Posts

Eliminating the Stress in Buying a House

/in , , , /by

Buying a house is stressful. At least, that’s what I hear. As someone who is planning on buying a house within the next few years, I want to make sure my experience is stress free… or at least as stress free as humanly possible. That’s why I decided to do a little sleuthing to see if I could uncover some tips and tricks to improve the home buying experience so that you can enjoy the process as much as possible. 

Tip #1: Use a Real Estate Agent

Simple, right? Using a real estate agent will definitely cut down on the amount of stress you feel while purchasing a house, especially if you’re working with someone you can trust. Yet as of 2020, 12% of people still don’t use them. Why?

Well, most people who aren’t using a real estate agent are looking to save money. This can work out if you’re already familiar with the property and are buying from someone you trust, like a family member. But if you’re looking at properties that you’re not familiar with, it has the potential to lead to all sorts of issues. Long-term, not using a realtor has the potential to cause far more stress than using one.

But what about the money? Well, using a realtor may not be as expensive as you think. Of course, it’s not free either. You will need to pay realtor fees. But the real estate agent’s commission generally comes from the seller, not the buyer. So, it may not add up to quite as much as you expect.

Using a real estate agent does come with its own stresses (we’ll get to some of those later) but overall, it’s the correct choice for most people.

Tip #2: Get Pre-Approved for a Mortgage

While doing my digging, I decided to reach out to our team of Mobile Mortgage Specialists to see what the number one tip they would give prospective home buyers was. The answer was nearly unanimous: get pre-approved for a mortgage!

What exactly does that mean? Well, it’s just like it sounds. Having a mortgage pre-approval means that a lender has reviewed your financial information and has determined that they would be willing to provide you with a mortgage to buy a house. Having this in-hand while you’re shopping for a home makes it easier for agents and sellers to take you seriously and can possibly save you from future disappointment.

Don’t believe me? Here’s what Lehanne Potts, one of our Mobile Mortgage Specialists, had to say about getting a preapproved mortgage:

“Getting pre-approved for a mortgage is your first step towards homeownership! It’s important whether you’re a first-time home buyer or an experienced purchaser. When you have a pre-approval, you can shop confidently knowing that you are looking in the right price range. And if there are any issues with the application, we’re able to develop a game plan to set you up for success in the future. By taking this very important first step, you can help avoid any disappointment or frustration that may come along if you skip this process.”

Tip #3: Know When to Compromise

Home buying involves compromise. Odds are that you aren’t going to find that perfect home with the attached two car garage, huge walk-in closet in the master bedroom, partially covered back deck with a hot tub. And if you do find a house that has everything you want? Odds are that it’s probably going to cost twice as much as you can afford. What I’m trying to say is, it’s important to know what sorts of things you’re willing to compromise on and which ones you aren’t before you get started.

The budget for your home isn’t something that you should typically be making changes to halfway through the process. A study by homes.com in 2018 showed that 13% of people feel that they overpaid for their home. That’s not a good feeling and it’s not one that’s going to go away anytime soon either. Avoid bidding wars and stay away from spending above your budget on the things you “want” for your house (like that hot tub) and focus on the things you “need” your house to have (like enough bedrooms for your growing family).

Another thing you don’t need to compromise on is your timeline. I know I was just talking about how great realtors are a few paragraphs ago, but sometimes they will try to get you to work on their schedule instead of your own. That’s because they’re likely working with several potential home buyers and the sooner you purchase your future home, the sooner they can switch their attention to helping someone else.

Well, that speed has the potential to add stress. There are a lot of important things to do and decisions to make during the home buying process, even after you’ve put an offer in, and this is not something you want to feel rushed while doing. If you are feeling the pressure to move through the process too quickly, talk to your realtor and let them know you need more time.

Tip #4: Talk to Someone Who’s Done It Before

There are a lot of things to consider when you’re buying a house – more than we could possibly cover in just this one blog. It can be overwhelming, especially if you’re buying a home for the first time (and if you are a first-time home buyer, you might want to check this blog out as well). Like so many things in life, it can start to become clearer and you will start to feel better if you talk to someone about it.

Obviously, you can always go to your realtor to ask them questions. But you can also learn a lot by speaking to other people in your life who have already gone through the process of owning their own home. They might have great tips to share with you about what they thought they did well when buying their house. Or, more likely, they might be able to share things they wish they’d done differently during their own home buying experience.

