How to be an adult part 2: Simple Budgeting Guidelines
Now that you understand how your pay cheques work let’s talk about budgeting that money.
What is a budget?
So what exactly is a budget? Well according to the smart people over at Merriam Webster(the dictionary people) Budget as a noun is defined as:
a : a statement of the financial position of an administration for a definite period of time based on estimates of expenditures during the period and proposals for financing them
b : a plan for the coordination of resources and expenditures
c : the amount of money that is available for, required for, or assigned to a particular purpose
And as a Verb:
1a : to put or allow for in a budget
b : to require to adhere to a budget
2a : to allocate funds for in a budget <budget a new hospital>
b : to plan or provide for the use of in detail <budgeting manpower>
So basically, for our purposes of personal finance a budget is the plan you give yourself on how you’re going to allocate your money. It doesn’t have to be spending, if you’re budgeting your pay cheque it should certainly have savings in it. Also you may want to include something towards an emergency fund.
How does one go about making a budget?
5 Simple financial restraints to change your spending habits
What the hell is a financial restraint? Well it maybe a term I just coined. When googled there’s not a lot that comes up! So, my thoughts on what financial restraints are this; it’s anything that keeps you disciplined in your spending. Basically, it’s your sheer determination or habits that prevent you from spending money. Read more
How To Be A Successful Adult: Understanding Your Paycheck
This seems like a topic that shouldn’t be needed. Your paycheck is quite simply your pay for performing your job at your place of employment. You have a total at the bottom that tells you how much money you’re getting. What’s so hard about that? Well I consistently see people who have received paychecks for decades tell people incorrectly how taxes work and many other mistakes. On top of that there’s sometimes dozens of additional lines that add and subtract money. There could be anything like health benefits, dental, life insurance, pension, GRRSP, union dues, tool allowance, and a hell of a lot more. Read more
2017 Goals and Plans
As you may have already read from my Q4 2016 post I achieved about half of the goals I set out for myself and this blog last year. I’m not usually one for New Year’s Resolutions but this blog turns out to be a great accountability check. If I post goals and plans for everyone to see, I better be planning on completing them or else I look like a fool! Or at least I think I do and you guys just don’t care.
For this year I’m going to load myself up with some goals and hopefully crush them all! For the sake of organization, I’ll break them down into a few different categories. So here we go! Read more
Another year is over and so here’s another update, this time for Q4 2016. As I mentioned in my last quarterly update I was jamming all of my trips into the last half of this year, so we’ll say I was on vacation…even though I probably wasn’t.
I’ll do a quick brag about my trips to start this off and get it out of the way. Read more
Happy New year everyone!
I hope 2016 was better to you than the media portrayed it to be. For the last few months of the year you’d swear nothing good happened. I think those people just didn’t have time to look at their retirement savings. The year was pretty solid overall for the markets, the Dow Jones was up 14.4% as of closing just before Christmas.
Very solid year for the Dow Jones
For Canadians, the TSX composite index was up 17.8% over the same time period! So, if your investments are close or matching these indexes you’re looking at a possible 14-18% return for one year. To put that into perspective you’ll double your portfolio in 5 years without any additional contributions! Read more
How to make money in real estate? That’s a very popular question and has tons of answers! You can literally make money with lots of different options, and each option has multiple ways to execute them. On top of that, you can apply each of those options to different areas of real estate like residential, commercial, industrial, etc. I could go on for a while with these but I won’t. Soooo see ya next week!?
NAAA! I’m just kidding…had ya for a minute though didn’t I? You thought I was going to take my dozens of blog dollars and disappear for ever didn’t you? Actually, I’m just going to touch on a few popular options and a few lesser known options on a higher level. In a future post I’ll break each of them down in greater detail, but for now we’re just going to dip our toes in the water on how to make money in real estate. Read more
Comparison sites have been around a long time; you’ve almost certainly used some yourself. Have you ever searched for a trip on Expedia or Kayak? I do it all the time, you can usually save a few hundred dollars on trips you’re planning. They’re also great research tools to help plan and budget your trips.
Have you ever bought anything on Amazon or eBay? Me too! You’d be foolish to buy something online and not consult these sites for price comparisons. You’d also be foolish to not check a site like Ebates to get an even further discount on your trips or products or money back.
While the above-mentioned sites work great for 90% of our purchasing. They unfortunately don’t help us with big ticket items like insurance and mortgages. Insurance typically is worth thousands of dollars and mortgages are often in the hundreds of thousands. You can save more on these than you would on almost any other purchase, besides the houses and cars themselves. Apparently, Canadians just don’t do this. According to a recent study by LowestRates.ca only 8% of respondents used a comparison site to source their most recent mortgage! WHAT?!?
Why would no one use these financial comparison sites?
Money tips for any age
Here are four money tips that you will either have success with, or you will regret not following. The choice is yours!
Never finance depreciating assets
If you’re borrowing money and the asset depreciates in value you’re paying much more than you think. Debt is not a bad thing if used correctly. If you use it to purchase properties that increase in value it can be worth it. You can borrow at 3% on a mortgage and you gain 4% each year on average on that house value, your net worth will still be increasing. If you buy stocks on a margin and they gain more than the cost to service your debt, you’re still ahead.
It’s when you buy everyday products on a credit card and don’t pay it off before you incur interest when you fall behind. With a depreciating asset you’re losing money over time on owning the asset and you’re also paying interest to own it. Look at owning a new car for an example. Buying a new car at 0.9% interest is a pretty good deal as far as finance rates go, but you’ll still pay more to lose money. Buying one at 0% is even better, the car will depreciate but you won’t be on the hook for any interest. Read more
How did I change my financial mindset?
My financial mindset has changed over the years. Growing up and always having some kind of income since I was about 10 years old definitely gave me a good work ethic. It also gave me a lot of spending money because as a kid I had no financial obligations. Because of this abundance of spending money, my financial mindset started off terrible. I had no problem buying myself comic books every week or snacks at the corner store. This all lead to probably an excessive spending habit in my later teenage years when I discovered paintball. After playing twice when I was 12 or 13 I went out and spent $400 dollars on an entry level gun and mask. After a few more times, I upgraded my mask to a thermal lense and started to spend more and more on gear. This grew over my teenage years to having 5-6 paintball guns at any given time and countless accessories. Read more