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five friends celebrating New Year's Eve

Ring in NYE without all the bells

Tired of being let down by the hype of New Year’s Eve? Us too! Here are some tips to help you ring in the New Year without breaking the bank.


New Year’s Eve is a day to look back on the past year, whether that be celebrating your successes or reflecting on some challenges you had experienced. It’s the day to start thinking of the year ahead and what goals you want to achieve.

However, for many, instead of reflecting and goal setting, we get caught up in the hype of the night’s activities. As soon as Christmas ends, we start worrying about what we’re going to do for New Year’s Eve and what we’re going to wear. We tend to forget what really matters, spending the time with the people who helped make the past year what it was. Yes, you may have a killer outfit on and the best party to attend but if the people that matter most aren’t with you, does it really matter?

No expectations approach

This New Year’s Eve eliminate all the stress of finding the perfect outfit or the best event to attend and plan a casual night to hang with family and friends instead.

For a more relaxed day and evening, consider doing one of these activities:

  • Go for an afternoon coffee with a friend you haven’t seen in a few months. Not only will you get to catch up, but the coffee may help you stay awake for when the clock strikes 12!
  • Have a pajama movie marathon – did someone say Harry Potter? Grab some popcorn and snacks and make a whole evening out of it.
  • Get outside and take part in some winter activities such as skating or a game of shinny, tobogganing or build a snowman. Too cold outside? Have a ‘snowball’ fight inside using rolled up socks… clean of course!

Don’t break your bank

Yes, it may be fun to treat yourself for the last night of the year, but we often overspend, waking up the next morning with the feeling of regret. You don’t need to fork out a bunch of money to have fun. Consider some of these fun activities that allow you to celebrate NYE without breaking your bank.

  • Start your day off with breakfast in bed – skip going out for brunch and make yourself eggs benny and pancakes at home. Even better, you can stay in your pajamas!
  • Make your own extravagant meal or have a potluck. Make it even more fun by having a theme. Who doesn’t love a good meal filled with great conversations with friends?
  • End the year with some competition by playing board games. Guaranteed for some laughs and hopefully not too many arguments. A few of our party favourites include Catch Phrase, charades and Pictionary.
  • Have a cocktail potluck. Have everyone bring a bottle of their favourite liquor and make your own fancy cocktails at home. Need some drink inspiration – check out some NYE cocktail recipes here.
  • A party isn’t a party without some music. Have each of your party guests send you their top five favourite songs from the past year and make a NYE playlist to dance the night away.
  • Make a time capsule for the last year. This allows you to celebrate the New Year and reflect on the previous year at the same time.  Have each guest think of a question (e.g., what was the best thing that happened to you last year or what was an obstacle you faced but overcame) and put into a box to look at later in the night and reflect with your friends or family.

This year don’t get caught in the hype of NYE.  Spend the time doing things with the ones you love and create more memories to reflect on in the years to come.

What are some ways you’ve rung in the New Year that didn’t break the bank? Share with us below.

holiday wrapped presents

Giving the gift of time

It’s not about how much you spend on a gift or how big the gift is, but about the emotions and experiences you create. Check out these 30 time/experience gifts, guaranteed to create memories with your loved ones.


Have you ever received a gift during the holidays that you thought was useless junk? If you said yes, you’re not alone! Last year, an Ipsos poll exclusive to Global News showed that one-quarter of people surveyed said most of the gifts they get during the holidays are useless junk.

How we feel about a gift usually comes from the emotions we get from it. Receiving another coffee cup provides us little emotion or satisfaction while receiving some type of experience can cause a variety of emotions and satisfaction, especially those that leave a lasting memory.

This holiday season consider giving the gift of time/experience and making homemade coupon vouchers for your loved ones – guaranteed to create smiles, build relationships and make memories.

Below are 30 voucher ideas to give to your loved ones.

10 ideas for kids

  1. Picnic at the park
  2. Car cleaning – inside and out
  3. Breakfast in bed
  4. Personalized chef for the day
  5. Control of the remote for one evening
  6. Breakfast for dinner – your choice
  7. Backyard camping night
  8. Date night – you pick an activity
  9. Foot rub
  10. Day of ‘I Love You’ – every hour list one thing you love about your significant other.

