We love our budget. It works, we know where we stand financially at any time, and we are always prepared for everything from a car repair to a quick weekend away. Over the years I've had a few friends ask me about our budget, and I've decided to just put it all down on "paper" for all to see (minus a few of the personal financial details of course...)
Our budget took a long time to work out the kinks, and it was inspired by one of our favorite shows "Till debt do us part". On the show, families are taught to live on cash, and work with jars to ensure they do not go over their spending, and they follow a system of "if you don't have the cash, you don't make the purchase" which is a very smart way to go. Credit can be both an amazing and awful tool depending on how to use it (more on that later). Here's how Ben and I work the Moo-la.
When I set to making our budget I first looked up Till Debt to us Part and took at look at a few of the resources that they use on the show. I found a spread sheet that you plug your numbers into, and it tells you what you should put in each "jar" to make your budget work. Unfortunately I found the spreadsheet a little too simplistic, so I set to making my own.
I opened up Excel and I made several rows with the headings of our "jars" Housing, Transportation, Life, and Savings.
At the top I listed my Pay cheque (after taxes) and Ben's pay cheque. I then broke them columns into starting with Yearly, Monthly, and Bi-weekly.
Then I started filling in the set bills we pay on a monthly basis in their appropriate category, the ones that tend to always be the same amount:
Mortgage/ Property Tax
Car/house insurance
Car Payments
Utilities (Gas/Electric/Cable/Home phone)
Cell phone(s)
Medical (Blue Cross)
RRSP
Then I collected numbers from both my bank account, and Ben's Bank account and put together our variable spending. Things like "Entertainment" "Gas" "Vacation" "Pets" "Gifts/Clothing" "Groceries" etc and filled in absolutely everything else we could possibly need to spend money on. Then I played with the totals in our "jars" until I had something that worked. It took several weeks for the numbers to really work, but in the end we figured out a budget that balanced and covered all our needs. It ended up looking like this:
Housing:
Mortgage/Property Tax
Insurance/Licence (house and car)
Utilities (gas and power)
Repairs (house)
Transportation:
Gas/Oil
Repairs
Car Loan
Life:
Groceries/Pet
Entertainment
Clothes
Family/Gifts
Bank Fees
Medical/Dental
Cell phones
Cable/Internet/Home Phone
Savings:
Vacation
RRSP
Inara
Joint Savings
Education
Once we had our jars figured out, we then had to put the system into practice, however we hate working in cash (mostly because we have next to no time to run to the bank each pay day to fill up our jars) but we are both RBC customers, and they have an amazing system of online savings accounts. So Ben and I created about 10 different savings accounts that we share between us to act as our jars:
House
Car
Life
Groceries
Entertainment
Savings
Inara
Inara Education
Vacation
Misc
We broke down Savings and Life a little more when it came to the accounts just because we needed to be able to see exactly what we were able to spend when it came to Inara, Groceries, Vacation, Entertainment and Education. Misc is an account that changes it's name all the time - currently it's called "Christmas" as we toss any extra's we end up with in there to put money away for Christmas spending.
In having our money all laid out like this, it really helps us plan for the future as well as live in the now. For example, since we put a set amount into our Entertainment account each month, when someone invites us out for dinner, or a movie, we can first take a look at the account, and figure out if A, we have enough money for the outing and B, if we were saving up that money for something further down the line, and can decide from there. For instance, our dear friend Athena is in a play in October and Ben and I are definitely going to attend, but since our Entertainment account took a beating from our most recent Calgary trip, we know we can't make any other plans from that account between now and Athena's play to be able to afford the tickets.
As well after a long while of stocking up our House account, when a hail storm hit us last summer breaking chunks of our shingles off, we had the money put aside for a new roof this spring. I can't imagine how we would have afforded to replace such a necessity while I was collecting Mat Leave had we not planned in advance.
Then we added another aspect - points. Ben and I are huge fans of collecting Visa reward points, Optimum points, and Air Miles. We figure if we are going to spend the money anyway, we might as well get a little bonus along the way. For example, Ben and I have bought two flat screen TV's with Visa Reward points, racked up from putting our Wedding and 2 years of spending on our Visa - we buy absolutely everything possible with our Visa (and pay it off out of the "jars" each pay period)- then when we have enough points, we cash them in for Future Shop Gift Cards, and watch for a Sale on TV's. It also helps to shop around Christmas for the really good deals. As well we collect Air Miles with some of our purchases, which we then cash in for Movie Tickets that we use to take some of the pressure off our Entertainment account. As for the Optimum Points, I'm a makeup artist, each year I spend a small fortune at Shoppers Drug Mart on Makeup, Hair accessories, Hair spray etc etc. Once I get to my 95,000 shoppers optimum points I can cash them in to buy up to $170 worth of merchandise with my points - but if I wait for Redemption Weekends (usually at least once a month) they give you an extra $50 if you cash in - which is $220, which I use to buy two flats of baby formula for my hypoallergenic child (which usually totals $275, and only covers about a month of her food).
As well we look for deals in everything we do. When we moved, we wanted to set up Cable with Telus, and took advantage of a deal when their Optic Cable came out, and got a brand new Xbox when we signed up. We also buy our tools during Fathers Day weekend, when Home Depot has the best deals, and stock up on any sort of decorating items (christmas lights/halloween stuff etc) after the season passes when they are a ridiculously good deal (I bought a Christmas Wreath for my front door for $2 from Michaels on Christmas Eve).
As for planning out Groceries, we are not above buying a truckload of well priced meats or items when they are on for a great deal, and I am getting much better at planning meals based off of what I have, rather than buying groceries based off of what I want to make.
It's taken us a long time to figure these things out, and I think we are in a place now where our budget is working for us more than we are working for it. Especially with not going back to my full time job, and choosing to stay home with Inara - if we want to make this work - we have to stick to the budget, and I honestly could not picture being able to do this without it.
I hope for those of you who read this, you picked up on a few tips, or maybe you have a few of your own to share with us - I am always looking for better ways to stretch a dollar! If you have any questions, feel free to ask! I'm pretty proud of our budget, and I like sharing my knowledge!
