How To Budget For Short-Term Savings: July Budget Update 2022
Learn how to budget for short-term savings goals and their importance to your financial health.
Short-Term Savings In My 20’s
My parents reminded me to consider what I spent my money on and whether it had a return on investment.
While enjoying my younger years, my parents constantly drilled me about finance and saving money.
Within three years, I sold my flat and ventured into the semi-detached lifestyle, a milestone.
I’ve often wondered what motivated me to save enough money to buy a flat when I was 21.
Living cheap and single in my 20s was easy for me, but as each year passed, things began to change.
There was a point when I was 19 years old when seeing so much poverty in the UK stung me.
Often it’s easier to turn a blind eye, but the empathetic inside of me could never do that.
I’ll never pretend to know someone’s financial story, but that was a turning point for me.
I volunteered at a community food drive and enjoyed listening to individual stories about money.
Treating people with kindness, listening, and not stripping their dignity of hope and achievements became paramount.
I started a budgeting journey online to bring like-minded people to my circle.
Today I want to discuss specifically short-term savings and their importance.
Let’s also look at the best places to hold your short-term savings.
What Are Short-Term Savings?
Short-term savings are essential and not intended to confuse someone beginning a budgeting journey.
However, without savings goals in mind, it will take longer to achieve what you’ll need tomorrow.
Consider short-term savings as a means to purchase something shortly.
I consider savings goals that have a short lifespan to be between months and five years.
Remember that this is my opinion, and your timeline may differ.
Anything after the five-year mark teeters into long-term savings goals, followed by the golden years.
Short-Term Savings Examples
- Purchasing a vehicle
- Downpayment to buy a home
- Renovating and general home maintenance
- Emergency savings
- Wedding
- Divorce
- Debt repayment
- Travel Destinations
- Personal Care
- New Baby
Best Places To Deposit Short-Term Savings
Finding a place to deposit your short-term savings should parallel your goals.
For example, a high-savings bank account is best if you plan to build a deck next summer and your goal is to save $12,000.
You could also save the money in a Tax-Free Savings Account to invest the money.
If you haven’t saved money in a TFSA before, you can deposit the $81,500 limit as of 2022.
- High-Interest Savings Account – Simplii, Motus Bank, EQ Bank, Tangerine, and TD Bank.
- Tax-Free Savings Account with our Manulife Financial Advisor
When we need cash for renovations or an emergency, we want to withdraw money fast without penalty.
Reasons Why We Keep Short-Term Savings
Over the years of blogging at Canadian Budget Binder, I’ve received messages from my readers about our short-term savings.
- Why do you keep so much money in your bank accounts?
- Is there a need to have several bank accounts?
- Can’t you invest the money sitting in your bank accounts?
- How much emergency savings is enough?
I wanted to explain how short-term savings became part of our budgeting routine and benefited us.
Combined, we have over $100,000 in our Simplii Bank account and a couple of other banks.
The reason why we keep so much money in our bank accounts is strictly for three reasons.
We also keep $5000 in a fireproof safe just in case we can’t get cash from the bank.
The cash comes from selling what we no longer need in our house where another person could benefit.
Also, any cash generated from using savings apps that pay by cheque, such as Rakuten Canada.
Perhaps my thinking is way out there, but you never know when you’ll be happy you’ve done something.
How To Budget For Short-Term Savings
A budget will help the user save the most money for long- and short-term savings goals.
Related: Top 4 Online Virtual Bank Accounts
If you are new to budgeting and unsure where to begin, Canadian Budget Binder can help guide you.
On Canadian Budget Binder, you can find a free excel budget or a printable basic budget.
Below are some outstanding bank accounts that are perfect for short-term savings; however, do your research.
Find out what your bank offers for interest rates to determine where you want to put your short-term savings.
Banks Where We Stash Short-Term Savings
KOHO is a reloadable prepaid Visa card attached to a budgeting app that assists users in their budget and manages money while earning cashback on their purchases.
- Tangerine bank account
- Simplii Financial – Join Simplii Financial today!
- EQ Bank HISA
- Motusbank
Build Savings Goals Into Your Monthly Budget
When you look at our monthly budget, you’ll see we have projected expenses.
These short-term savings would be saved or paid for within the budgeting year.
We also save more than one year in another bank account for renovations.
For this reason, we have accounts where we can transfer money quickly from bank to bank.
My Simple 10 Step Mini Budgeting Series includes projected expenses built into our monthly budget.
At the end of the month, any money left after paying our bills goes into our emergency savings.
Our emergency money is saved in another high-interest bank account with easy access.
