budget | mindwi.se edit

Current: So far in 7 months of 2022, Budgeting 2022, What I bought for myself so far in 2022

Older: Review 2021, Budgeting 2021, Review 2020, Budgeting 2020, Review 2019, Budgeting 2019, Comparison 2016 vs 2019

Currently using Debit and Credit to manage my money flow.

So far in 7 months of 2022

On the income side, most of it is on track, except the expenses and cash back that is low because of no work travel. Also, one federal tax return is still pending to this day (about 4,800).

On the expense side, clothing, family, food, home (an increase for September is planned as we move in a larger unit), pharmacy and pet are all on track. Spot and tech is high mostly because of a bike purchase (2,400), transit is high because of an expensive car repair (2,600) and SAVINGS is low because we will increase it soon to match our goals. Travel is a new category I had to create to separate irregular expenses from the other ones.

On top of that, I avoided to list medical as I'm dealing to get a major refund of many expenses for an hospital delivery outside my home province and it will probably end up below the actual expenses. It will be listed in the yearly summary.

In September, a cash back from Amex will provide about $500 and a potential settlement against Desjardins (regarding a data breach) will provide about $2000 to us.

Budgeting 2022

Number of expense categories reduced from 21 to 7 to simplify.

Moved back to BC on March 1st, we settled to rent an apartment for the moment. It keeps our costs stable and with a newborn, we don't really want to spend our time to bid on condos that will sell way over listed price anyway. We will keep adjusting our expenses and sell possessions we no longer use to reduce our burden.

We can count on a close to $12k tax return since we moved twice last year and all expenses are deductible.

Few notes by category

Clothing: Even if the last two years were above the $2,100 mark, I'll try to minimize the damages here.

Family: Since we just expanded to a family of 4 and we moved again, this category has been increased because big expenses will arrive.

Food: This one will be difficult since the inflation of good prices is alarming. Still, I decided to restrict it to $1000/month.

Home: We decided to rent at $1,900/month, on which we need to add a mere $14 for insurance, $26 for hydro, $20 for phones and $50 for Internet (starting in June). We do not pay city taxes, strata fees or any other maintenance costs on appliances.

Pharmacy and pet: Last year totalled at $2,600, decided to try to lower our expenses at $2,100 by buying cheaper products and by stocking a bit.

Sport and tech: Decided to buy a $2,400 road bike to replace the one that I sold a year ago. Still budgeting it even though it is a replacement. The rest will be tech parts (batteries, etc) and sport gear (helmet, gloves, replacement parts).

Transit: Former Car category, now replaced to consider the fact that we will have bus expenses. Our car that we bought last year will probably need some maintenance, but we really don't use it much for now, so it brings our gas bill super low. Fixed expense is the car insurance at $130/month. Rest is variable with mileage and bus usage, but it doesn't include depreciation. I believe it is more than needed.

SAVINGS: On the budget, we have a huge gap of about $21k between incomes and expenses, but I'm sure we will increase the saving rate. $17k is the bare minimum (it represents twice the TFSA contribution limit of $6000 per adult and twice the RESP contribution minimum of $2500 per child to get the federal grant).

What I bought for myself so far in 2022

Every single item bought was to replace a broken, sold or disposed product I already had.

I'm not listing the things I sold because I totally lost track to be honest. Also, common possession are not listed, per example a set of winter tires for our car is actually shared with my wife, so I don't consider it mine as per se.

July 1st update: During the first six months of the year, I purchased a bit more than what is listed above. However, I returned that extra stuff because it was disappointment after disappointment. We tend to forget how buying stuff doesn't produce the expected outcome most of the time and it also doesn't lead to more happiness. I try not to add anything in my possession list before removing something. But even by replacing something, so we feel like upgrading our life, dissatisfaction stops by most of the time.

For example, I own a Farsik small handle bar bag for my bicycle. I want to give it to my wife so we can use it. I'm now looking to get a new one for myself. Ordered a massive 17L Giant bikepacking bag. Truth is, I probably won't bikepack enough to justify a $150 bag that is a pain to use on a daily basis. Ah, and it doesn't fit a road bike handlebar properly because it is too wide. Having passed the return date, I sold it at loss and bought a different one.

Review 2021

In correlation with our Budgeting 2021, let's review the full year.

Expenses (Actual vs planned)

Incomes (Actual vs planned)

Extraordinary expenses (not budgeted)

Incomes (Actual vs yearly projected net)

If you compare the expenses total with the incomes total, the excess is still another $13k. This is potentially another saving chunk currently used as emergency fund or money in transit to savings/investments.

What I bought

What I sold

End note

Not much to say except I failed totally in my goals. I moved back East and returned to BC at the beginning of 2022. What a waste of time, money and energy. And nothing that I bought made me happy at all. It just complicated my life as before. Next year, I really need to refocus on what really matter.