10 ideas for parents

  1. Sleepover at Grandma’s house
  2. 1-hour reading time with parent or grandparent
  3. You pick the supper menu tonight
  4. Movie night in – your choice
  5. Pillow and blanket fort building contest
  6. Game night – your choice
  7. Stay up 30 minutes past bed time
  8. Pick one item to add to the grocery cart
  9. Day of tobogganing
  10. Day of skating

10 ideas for couples

  1. 1-hour yard work
  2. Breakfast in bed
  3. An evening of babysitting so you can go on a date night
  4. Folding and putting away all laundry
  5. Spa day at home
  6. Cleaning of the bathroom – toilet included
  7. Parents day off – stay in pajamas all day
  8. DIY photo album day
  9. Homemade dinner including serving and kitchen clean up
  10. Design a scavenger hunt for the whole family

 

When creating vouchers for the ones you love consider their age, who they are and what their interests are.

This holiday season remember it’s not about the amount you spend on a gift or how big the gift is but about the emotions and experiences you create. Gifts that come from the heart are usually the best gifts of all.

What other gifts of time/experiences ideas do you have or have you given? Share with us in the comments below.

List of payments

How much money should I spend on…

Where should you be spending your money? This blog shares the recommended percentages on where you should be spending your money on things such as housing, transportation and more.


 

A budget is a plan that can prioritize your money. It allows you to see how much money you’ll bring in each month (income) and where you plan on spending (expenses) your money. It also allows you to understand where you may be able to decrease budget within some categories such as living expenses or increase your budget in other categories such as savings. Most importantly, it helps to set a plan to not spend above your means.

A budget can also help you see what percentage of your income you’re spending within the different expense categories. Below we break down the different expense categories and the recommended percentage of income you should be spending within each.

Housing

We recommend keeping your housing expenses to 30-40% of your income. Housing expenses include your mortgage/rent, condo fees, property taxes, insurance, maintenance and utility payments.

One popular rule of thumb says that you should set aside 1% of your home’s value each year for ongoing maintenance (vent cleaning, paint refresh, etc.). For example, if your home is worth $250,000, you should budget $2,500 each year for maintenance. We recommend setting money aside each month into a savings account to cover these maintenance costs when they occur. Doing so, will help you be prepared for those larger expenses and not be ‘scrambling’ to find money within your budget to cover a large expense.

Though many of these expenses are fixed, meaning you can’t change the expense amount, there are a few ways you can reduce these expenses. Consider reducing the amount you use/spend on utilities. This can include installing a rain barrel to collect rainwater to water your yard or trying out one of these eight energy-saving tips.

Transportation

We recommend keeping your transportation expenses to 10-20% of your income. Expenses in this category include vehicle loans, gas, insurance and maintenance.

Some ways to reduce expenses in this category include using city transit, carpooling or saving on gas by using GasBuddy.com to tell you where the nearest and cheapest gas stations are.

Living expenses

For living expenses, we recommend keeping to 20-30% of your income. These expenses include childcare, groceries, eating out, entertainment, phone, personal care, clothing, gifts, donations, medical, etc. Though there are a lot of expenses in this category, many of these are variable expenses meaning they can be adjusted based on your financial situation.

You may not be able to change your childcare fees, but expenses related to groceries, eating out, entertainment, phones, etc. can be adjusted. Things such as cooking at home vs. going out to eat or picking a smaller cable package or cell phone package are all ways to help reduce these expenses.

Budgeting doesn’t mean you can’t have fun but instead helps you be aware of how you’re spending your money and to treat yourself in moderation and within your means. Here are a few creative alternatives to consider to help keep expenses down within these categories.

Debt repayment

If you have debt, such as a balance on a line of credit or credit card, we recommend keeping your debt repayments at 10-20% of your income.

It may be tempting to reduce expenses in this category before others when adjusting your budget, but we recommend trying to reduce elsewhere, like your living expenses before adjusting these expenses. Setting 10-20% of your income towards paying off your debt sets a plan in action for eliminating your debt and helps towards your financial freedom.