To test this out, I decided to ask some homeowners from my own life what advice they’d have for me. Here’s what they had to say:

“Buying a new house for the first time can be filled with a lot of emotions – but the first one should always be excitement!

If I could go back to the first time my husband & I bought a house, I would make sure I sat down and prioritized a “wants” and “needs” list. My needs list would be the things that the house would HAVE to have and I would not budge on. The wants list would be filled with things that I really want in my first home, but that when push came to shove, I could sacrifice. For example, something that was on my needs list was three upstairs bedrooms and something that was on my wants list was an attached garage. I ended up sacrificing my attached garage in order to find something with three bedrooms upstairs.

Don’t forget to have fun and enjoy the process – you only get to be a first-time homeowner once!”

– Amanda, Moose Jaw

“As a first-time homebuyer, I found working with an experienced realtor to be extremely beneficial throughout the process. I had lots of questions, and they were able to answer everything I asked in terms I could easily understand. By using a realtor, I found that it took a lot of the stress of the process off my shoulders. I would also recommend doing your research into the home buying process beforehand so that you are able to ask the important questions.”

– Jarvis, Watrous

“I would recommend that people shop around. Don’t let the real estate agent dictate what you do or the speed you do it at – they are there to serve your needs. Also, make sure you get a house inspection. If you can’t afford one, you probably can’t afford a house.”

– Eric, Swift Current

The Answer to The Question…

So, can buying a house be totally stress-free? Honestly, probably not. There’s always going to be a certain level of stress that comes with making such a costly and impactful purchase.

But as I’ve learned while writing this, there are a lot of things that you can do to reduce the amount of stress you feel throughout the process. By using the tips in this blog as a starting point, you’ll be setting yourself up for a successful experience.

Happy house hunting!

five friends celebrating New Year's Eve

Ring in NYE without all the bells

/0 Comments/in , /by

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.

Hand scrolling through social media on a tablet

The financial pressures of social media

/0 Comments/in , , /by

Social media has transformed the way we see things and how we share things. It’s important to understand our true identity vs. digital identity and how social media impacts us in order to keep balance in the digital world.

Have you ever scrolled through your social feeds and saw something that you wanted? Or saw photos of what your friends were doing such as a recent vacation or night out and started comparing your life to theirs. For many, the answer is yes.

Social media has transformed the way we see things as well as how we share things. The digital world allows us to capture every moment on camera and social media has caused us to feel the need to share all of these experiences. How much of what we share though paints the full picture of our true selves?

In reality, what we share on social media is what we want others to see – the food we’re eating, the vacations we’re taking and all the family and friend experiences we’re having. We create a digital identity that often differs from our true identity.

What’s not being shared is those not-so-good things, our behind the scenes – the food mishaps that caused for that pizza to be ordered, the credit card debt we have from going on that vacation or the meltdown we had trying to get our child out the door to their activity on time and realizing team fees were also due that day. We create a false sense of reality and the picture we’ve shared is only giving part of the story to those seeing it.

Outside viewing in

From the outside, when seeing these photos we tend to forget that there’s more to the image than what we’re seeing. Most often, we forget to look at the fuller picture and make ourselves believe what we see is a reality. We don’t think about all the unknown behind the scene details. We start to compare our own lifestyles and experiences to those of others and at times, start doing things outside of our comfort zone to keep up with those around us. We then share these experiences on social to show that we are doing fun, exciting things as well, creating our own digital identity.

It becomes a domino effect. Just like you’re feeling the pressure to keep up and share all the ‘fun’ experiences, others – including those you’re trying to keep up with – are watching your feeds and feeling the same pressures to keep up with you.  The cycle is never-ending as everyone continually tries to keep up with others and at the same time, fails to provide some of the truths of the behind-the-scenes.

Staying balanced

This never-ending cycle can impact us mentally, emotionally and financially. It’s important to stay focused and live the way that works for you, not the way others make you feel you need to live or how you feel you need to share with others. Here are a few tips to staying balanced in today’s digital world.

