Tuesday, January 15, 2013

Budgeting 101

This is almost Part 2 to my previous post: Live Below your Means

Megan and I are getting Married.

We had to decide: House, Or Wedding First.

Logic ended up winning out over emotion, and we bought the home. (it was a close decision)
Because of the First Time Home Buyer Program in Canada (where you can use up to 25,000 of your RRSP's as a down payment for a house without a tax hit if you pay it back within 15 years) we realized it wouldn't delay getting married by more than a year.

So now we're saving our "pennies", the date is set, and we're looking good to go.

How we're saving money:


Cars are our biggest expense after the house. Between Gas, Insurance, payments, and Maintenance, its over $1000 a month for both our cars.

Mine is paid off, but over 180,000km. Its going to need work to keep it on the road. I plan to drive it to 300,000km if it'll let me, but I'll sell it if maintenance costs more than $300 a month averaged over 9 months. (a new car would be cheaper then)

So far, on Megan's Mazda5, I've saved over $1,000 bucks in the last 6 months. To SAVE that money, I did spend about 200 bucks in parts/tools. (For every new job, there's a new tool :-) )

What I realized is - Dealerships... really do deserve the name "Stealership"  Mazda wanted 900 bucks to fix her door lock. It took me 86 bucks from an auto wrecker (including shipping!) and an HOUR to figure it out on my own. Dealership wanted 290 for the part, and then 4 hours labor  for $790+tax (Total savings - $810 dollars)

Also replaced her rear struts, at a cost of 70 bucks to me, and a 50 dollar Torque Wrench. (dealership wanted 380 to do it - total savings $260 bucks)

I also swap over our tires from summers to winters (winter tires get you 5% off your insurance)
that's 50 bucks a year, per car (so $100) plus the 5% off your insurance)

Also - I've slowed down. Instead of doing 130 on the highway, I'm doing 110. Went from 9.0l/100km to 7.2l/100km when I'm not stuck in traffic. On the whole, I'm averaging a 15% reduction in gas (which is a lot, because I drive ~2100km a month to work and back)


An earlier post about LED lights, Saving energy. Simply putting my power hungry "server" computers to sleep when I'm not using them... dropped electricity usage by about 25 bucks a month

  • No TV Service - Download our favorite shows.
  • No Home Phone Service - Cell phones!
  • Buy In Bulk/sale items- Chest freezer FTW!
  • Lowered the heat - Bought an Electric Mattress heater for megan, so the housecan get down to 18*c at night, 20*c During the day. (The difference between 20 and 23*c is about 15-20 bucks a month)
  • Cold water Laundry and after 7PM - saves about 40 cents a load. (4 bucks a month?)


We switched everything over to one company (Bel-air direct)
They're not the most "friendly" company when it comes to a claim... but they are, without a doubt, the cheapest. I've been with them for 5+ years now. We just switched megan over now that we're classified as "common law" and as a result, we've stacked up discount ontop of discount:

  • My 5+ year loyalty bonus
  • Winter tires 5%
  • Car Alarm ~2.5%
  • Multi Vehicle 20%
  • Multi Plan (home insurance) 15%
  • Good driving record which gets me a deal too. (Megan is haunted by a not-her-fault writeoff... (being t-boned by an old man running a red light SUCKS)

So in total, for Home, and our cars, our insurance has dropped almost $200 a month by putting it all under one account. Score!


For this, I have my own kinda method. it involves a lot of bank accounts! Its kind of like the "magic jar" method from "till debt to us part"

Savings - This is what all the utilities come out of, Mortgage payments, etc. At the end of the month, I put a minimum of 75% of the leftovers into saving for the wedding.

Chequing - I transfer my "expendable" money to this account. if I want to buy something I generally wouldn't buy... the "spare" money in this is for that. I put about 3% of my paycheque in here. Its kind of my "guilty pleasure" money. (i.e. tech toys, Video Games, Cosmetic Car stuff, etc)

Visa: If a place accepts visa, I use my visa instead of savings. When I get home, I look at the receipts and transfer money to the visa, before it even shows up. I do this mostly for the points. It'll help with the honeymoon!

E-savings - Some money set aside for my car - its going to need some major work sooner or later.

TSFA - Its just there... I don't touch it. I consider that the "Oh crap we both lost our jobs and we're going to lose the house" emergency money. (I'll also get raped by the tax-man if I ever do touch it)

Wedding Savings: I throw as much as I think I can afford on payday, and then most (75%) of any leftovers at the end of the month. I HAVE overestimated in the past and put too much in there on payday, but rather than taking it back out a week later, I try and live like a hobo until the next payday.

The last, and KEY thing that helps me manage money is actually Royal Banks' "My Finance Tracker" It's an online money manager that lets you set budgets for each "area" of spending.

At any time, I can look up exactly how much I spent, at what store, and when. I go in every week and check to make sure everything has been categorized.  All this is key to realizing where you are hemmoraging money. (Interest, Starbucks, Monthly subscriptions, Dining out, etc)

True Story:
When Megan and I started dating (when I was "wooing" her) I was HORRIFIED to discover that my "entertainment" and "Dining" categories jumped up over $1200 a month. Now a days, I make sure we have 1-2 "Date nights" a month, and hanging out with friends either is watching a movie at someones house, or playing cards for 3 hours over a 5 dollar Bubble Tea at Forever Tea Shop Much cheaper than Movie theater + Dinner (80 dollars) or something similar. We re-discovered the lost art of "cheap" dates. A walk along the shoreline and an ice-cream cone replaced a night on the town.

Track your little expenses. Coffee is a bad one. Dining out (Guilty!) is also a huge expense. Packing a lunch costs about 2-3 bucks. Buying a lunch is usually 7-12 bucks. replace dining out with packing a lunch and you're saving over 1000 bucks a year - EASY.

So, A couple lifestyle choices, and we will have "saved" ourselves the wedding that we both have been looking forward to for many years!

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