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.