Friday, 26 February 2016

Progress Report on The Recently Improved Budget

For the past five years, I've been converted to and a huge believer of the Church of Budgeting! It's crazy how much my life has changed in the last few years with a budget. I still have my super archaic budgets from the previous years and it's funny to see how much I've progressed from them. I started out like most people who graduate university with a shiny new degree and specialized certificate, super enthusiastic and ready to take on the real world. What no one really tells you is that you also graduate with the huge OSAP loan you took out to go to school and now have to start making the payments. Not to mention, I went to Italy to study abroad and started to rack up credit card debt. With reality crashing in, life seemed so bleak and caused so many sleepless nights. Feeling helpless with just a weekend job to barely pay for rent, some groceries, a phone bill, so many numbers clumped together on my OSAP loan and with my credit card debt at 19.99% interest, I was pretty sure I was seriously f*%$ed! I figured this must be the way life is and all my peers I knew were in the same situation and most adults I knew were always worried about money and had some form of debt. It was very discouraging, until one day I decided to do something about it. I didn't know where to start but I knew I had to just start anywhere because I was going down a path I was just not happy about. I feel like this is where school really started for me. I found Gail Vaz Oxalate's tv shows, read everything I could get my hands on at the public library, scoured the internet and asked people around me for advice. Little did I know that most people knew nothing of personal finance, not even my parents! It's funny how our whole lives we believe our parents know EVERYTHING about EVERYTHING! The realization that your parents don't know everything and pretty much winged everything is pretty astonishing!

From the day I decided to take charge of my life I've always had a budget, it's numero uno in my eyes with regards to money. I refer to it at least once a day and use one detailed budget throughout the year. It helps me keep track of hours work, when I'm paid, for what projects, dates I paid to funds and confirmation codes for those payments etc. Regardless of income, without a budget you can't see where exactly your money is going and how to plan for your future goals. It helps keep you accountable. You can clearly see if you paid into your funds weekly or monthly (however you set it up, ideally should be timed to when you are paid), when you've paid your bills and all that. People think budgets are set in stone and that once you make one you can't keep it cause it's not workable. But budgets are fluid, they change and grow as you do. If it doesn't work you can change it or get rid of the unworkable section all together. It's so personalized, that you make it work how you see fit. It's taken me years to figure out what to add and take away in my budget, what works and what does not? How many columns do I need? If I should highlight sections? What text colours I should use to denote incoming and out going amounts? In the last couple months, I've changed my work schedule and took on some extra gigs and left behind some more stressful ones. I'm trying to focus on working efficiently with my time than just working to make money. The extra hours are crappy as they are during the week on top of my day job but the pay is more and it's both less work and stress. So, at the end of the day it made sense to me to forgo a few hours of sleep for a nice bump up in savings.

Lately, my issue was getting a little frustrated that I had focused most of my attention saving for a downpayment and other things. That one of my top, if not the top priority, my retirement was getting neglected. So, I sat down one evening and rejigged my entire budget to properly reflect what I wanted to accomplish. It was too skewed to save for the present and short term future items (next 5 years), that I was totally neglecting saving for the long term. The 67+ year old Julie! Possibly the early retired Julie! I knew this meant cutting back on things I really enjoyed right now, like eating out and splurging on little miscellaneous purchases but after two months I don't miss it as much! I've gotten really creative about it! Fruits have been incredibly expensive lately, that I've started to snack on frozen cherries at work! They were free from my mom's cherry tree that I pitted and froze from last summer. I still have the food tax implemented and it's doing quite well. I've only eaten out a handful of times since the year began and have paid the equivalent into the fund every time. Being honest with myself with out cheating on my budget makes me feel so good about it. It makes me think twice about how much I really want to have a nice dinner out for $30 because I'm now paying a total of $60 for that same plate of food! I haven't decided what I'd do with the extra money at the end of the year but it's nice to know that money is growing if I do hit up a restaurant. It's also nice to know to find out what the exact dollar amount I spent eating fast food and restaurants would be too! Ask anyone, I hate and can't do math to save my life but for some reason when it comes to money I love calculating and figuring out everything! I want to find out as much info as possible and track everything! I don't know why but it's so much fun for me! I love seeing the progress!

This new budget meant I didn't have unlimited fun money anymore, that I needed to set amounts for everything I was planning to spend to maximize every dollar that was coming in. Couple of issues I'm having are the grocery budget, fun money and extra income.
- Groceries are so hard to budget for! One week could be hundreds of dollars or the next could be $20 because we decided to eat from our reserves at home. And being a relatively new fund, I don't have any roll over from previous weeks that it sort of balances itself out. So, I end up taking money elsewhere to make up for the different.
- Fun money has just been accumulating and as much as I want to spend it, I'm having a hard time feeling comfortable blowing it all at once. I've read up many blogs and articles about how people feel guilty about spending money when they have all these savings plans/goals. I think I'm one of those people but not quite as bad! I enjoy to spend money here and there but I think I'm trying to somewhat hoard it for more fun times like all the food festivals in the summer we love to go to. I always think that there will be a time where I really need to blow it all, but that time never really comes up. It's good and bad, I suppose. And all the travelling fun money I want to spend on trips! Plus, being that it's winter and cold we've been holed up in our place enjoying Netflixs, craft nights and puzzle time. Not to mention free Yoga in the building! We really need to be more on top of the free activities to still have fun without the money part.
- Extra income also sort of messes up my budgeting. It's a good problem to have, I know! I've done a lot of extra hours at work to cover for a co-workers on vacation or to cover last minute sick people but I'm incredibly lazy to allocate where they extra money goes to and to calculate all the extra hours and money. So, I've sort of brush it over to cover the extra groceries and when we do eat out I pay off the meal and the food tax from this money. I have used a bit left over to top up my TFSA that I'm using as my retirement but then it gets kind of blurry that I probably should be paying off my "debt" that I owe to a couple of funds. As much as I'm on top of my budgeting, I've had my lazy moments too. It can get mentally exhausting have to be an adult all the time about everything and always dealing with money. I would love to grab a big wad of cash and blow it on crap! Bahahaha! Yeah, right! Not very likely going to happen!

Five years later after my first budget, I'd have to say how much a pain in the ass the upkeep can be but the rewards are so amazing! You really get what you put into it! What you could do with your money if you just put a bit of time and effort into it and not mindlessly wander through life is ENDLESS. Like what Gail say's and I'm paraphrasing "you can have everything you want, just not at the same time." And I believe it too! Whoo knew, I'd be able to do what I love, travel the world and have my debt paid off! Life is so different now! I LOVE it! I feel empowered and knowledgeable about my money and you can too! I tackled one of my greatest fears and turned it into my greatest ally. Read a couple articles a day and start today! No joke, I read money articles from about twenty different websites each weekday. Some sites, I can be reading about 10 articles or pages and pages of forums with questions from everyday people. There are tons of bad advice out there as well, but in time you see what works for you and you can easily weed out the crap stuff. See who is writing the article, be skeptical! If it's from a guy who works at one of the five major banks trying to sell you their services, be wary he's working for commission.

Good luck! Hope budgeting brings you as much joy and sense of security as it does me.

Eros and Pookie