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Budgeting Part 1

Lets face it. It is so much easier to spend than save. We live in a spending culture. We work, we spend, we work, we spend ... such is the way we live our lives in North America. 


Spending is like a disease ... if left untreated the credit card bills start to grow. Does this remind you of anyone you know?


  • Go for a walk and stopping by a coffee shop for some hot chocolate x3 times a month ... 20 dollars
  • Have friends in from out of town and eating out at least two or three times ... 250 dollars
  • Upgrade some thing in your house like a lamp, rug or table to freshen things up ... 100 dollars
  • Meet the gang from work in the morning for a coffee before work 15 times a month ... 45 dollars
These "necessary" expenses can blow a whole in any ones cash flow, and they happen because we don't plan or budget for them. 


There is no such thing as bad expense ... as long as you can afford it and it  is planned for.

The problem with budgeting is most of us have avoided doing it for so long the thought of controlling our spend is the last thing on our minds.


Here are some ideas I have used personally and with my clients that have worked ....


"Less transactions means more money in your pocket!"


Take out your credit card statement(s), and bank statement(s). If your each statement is longer than one page you are in trouble. By the end of the month it is unlikely you can even remember what you are spending your money on, and it is very easy to over spend.


If you cut the number of transactions you make you will SAVE money.


So how do you cut your transactions easily? Get Organized. You only have to do this once or twice a year. Once you have a frame work the rest of the budgeting goes easily.


Grab a note pad and list your typical bills in any given month. Most of us only have 9 or 10. Here is a typical example

  1. Rent/Mortgage - monthly on the 1st
  2. Hydro - monthly on the 8th
  3. Car Payment - monthly on the 11th
  4. Car Insurance - monthly on the 12th
  5. Gas for your Car - weekly 
  6. Telephone/Internet/Cable - monthly 18th 
  7. Food - weekly
  8. Life Insurance - monthly 23rd
  9. RSP Savings - monthly 24th
  10. Credit Payment - monthly 24th

Next write them on a calender. Then choose which  day of the week you want to pay the weekly bills. I like Fridays before I we go grocery shopping.


Before you go to the next step go over this with your spouse/partner. Make sure you haven't missed anything and that the frequency makes sense for you. Maybe you prefer to go shopping twice a month instead of weekly.


Your goal ... a bank statement and credit card bill with only 10 transactions on each. Yes it is possible. This change alone can SAVE you 200 - 300 dollars a month.


"Put the calender or list on your fridge so you can see it. Congratulations on completing step one!"


In Budgeting Part 2 we will talk about the next step ... how using Cash will SAVE you even more money and time!

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