The type of budget we use is a zero-based budget where all money has a place.
Our monthly budget includes retirement savings, but those are long-term savings for retirement.
Own Your Short-Term Savings With Pride
The worst thing anyone could do is set up short-term savings goals and throw them out the window.
For some people, once they tap into their savings, it doesn’t stop because it becomes an excuse bank.
Don’t be that person, and start saving the money you need without tapping into reserves such as credit cards.
For example, if we set up a goal to landscape our property in two years saving $10,000 cash, we do it.
The idea is not to wait until you’re broke to find ways to earn extra money.
If you’re worried about your income streams, do something today to beef up your savings.
Once you control the short-term savings, you’ll realize how significant the long-term savings will be.
Discussion: How do you manage your short-term savings?
Feel free to leave me a comment below.
Thanks
Now, on to our July 2022 Budget Update.
CBB Family Budget Report
July 2022 Budget Summary
In July, we spent quite a bit of money, considering our net income was just over $12,000.
One of our short-term goals is to save money to pay for renovations we’d like to have done within the next five years.
I’ve been working on a complete tear-down of our primary bathroom and am sparing no expense to rebuild it.
We also rented a bin to throw out the demo materials that cost us shy of $500 for one week, which included the dumping fee.
I thought that was reasonable and comparable to most companies I contacted in our area.
For the most part, I have all the materials paid to finish up the master bedroom bathroom so I can work on other small projects.
Next spring, we will have enough money saved so I can build a brand new extended deck.
Thanks for reading.
Mr. CBB
Year To Date Percentages 2022
Our savings of include investments as well as any savings for this month based on the net income of $12,096.62.
Equally important is that we save money on our projected expenses due in the coming months.
An excellent example of projected expenses would be buying Christmas gifts in December or throughout the year.
All categories took 100% of our income, showing that we accounted for all the revenue in July 2022.
This type of budget is a zero-based budget where all the money has a home.
Budget Expenses Percentages
Monthly Home Budget Breakdown
Below is a breakdown of our expenses which helps us understand where our money goes.
- Chequing– This is the bank account from which we pay our household bills. We use Simplii Financial, TD Canada Trust, and Tangerine Bank. Join Simplii Financial today! Read more about the best Canadian online virtual banks.
- Emergency Savings Account– This money is in a laughable high-interest savings account.
- Regular Savings Account– This savings account holds our projected expenses.
- Monthly Budgeted Total: $6564.18
- Monthly Net Income Total: $12,096.62
- (Check out the Ultimate Grocery Guide to see where our grocery money goes)
- Projected Expenses: These are expenses we know we will pay for throughout the year = $905.00
- Total Expenses Paid Out: $9,628.12
- Total Expenses Paid Out: Calculated is $12,096.62 (total net monthly income) – $905.00 (projected expenses) – $1563.50 (Savings to emergency fund) = $9628.12
- Actual Cash Savings going into Emergency Savings: Calculated is $12,096.62 (total monthly net income) – $9,628.12 (actual expenses paid out for the month) – $905.00 projected expenses) = $1,563.50
Estimated Budget and Actual Budget
Below, you will see two tables: Our monthly and actual budgets.
Our monthly budget represents two adults and an 8-year-old boy.
Budget Colour Key: It is a projected expense when highlighted in blue.
Since May 2014, we’ve been mortgage-free, redirecting our money into investments and renovations.
Spending less than we earn and budgeting has been the easiest way to pay off our debt and save money.
Monthly Budget Amounts July 2022
Actual Monthly Budget July 2022
I’ll be back in September to share our August Budget Update.
Keep reading below to see how our 2022 Budget Challengers are doing with their monthly budget report.
Thanks for reading,
Mr.CBB
Monthly Budget Challenge 2022
Welcome to the 2022 Budget Reports from our 2022 budget challenge.
Over the past two years, this challenge started with many positive CBB readers who wanted to join.
For 2022 we began with six people ready to change their lives by challenging how they manage a budget.
As of July, we have four budget challengers for the rest of 2022.
Each budget summary will always fall under the same Budget Challenger number below.
If you comment on any of the budgets below, always use the budget challenger number so they know it’s for them.
Budget Challenger #1
In July, I had to fix my car, which cost me $800, which I put on my MasterCard.
- My cell bill is for three cells for my children and me.
- Starting in August, I want to go all cash.
- I doubled my power, water and energy bill. It’s been hot lately.
- Increased my RRSP contributions from $100 to $250 now per month
- Cancelled Netflix and TSN
- Crave and pay 16.70 dollars per month.
- I spent lots of groceries.
