Did you know that October is National Financial Planning Month? Sexy, I know. Well, although having peace of mind in your finances may not be sexy, it does take a load of stress off your back, doesn’t it? So, in honour of this time of year, I planned (months in advance) to share a post of this kind with you.
When I shared a post on money words, which I still think are important to know about, in that same post I linked you to my favourite Canadian finance blogs. In another post, where I gave advice to new and returning students, I said that students should keep track of whatever money is coming in. Well, consider this post to be the sister of that post because I believe that everyone (not just students) should have and keep a budget. I don’t care how rich you are, you should have a budget.
So, of course (given the title and what I have said up to this point) you know that this is going to be a post where I share my own budgeting tips and tricks. So, without beating around the bush, here are my budgeting tips…
Tip #1: Have a budget.
You have to have a budget! People who go deeper and deeper into debt are doing it because 1. they have no budget and 2. they have no budget! Of course, there are circumstances where you might be going into debt because you don’t make enough money, and, in Gail Vaz-Oxlade’s words, “you are using credit to fill the gap,” but in those cases you should really build a budget, look at how you can cut down your expenses, and possibly take on more work to make ends meet and have a nest egg too.
Tip #2: Save some money. 💴💰
I shouldn’t even have to tell you this, because anything can happen in life (and trust me, I have been there and bought that t-shirt on how stuff can really hit the fan in your life), but you have to have some a little something left aside in case you can’t work or if you have to go away from home because of an emergency. If possible, you should also save to achieve goals or dreams in life – such as buying a car, a house, a vacation that you really want to take, or even for your own wedding. So yes, I believe in having an emergency fund and a goal/dream fund. Set your budget according to how much you have coming in, and stick to it every month. If you have a lot of debt, and you can’t afford to save a lot, then save what you can. A little bit is better than nothing.
Tip #3: Leave room for play.
An entertainment budget is highly important, no matter how little you make and how little you are able to put aside for play because it gives you a little boost every month that keeps you going. Everybody needs something to look forward to (that’s why some people look forward to Friday when they work those jobs they absolutely hate). So, whether it’s $20 or $100, leave room in your budget for fun.
Tip #4: Keep your receipts.
I keep my receipts because it helps me see where I can cut back on my spending, and it also helps ensure that everything I’m writing down is accurate. If you do online shopping you can always print off the invoice that they send you via email and stick it in your receipt folder. I thought about buying one of those fancy ribbed things that people hold receipts in but in the end, I settled on using an old pencil case. It zips up (which means everything stays in place), and when I run numbers at the end of the month everything is paperclipped together in there. I don’t keep my receipts all year long (because I think that would be too much for me), instead, I keep the receipts of the month, write them down as they come in, and recycle them at the end of the month (consequently making room for new receipts).
Tip #5: Revisit your budget annually
I’m not at the point where I need to do this yet, however, with the passage of time, things change. Perhaps you got married or engaged (or you moved in with that someone), perhaps you switched jobs or moved into a new home; maybe you lost your job, maybe you took a pay cut, or maybe you took a pay raise. It’s important to consider what needs to change, what needs to stay the same, and what can be made just that little bit better. So revisit your budget before the start of a new year (and that year would begin whenever you decide to start budgeting).
Tip #7: Write it all down
Yes, it’s important to monitor your spending, your savings (which you should have) and basically all the money that’s going out and coming in. Although there are online and mobile services that could do this for me, I like pen and paper. After searching for a budget spread for someone who is trying to save and live at the same time (while living free of debt – yes, I am very blessed) I gathered what I learned from browsing the net (specifically bullet journals), I remembered what I learned from Gail Vaz-Oxlade’s shows (Till Debt Do Us Part, Money Moron, and Princess), and came up with my own spreads. I have a savings tracker, a monthly variable spending log, and a monthly fixed expenses log. Although they’re not the prettiest spreads (as I don’t have the neatest handwriting or drawing skills), I am still happy to share my journal spreads with you below (please note that these pictures were taken way in advance because I wanted to share this blank and because I also wanted to share this post when I had spent most of the year keeping up with this):
Monthly Bill Calendar:
Monthly (Fixed) Expense Log:
Monthly Variable Spending Log:
I first heard of the concept of “variable” and “fixed” spending from Gail Vaz-Oxlade, on the shows that I just mentioned. She has a no-nonsense approach to spending and saving, and I highly suggest that you check out her website and those shows. Although last time I checked, she’s not blogging about money anymore or doing any of those shows, her teachings are still out there. You can catch some episodes of her shows on T.V. from time to time, and they are also uploaded to YouTube. “Variable” expenses are expenses that might not be the same from month to month, they are mostly non-essential to life, and they are the things that you start to cut down or out of your budget if it needs to get tighter. Variable expenses might include clothing (which I personally have a budget for), and anything else that changes from month to month. “Fixed” expenses are usually bills that are set in stone (such as your rent, utilities – for the most part, they stay in the same ballpark, and, for me, they might include things that I try to stay fixed on (like my self-care/grooming supplies, entertainment, and my monthly transportation). I also have a savings tracker which allows me to write my savings down.
To make my money journal pretty (a journal which I picked up from Walmart), I bought money bag stickers from a shop called SweetAvasPaper which operates out of Middle Haddam, Connecticut, and “Bill due” flag stickers (to track when a bill is due on my month-at-a-glance bill calendars) from SweetKawaiiDesign in Portland, Oregon, U.S. I also used year-at-a-glance stickers from a seller in Derby, England called BTSJoyOnPaper, which you can actually highlight and write on:
Everything else was made functional with the help of a pencil, several pens (one of them is pictured – a gel pen), and a ruler:
So, that’s it! Do you think there is anything that I missed? Leave it in a comment down below so I know!