There must be other ways to save on groceries once our spending ban is up. We simply can't live off our pantry indefinitely. So I started exploring the ways in which we can keep to the new budget once it is in place, keeping in mind that we will need to shave 50% off what most websites claim to be the average budget for a family of five. (We are going from the recommended $1000 per month to $500 per month.)
There are lots of things that we already do or could be doing that will save us money. Here are a few:
1) Eat local and seasonal to save money.Them pineapples ain't from around these parts....a few turnips in the fall could go a long way for our grocery bill at an unbelievable non-budget busting price.
2) A feel good connection beyond savings to our groceries could happen by supporting our local CSA's. http://www.taprootfarms.ca/ http://csafarms.ca/
3) We could build a garden in our backyard if I can stop killing our one house plant by spring. Thank goodness for my kids who keep giving it plant CPR to bring it back to life. Maybe they should make the garden!
4) We haven't supported our local farmers market enough. On my way home tonight, cucumbers were 3 for $1 at our local Vegetorium. http://www.facebook.com/pages/The-Vegetorium-Country-Farm-Market/172196609466841
5) Can't think of a better outing with the kids than visiting our local u-pick. Abundance is all around us in Canada with strawberries, peaches, cherries, blueberries, plums, apples, pumpkins and pears.
6) Manager's specials...don't even get me started on how crazy it is that there are people I know who are terrified of discount meat and fish. The grocery store wouldn't sell it if it wasn't consumable! Most stores have a very short shelf life on fresh items...to the point of being overly safe. In order to push these items for sale since they would rather get something than nothing, stores will discount items 50% or more to get them sold WELL BEFORE they would expire in your fridge. This is a savings mecca! If you are not going to cook it within two days, freeze it and save, save, save.
7) Raid the discount shelf in each grocery department. Making soup, banana bread, blueberry muffins, stews? Do you really need top notch produce for these items......the answer is no, especially when you are pureeing the hell out of it! The reason why cooks created some of these recipes was for the shear purpose of preserving or re-purposing items on the verge of no return. Take advantage of cheap produce.
8) Plan your meals around the weekly grocery flyer. If you take the time to plan, this is a great way to figure out what you are having for dinner and to save at the same time.
9) Buy only what you need in small quantities and bulk when it makes sense. This is simple....good deal on ketchup equals buy bulk in our house. Need cloves for a recipe equals buy what we need for the recipe since they are only going to sit in the cupboard till next year. Your local Bulk Barn is a great source for those one time only buys....
10) Buy generic products. Stop paying for advertising!!!! Yes we love our Heinz, Kraft, General Mills, Lays, and Coke products. No surprise, these companies are pigs when it comes to our money. They also make Our Compliments, Sensations, President's Choice, Blue Menu and No Name products. Check the ingredients side by side, if they look an awful lot alike, save some money.
11) Avoid food that isn't food. We like to think that our grocery dollars don't get wasted on non-food products, but there isn't a bag of chips on this planet that I wouldn't eat given the opportunity. We all have our secret food shame and this one's mine. Lays slogan, "Betcha can't eat just one...." is just plain mean for chip addicts everywhere. In the month ahead when the budget kicks in, my new rule will be that there will be no money spent on non-food items.....and this includes all items that advertisers would like to trick us into thinking it is food. Fibre One Brownies.......seriously?! It's shit....and not just because of the fibre.
12) Over packaged...how much of what you are paying for is garbage? This is where the scratch cooking kicks into high gear. I hear all the time that it costs more to cook from scratch, that packaged items are cheaper. It's not just about the packaging, which trust me, you are paying for, but the fact that most items heavily packaged are mostly chemicals.
So while it may seem that Kraft dinner, Fudgeos, Mr. Noodles, and Twinkies are cheap....they are expensive when it comes to our health and lead to over-eating since our body knows the difference. They make us hungry....really, really hungry. The same amount of money for food could be spent on a can of beans or some butternut squash and it would go further and give us the nourishment we need to be satisfied.
13) Shelf tags...read the price per unit. I had a conversation in an aisle with a lady who insisted that the Chippits were cheaper because they were on sale. When I showed her how to look at the shelf tag to see the per 100 gram price of an equivalent product, she had a really hard time acknowledging that they weren't. In the end, she took the Chippits because she said they were better.....really? Every grocery store has shelf tags with the price broken down...read them and save.
14) Do your own food prep. Anything with labour added means higher price and often times, tax too. Cut your own veggies, butcher your own chicken and meat, make your own breadcrumbs with the leftover cracker bits, chips crumbs (if there is any left) and save some money.
15) Boneless, skinless chicken breasts are the bane of my existence!!! They taste like nothing!!! Worse, because every diet book, every weight loss show and every nutritionist thinks they are the greatest thing since sliced bread....they are in demand. Whenever a product is in demand, you will pay more for it. Buy a whole chicken it's tastier....all the flavour comes from the bones and skin. If you want smaller pieces, cut it up. If you want to save the fat, tear off the skin AFTER it is cooked. I dare ya to discard it! :) Best of all, whole chickens will save you money.
16) Meatless Mondays....duh, vegetables are cheaper than meat. Ugg, save money and lose some weight.
17) Reward programs are great for spending money and getting points or dollars back. We are such good spenders that we have been able to get upwards of $50 a month back. However, those days are over. Still, its nice to earn a little bit on the things you need to buy any ways.
18) Grocery lists.....The majority of Canadian's don't make a list, don't plan, don't pass go, don't collect $200 and go straight to jail. (If you didn't play a lot of Monopoly as a kid, you won't understand what the hell I am talking about.) We do this and save money by sticking to the list.
If you want to save time at the grocery store and you have your local memorized, take your standard piece of paper divide it into four quadrants and label them, " Meat/Seafood, Bakery/ Dairy. Produce and Aisles", then place your list items inside the four quadrants. I add a clipboard, highlighter and let one of the kids,"Go to town" at the store scratching off items as we go. The quadrants keep us from back shopping that a standard list does. Once the departments list is crossed off, we move on to the next section.