It’s important to always budget money to ensure your debt’s monthly minimum payment is covered and then apply extra money to your debt to reduce the amount owed even faster. For additional advice and tips on eliminating debt, we recommend checking out our Eliminating Debt blog.

Savings

For savings, we recommend putting 10% or more of your income into savings each month. This includes savings for your goals (short-term, intermediate and long-term), retirement, emergency savings, RESPs and more.

This category is truly about being sure to pay yourself first. Not sure what we’re talking about – discover more here.

To make budgeting easier for you, we recommend checking out our online Budget Calculator. All you have to do is insert your monthly income, expenses and savings and you’ll get a clear picture of where you are financially. You’ll also be able to see how your expenses fit within the recommended percentages we just discussed.

At the end of the day, setting a budget can help you stay focused on what’s important and give you guidelines on how you’ll spend your money. As for ensuring you stick to this budget though, that will be up to you.

stack of pancakes with fruit and syrup

No-spend weekend challenge

Weekend spending can add up. Consider taking the weekend off from spending and see how much money you can save. You may be surprised by the results.


When it comes to the weekend, how much do you spend? Think about the last few weekends and all the things you did. Did you eat out at all? Go shopping? Had a coffee date with a friend? When you start to look back at your last few weekends you may be surprised by how many of your weekend activities had a cost to them.

Many of us tend to spend more on the weekend as we’re not working to make money, but instead, we’re out spending the money we worked hard to make. This is because instead of having work to occupy us, we’re looking for ways to keep us busy.

What if you could take an entire weekend off from spending? What could you do with that extra savings? Give it a try and take our No-Spend Weekend Challenge this weekend.

The challenge

What qualifies as a no-spend weekend? It’s taking two days in a row such as a Saturday and Sunday and making an effort to not spend money on non-essential things. No dinners out. No brunches. No weekend coffee. No shopping. It means getting creative with what’s in your fridge and weekend activities, and only spending money on necessities such as groceries if needed.

Game plan

Ready to take the challenge but unsure where to start? We’ve got you covered. To help you succeed, we’ve planned an entire no-spend weekend for you below. All you need to do is accept the challenge and enjoy the savings!

Saturday

Get your day started off with an activity like free yoga in the park, a bike ride or grab your tennis racket and hit the court. In the afternoon, set some time aside to finish that project around the house you keep putting off or doing some of that dreadful cleaning such as washing walls and baseboards. Finishing it will make you feel so good and accomplished without spending any extra money.

In the evening, pack a picnic and blanket and walk to your neighbourhood park for an early dinner in the park. Too cold? Why not have a picnic in the living room?

End the evening with a game or movie night, dusting off games or DVDs in your collection that haven’t been used in a while.

Sunday

Start your lazy Sunday off with coffee and breakfast in bed while watching your favourite TV show. Use items in your fridge to make the ultimate omelette or whip up a quick batch of pancakes using this simple recipe.

Then head outside with your camera or smartphone to take some family photos. Explore your neighbourhood to scout out cool back alley or coloured walls for your backdrop.

For supper, take the pantry challenge and make a Sunday family meal with only the ingredients that you have at home. Spend the rest of the evening doing a puzzle or reading a book, then head to bed early for a good night’s rest.

 

Not spending money doesn’t have to be boring. The key to success is planning ahead so you take out the obligation of spending. The above schedule can be used as just a guideline for your no-spend weekend and feel free to sub in other free activities that you and your family enjoy. Need some more ideas? Try some of these no-spend activities out!

Taking the no-spend weekend challenge may be easier than you think and something you want to incorporate into your life more often. Challenge yourself to a no-spend weekend once a month, or if you’re ambitious, consider having a no-spend day at least once a week. Whatever you decide, remember there are endless ideas out there that don’t have to cost a thing and will help you save dollars in the end!

Completed the challenge? How did it go – hard? Easy? What did you learn? Share your experience below.

Girl holding a credit card

Building blocks of credit

Credit isn’t a bad thing if used responsibly and can be a tool that can help your future.