  • Know the difference between a want and a need. Do you really ‘need’ that pair of shoes you saw on Instagram? Before making a purchase on something you saw, ask yourself if it’s a want or a need? How will it make you feel and will this feeling last or be short-lived? Asking these questions help you be mindful when shopping and could prevent you from making a purchase spontaneously that you later regret.
  • Don’t just do it to check off the box. We grow up thinking we need to check the box based on where we ‘should be in life’. We find ourselves trapped by the mindset that we should have the house, the car, the family, etc. by a certain age, especially if we’re seeing our friends doing it on social media and it can normalize the movement of over-spending. Reality is we’re all at different life stages and all have different goals and priorities. Just because someone else is checking that box doesn’t mean you have to do so as well. Remind yourself of this and do things on your terms – when you’re ready and feel it’s the right thing for you mentally and financially.
  • Quit comparing yourself to others, especially financially! Do you actually know how much each one of your friends makes? Most likely not, yet we make assumptions and then compare ourselves to them. We think ‘well I make about the same as so-and-so, so I too should be able to take a hot vacation each year’. This creates an unhealthy relationship of what reality is, as we don’t really often know the behind-the-scene details. Instead of comparing yourself and keeping up to what others are doing, understand your well-being and set goals for you. Taking a hot vacation may be possible every year but do it on your terms and ensure you create a financial action plan to help you achieve this goal.
  • Be present and make personal connections. Our digital identity is just one piece of the story. By being present and interacting with friends outside of the digital world, you’re able to connect with their true identity. Often times, you’ll start to see the fuller picture of those posts – the behind the scenes – and get a better sense of the true reality of what’s being shown.

Social media impacts everyone’s mental, emotional and financial well-being differently. Understand how it affects you personally and be conscious of this next time you’re scrolling through your social media feeds. Remember that what you’re seeing is just what others want you to see and there’s usually a lot more to the story.

Like what you read and what to hear more? Check out our recent The FOMO Effect – A Panel Discussion, where we spoke with four, amazing local Saskatchewanians to hear their views on the pressures of social media and the impact it can have on our financial well-being.

We want to know – has social media had an impact on you financially? Share your experiences and your tips & advice on staying balanced in a digital world below.

table with several wrapped wedding gifts

Unique wedding gift ideas

/0 Comments/in , /by

Trying to find the best wedding gift can sometimes be stressful. It shouldn’t be about how much you spend but instead the thought you put into the gift. Here are a few unique wedding gift ideas, perfect for showing your love for the newlyweds, that won’t break the bank.

Wedding season is here! As the invites start coming in, we often start to see dollar signs rather than wedding bells. When we think of a wedding gift, our automatic go-to is cash but then start to question what is too much, or what is too little?

Instead of stressing out on how much cash to give, consider giving a wedding gift unique to the couple – one that truly shows how much you care about them and doesn’t break the bank! Below are a few unique wedding gift ideas to get you started.

Basket gift ideas

  • First wine basket – Wine lovers? Put a package together to help celebrate “A Year of Couple Firsts”. Include a bottle of wine or champagne for every occasion and create printable tags. Ideas for “firsts” can be: First Home, First Baby (non-alcoholic bubbly), First Fight, First Trip, First Christmas, First Anniversary, etc.
  • Dessert basket – Create the perfect ending to date night with a dessert basket, which also provides the new couple with some household staple items. Use a large mixing bowl as the basket and include items such as brownie mix, spatulas, measuring spoons and cups, his & her aprons and a cute pair of oven mitts. If your budget allows, consider adding a bottle of dessert wine or port
  • Romantic night basket – Give the gift of a ‘spa-day-in’ by creating a spa basket. Purchase two inexpensive robes and take to a local seamstress to get monogrammed with the bride and groom initials. Package together and include foaming bath soap, bath salts and a brush and some lotions and oils for a romantic tub night for the newlyweds.

On a budget

  • Group gift – Will a large group of friends be attending the wedding? Consider doing a group gift and all chip in for a bigger ticket item on the registry. A big gift will make a high impact and depending on the number of people you can rally together you might be able to bring the budget down.
  • Cleaning service – Alleviate some wedding stress by gifting a cleaning service for a practical gift that the new couple will love. Often you can find a deal on Groupon for maid services.
  • Tickets – Music or lovers of the arts? Or perhaps sports fans? Find some less expensive tickets on Stubhub and gift them the perfect date night!
  • Meal service – Take the stress out of having to cook during the week with a taste of meal delivery service. Hello Fresh offers gift cards for 3 meals for 2 people under $80! This provides a basic necessity while giving the couple something fun to do together.