19) Deposits are ripping us off! Juice boxes....1 juice x 3 kids x 5 days per week x 40 weeks = 600 juices / 10 packs of juice = 60 packs. We pay $1 for every 10 pack of juice in refundable deposits in Atlantic Canada. Do our kids bring those boxes home? Nope! We throw out $60 per year in juice boxes alone. Anything that requires a deposit is off my grocery list.
20) Maybe coupons aren't crap. I mean the ones for products that are a regular part of your household or for the ones that are already printed up. Justifying printer ink which is really expensive to print off a $1 off coupon for Sunrise Super Squeezies Tubes is messed up. I don't even know what the hell this product is and they want me to put it in my kids lunch box. There isn't even a single food descriptor on the box from what I can see...just that it has Omega 3 and DHA. Yum! Here's the link: http://www.savealoonie.com/print-coupons/sunrise-super-squeezies-tubes-coupon-2/.
I think most of these are good suggestions and not just the ravings of a money saving lunatic. They are also easily doable and when we hit our first food budget in November, I hope they will create the savings we need to stick to our plan.
We are your average Canadian family and we eat too many potato chips.
Monday, 29 October 2012
Sunday, 28 October 2012
Fine Dining on zero percent food cost...
How do you recoup dollars already spent? We may have a 100% budget ready to go but that doesn't help us with getting ahead of months of overspending. This is where the real austerity measures kick in, but I have a plan!
If we can get through an entire months cycle without spending any money on our most variable of costs, then we can kick start this budget plan and maybe get a bit of a leg up. This translates to no money spent on clothing, groceries, toiletries, paper products, cleaning supplies, booze, medicine to deal with having no booze :), entertainment of any kind, kitty supplies, kid extras, and car maintenance.
Yikes! If that weren't enough, I am going to decrease our monthly somewhat fixed cost from NS Power by reducing our power usage by shutting off the lights by 10 pm pronto, using candles more often....(hopefully will lead to romantic entertainment time since we have no booze budget!), turning the thermostat way down (not only will our friends need sweaters but perhaps snow pants as well), reducing electronic viewing time and replacing it with board games, and sourcing out every available opportunity to reduce the vampire power that is sucking our wallet dry throughout the house.
For the grocery bill, I am a Chef on a mission to utilize our pantry, fridge and freezer with our existing inventory of ingredients to create meals that will face the scrutiny of my children and husband who have come to expect an unlimited source of bounty and have never experienced what it is like to not be able to buy their favourite foods.
We do a lot of scratch cooking but this, I can only imagine, will take us to a whole new level as we near the end of the month. Hell....it may not be as tough as I think, considering as North Americans, we tend to keep a ridiculous amount of food on hand with our giant fridges, freezers and don't forget...the extra fridges and freezers in our garages.
Have a look around.......I have, and I am astounded at how much money we have tied up in food that is just hanging around in our pantry and cupboards. We have two bottles of ketchup (unless you are Canadian, you wouldn't understand...we can't run out of this stuff with three kids), 3 bottles of BBQ sauce, taco kits, cans of beans and soup, spices, vinegars, oils and other condiments that touch on just about every aisle of the grocery store. We have chicken, beef, pork, and lobster meat in our freezer, enough varieties of pasta to start our own Italiano bistro, and baking supplies that would make the Cake Boss jealous.
Then there is the leftovers that I have neatly portioned in the freezer in case we ever get around to eating them. Why we don't take advantage of this plethora of easy food goodness is beyond my understanding, but sometimes we just don't feel like it or more often than not, we simply haven't taken the damn things out of the freezer in time to be enjoyed. This is completely embarrassing to admit.....but I don't think we are alone when it comes to leftovers or when it comes to planning. The average Canadian family has the luxury of tossing them out or freezing them till pigs fly.
Never mind, the amount of food that ends up in the garbage or compost. I wish that I could say that this never happens in our house.....but the ugly truth is that it does.
According to an article published by the CBC,
"Canadians are among the world's most well-fed people — so much so that we're wasting billions of dollars worth of edible food a year, mostly coming from our homes, according to a study.
The Cut Waste, Grow Profit draft report from the Ontario-based Value Chain Management Centre (VCMC) suggests that more than half (51 per cent) of the estimated $27 billion of food wasted countrywide ends up as unwanted leftovers dropped into household trash bins.
Expectations for larger portion sizes, confusion about safe consumption and sell-by dates, and the low cost to households of over-purchasing and wasting food were among factors blamed for the wasteful behaviour.
The food waste that occurs in Canada is largely a symptom of current processes and attitudes, primarily of abundance and affluence," the unpublished paper states."
http://www.cbc.ca/news/canada/story/2012/09/28/food-waste-report.html
Yes, I feel the shame, after reading that article and its not just because I know that we have thrown our money in the garbage, literally. But because of the morality of what food waste costs us as a society. We waste water, fertile soil, labour, and the costs associated with extensive transportation which has a direct impact on our environment. Even worse, is that I have an obligation, even if through my profession alone to lead others in how to be creative with their food supply to stop the waste from happening. I am wearing the Chef cone of shame as punishment.
Want to know if you are not alone....do a little dumpster diving through your neighbourhood come compost pick up day. I haven't done it yet, but if things get too tough, we could use this as a food source to get us through the month. No joke! I just finished reading an interesting article about Freeganism, a fancy term for the practise described above.