The word credit may be scary or viewed as something negative, but it can be the opposite. Credit isn’t a bad thing if used responsibly and is a tool that can positively help your future. Looking to get a mortgage? How about a loan for a new set of wheels? Building and having a good credit score is essential throughout your life and enables you to borrow money for these life events.

Importance of credit

Building credit is important as it identifies how you manage debt. By paying back the money you borrow with on-time payments, it shows you can responsibly manage debt and sets you up for the future.

A credit score will be given to you based on your credit behaviours. Credit scores range from 300 up to 900 points. When you’re first starting out, you’ll be at the lower end of the range. As you build your credit and display good credit behaviours, this score will increase. A score of 700 or above is considered good while a score of 800 or above is considered excellent. As good behaviours help improve your score, it’s important to note that bad credit behaviours can decrease this score. This score is with you forever, and it’s important you display positive credit behaviours.

You may think playing it safe by avoiding credit all together is the way to go, but in fact, it may be hindering you in the future. Without credit, you can’t show if you can manage debt responsibly which can impact your ability to get a loan, mortgage, etc.

Building credit

Start building credit as soon as possible. Start by applying for a low limit credit card after high school and paying the entire balance monthly. Credit cards are a great credit-building tool and can offer great additional features and benefits above and beyond just helping to build credit. Benefits from credit cards can range from insurance coverage to rewards points and even cash back to help pay your balance!

Good credit behaviours

Remember, good credit means you display positive credit behaviours showing you can responsibly manage debt. You can do this by:

  • Paying your monthly bills (utility, cell phone, etc.) on time each month. Consider setting up automatic payments.
  • Understand your spending and talk to a financial advisor to ensure the credit you have (credit cards, loans, etc.) is manageable and fits within your financial situation.
  • Pay your credit card balance in full each month. Remember your credit card statement ‘due date’ is the date the money is due on the account and payments typically take a few days to process. Make payments at least 2-3 days prior to your due date to account for processing times.
  • Do not apply for multiple loans or credit cards all within a short amount of time. Each time you apply for a loan, mortgage or credit card, the issuer does a hard credit inquiry or ‘a hit’ on your credit score showing that your credit has been checked. Excessive applications could affect your ability to be approved as it may look like you’re a riskier borrower or could be perceived as desperation.

Understanding your credit score and how your behaviours impact this score is important.  You can do a soft inquiry (an inquiry only visible to you and that doesn’t affect your credit score) by using www.transunion.ca. We also recommend speaking to your financial advisor. They’ll work with you to understand your credit and create a plan to help you reach your financial goals.

As you can see, credit doesn’t need to be a bad word. Building and developing good credit behaviours early on, help set you on the right track for life. Contact your financial advisor today to see how credit can be a positive for you.

What questions do you have about building your credit? Ask below and we’ll be sure to answer.

girl taking picture of food

Do you have the fear of missing out?

In a society of technology, we continually face the pressure of spending money – seeing what our friends are doing and purchasing and feeling like we have to keep up. This fear of missing out (FOMO) can have a big impact on our finances.


The fear of missing out (FOMO) is real. In a time where social media impacts spending habits, people are often urged to “keep up” and are constantly looking for the next big purchase, rather than save – because you can’t Instagram your savings account balance, but you can Facebook that vacation and Tweet that new pair of shoes. So, is the fear of missing out putting you into debt?

FOMO & debt

According to a recent study by public relations firm Citizen Relations, 56% of Canadian millennials (those aged 18 to 30) feel driven to live beyond their means because of social media. It’s the “fear of missing out” on trips, events, meals, shopping, sales – the list goes on.

Keeping up with your friends’ spending can be linked to social media as often when you make a big purchase you share it. If you miss that trip with your friends you are constantly reminded through social that you’re not there from their posts. Another study from Credit Karma found that nearly 40% of millennials have gone into debt to keep up with their peers. In an age of destination bachelor and bachelorette parties and destination weddings – how do you limit yourself to only spend what you have while still being able to afford the important life moments.