Forever memories

  • Framed night sky – Capture the night sky of their wedding night in a framed picture frame. Take your own picture or use a site such as The Night Sky who will create a custom star map for you. All you need to then worry about is finding the perfect frame.
  • Capture the honeymoon – Is the couple going on a destination honeymoon? Help the couple capture their first few days on their honeymoon by giving a gift card for a vacation photographer, such as Flytographer.
  • Mini-getaway – Give a gift of adventure with a gift card to Airbnb. The couple can choose a destination and put the money towards a night stay in a destination of their choosing for a mini vacation after they’re married.

Remember, weddings are about celebrating the commitment of two people. You shouldn’t stress about gift giving. As the saying goes, it’s not the gift but the thought that counts. Giving a thoughtful gift that the couple will enjoy is sometimes better than spending a lot of money. Just like we invest our money we should also invest in relationships as that is what’s really important!

married couple looking into the sunset at Saskatchewan legislature buildingCourtney Rink

#MONEYTALKs to have before marriage

/0 Comments/in , /by

Money is an important conversation to have in any relationship. Our Conexus experts share their advice on important #MONEYTALKs to have with your partner.

Wedding season is upon us and love is in the air. Have you had the #MONEYTALK with your significant other yet? Money can cause stress in a relationship and having discussions about money with your partner can help ensure you’re on the same page, and not become a bigger issue down the road.

So what type of #MONEYTALKs should you have with your partner? We asked our Conexus experts to give us their best marriage financial advice – here’s what they had to say:

“These conversations can be complex and sometimes uncomfortable to have. Everyone’s situation is unique. I would advise having many smaller conversations around priorities, resources and goals to find common ground.” ~Jason A.

 

“What are your goals and dreams and what does success look like for you? For some people, it’s all about saving, while for others, they want to focus on enjoying life. Making sure you’re on the same page about saving vs. spending is absolutely key.” ~Nicole H.

 

“It’s important to agree on a process for discussing finances and building that as a regular part of the relationship. Over time, life happens, goals change, etc. and having money chats as a regular discussion in your relationship is a great way to ensure that money doesn’t become something that pulls you apart over time, but rather, something that can help bind the family together.” ~Eric D.

 

“Have a discussion around personal feelings related to debt (i.e. what the couple is willing to go into debt for vs. what they’re not.) If one person is okay with debt and the other is not, it can cause strain. Communication and ensuring you find someone that shares your financial values helps to support a strong relationship.” ~Kim M.

 

“Discussions about money seem to be awkward for many. Early on, establish a mutual agreement to keep no secrets. Be upfront and honest with each other about your individual financial health and set goals together. And let’s not forget that this usually means compromise by all parties!” ~ Susan S.

 

“Include your financial experts early on in the conversation to help alleviate fears and concerns and help come up with the right plan and approach for you and your partner!” ~Kyle D.

 

“Have a good degree of financial knowledge. When both people have a good understanding of the topic, the conversations will be stronger and one person won’t be making all of the decisions while the other merely accepts what is happening.” ~ Marcie A.

 

“Share the responsibility of paying bills, budgeting, savings, etc., if you decide to have only joint accounts. It’s important that each partner have this knowledge and share the responsibility so that if something were to happen to the other person, they’d be able to continue these financial tasks.”~Kyla F.

 

“Understand how your ‘love language’ relates to finances. If one person’s language is gifts and the other prefers quality time, this could play into budgeting and lifestyle goals. Be sure to have conversations around as many aspects of finances as possible to ensure you understand each other’s feelings towards money and are on the same page.”~Lisa C.

Money is one of the biggest causes of issues, arguments and stress in a relationship. It may not always be easy to talk about, but starting early and discussing frequently can reduce stress and make these difficult conversations easier to have. It can also help prevent bigger issues from happening further down the road.

Do you have advice for other financial #MONEYTALKs couples should have before getting married? Comment below!

jar labelled budget with coins in it

The importance of having an emergency fund

/0 Comments/in , , , /by

Life happens and sometimes an unexpected curveball is thrown our way, threatening our financial well-being and causing stress. Having an emergency savings fund helps us be prepared for these unexpected life events.