While I don't think that at this point I will use it as an optional food source in the days to come (I am sure it would be a great neighbour relations killer), I still recommend that you read a little bit about the practise since according to about.com "Freeganism is an anti-consumerist movement. It takes issue with society's focus on buying new and throwing away old (but still useful) items. In the simplest terms, freeganism is a reaction against the waste of resources. Participants, known as "freegans," have two main goals: to buy as little as possible and to use only what they need." http://www.thecoast.ca/halifax/the-dumpster-diet/Content?oid=3131240
I think most average Canadian families would find this idealism food for thought. Ha! Bad joke, but on a serious note, isn't that why most of us are in the mess we are in? We are spending way more than what we are making on materialistic things that we justify as necessary with money we don't have. A little Freeganism could go a long way, baby!
The value of wasted food in Canada is estimated to be over $27 billion dollars each year. If the average household spends $140 per week on food and 20% goes to waste, it translates to $28 per week. Multiply that by 52 weeks and you have $1456 per Canadian family wasted annually per year.
We plan on starting a food waste diary this week. It will give us an honest account of how much we throw away and since we have zero budget for food this month, we really have no excuse.
We are your average Canadian family and we throw our money in the garbage.
Friday, 26 October 2012
Poverty doesn't buy happiness.....
Once we
established how much we were over-spending now comes the fun part of how to
trim 39% from our current non-existent budget. Using the budget percentage for after tax
guidelines, which took me the better part of five hours to do, I came up with a
budget that adds up to 100%.
The timing of
us doing this comes when we are running out of options as to how we are going
to pay the bills this month. We are at the point of needing to do something
immediately to fix this or else financial disaster is around the corner.
Anxiety attacks aside, I am feeling a little relief after going through this
process and seeing that there is hope.
So how do
you trim 39%? Or for the average Canadian families spending habits…… 63%?
I started with laying out the fixed costs, the ones that I could do nothing about renegotiating at this time. These are items like our mortgage payment, house and car insurance, fuel oil payment, electricity costs, car loan, cell phones and RESP loans for the kids. Some of these things could be negotiated down the road but they are not going to help us when dealing with immediate cash drain problems.
I started with laying out the fixed costs, the ones that I could do nothing about renegotiating at this time. These are items like our mortgage payment, house and car insurance, fuel oil payment, electricity costs, car loan, cell phones and RESP loans for the kids. Some of these things could be negotiated down the road but they are not going to help us when dealing with immediate cash drain problems.
Then I
dealt with each category based on the budget guideline percentages of after tax
income spending to evaluate what needs to be trimmed.
For
housing, we were actually in line with 31% of our income going towards the
mortgage, taxes, insurance and fuel oil.
Next up was
utilities, where we were overspending by 12% as opposed to the suggested
5%. Our cell phones are locked into a
three year plan (gah!) with 18 months more to go. I had already negotiated with
fees last spring and had $70 knocked off the bill by reducing services and
changing the package.
Almost like
a gift from the gods, I received a flyer for Fibre Op from Bell which would
reduce our bundle for cable, internet and home phone for only $99 for a year,
no contract. Initially, even though this seemed promising, I figured it would
be more frugal if we just cancelled the whole damn thing, instead using our
cell phones, skype and getting a basic internet package.
Yes,
internet for our average Canadian family is a necessity. Our schools for our
children don’t even communicate with us by phone or letters home anymore. Plus, there is my blog, facebook and we live
a million miles away from any of our family.
To get a
cell phone long distance package from Rogers to cover our phone time with our
two parents who have yet to embrace any form of technology beyond a home phone,
it was going to be substantially more per month than what we are currently
paying for our home phone. Frustrating! Yes, but I didn’t let that stop me from
exploring what it would cost us for just having internet with Eastlink, and no
bundle.
Guess what?
It would amount to a savings of $15 per month. Well, whoopity-do, I’m gonna go
buy myself a motorcycle with those savings. I explained to Eastlink that I was
thinking about dropping them as a service and that for $15 more than what they
were suggesting for only internet, I could have Fibre op cable, internet, home
phone and a PVR for a year! I asked if they could offer anything better. They
said, “Nope”. I said, “It’s been nice knowing you.”
We have the
Fibre Op guy from Bell installing today. We saved $61 by switching companies
which cut over 2% off the Utilities budget.
With some other trimming, we are now down to 9% which is over the
suggested 5%, but my guess is that whoever made this guideline did so before
technology became a necessity.
Food cost
is something that I find really easy to manage in terms of trimming. That being
said, it also the easiest place for me to spend since who doesn’t feel like
anything that you put in your cart seems justified since it goes towards
keeping your family healthy and well nourished….maybe sometimes a little too
well nourished since both me and my husband are about 20 lbs overweight.
We are not
huge eater outers but we did spend money on a couple of places last month that
were completely over our non-budget. Definitely, no eating out! No rum or wine
or beer….all the sobbing and crying aside, it is an easy expense to trim or so the experts say. J
Next trim
the budget from 19% to 11%. That means for us, we go from having $1000 to spend
on food (which is average…they say $200 per person and we have 5) to spending
$600. I divided that further and left $500 for food, $50 for house stuff (paper
products, ect.) and $50 for personal stuff (razors, pads, deodorant).
Transportation
we were good with 15% of our budget going towards car loan, gas, maintenance
and insurance. There’s not a lot that we can trim anyways, other than more
stay-cations and less overall driving to avoid paying for additional gas. We
are lucky that we live close to work but unlucky in that we pay higher gas
prices than in other provinces or countries. There is no choice between
companies since we get gouged no matter which station we choose.
Clothing
was an easy one and I even further reduced it to 2% because we have always
relied on used clothes, great deals and grandparents. There is no shame in
second hand and often times I can find way cooler things than those that are in
our standard big box boring stores anyways. I have this great looking leather
retro 70’s jacket that cost me $5. I feel totally hot in it, way hotter than I
would in a new $500 jacket that would make me feel guilty because I spent half
our mortgage on a coat.
