sooner did we get there and both hubby and I came down with a nasty head cold.
Then 48 hours later I got hit with a flu bug as well to make matters worse.
Fortunately, there was a Costco and Walmart Super Centre nearby so hubby bounced back from his cold relatively quickly and ran out daily to pick up groceries for our meals.
We relaxed and watched movies in between me running a fever, having chills and napping. Hubby really enjoyed the hot breakfasts included with the reservation.
I was all about the apple juice because that’s all that appealed to me with a raging fever.
Remember our projected 2019 vacation expenses…well here’s how things are shaking down so far:
Where Projected Expenses Actual Expenses
B-Day Get Away $200 $200
Portland Vacation $400 $291.31
Anniversary Trip $250 still to come
Bellevue Holiday $650 still to come
Annual Allotment $1,500.00 $491.31
Our vacation budget finished off with $3,369.81 in our vacation accounts but let’s say that’s $1,300.00 is for 2019 and $2,069.81 is already saved for 2020 vacationing pleasure.
Of the $1,300.00 currently allocated to 2019, I will pay $291.31 as soon as the credit card statement is issued.
*What a wonderful write-up this month. I kind of felt like you took me back in a movie where I could see your mom and dad and how the story unfolded.- Mr.CBB
Budget Challenge #2
Current Status 116% to budget
Well, what can I say?
This month I let get away from me, again.
At the beginning of the month I was at my lowest point, depression wise.
In my mind, I was frustrated and upset at everything, also dreading the vacation I had planned.
I planned a Hawaiian vacation at the end of September because my mother’s Kauai timeshare wasn’t going to be used by her this year, so yay free accommodation.
However, I also had major points saved up with More Rewards, from their credit card promotions.
So, I and my whole family (baby-free) got to fly on points. I was like Why not?
The best thing was that my Father got to meet us there and we got some help babysitting.
I must admit I was hoping to use those points on a cruise to the Caribbean but Hawaii was the next best thing (plus free accommodation!) I still have quite a few points so I’m not terribly upset.
However, I thought it was worth it in the end because that vacation gave me a whole new perspective on my depression situation.
It let me see my baby in a whole new light, away from my dark depressing apartment and he’s not as bad as I thought he was.
I also learned to let go of a lot of things that were contributing to my anxiety (namely getting him down for naps)
It was then that I had realized that I needed to go with the flow more often.
So here’s to things looking up from here onward. 😊
I’ll start with my fails, what did I do this month?
Well, I ate out a lot, I booked a luau in Hawaii for us which tipped the scale way over (definitely not planned for because of the trip being the last-minute however we attended a timeshare pitch and got $150 knocked off).
I also bought a couple of furniture items for the baby.
He’ll be crawling soon so I need a toy chest to put my 5-year old’s toys in.
Auto definitely, we used less gas because we were out of the country for a week.
I found a free booster seat for my five-year-old on my Neighborhood Facebook group.
Using points to fly to Hawaii, I got a $1500 trip for free! Getting my mom’s timeshare for free, that’s like $3,000 right there.
I can’t stress enough how grateful I am for that opportunity.
We also successfully fended off the timeshare pitch cuz we don’t need that expense and everyone told us not to do it.
For me I really didn’t want to buy one because it’s like buying a new car, it takes 10 years to pay off and am I really going on vacation like this so often?
No, I’d rather pay down my Mortgage!!
My updates are shorter than the rest of the gang, but I do enjoy writing these because I read back to January and remember what I did that month sort of like a journal.
I also think getting to the point is important (we all know that one food blogger that goes on and on about what they did and thought exactly before giving you the recipe).
One day I think I might share this with my kids someday so they know what their mother was like way back when.
Until next time!
*That was so nice to read and I’m sure your kids will love to read about it too. – Mr.CBB
Budget Challenge #3
Hi Mr CBB,
October was a busy month for us (aren’t they all though).
We celebrated Thanksgiving at my sister’s house, so I didn’t have to buy as many groceries as I usually do.
Also, we had a free turkey (my mom won at the church turkey bingo).
It may look like we had extra income this month, but there were 5 pay periods.
I base the bills on 4 weeks, so we were able to put away a little extra for our trip and the remainder went to our savings account.
I was pleased that our groceries were closer to our budget, only $90 from being right on, so I’ll take that as a win!
I’ve struggled with our food category budget for most of the year, but recently I feel like we have a better handle on it now.
Our ‘Everything Else’ category, this month, included clothing, miscellaneous household items, health expenses, books and holiday items.
- Five-week pay this month
- Groceries almost on budget
- Didn’t use credit cards for anything this month
- Able to put extra money into savings
– No cons this month!
* I love a good month with no cons, well done. Yes, 5 pay periods are nice to get.
Budget Challenge #4
My October 2019 Budget Update:
Good evening Mr CBB,
Where has the time gone, I keep thinking its still March and we’re nearing the end of the year!
Not a lot to report this month, still going over when it comes to fast food.
I’m wavering on what to do about a cellphone plan;
Do I buy a new one outright so I can get a lower plan?
Should I get a better discount on a phone but pay a higher rate plan?
I feel I’m overpaying by about $20 a month in terms of the usage I have, but I have one of the cheapest plans available.
That and internet, I feel WAY overcharged but not a lot of options when you live rurally.
The only real deviation from a normal charge this month was the $360 I paid for my property taxes.
This has been bundled with my mortgage payment but is now separate.
Next month is the hard month so I tried to keep expenses to a minimum this month.
Also, next month has everything to do with getting the house and car (and me) ready for winter.
I’ll probably make some payments toward my vacation in February.
I also noticed something this month, I haven’t been tracking when I use gift cards.
Very rarely do I ever use cash, so I keep the receipts when I do.
However, for credit card or debit card purchases I don’t keep the receipts I just look back at visa/master card.
I’m going to have to monitor this, especially since some stores are generic enough that I might be spending the money in a variety of ways.
The expenses will only show up on my credit card with the store name (pet, automotive, food, clothing etc don’t get counted right if I don’t track it right).