If your furnace broke down tomorrow, do you have the money to fix it? What about if you were laid off from work, do you have money set aside to cover daily expenses until you got back up on your feet? Or what If you got hurt while playing a sport causing you to be off work for six weeks, would you be able to cover your mortgage payments, bills, groceries, etc.?

Life sometimes throws us a curveball, threatening our financial well-being and causing us stress. An emergency savings fund helps us be prepared for those unexpected life events.

What is an emergency savings fund?

An emergency savings fund is money you’ve set aside for life’s unexpected events such as the loss of a job, a debilitating illness or injury, or a major repair to your home. It provides you with a financial safety net and gives you comfort knowing that you can tackle any of life’s unexpected events without adding money worries to your list.

What if I don’t have an emergency savings fund?

Without an emergency savings fund, you’re living on the ‘financial’ edge, hoping to get by without running into a crisis. If an emergency does happen, it can cause a little problem to turn into a big, expensive financial situation. It can also cause a lot of additional stress.

As well, without an emergency savings fund, many people turn to debt instruments such as credit cards and lines of credits, to help cover costs. Depending on your financial situation, this could cause even more money worries as it’s only a short-term solution.

How much money should I save for an emergency?

When looking at the amount you need to save for an emergency, a good rule of thumb is three to six months’ worth of expenses. Calculate this amount using a budgeting tool. Over a few months, track the amount you’ve spent on your needs including housing, utilities, food, insurance, transportation, debt and personal expenses. Once you’ve completed this, you should have a good idea of the amount you should set aside for emergency purposes.

How can I save for an emergency?

Making regular payments into a savings account each payday is the simplest and most effective way to save money. It may not seem like a lot to begin with, but don’t let that discourage you. Over time, if managed properly, the fund will grow to the required amount.

When should I use my emergency savings?

When determining whether to use your emergency fund, ask yourself the following three questions:

1. Is it unexpected?

An unexpected emergency is one that you didn’t anticipate occurring, such as:

  • Loss of a job;
  • A debilitating illness or injury; or
  • Major repair to your home or vehicle caused by circumstances out of your control.

Annual reoccurring expenses, such as property taxes, would not qualify as an unexpected emergency.

2. Is it necessary?

Needs are often confused with wants and you’ll need to determine if the unexpected emergency is a want or a need. For example, if you have a water leak in your kitchen and you have to put in new flooring, this could be considered a need or an emergency. On the other hand, if your flooring is old, and you want an updated look, this would be considered a want and you’re emergency savings should not be used.

New items are great; however, your emergency funds should not be used for them.

3. Is it urgent?

When an immediate need arises, the last thing you want to worry about is how you’re going to pay for it. When making a decision on whether the expense is an urgent need, determine if it will affect your ability to provide the basics for you and your family.

Remember, the money you have set aside should only be used if you have an unexpected, immediate expense. If you do use money from your emergency savings, be sure to replenish the money as soon as you get back on your feet by making regular payments.

Life may throw you curveballs, but being prepared will give you peace-of-mind knowing you have money set aside for those unexpected events. It will also help your overall financial well-being and reduce stress.

Are you prepared for an emergency? We’d love to help you get started – contact us today!

person holding sign that says budget

Kick-start your finances: creating a budget

/0 Comments/in , /by

Create a budget that works for you using the information and templates in this blog.

Let’s create a budget. A budget is a tool that helps you manage your money. It shows you your full financial picture – the money you bring in each month and where you plan to spend it. It helps you determine what a want vs. a need is and shows you where you can cut expenses to ensure you only spend what you have. It also allows you to see where there may be any extra money that you can put towards reaching your overall goals quicker.

This blog focuses on creating an annual budget that works for you. You can complete this challenge manually on a piece of paper or online. If doing online, here are several great budget templates that can assist you:

Whatever method you choose, the process will be very similar.

Determining your monthly income

The first step of a budget is figuring out how much money you’ll have each month (see Kick-start your finances: where’s my money going). Under the income section of your budget, list all sources of money (pay, support, grants, etc.) you’ll receive in the coming months. Remember, this is the take-home amount as it’s the money you actually have available to spend.

For those with a regular pay cheque – one that is the same each time – your income should be around the same amount each month. Note: If you’re paid bi-weekly, there are two months each year that you’ll receive three pay cheques.