Personal and Discretionary Spending is where
we completely drop the ball every month. I didn’t even realize that some of our
current spending is locked in as a fixed cost since our daughters both have
music lessons that cost $80 a month. Grandma pays for the other half, thank
goodness, but when I looked at trimming this, I simply didn’t have the heart.
We have a
family gym pass that costs us $60. We use it for skating, swimming, squash and
exercising with equipment. Don’t know why we are still overweight but thank
goodness we still get exercise! A family fitness tax credit at the end of the
year helps me justify the expense. Lastly, we donate $10 to David Suzuki and
have done this for more than 10 years, again a tax credit, but more fixed costs
to consider.
After some
discussion, we decided to keep these things for now, provided that we reduce
our spending from a whopping 24% to 5%. Next month will be the ultimate test to
see if we can stick to this, the consequence of not doing so will result in us
losing the above.
Someone
near and dear to us is watching our children in our home afterschool which we
love. This was our toughest decision to make since we can’t get a better
arrangement. After making a few phone calls, we find that we could cut our
childcare budget by 5% if we used the afterschool excel program located at our children’s
school. Tough call? You bet! This is a decision that affects someone we love and potentially our kids happiness.
We are
fortunate to have not one, but two medical plans. Only thing is, we have been
too stupid and/or lazy to use them properly. Really, how difficult is it to
fill out paperwork? In our home, the only excuse we have is that we are too
friggin’ busy……it’s a lame excuse when we realized how much additional revenue
could be coming in to cover our month to month cost for dental, medical and
optical expenses.
Through a
few quick phone calls, I found out how to submit my paperwork for the remaining
amount that my husband’s plan does not cover. In the process, I found out that
the company I work for puts in extra flex dollars to cover any extras not
covered by our medical plan.
Imagine my
surprise when I found out that I have almost $2000 in monies that we could have
been using over the past year! What an idiot I am! We set our medical budget at 2% budget per month because we still need
to pay for the damn cat, in case we have vet bills. (I love my kitty, don’t
get me wrong, but they can be expensive. Her last vet bill cost more than what
we paid to purchase her from the local SPCA. It’s ridiculous!)
This leaves
us with the recommended 5% towards that ever evasive thing called Savings. We
already have fixed costs going towards RESPS so hopefully our kids can have a
decent education and be smarter than we are. Luckily too, our RRSPS come out of
our income and don’t factor into the month to month spending, otherwise we
would have nothing towards our retirement.
The remaining amount will, in theory, create a buffer of savings, if
we stick to the budget.
Last and we
wish it was least, our debt. We currently have decided to spend the maximum
recommended amount so that we can get as much paid off before interest rates
change in Canada. That means that we will be spending 15% per month towards our
existing debt on a roofing job and flood damage to our home.
We are your
average Canadian family and we have been spending our way into poverty.
Thursday, 25 October 2012
Don't let the green grass fool ya!
Remember that old tune from Wilson Pickett? Its a song about his girlfriend leaving him for a another guy, not really what I was thinking of when I chose that title for this blog, but rather referring to the idea that it isn't always greener on the other side of the fence.
The day I stared this blog, it was almost like an out of body experience...there was no conscious decision that day or thoughts previous about letting the whole world know that we are doing a pretty miserable job of managing our finances. The minute I published my first post, that's when the panic set in.
Like other families who have only opened up to me recently, we have done a pretty damn good job of hiding our ability to keep up with the Joneses by doing some smart and some not so smart things to stay in the community loop both for us and for our kids.
Its not just our friends that we have hidden this from but also our family. We don't want ANYONE to know that we are struggling financially and I know now that we are ABSOLUTELY not alone in doing everything we can to hide that fact.
There is something cathartic though about letting it all go, and even though we are far from getting out of the weeds, I feel a sense of empowerment (even if false) from exposing our average Canadian secret. It hopefully will let me off the hook this Christmas when I introduce Austerity Measures holiday fun! :)
So now comes the day where we need to look at the nitty gritty of budgeting. If you haven't done any research into how best to prepare a budget, you would think that it would be quite simple or straightforward to find a simple chart or a list of guidelines to follow on the internet. At least I thought so.
Instead I have looked at more hocus pocus crap websites that often lead me to some credit lending or cash back business than I need to look at in a lifetime.My instincts tell me that these places are in the business of making money off our poverty, rather than solving our debt crisis in a matter of weeks according to the testimonials.
After cruising the internet for awhile, I came to the conclusion that it is not just about designing a budget. That won't result in a guaranteed decrease in our expenses. Yes, we need a budget. But more than that, we need to understand what is an acceptable amount to be spending on stuff.
From housing to childcare to utilities, what actual percentage of our income spent on these is acceptable by experts standards? Before we even attempt to put together a budget, it would seem to me that we would need to find out. From there this would give us our first step towards analyzing what we need to stop spending money on and to perhaps start negotiating in terms of price on the services that we need.
Trust me, when I say that this is a lot harder to find than it should be. The best so far for a starting point is a basic household budgeting guidelines for after net tax income from a Canadian website called, "My Money Coach."
http://www.mymoneycoach.ca/_Library/docs/Budgeting_for_After_Tax_Income.pdf
It is a bit ridiculous that it has absolutely NOTHING about childcare expenses. I have yet to find something that gives me a percentage of what is an acceptable amount of after-tax income to spend on childcare in Canada. Stay tuned because I will in time.
So now comes the easy part...using the percentages suggested we need to figure out where we are going wrong. The first thing I notice is that the percentages don't add up to 100% and that there is no childcare allowance. So its up to me to balance the frigin' budgeting guidelines in addition to looking at our figures for last month. Here goes:
35% HOUSING: We came in at 33%. So far, so good. We don't need to move, yet.
mortgage / taxes / strata
rent
insurance
power
5% UTILITIES: Surprise! We are spending 12%....yikes!
phone / cell phone
gas/fuel oil
cable / internet
water
10 – 20% FOOD: We are spending 18%...not gut busting, but very close.
groceries
personal care
baby needs
eating out
15 – 20% TRANSPORTATION: Total 19% this month because of the sticker renewal. (Snow tires, next!)
bus / taxi /
car loans
fuel
insurance
maintenance
parking
3 – 5% CLOTHING for all members of the family: 2% spent....damn Halloween costumes and work shoes!