Say no to FOMO

  • Ask yourself “why”
    Before making a purchase ask yourself, “Am I making this purchase because I can afford it and it will make me happy?” or are you purchasing because your friends have it? Being able to identify a want vs. a need is an important question to ask yourself before you spend.
  • Limit yourself
    Figure out what works within your budget and set that as your limit. If you can afford to go out once a week for dinner and drinks with friends then stick to that. Find other solutions to going out, like inviting friends over and everyone brings a bottle of wine and appetizer.
  • Social media detox
    Limit your time on social media. Constantly keeping up with social media can directly relate to the feeling of keeping up.
  • Evaluate who you’re following
    Clean up the accounts you are following on social media by unfollowing stores and blogs. The less you see, the less temptation you will face to “swipe up” and swipe your credit card.
  • Buy for you – not your friends
    Recognize that everyone’s budget is different. We all have different incomes and expenses, so going on the expensive trip or upgrading your kitchen may have fit into your friends budget, but might not fit in yours and that’s OK.
  • Ignore the pressure
    Just like in high school, saying “no” to your friends might seem hard, but your friends should understand that sometimes you have other financial obligations. Finding an alternative hang out plan or trip that is affordable or further in the future that gives you time to save are great solutions to avoid the pressures of going out to spend.

Remember, FOMO is not an excuse to put you into debt. We’re not saying you should deny yourself of every experience, but instead when making purchases ensure 1) you can afford it and 2) it is making you happy – not your friends. Folding to the pressures of social media and your friends will not help your budget and will affect your finances later in life. It’s important to recognize the pressures of FOMO spending habits so you can spend responsibly.

couple looking at tablet

Pay Yourself First

Paying yourself first means saving first and spending what’s left over. This blog teaches you all about the why, how and where.


You’ve heard the term ‘pay yourself first’ many times, but what does it actually mean? For us, ‘pay yourself first’ means saving first and spending what’s left over – to put money into your savings each payday, as soon as you get paid and before you’re tempted to go and spend on something else.

But why?

Paying yourself first not only helps you reach your short and long-term goals, but you may also be surprised with all the benefits you’ll begin to see, including:

  • Setting saving as a priority;
  • Creating positive financial habits;
  • Being in control of your finances and future; and
  • Improving your overall financial well-being.

By spending only what’s left over after you save, you’ll also begin to understand your needs vs. wants a bit more, and understand how your previous spending habits may have impacted your saving habits.

But how?

Determine your short and long-term goals and the amount you want to save. Prioritize these goals from most important to least important.

When starting the pay yourself first method, start small to become comfortable with saving first, and spending what’s left. As you become more comfortable with the method, increase your contribution amounts.

A great way to ensure you don’t break away from this habit is to set up automatic money transfers each payday to move money automatically over into your savings.

But where?

There are many different ways to save money and your short and long-term goals can help determine which type of account you may need.

For example, if you’re saving for retirement, you may consider putting your savings into a Registered Retirement Savings Plan or Tax-Free Savings Account. If you’re looking to build your wealth, you may consider putting into a term investment or Guaranteed Investment Certificate (GIC).

Talk to a financial advisor to help understand what savings tool may be best for you and to set up an account.

Being in control of your finances helps you be in control of your future. By paying yourself first, you’re taking a positive step in creating good financial habits and contributing to your overall financial well-being. Now it’s up to you – start paying yourself first… on your next payday!

brown paper bag lunch of a sandwich and apple

What’s your daily lunch costing you?

Buying lunch may be convenient – and tasty – but the costs can add up over time. Learn how much your daily lunch purchases may be costing you and tips on how to save.


If you’re like me, you’re not a morning person. You hit snooze as many times as possible and you’re usually rushed to get out the door to get to work on time. You haven’t made lunch and decide you’ll just grab something quick from a local restaurant.

Depending on where you work, you may have easy access to a variety of restaurants that makes the temptation to purchase lunch even greater. Add the ‘cheap’ lunch specials and it becomes more of a habit than a once-in-awhile thing.  Unfortunately, it’s not so great for our wallets – let’s look at a few numbers to see the impact.

Looking at 10 different restaurants, I found lunch meal prices vastly ranged with the average person spending anywhere between $8 -$20 – and that sometimes wasn’t even including a drink! A typical lunch purchase will cost you about $14. The number may not seem high, but what does that look like over a year?