For those that have irregular or seasonal income, it can be a bit more difficult and there are two ways you can determine a monthly income amount for your budget:

  1. Use your average monthly income. You can find this by taking your last six months’ total income and dividing by six.
  2. Use your lowest amount of monthly income that you received in the last six months. For example, if you’re monthly income over the last six months ranged between $1,900 and $2,200, use the $1,900 amount in your budget.

Whether you have a regular or irregular monthly income, it’s important to not over-estimate this amount when creating a budget. A budget provides you guidance on how you will spend this money and over-estimating will cause you to budget money you don’t have. If you end up receiving more money in a month than what you budgeted, use this extra money and put towards reaching your saving goals faster.

Remember, you shouldn’t include any non-guaranteed income such as tips and money received as gifts into your anticipated monthly income budget. Non-guaranteed money is exactly that – not guaranteed and unknown – and should be treated as extra money for your goals.

Creating a budget based on what you have

Now that you have noted your income for each month, it’s time to create a plan to spend this money. First, create a list of all your expense categories. The spending analysis you completed in the Kick-start your finances: where’s my money blog can assist you in creating categories specific to your spending habits. Be sure to include categories for your saving goals and any debt payment expenses, such as credit cards, you may also need to budget for each month. Once you have these categories, take it one step further and create sub-categories for each expense. This helps provide a detailed understanding of each category and identifies fixed expenses (ones you can’t change) and variable expenses (those you have control over and can change).

Example:

Next, you’ll need to allocate money to each expense. It may be easiest to start with expenses that are fixed such as mortgage/rent, utilities, etc. and then move into the variable expenses such as groceries, entertainment, etc.  Don’t forget to include expenses that aren’t monthly such as sporting fees, gift purchases, etc. – for these expenses, place the budgeted amount under the month they’ll occur. It’s also okay to leave a category at $0 if you don’t plan on spending anything in that category within a given month.

Once you have your amounts allocated, look to see how it measures against your monthly income. If you’re under-budget, woohoo! With this extra money, look at adding more to your saving goal categories to help you reach your goals faster.

Example:

If you’re over-budget, some adjustments will need to be made. First, look at your variable expenses – are there any places you can reduce your budget such as groceries, entertainment, etc.? Adjust as needed until you become balanced, or even better yet, under-budget.

If money is really tight in one particular month, consider not budgeting money for one of your saving goals. Use this as a last resort though and ensure it doesn’t become a consistent thing. If you’re noticing a trend in not having enough money to cover your expenses month after month, consider bringing in extra income or making some changes in your day-to-day life. For example, pick up a part-time job to bring in more income or start using public transit to help reduce costs related to your vehicle.

One-time, occasional expenses

Expenses that only occur once or twice throughout the year can have a big impact on our monthly budget. For these expenses you can do two things:

  1. Budget the full amount in the month the expense occurs; or
  2. Budget smaller amounts each month leading up to the expense.

The second option helps reduce the pressure of finding these one-time costs within your budget all at once and is especially helpful if you have several large, one-time expenses that all occur within the same timeframe.

For example, your child plays soccer and club fees of $400 are due every September. Consider putting smaller amounts into your budget each month that can be used to pay for the expense when it comes due. If you were to start in February, by putting $30 away each month, you’ll have $210 by September which would only leave you with $190 extra to budget in September to help cover this expense.

Example:

Create separate savings accounts for your goals

When saving for your goals, place this money in a separate account for each goal. Set limits on accessibility (i.e., must go to a branch to access the money) to reduce the spending temptation. By placing in a savings or investment account, you’ll also gain interest and see the money grow faster.

If you put these all together, you have your annual budget – your full financial picture.

Setting a budget helps you focus on what’s important and gives you guidelines on how you’ll spend your money. It’ll be up to you though to ensure it actually happens the way you say it will. You can do this by keeping track of your spending – see Kick-start your finances: track your spending for more information.

Have any questions? Ask below in the comments!

receipt on top of a variety of items purchased

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

/0 Comments/in , /by

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.

man kick boxing

Kick-start your finances: goal setting

/0 Comments/in , , /by

Setting financial goals helps you to figure out what’s important, focus on priorities and analyze your wants vs. your needs. 