3% MEDICAL: Damn cat therapy cost us 3%! (See previous blog....grrr!)
health care premiums
specialists
over-the-counter
5 – 10% PERSONAL &
DISCRETIONARY: Uh, oh....here it comes....head held in shame.....24%.....aaaaccckkkkk!!!!!!
entertainment
recreation
tobacco
alcohol
gaming
hair cuts
hobbies
5 – 10% SAVINGS: 3% for RESP for kids
"Plan to save money for expenses that don’t occur every
month, as well as for your future. Then you’ll have a
little extra available when you need it."
Ha! Ha! The info above in quotes is from the website. Savings account?! What savings account!
5 – 15% DEBT PAYMENTS: 15% for our roof and flood disaster
"Many people find that their budget is quite tight
because their monthly debt payments are closer to 25%
of their net income." Phfew...not us...yet. Hopefully they don't raise interest rates!
10% CHILDCARE: This is what we are currently spending per month. Not sure what is recommended but this seems to be a large chunk of what we are currently making.
Do I feel a sense of shame and regret? Absolutely! My total adds up to 139% of our income. It is fairly obvious to me where the problem areas are. However, there is no point on going on a pitty party, self scathing rampage if we want to turn this around. I'd rather focus my energy on cutting out the 39%. It's time to start chopping!
We are your average Canadian family and we are spending $1.39 for every dollar that we earn.
The day I stared this blog, it was almost like an out of body experience...there was no conscious decision that day or thoughts previous about letting the whole world know that we are doing a pretty miserable job of managing our finances. The minute I published my first post, that's when the panic set in.
Like other families who have only opened up to me recently, we have done a pretty damn good job of hiding our ability to keep up with the Joneses by doing some smart and some not so smart things to stay in the community loop both for us and for our kids.
Its not just our friends that we have hidden this from but also our family. We don't want ANYONE to know that we are struggling financially and I know now that we are ABSOLUTELY not alone in doing everything we can to hide that fact.
There is something cathartic though about letting it all go, and even though we are far from getting out of the weeds, I feel a sense of empowerment (even if false) from exposing our average Canadian secret. It hopefully will let me off the hook this Christmas when I introduce Austerity Measures holiday fun! :)
So now comes the day where we need to look at the nitty gritty of budgeting. If you haven't done any research into how best to prepare a budget, you would think that it would be quite simple or straightforward to find a simple chart or a list of guidelines to follow on the internet. At least I thought so.
Instead I have looked at more hocus pocus crap websites that often lead me to some credit lending or cash back business than I need to look at in a lifetime.My instincts tell me that these places are in the business of making money off our poverty, rather than solving our debt crisis in a matter of weeks according to the testimonials.
After cruising the internet for awhile, I came to the conclusion that it is not just about designing a budget. That won't result in a guaranteed decrease in our expenses. Yes, we need a budget. But more than that, we need to understand what is an acceptable amount to be spending on stuff.
From housing to childcare to utilities, what actual percentage of our income spent on these is acceptable by experts standards? Before we even attempt to put together a budget, it would seem to me that we would need to find out. From there this would give us our first step towards analyzing what we need to stop spending money on and to perhaps start negotiating in terms of price on the services that we need.
Trust me, when I say that this is a lot harder to find than it should be. The best so far for a starting point is a basic household budgeting guidelines for after net tax income from a Canadian website called, "My Money Coach."
http://www.mymoneycoach.ca/_Library/docs/Budgeting_for_After_Tax_Income.pdf
It is a bit ridiculous that it has absolutely NOTHING about childcare expenses. I have yet to find something that gives me a percentage of what is an acceptable amount of after-tax income to spend on childcare in Canada. Stay tuned because I will in time.
So now comes the easy part...using the percentages suggested we need to figure out where we are going wrong. The first thing I notice is that the percentages don't add up to 100% and that there is no childcare allowance. So its up to me to balance the frigin' budgeting guidelines in addition to looking at our figures for last month. Here goes:
35% HOUSING: We came in at 33%. So far, so good. We don't need to move, yet.
mortgage / taxes / strata
rent
insurance
power
5% UTILITIES: Surprise! We are spending 12%....yikes!
phone / cell phone
gas/fuel oil
cable / internet
water
10 – 20% FOOD: We are spending 18%...not gut busting, but very close.
groceries
personal care
baby needs
eating out
15 – 20% TRANSPORTATION: Total 19% this month because of the sticker renewal. (Snow tires, next!)
bus / taxi /
car loans
fuel
insurance
maintenance
parking
3 – 5% CLOTHING for all members of the family: 2% spent....damn Halloween costumes and work shoes!
3% MEDICAL: Damn cat therapy cost us 3%! (See previous blog....grrr!)
health care premiums
specialists
over-the-counter
5 – 10% PERSONAL &
DISCRETIONARY: Uh, oh....here it comes....head held in shame.....24%.....aaaaccckkkkk!!!!!!
entertainment
recreation
tobacco
alcohol
gaming
hair cuts
hobbies
5 – 10% SAVINGS: 3% for RESP for kids
"Plan to save money for expenses that don’t occur every
month, as well as for your future. Then you’ll have a
little extra available when you need it."
Ha! Ha! The info above in quotes is from the website. Savings account?! What savings account!
5 – 15% DEBT PAYMENTS: 15% for our roof and flood disaster
"Many people find that their budget is quite tight
because their monthly debt payments are closer to 25%
of their net income." Phfew...not us...yet. Hopefully they don't raise interest rates!