Thinking about your lunch routines, how often do you go out for lunch? Once a week? Two – three times per week? More? The more often, the greater the costs:

1x per week = Approx. $728 annually
2x per week = Approx. $1,456 annually
3x per week = Approx. $2,184 annually
4x per week = Approx. $2,912 annually
5x per week = Approx. $3,640 annually

The numbers are substantial once you start adding them up. So how do you save?

The simple answer… pack a lunch. Packing lunch costs a fraction of the cost of eating out and reduces the temptation to run out and grab something. The money you save can then be put towards something else such as a vacation, your retirement or even into your emergency savings fund. Check out the Pay Yourself First video to see how easy it can be.

Bringing the same lunch can become boring, which also can increase your temptation to buy. If this happens to you, consider making one of the great lunch ideas found below.

Packing your lunch the night before will help you save time in the morning and help fight the urge to go out. Even better, you’ll still be able to hit that snooze button one extra time – sounds great to me!

person holding a phone in front of a computer

Kick-start your finances: tracking your spending

In order to make your budget successful, you’ll need to keep track of your spending. In this blog, learn how to easily track your spending daily, weekly and monthly.


You’ve set goals, analyzed your spending habits from the previous year, and created a budget for the year to come. The next step is to keep track of your spending and ensure you don’t go over budget.

To track your spending, every transaction, whether cash, debit or credit, needs to be accounted for. This means everything! If you find $20 in your coat pocket and buy lunch, you need to track it. If you scour the couch cushions for lost change to buy a coffee, you need to track it. Every penny you spend needs to be tracked to ensure you have an accurate picture of what you’re spending, which will also help you budget later on.

There are many ways you can keep track of your spending. Below are a couple of our favourites:

  • Create an expense tracker similar to the image below. Record each transaction you make under the expense category it belongs. Each week, total up the transactions and subtract from your monthly budget totals to show what amount you have remaining for the month.

  • Create envelopes for each expense category and write the monthly budget on the envelope. When you make a purchase, be sure to get a receipt and place in the correct envelope. Daily or weekly, total up the receipts and subtract the total from your monthly budget amount directly on the envelope.

You can also find a variety of apps and templates online to use. Some even give you the ability to enter your budget and spending and set up notifications when you’re getting close to your budget.

Whatever method you choose, don’t forget to include transactions that may automatically come out of your accounts such as fees, payments, etc. Throughout the month, be aware of how your spending compares to the budget you set. Make sure you know how close your spending is to your budgeted amount. Are you close to overspending? Think about what kind of behaviours, like buying lunch daily, you can change or which categories you can shift money from so you don’t overspend.

At the end of the month, cross reference your expense tracker to your monthly statements to ensure you haven’t missed anything. Then, look at the monthly spending and budgets and analyze how you did. What were your challenges? Were there any categories you thought you’d spend more in than you did? Can any adjustments be made to future budgets?

For example, during your analysis, you see that under the fuel category you budgeted $300 for the month but only spent $150. Is it possible you over budgeted? If so, could you lower the amount in future budgets and place the difference in categories that challenged you or to help grow your savings faster?

To be in control of your finances, being organized and consistent is key. Remember to start with goals and look at how you spend your money. Create a budget specific to you and then hold yourself accountable by keeping track of your spending. Remember to review and adjust as things may change.

receipt on top of a variety of items purchased

Kick-start your finances: where does my money go?

Not sure where all your money is going? This blog helps you dig deep into your spending habits and understand where your money is going each month.


When you think about your finances, do you immediately feel overwhelmed and stressed? Do you ever wonder where all of your money is going? Do you keep saying you’re going to get on track with your finances tomorrow, but tomorrow never happens?

In order to do so, you first need to understand how you spend your money. We’re here to help. In this blog, we’ll look at your spending habits and at the end, you should have a better understanding of exactly where your money is going. Before starting though, be sure to check out and complete Kick-start your finances: goal setting.