We all dream about what we want to do and what we want to achieve. From going on a vacation, paying off debt, putting money away for our child’s education or having enough money set aside for retirement; these dreams become our goals and like most things, have a financial component to them.

Unsure of where to start? Taking the time to set goals will provide you with an understanding of your big picture. It allows you to figure out what’s important to you, focus on priorities and analyze your needs vs. your wants. Below you will find some advice on creating realistic and achievable financial goals, helping you make tomorrow, today.

Creating goals

There are three types of goals:

  1. Short-term Goals: These are goals that you can achieve in a short amount of time – less than one year – and can include things such as a minor home renovation, paying off a credit card or starting an emergency fund. These goals can also be shorter goals that contribute to a larger, long-term goal such as starting to put a small amount of money away for retirement.
  2. Intermediate Goals: These goals take a bit longer to achieve – between one to five years. Saving money for a down-payment on a home or saving for a family vacation are great examples that may fit into this category.
  3. Long-term Goals: These goals tend to be longer – 10+ years. These goals are often re-assessed throughout the course of their timeframes to ensure you’re on track and often are adjusted due to changing situations/environments. Some examples of long-term goals may include saving for your child’s education, paying off a student loan or saving enough money to retire.

Now that you know the different types of goals, write down your short-term, intermediate, and long-term goals for 2018. When making a list think about things such as:

  • What makes you happy? (e.g., family, vacation)
  • What makes you stressed? (e.g., credit card debt)
  • What do you wish you had? (e.g., new furniture)
  • What things do you like doing? (e.g., traveling, spending time with friends)
  • Where do you see yourself in one year? (e.g., taking a hot vacation) Five years? (e.g., having a down payment for a home) Ten years? (e.g., having my student loans paid off)
  • What does having overall financial well-being mean to you? (e.g., understanding my money and not having to worry if I’ll have enough when I retire.)

When setting your goals include specifics, such as costs and timelines. Also look to see if your goals are realistic and achievable. Small goals are easier to reach and help train your brain into believing you can achieve it. This can also increase your chance of success in future goals. Below is an example of how you can take the things important to you and group into short-term, intermediate and long-term goals.

Prioritize. Prioritize. Prioritize.

Once you have your goals written and organized, it’s time to prioritize. This will help you understand what’s most important and where you should focus your time, money and energy.

Though it is great to have lots of goals, actually achieving them all may be difficult. You must take a look at your goals and ensure they’re also realistic and achievable when you look at them all together. It’s important to set yourself up for success and work within your means.

Prioritizing will also allow you to make any adjustments needed to make these goals achievable. When prioritizing ask yourself:

  • If you could only achieve one of these items, which one would it be?
  • Are there any goals on my list that are needs vs. wants?
  • How long do I have to achieve this goal – is that a must or can it be adjusted?
  • Can I break any of my larger goals into smaller goals?
  • Can I put a hold on any of these goals and begin working on only once I have completed another goal?

When prioritizing and making adjustments, be aware of how achieving these goals will impact your finances now. Online calculators can help you understand exactly what you need to do now to achieve your goal within your timeline. Depending on your current financial situation and the impact your goal will have (e.g., monthly contributions), you may need to re-adjust or plan your goals differently.

Team effort

If you are married or have a significant other in which you share financial responsibilities with, it’s essential you work together when creating your financial goals. Work together to develop a list of goals and discuss what’s a priority and what’s not. Together, determine what is achievable and ensure you’re on the same page – if not, you could be setting yourself up for failure. Once set, be each other’s motivation and hold each other accountable to help ensure success.

Talk to your financial advisor

The most important thing you can do once you’ve created and prioritized your list of goals is to talk with your financial advisor. They will be able to provide you with advice on your goals and help you look at the big picture. They may also identify any obstacles that impact you reaching these goals and provide guidance on what types of adjustments can be made. Your financial advisor will also be able to tell you which products, such as RRSPs, Tax-Free Savings Accounts, mutual funds, etc., you should consider helping contribute towards your success.

When it comes to kick-starting your finances, start off by understanding what’s important to you and what you want to achieve with your finances.  Create short-term, intermediate, and long-term goals and prioritize accordingly. Once you’re done, make an appointment with your financial advisor to discuss and determine what tools and resources are available to help you succeed. Don’t have a financial advisor, no worries – you can request financial advice here.

busy shopping mall

Boxing Day shop like a champ

/0 Comments/in , , /by

Take the stress out of Boxing Day shopping by following a few of these tips that will help make the best of your time, money and sanity.