10% CHILDCARE: This is what we are currently spending per month. Not sure what is recommended but this seems to be a large chunk of what we are currently making.
Do I feel a sense of shame and regret? Absolutely! My total adds up to 139% of our income. It is fairly obvious to me where the problem areas are. However, there is no point on going on a pitty party, self scathing rampage if we want to turn this around. I'd rather focus my energy on cutting out the 39%. It's time to start chopping!
We are your average Canadian family and we are spending $1.39 for every dollar that we earn.
Wednesday, 24 October 2012
Someone throw me a frickin' bone here....
In economics, austerity measures are taken when a government needs to reduce its spending to pay back creditors. It fairly obvious after reviewing our revenues verses expenses that we need to sort something out....and quick.
Last nights news contained not one but three references to the Canadian government hiking interest rates in the days to come. The bigger part of the news is why they are doing this. Guess what?! The central bank is alarmed over the record high household debt to income ratio, and said that for the first time ever that personal debt would play a key role in monetary policy decisions.
We are spending way more than we are making and not just by a little bit. As of right now, the average Canadian is spending $1.63 to every dollar made. Multiply that by how many Canadians we have and that is a whole lot of debt. Sometimes its nice to know that you are not alone....but in this case, I wish we weren't.
The banks and the government want us Canadians to knock it off with with credit spending. Very soon those low interest rates that we are paying on our mortgages and lines of credit are going to go up.
What does this mean for us? First of all, we need to start tackling our month to month with the overspending which means one of two things....increase the revenue or decrease the expenses.
Next, we need to start paying off the debt and as quickly as possible BEFORE the interest rates increase, if at all possible.
Panicked?! Yes, I am. But this blog can't be about how scared I am. The whole point of me sharing this experience is that I know that I can somehow fix this. That the inherent problem solver in me is going to figure out with not just one, but many solutions that will hopefully help us and others.
First step is the obvious....we need to find a way to reduce expenses. In the last week I have spent a good chunk of time going over our bills to define what it is that we are spending our money on and also how much we are overspending. To figure out where we can cut expenses, I have been searching the internet for articles on reducing our spending and on how to save money.
There are some really stupid suggestions like buying more or buying bulk for groceries, reducing your premium cable package to a basic package, doing a full load of wash instead of a partial load, cutting back on watering the lawn, turning off lights you aren't using, turning down the thermostat, stop buying designer labels, and my personal favourite......stop renewing your annual travel insurance.
What planet are these money saving experts on anyways?! If my monthly budget for groceries needs to be reduced, it would stand to reason that having an extra inventory of macaroni sitting on my shelves may be money saving in the long term, but at the end of the day, its really just money sitting in my cupboard.
What premium cable package? Who doesn't do a full load of wash these days, especially with five people in the house? Frankly, I would be better off to make these kids wear their clothes till they are good and dirty which would cut down on the overall loads than to follow that lame suggestion. Watering the lawn....really?! We live in Atlantic Canada, if your lawn isn't watered, wait five minutes.
I live with the light and heat Dictator....no joke. Friends and family bring thermal underwear and slippers to our home outside of the summer season. Our daughter nearly froze to death last night because she forgot to take the extra comforter to bed with her. She also forgot that Daddy turns down the heat before he goes to sleep.
Designer labels, please. I have some clothing and shoes that I have been wearing now for 15 years! If you change locations and or friends often enough, they won't notice.
And for the finale, .......travel insurance. When was the last time we travelled anywhere?! Our idea of travel is a picnic brought from home, a trip to the park or the beach, and done in a day. It hardly requires any insurance.
Somebody throw me a frickin' bone here, because there has got to a better way of doing this beyond all of the normal everyday things we already do. And dammit, I will find a way!
Last nights news contained not one but three references to the Canadian government hiking interest rates in the days to come. The bigger part of the news is why they are doing this. Guess what?! The central bank is alarmed over the record high household debt to income ratio, and said that for the first time ever that personal debt would play a key role in monetary policy decisions.
We are spending way more than we are making and not just by a little bit. As of right now, the average Canadian is spending $1.63 to every dollar made. Multiply that by how many Canadians we have and that is a whole lot of debt. Sometimes its nice to know that you are not alone....but in this case, I wish we weren't.
The banks and the government want us Canadians to knock it off with with credit spending. Very soon those low interest rates that we are paying on our mortgages and lines of credit are going to go up.
What does this mean for us? First of all, we need to start tackling our month to month with the overspending which means one of two things....increase the revenue or decrease the expenses.
Next, we need to start paying off the debt and as quickly as possible BEFORE the interest rates increase, if at all possible.
Panicked?! Yes, I am. But this blog can't be about how scared I am. The whole point of me sharing this experience is that I know that I can somehow fix this. That the inherent problem solver in me is going to figure out with not just one, but many solutions that will hopefully help us and others.
First step is the obvious....we need to find a way to reduce expenses. In the last week I have spent a good chunk of time going over our bills to define what it is that we are spending our money on and also how much we are overspending. To figure out where we can cut expenses, I have been searching the internet for articles on reducing our spending and on how to save money.
There are some really stupid suggestions like buying more or buying bulk for groceries, reducing your premium cable package to a basic package, doing a full load of wash instead of a partial load, cutting back on watering the lawn, turning off lights you aren't using, turning down the thermostat, stop buying designer labels, and my personal favourite......stop renewing your annual travel insurance.
What planet are these money saving experts on anyways?! If my monthly budget for groceries needs to be reduced, it would stand to reason that having an extra inventory of macaroni sitting on my shelves may be money saving in the long term, but at the end of the day, its really just money sitting in my cupboard.
What premium cable package? Who doesn't do a full load of wash these days, especially with five people in the house? Frankly, I would be better off to make these kids wear their clothes till they are good and dirty which would cut down on the overall loads than to follow that lame suggestion. Watering the lawn....really?! We live in Atlantic Canada, if your lawn isn't watered, wait five minutes.
