By the request of a few people, I've taken some time today to write about something I've done that could benefit other people. I have gone through all stages of money saving, spending, borrowing, loaning, you name it. I've had a very healthy savings account and a very empty one all in my adult life. I've learned a lot of lessons along the way, but the one I recently learned changed my life.
I used to watch a TV show called Til Debt Do Us Part. I think this show is partly the reason why I'm scared of debt, because I know how bad it can get. If you haven't seen it, Gail Vaz Oxlade used to pick couples who were in financial despair and over a month help them get back on track. She took away their debit and credit cards, made them live off cash, and made them do some challenges to help rescue their financial and relationship situations.
I've tried living off of only cash before, and I sucked at it. It's difficult, let me tell you. It's not a habit you can just change overnight. And it's not that I was going crazy with my credit cards before, it's just that I would be too lazy to go to the bank, so I would use my credit card for gas instead. Over time, I looked at my statements and realized that I was spending WAY too much money on 'stuff' and 'junk' essentially. Going out to dinner, a new top, coffee, it all added up and it is crazy how much money I should have in my savings account right now, especially after this summer.
I knew that coming into September I would be going back to school. I was taking on a different job, I was really busy with my business, and I needed to take control of my money. So I went to Dollarama, I bought 6 jars, some paint (because I'm a DIY kinda gal) and a binder with looseleaf and I got to work. I created my budget binder with 'magic' money jars and I hid my credit cards.
Now I used to watch this show religiously, so I knew what I had to do. But I also went to Gail Vaz Oxlade's website for some extra tips and suggestions on how to get started. Since I'm still living at home, I found this the perfect time to get myself financially fit and thinking about saving for the future. Everyone will have different priorities and things they need to pay for, but this is what my basic binder looked like:
Food
Transportation
Entertainment
Clothing/Gifts
Other
I use these five categories as my 'variable expenses'. This does not include rent, car payment, insurance, RRSP, TFSA, or Cell Phone. Those are fixed expenses, which I will get into in another post. For now I'm concentrating on these.
Each of these jars I fill every Sunday. The first month was the hardest to do this, so I stuck to the same amount each week. Depending on what I needed out of each jar, was how much I put in. So for the first month each week looked like this:
Food: $50
Transportation: $40
Entertainment: $30
Clothing/Gifts: $25
Other: $25
This was very tight for a while, and I had to make a lot of changes to my lifestyle in order to live this way. But I was determined to fix my situation and I knew I was going to have to make sacrifices. With school being back on, my entertainment budget wasn't touched a lot, and with our business being so busy, I didn't have any time to go to the mall to shop. Keeping myself busy with important stuff was key for me to make sure I wasn't running out of money each week.
Don't get me wrong, in the first month there were weeks when I ran out of money and would have to pull from other jars. But I was 100% determined to not use my credit card, and I succeeded.
I use a half an hour each Sunday to organize myself. That's it, that's all I need now. I go to the bank, get my money, come home, write out each category for the week and put the proper money in the jars. Boom. That's it, done. It's SO easy. At first, keeping your receipts and writing everything you spend money on is the most tedious task, which is why I failed at this the first time I tried it. But they say it takes 21 days to make a habit, so don't give up!
I know this is an incredibly long post, and I have a LOT more information to share. So I will try and make this a weekly thing, along with my budgeting, to try and help you get to be financially fit too! And if you're ever in a pickle about money or saving, talk to someone. There are tons of free resources including your bank, online, or even your parents. It's really easy!
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