To complete the steps in this blog, you can do online using a personal financial management tool or manually. Regardless of the method you choose, you will need to gather the following information prior to starting:

  • Any financial statements from the last year including bank accounts, mortgages, investments, lines of credits, credit cards, etc.
  • Pay stubs showing the income you made in the last year.
  • Any other documents that show income or expenses incurred last year that may not show on the documents listed above (i.e., receipts for cash purchases, etc.).

Step 1: What is your monthly income?

This means all the money that you make – any source of income including your pay cheque, support payments, property income, etc. Look back at the last 12 months and write down all sources of income you made each month. Note the take-home amount (after deductions) as this represents the money you have available to spend.

If you received any non-guaranteed income, such as tips or money as gifts, note in a sub-category called ‘Extra Income’. Separating this amount is especially important when determining your monthly income for budget purposes. As this amount is not guaranteed and unknown, it shouldn’t be included as income when setting a budget; instead, any extra money received should be noted as ‘Extra’ and go towards helping you reach your goals.

Knowing the money you bring in helps give you an understanding of what money you have to manage. Later on in this blog, you’ll also use this amount to see if there were any months you spent over what you actually brought in.

Step 2: Where does my money go?

When we see how much money we bring in, sometimes we are shocked and wonder where it goes – especially if we aren’t consistently budgeting and tracking our money. To understand where your money goes, categorize each month’s spending transactions for over the last year. Categories should be specific and could include:

  • Mortgage
  • Utilities (separate per utility to provide a further breakdown of each cost)
  • Groceries
  • Entertainment
  • Restaurants/Eating Out
  • Insurance
  • Gas
  • Investments
  • Savings

If you took out cash and are unsure of what purchases you made with it, place into a category called unknown.

Being as detailed as possible is important to really help you understand your spending habits. In order to compare your spending to your monthly income, categorize each month’s spending individually. To see a yearly total, simply add the category’s total for each month.

Once all transactions are categorized, you’ll be able to see what you spent per category. Take these amounts and compare to the recommended spending guidelines below:

  • 25-40% on housing;
  • 10-20% on transportation;
  • 40-50% on living expenses such as groceries, etc.; and
  • 10-20% on savings.

How do you compare to the recommendations? Were there any categories you didn’t realize you were spending that much on?

When you look at spending as a whole vs. individual transactions, the results can be shocking. Typically, when we make smaller purchases, we don’t tend to think of them as making a difference; grouping similar purchases together though, give us the big picture and some of the small things can actually be bigger than what we thought.

Step 3: Am I spending above my income?

To understand how your spending compares to the money you’re bringing in, take your monthly income and minus the total expenses you had that month. Were there any months you overspent? What products, such as credit cards, etc., did you use to compensate? If you found any months that you overspent, take a look back at the different categories and transactions – was there anything you could have done differently?

An additional bonus for Conexus members:

As a Conexus member, you have access to our Personal Financial Management tool which will make this challenge a bit easier to complete. Through the tool, you not only can see all of your Conexus accounts but you can also connect and see any accounts you may have at another financial institution. The tool does its best to categorize your transactions automatically, but you may need to change the category on some transactions from time to time.

Another benefit of using this tool is that you can set up budgets later on. You can find more information, including tutorials and “how to’s” here. And hey, if you’re not a Conexus member but really want to use this tool, consider becoming a member today!

Now, it’s your turn

Having an understanding of the money you bring in and how you spend it is a big task alone. It can also be a bit stressful and overwhelming when you start to see the big picture of your spending habits. This could be your opportunity to kick that feeling and to help you reduce this stress.

Take the challenge today. Look back at your income and spending over the last year. Is there anything that stuck out? Are there any themes such as one-time yearly expenses that you weren’t prepared for, etc.? Be sure to note any themes or areas you want to improve as next week, we’ll be taking this information a step further and focusing on how to create a budget that works for you. We’ll also show you how to prepare for those one-time yearly expenses and eliminate some of the unnecessary spending you didn’t realize you were doing until today.

We want to hear from you. What is your biggest take away from this blog? Were you surprised by any of your spending habits? For us… let’s just say we didn’t realize how fast those daily coffee purchases were adding up! Join the conversation – share your experiences below.