We understand Boxing Day can be quite chaotic especially when you start to think about the large crowds, long lines and the amount of money exchanging hands. A survey by RetailMeNot.ca showed that Canadians could spend as much as $600 this year on Boxing Day and New Years. When asked how in-store Boxing Day shopping made Canadians feel, it isn’t surprising to hear 77% said “overwhelming”.

To help with that overwhelming feeling, we’ve put together a few tips to help you prepare for Boxing Day shopping and make the best of your time, money and sanity!

Create a game plan

Boxing Day can be full of temptations and impulse buying. Setting a game plan in advance will ensure you shop with intention and help you avoid those unnecessary purchase.

Prior to shopping, make a list of the things you are wanting to buy. Prioritize the list and identify want vs need purchases. Are all the items on your list an absolute must-need?

Next part of your plan should be to set a budget prior to Boxing Day shopping. Without one, you can easily spend more than you’re comfortable with causing buyer’s remorse and stress later on. Use this budget to re-evaluate your list and determine if there are any items you could reconsider purchasing or that you can purchase at a later date.

Do your research

Research before venturing out for the day, taking a look at flyers, going online or even using apps such as Flipp to compare item prices at different stores. Write down the stores you plan on visiting to buy the items on your list. Use this list to map out your route to help save travel time and gas! Be sure to only stop at places on your list.

Another thing to look for when researching is week-long Boxing Day sales. Many retailers now extend their Boxing Day sales for the length of the week to reduce a bit of shopping chaos. Instead of going out into the crowds all in one day, are there any items you can purchase throughout the week that allow you to still get the sale price? This can also help reduce the feeling of being overwhelmed by not trying to make your purchases all in one day

Consider online shopping

Many retailers will also have Boxing Day sales through their online sites, some even starting a few days before or right at 12:01 a.m. Boxing Day. The only downside to online shopping is having to wait for the item to ship. Depending on the item, is it an absolute must that you need the item right that second or can you wait a few days until it arrives in the mailbox?

If online shopping, be cautious of shipping and exchange rates. Sometimes the costs can outweigh the convenience of shopping online and there may be a few items that are better off you going to the store for.

Leave your credit cards at home

A simple way to not overspend on Boxing Day is to leave your credit cards at home. Only use cash or debit for Boxing Day purchases to help eliminate the temptation of buying something that’s not on your list.

If using cash, only bring as much as your budget. Once the cash is gone, you know it’s time to stop shopping. If using debit, keep track of your purchases by writing and totalling your amounts on a piece of paper. Once you’ve hit your limit, it’s time to go home.

Avoid group shopping

Shopping with friends can be fun, but creates opportunities for temptation. When you’re with a group, you tend to go into stores that you wouldn’t necessarily have gone into if you were by yourself which often leads to an unnecessary purchase. If you didn’t plan on going into that store originally, you most likely didn’t know that item existed – is it really something you need to buy?

Consider shopping alone or with one person. If partnering up, make a game plan together. Also, ask your friend to help you from impulse buying by having them look at your items before purchasing and providing their opinion.

If you do go into a store that you weren’t originally planning to, avoid impulse buying temptations and stick to the items on your list. Think about it… you weren’t planning to go to that store and the item you didn’t know existed nor was on your list. Just because you see the item now, is it really something you need to buy?

Avoid spending to save

We all know the deals on Boxing Day can be great but beware of the deals that make you spend more to save. A great example of this is the ‘Buy One Item, Get Another 50% Off’ deal. Yes, the second item is 50% off, but if you were only planning to purchase one in the first place, you now are paying 50% over your budget for the second item. Many stores also put the discount on the lowest priced item, which also can cause you to spend more than you were planning.

When looking for deals, be sure to read the fine print, sign and prices carefully. Also, become familiar with the store’s return policy so that if you decide you no longer want it, you are able to return it.

When it comes to a successful Boxing Day shopping haul, patience and comfortable shoes will be the most important thing. Paired with the tips above, you’ll also eliminate spending stress and hours spent in stores and lines. Happy shopping!