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Monday, April 21, 2014

Where does your money go - do you budget?


I am addressing today another subject that is taboo.... Money! 

We all know that money does not grow on trees...
We've been told that quite often by our parents!

Today's kids are learning that it doesn't come from the banking machine indefinitely either! When there is no more in the account, the machine won't give you!

We also all know that we need money for stuff...  some is essential and some isn't!

Actual essential needs are: roof over you head, clothes to not be walking around naked and food to nourish you body.

Anything else, including huge houses, designer clothes and expensive food is not! 
Sorry if I am breaking your bubble here.

Now different people have created different need form themselves.  And that's OK!  This is why we have all that stuff available to us.  It's the beauty of living in this day and age.

But, you can't have everything...  you can't keep up with the Joneses.... because there is always someone richer or more willing/capable to go further in debt then you!

You need to prioritize - whether you're a minimalist or not.

Because  the Joneses won't make you happy in the long run!

Have you ever made the calculation of how much it cost you to live on a yearly basis?
Did you ever take the time to break it down and see where you can save in order to put on what is more important to YOU?

I came across a calculation for resident in Quebec recently and it was quite interesting (I am sure similar calculations exist for other places in the world too).  I noted most of it down to use in a post but I seem to have forgotten some numbers...  but essentially, if you live in Quebec and earn 25$ and hour for a 40 our work week, you earn 52000$ a year.

(following number are all approximate of course and based on a family of one. If you are more than one in a home, some costs like clothes and food for example will obviously be doubled or tripled... or even more! Also those number are average - nothing too fancy!))

After income taxes are paid, you have 36 943$ left.

If you own a house (paid 200 000$) it cost you 16 282$ per year
If you own a car (10 000$) it cost you 5 106$ per year
Food 3 600$ per year per person
Telecom 2 200$ per year
Furniture 1 091$ per year
Clothes 1 470$ per year per person
Travel/activity 1 886$ per year for one
Alcohol 637$ per year per adults
Health and beauty 1 142$ per year per adult?!
Other 2 000$ per year - maybe more if you are more than one...
With a few more numbers I did not write down....
The amount of $ left in your pocket at the end of the year is: -1069$ if you live alone and spend the average amount that is "expected" from you!  Now if you have to support others.... can you imagine???

And then you may wonder why your amount of debt increases each year?
We are clearly spending more than we make! And not just here in Quebec! This is pretty much everywhere!  Do you think this is sustainable in the long run?

Now how do you reverse that?  How can you ensure you can work towards your goal? Whatever your goal is, you must have one... other than keeping up with the Joneses! And if you don't, it's time you find one.  It's the only way you'll get out of this cycle.

First, you should know exactly where each penny goes...
I am not necessarily talking about keeping a log of each coffee you buy... or lottery ticket...
I never did that!  I find it unrealistic!!! But to some, that method works.

You  should at least know where the big bucks goes and then figure out what is left for you to spend... on clothes, furniture, travel, activities...  if there is any!  If there isn't, maybe you can/should cut somewhere.

I know that I have worked out to decrease my housing/utilities... a lot!
By not owning a car, I almost half the transportation cost even with 3 bus passes year round.
Food, I am right there in the average, but there is 3 of us - therefore you triple that number.
Health and beauty only include hair cuts and dye for myself: my husband shaves his head and I cut my son's hair.
Furniture, clothes, Travel, Activities gets assign what is left...
And there is no alcohol in this home!

These are the choices I made with my husband to satisfy our lifestyle!

We made those choices because we have priorities we are working towards...  slowly but surely!
Like becoming 100% debt free and doing work we love instead of work that actually causes us to spend more money to relieve stress of a job you do not like!

Have you ever realise that working actually cost you money? Of course you have to work.. we all do!  But what I am saying is that maybe some of the cost it incurs is not money well spent?
Did you know that having a boss you love is worth 10 000$ per year? Having a job you love another 10 000$ per year?  And a job that is less then 30 minutes commute from your home another 10 000$?

How is that so?  Of course you don't actually get an extra 30000$ on your pay check if you love your boss, you job and work close to home... but you actually SAVE 30 000$ per year in stress related expenses... commuting cost and time!

Maybe it's time you look at what you are doing...
Take a look at your job, your budget...
Figure out priorities...
And make choices! YOUR choices... not the one people expect you to make.

This is what being a minimalist is all about!  Choices!  Freedom!
It comes at a price yes...  you have to make choices... Difficult ones sometimes. 
But everything has a price!   You only need to figure out what you are willing to pay!

thanks for reading!  and sharing!

love&peace,
nath
xox

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