I helped a friend with his budget a few weeks ago. Now, normally I love talking about budgets. It’s actually one of my favorite things to talk about. I am, also, the only person in my social circle who straight up asks if people can afford something, or if they have a budget set aside for it. This, as a result, has earned the title of money queen. Trust me, I’m actually that amazing with money since I tend to spend way too quickly, but have become really good at setting budgets, whether by it’s advising clients, or friends.
Back to my friend. We sat down on a normal sunday morning, and we came over with his laptop; a list of all his expenses, and his saved copies of his paystubs on his laptop. That was the first sign that he was in trouble. It was a fairly time intensive project as a) he makes way too many impulsive decisions, and b) this was the first time he was paying attention to any of it.
We have a tendency of increasing our spending the instant that our income increase. We can’t help ourselves. Females, in particular, are shy about being too involved with their money. I don’t really get that. Knowing about the markets is sexy, and being financially independent is even more so. Or at least thats what my friends tell me.
My point here was that most of us don’t really do much with a plan.
A PLAN IS KEY!
Want to buy a house in the next 2 years? How are you going to pay for it?
Live in the city and own a car? How much is the car costing you, and how much can you save by taking public transit instead. For the record, parking in the City of Toronto is extremely expensive. A full day’s parking in the downtown core can cost anywhere between $20-$30.
What to retire by 50 or 55? What’s your magic number? Bet you haven’t thought about it?
Plan on having kids? Want them to go to University? Are you going to be able to help?
My goal here isn’t to preach, but to remind you (and myself) that planning for the future does wonders.
And no, you don’t have to jump into saving for everything at that same. Not every scenario fits everyone, but it is a good place to start. Chances are that thing that’s nagging you every time you get a bill means that you could do without.
In my friend’s case, it was his car. He lives 15 mins away walking from work, and his pretty much down town. Saving $1000 seems HUGE when you add up all the fees including insurance, gas, car payments etc. Living without luxuries is not something I ever recommend, but I do suggest taking a close look at your daily expenses. Currently that nagging really for me is caused my cell phone bills. I need to call Rogers tomorrow.
Do you get that nagging feeling when a bill comes in?