I live with the light and heat Dictator....no joke. Friends and family bring thermal underwear and slippers to our home outside of the summer season. Our daughter nearly froze to death last night because she forgot to take the extra comforter to bed with her. She also forgot that Daddy turns down the heat before he goes to sleep.
Designer labels, please. I have some clothing and shoes that I have been wearing now for 15 years! If you change locations and or friends often enough, they won't notice.
And for the finale, .......travel insurance. When was the last time we travelled anywhere?! Our idea of travel is a picnic brought from home, a trip to the park or the beach, and done in a day. It hardly requires any insurance.
Somebody throw me a frickin' bone here, because there has got to a better way of doing this beyond all of the normal everyday things we already do. And dammit, I will find a way!
Tuesday, 23 October 2012
Why is the money and the rum always gone?
Its been no secret in our house for the last few months that we have been running a deficit. Yes, we have been paying off the credit card....but the truth is there may have been a little extra the past few months that have been landing on our borrowing account when we don't have the full amount in our bank account.
We keep making the agreement that its no problem and when the next check comes in, we will just cover it. The blame lies with when we get paid, not that we spent too much. Why do these damn credit card companies need it on the 23rd? Why not the 26th or even better the 30th!? (Keep in mind that these are just delusional rationalizations since its a 30 day cycle, you either have the money or you don't and well, we don't).
So what the hell are we spending the money on? Why is our credit card bill $3000 instead of $1000 per month like we've budgeted. Even a $1000 a month may seem like a lot, but like other families we use the points on our Mastercard to buy groceries. We have automatic payments for our cell phones, cable and internet. As well, we use the card for gas and groceries.
A closer examination of our credit card reveals all of the dirty secrets we have been hiding from ourselves and it is the root of the reason why we are sinking deeper and deeper into debt each month.
We spent $750 on groceries, $370 on gas, and $32 at our favourite Canadian guilty necessity Tim's. Now here is where is gets ugly since even though this tips the scale over our $1000 budget, we didn't just do it by a few dollars, we tipped it by a whopping $2300.
Don't tell anyone but here is the juicy dirt of what we spent our money on. We ate out for dinner twice, one was to celebrate a friends birthday and the other was because it was Daddy's night to cook.
We bought curtains after four years of living in a home with a huge picture window at street level that once it gets dark at 6 pm becomes a living entertainment source for our neighbours walking their dogs after dinner.
For two stickers and some certificates for our cars, we spent $325 with NS Registry of Motor Vehicles....really?!
Our charity of choice for the last 12 years has been the Terry Fox Foundation. We do the run every September as a family and chose to donate $55 this year.
I purchased some sneakers for work that I can use for orthotics since the constant walking and standing on concrete is killing my feet.
And for the ultimate, cat out of the bag, secret of where our money went.....We took our cat to the vet. She was oh, such a good kitty for 10 months and then recently took to peeing in our living room on the hard wood. Thought she had a bladder infection, and after testing and spending a half an hour with our vet trying to figure what was wrong with her. He came to the conclusion that the recent appearance of another kitty outside our home is giving our cat anxiety issues. Cat therapy....$140. F**king priceless!
The remainder was spent on the few things we need for our house with small amounts from places like Canadian Tire, Shoppers Drugmart and Walmart.
Now I get that these things were NOT in the budget and what a bad girl I am for going on such a massive spending spree, but really?! This is the part that I don't get....how are we supposed to get our finances in line when every month, there seems to be a list of somewhat essential (except for the cat) expenses.
Damn, we waited four years for curtains!! In my guilt, I dug out the receipt in a desperate attempt to redeem myself and return them. It was two days past the exchange date. For a moment I felt hopeless, a failure and totally self-indulgent, chastising myself for being so irresponsible.
Wait a minute! Hold the phone here....we have two jobs, work a combined total of 90 hours a week and it wasn't spent on gambling and hookers! There has got to be some other way that we can manage our month to month without sweating the small stuff and with allowing ourselves the occasional luxury to make to day to day toil and drudgery seem worth it. What is the point of sacrificing all this time and energy for such a low rate of return?
We are your average Canadian family and we can't afford curtains.....something has got to give!
We keep making the agreement that its no problem and when the next check comes in, we will just cover it. The blame lies with when we get paid, not that we spent too much. Why do these damn credit card companies need it on the 23rd? Why not the 26th or even better the 30th!? (Keep in mind that these are just delusional rationalizations since its a 30 day cycle, you either have the money or you don't and well, we don't).
So what the hell are we spending the money on? Why is our credit card bill $3000 instead of $1000 per month like we've budgeted. Even a $1000 a month may seem like a lot, but like other families we use the points on our Mastercard to buy groceries. We have automatic payments for our cell phones, cable and internet. As well, we use the card for gas and groceries.
A closer examination of our credit card reveals all of the dirty secrets we have been hiding from ourselves and it is the root of the reason why we are sinking deeper and deeper into debt each month.
We spent $750 on groceries, $370 on gas, and $32 at our favourite Canadian guilty necessity Tim's. Now here is where is gets ugly since even though this tips the scale over our $1000 budget, we didn't just do it by a few dollars, we tipped it by a whopping $2300.
Don't tell anyone but here is the juicy dirt of what we spent our money on. We ate out for dinner twice, one was to celebrate a friends birthday and the other was because it was Daddy's night to cook.
We bought curtains after four years of living in a home with a huge picture window at street level that once it gets dark at 6 pm becomes a living entertainment source for our neighbours walking their dogs after dinner.
For two stickers and some certificates for our cars, we spent $325 with NS Registry of Motor Vehicles....really?!
Our charity of choice for the last 12 years has been the Terry Fox Foundation. We do the run every September as a family and chose to donate $55 this year.