Budgeting 2021

Even if everything is to be set regarding the sale of our place and job transfers, we hope to be able to move early in the year. It will impact the budget, so let's assume March 1st. If the category is split in two, it denotes the previous location and the new one.

Planned expenses

Projected net incomes

The gap between spending and incomes is not a bug, it's a feature. I tend not to budget to tight because it does not serve the beneficiaries well in my opinion. Incomes can fluctuate, so can the expenses. Any leftovers will be turned in savings, no second though.

This budget will allow us to save a minimum of 18% of net incomes, plus the equity on the mortgage ($12 000), bringing the total saving rate at 33%. In the perspective of a downsizing year, it is excellent.

Few notes

Here are couple details on what will happen this year, so I don't forget.

On another note

Life is not only about money. Don't take this planning as the meaning of our life. We do aspire at creative work, spiritual experiences, etc. I just personally want our wallet to be aligned with our values and not to be a drag for our future. At the same time, I do not want to pursuit the American Dream of the always more money, always more stuff. Thus, I don't care about having a promotion to get a better income. All I want is to make good decisions with my money.

Review 2020

Total spendings of $63 441 without the savings.

On incomes of $92 093, savings then equal 25%, on which we need to add 26% from the equity built on the mortgage ($24 000 estimated, inflated with the reduction on prime rate). Thus, the total saving rate is 51%.

Compared to 2019

When comparing with last year's review, we were able to reduce:

But, we spent more money on:

Then, we basically saved $70/month, even though many increases were out of our control. If we don't count the extra payment on the mortgage, it is $173/month in reduction. Imagine if we were able to cut our crazy spending on food.

Also, savings were reduced, but mostly because we haven't invested all the funds in 2020, preferring to have a security fund since we had a leave without pay.

Budgeting 2020

While we estimate to live on a single salary from June 2020, this will have a considerable impact. We need to budget more than ever and avoid unnecessary spending.

The expected revenues are:

I intentionally leave a difference between planned spending and planned income so as not to budget too tightly. As much as the income can be greater than what is planned, so much the expenses can vary.

This budget will allow us to save 17% of our net income. In the perspective of a year of decline, it's still excellent.

Review 2019

Total expenses

This adds up to a total expense of $ 99,742.

The savings are therefore 36% to which we must add 15% thanks to the capital accumulated on the mortgage ($ 14,865 estimated). This gives a figure of 51% savings.

Budgeting 2019

After the move in December 2018, there will be the birth of our child who will upset the established order! Scheduled for April, we have been preparing for a few weeks already, both physically and financially, its coming. My spouse will first be 4 months at 93% of her salary, then 8 more months at 55%. It's an understatement to say that this will come as a shock, especially since the costs of care in BC (after maternity leave) are not what can be described as frugal.

Our objectives are to continue to reduce certain expenses (in food for example, but also certain "luxuries").

Analysis of monthly costs and 2019 targets

In order to be able to estimate our expenses, I made a summary from May 1, 2018 to February 18, 2019 using YNAB (You Need A Budget).

Category : Amount rounded to the nearest dollar - Notes [Target]

Note that education and medical expenses are fully covered by the employer.

In total, I estimate the re-balancing of expenses at a possible savings of $ 55 per month in 2019. However, this same $ 55 could be allocated to the addition of 2 20-year term life insurance policies.

We have stopped saving most of the 46% of our income since the move and have created automatic transfers into savings accounts to cover variations in future income and some expenses within 2-3 years. . After having re-balanced the budget during the 8 month to 55% of the 2nd salary, we will increase the savings rate again for the long term.

Thus, our objectives are to better reflect on each of the unforeseen purchases in order to better contain the budget during the 8 months for which the income will be lower and to re-establish savings.

Comparison 2016 vs 2019

Our monthly costs in 2016

With a house in Quebec (QC) sold for $435,000, two recent / luxury cars and 1 motorcycle.

Our monthly costs forecast in 2019

With a condominium in British Columbia (BC) bought for $ 715,000 and a 14 year old car.

The difference of about $850 is major. However, we must also consider that the new province saves us about $ 1,000 / month in taxes. However, childcare services will be more expensive in the years when we use them. The ability to sell the car and reduce our travel costs would reduce our costs below $ 2,000 / month.

I also notice that our costs in 2016 represented nearly 50% of our net salaries in QC while it will be around 30% of our net salaries in BC in 2019.

Obviously, even if the price still seems high to us, we consider to be able to subsist with such financial responsibilities. Our tendency to cut our costs and increase the savings / investment ratio allows us to breathe and not worry with our current lifestyle.