- We had a staycation.
- I went to the grocery store a few times
- A Checkout 51 cheque for $81 came in the mail.
- I received my carbon tax rebate of $137.50.
- I’m still planning a yard sale.
Thanks
Budget Challenger #3
Hi Everyone,
I will start by answering your questions in June.
‘Did you find it hard to find a renter?’
No, I don’t have much of an issue with finding renters.
This year I used Places4Students.com, where my ad was up for two weeks and had our lease signed and deposit secured.
They will pay the 1st month’s rent when they receive their keys in September.
I had also put the ad up on Facebook Market Place and Kijiji and had over 20 responses for the last two alone. I would put the rental ad on Kijiji in previous years, and it worked successfully.
We have a pretty solid lease that my husband perfected (and had reviewed to ensure we are covered).
As we stick to primary students, we haven’t had many issues with the Tenant Act.
One student tried to challenge us but failed as they were unaware of the Act and never issued a formal complaint.
‘Can you increase the rent once someone leaves?’
Yes, you can increase the rent once someone leaves.
There is no one to challenge this as it’s not a rent increase while they live there without notice.
Since the rental was empty, we did increase the rent this time as a bachelor suite in this city is harder to come by.
So you will note that the rent from source #4 is up to $650 from the previous $600.
We also decreased the amount of their private space and furnished the suite so a Student could bring clothes and a few personal touches.
While the ad was on Kijiji, we ended up with a contract worker needing a bed for a month, so we accepted rent between July/August until our September tenant arrived.
Now for our July Budget Update.
My budget was under – $306, but I got the bank back in balance, so no fees occurred.
We dropped our streaming service, and the summer is busy enough that we won’t use this anyway.
Budget Challenger #4
Greetings, CBB!
My July budget felt pretty good, spending-wise.
As I mentioned last update, part of the highway between BC and the Yukon washed out on Canada Day.
Due to this incident, people in our community took action, but some got greedy.
A) People panicked over how groceries were going to get up here.
I observed a man trying to buy 30 cartons of eggs in defiance of the “2 per customer” posted limit.
B) The situation created some exciting meals from the contents of my pantry/freezer.
Once again, I went over my food budget – I’m blaming parties and junk food.
I’m considering transitioning into a lower carb, higher fat (LCHF) eating habit in August.
As of now, I’m not ready to go keto, but increasing my veggies and cutting down on grains seems manageable.
So July was a month of consuming the carby foods in my kitchen and not replacing them.
I also picked up a container garden on the Buy & Sell for a quarter of the new price.
Over Christmas, I did some research but couldn’t thoil* the price tag, so I will be able to grow lettuce/kale and some greenery indoors all year.
Thoil – a Gaelic word I picked up from Gail Vaz-Oxlade, meaning “to be able to justify the expense” – as in, “I could afford the full-price container garden, but I couldn’t justify the expense of it.”
Such a handy word!!
It was a lovely surprise to open my electrical bill and see a minimal amount – $28.14.
It turns out there was a $50 Inflation Relief Rebate included in July so that I could sock $100 of my $130 budgeted electrical amount into my Electrical PE Account in case of higher numbers in the winter.
In the past, I have put the budgeted amounts into the PE accounts and taken them out as needed – often in the same month.
My income/expenses look inflated when I do that, so I’m working on managing my PE deposits in a way that looks better but still makes sense to my brain.
That’s CBB Challenger 4 for July!
See you after my trip to Ontario in August!
Budget Challenger #5
July was exciting as I injured myself on July 1st and was on bed rest for most of the month.
You’ll notice that our expenses were low since I wasn’t going into the office.
I can see the appeal for people to work from home gas, groceries and fast food was down for me significantly.
In July, my gas was higher because twice I had to go for appointments outside of where I live; otherwise, the gas would have almost been nil.
We have a lot of upcoming expenses next month as we expect six cords of wood to be delivered.
I also think my brakes aren’t in great shape, so those may need replacing next month.
My fingers are crossed, though, in hopes that I may be able to get away with it until September.
I’m also planning for a vacation week in November, and November is also a car inspection which I’m nervous about.
With so few cars available, I’m worried that my car is near the end of its life.
I guess we’ll have to wait and see what happens!
July Budget 2022
- Gas $67.22, $56.87, $56.$16, $55
- Fast food $15.78, $17.33, $15.53
- Internet $110
- Entertainment $14.94, $14.78, $11.49
- Health $10
- Grocery $50.49, $15.09, $54.69, $4.01
- Savings $200
- Power bill $194.02
- Car/house insurance $165.66
- Phone $72.84