I purchased some sneakers for work that I can use for orthotics since the constant walking and standing on concrete is killing my feet.
And for the ultimate, cat out of the bag, secret of where our money went.....We took our cat to the vet. She was oh, such a good kitty for 10 months and then recently took to peeing in our living room on the hard wood. Thought she had a bladder infection, and after testing and spending a half an hour with our vet trying to figure what was wrong with her. He came to the conclusion that the recent appearance of another kitty outside our home is giving our cat anxiety issues. Cat therapy....$140. F**king priceless!
The remainder was spent on the few things we need for our house with small amounts from places like Canadian Tire, Shoppers Drugmart and Walmart.
Now I get that these things were NOT in the budget and what a bad girl I am for going on such a massive spending spree, but really?! This is the part that I don't get....how are we supposed to get our finances in line when every month, there seems to be a list of somewhat essential (except for the cat) expenses.
Damn, we waited four years for curtains!! In my guilt, I dug out the receipt in a desperate attempt to redeem myself and return them. It was two days past the exchange date. For a moment I felt hopeless, a failure and totally self-indulgent, chastising myself for being so irresponsible.
Wait a minute! Hold the phone here....we have two jobs, work a combined total of 90 hours a week and it wasn't spent on gambling and hookers! There has got to be some other way that we can manage our month to month without sweating the small stuff and with allowing ourselves the occasional luxury to make to day to day toil and drudgery seem worth it. What is the point of sacrificing all this time and energy for such a low rate of return?
We are your average Canadian family and we can't afford curtains.....something has got to give!
Sunday, 21 October 2012
How the Hell did we get here?
We don't smoke, we don't drink...(well, one bottle of wine on the weekend occasionally can be considered money spent on booze, but I classify it as homepathic medicine.)
We don't have luxury anything, no fancy cars, or expensive jewelry, no outlandish hobbies with high priced memberships, forget the magazine subscriptions out the wazoo, or even high end furnishings for our home purchased on credit.
We don't even have a outrageous mortgage. Our house is a fixer upper or what I refer to as our broken dream home purchased for $270 k with a 2% interest rate and spread out over 25 years.
There's no balance on any of our credit cards as we pay it off every month.
We have two borrowing accounts which currently are carrying the balance of a forced roofing job by our insurance company (no roof, no insurance they said) and the extra cost of repairing our home when it was flooded after a big rainstorm during the middle of our roofing job which the insurance company did not cover entirely.
Andrew & I both have decent jobs making a combined income of around $80 K per year with benefit plans and RRSP matching for both of the companies we work for.
My job even helps with the finances in that I am a trained Chef and thus can save us a lot of money by being crafty in the kitchen and by not having to buy processed convenience foods that cost too much for the convenience.
Our three children are not spoiled by us, but rather by their grandparents who supply us with toys, clothes, music lessons which offers us as parents a whole lot of help when it comes to the extras.
So, what the Hell? Why are we struggling from paycheck to paycheck, with anything extra outside of mortgage, insurance, one car payment of $300, water, power, fuel oil, taxes, groceries, childcare, cell phones, basic cable and internet, landing on our borrowing account.
We have one extra as a family and that is our membership which costs us $60 a month for skating, swimming, and gym use. It is the one really important thing that I would love to hold on to, but may need to let go in the months ahead.
I know that we have a lot more than some do, but this blog is not about those in really, really unfortunate financial situations (trust me, I know it could get or be worse), but what I think is the average Canadian family with dual incomes who are working hard everyday and wondering why they have to play the "money game" every month when it comes time to pay the bills.
We can't be the only family wondering why the hell we go to work everyday to pay the bills and yet still can't manage to pay the bills. Hopefully this blog will help me to connect with others who understand our frustration and give me an opportunity to explore ways to pay off our debt, and manage our month to month.
We don't have luxury anything, no fancy cars, or expensive jewelry, no outlandish hobbies with high priced memberships, forget the magazine subscriptions out the wazoo, or even high end furnishings for our home purchased on credit.
We don't even have a outrageous mortgage. Our house is a fixer upper or what I refer to as our broken dream home purchased for $270 k with a 2% interest rate and spread out over 25 years.
There's no balance on any of our credit cards as we pay it off every month.
We have two borrowing accounts which currently are carrying the balance of a forced roofing job by our insurance company (no roof, no insurance they said) and the extra cost of repairing our home when it was flooded after a big rainstorm during the middle of our roofing job which the insurance company did not cover entirely.
Andrew & I both have decent jobs making a combined income of around $80 K per year with benefit plans and RRSP matching for both of the companies we work for.
My job even helps with the finances in that I am a trained Chef and thus can save us a lot of money by being crafty in the kitchen and by not having to buy processed convenience foods that cost too much for the convenience.
Our three children are not spoiled by us, but rather by their grandparents who supply us with toys, clothes, music lessons which offers us as parents a whole lot of help when it comes to the extras.
So, what the Hell? Why are we struggling from paycheck to paycheck, with anything extra outside of mortgage, insurance, one car payment of $300, water, power, fuel oil, taxes, groceries, childcare, cell phones, basic cable and internet, landing on our borrowing account.
We have one extra as a family and that is our membership which costs us $60 a month for skating, swimming, and gym use. It is the one really important thing that I would love to hold on to, but may need to let go in the months ahead.
I know that we have a lot more than some do, but this blog is not about those in really, really unfortunate financial situations (trust me, I know it could get or be worse), but what I think is the average Canadian family with dual incomes who are working hard everyday and wondering why they have to play the "money game" every month when it comes time to pay the bills.
We can't be the only family wondering why the hell we go to work everyday to pay the bills and yet still can't manage to pay the bills. Hopefully this blog will help me to connect with others who understand our frustration and give me an opportunity to explore ways to pay off our debt, and manage our month to month.