GOOD MONEY HABITS MATTER FOR TODAY AND FOR YOUR TOMORROW
You might tell me that you already know all about good money habits BUT are you practicing them?
If the answer is no then you really don’t know what it’s like to put good money habits to work for your financial wealth.
Let’s have a look at two areas that are outside of the scope of what I want to talk to you today about but relevant.
Your career and your credit score are two areas you don’t want to skip over when you are evaluating good money habits.
Your Career Matters
The reason I point out your career is that if you aren’t happy with what you do the likelihood of you wanting to move up is slim.
Take the time to find an employer that balances a well-paid income and happiness in your life.
It may take you time as it did for me but eventually, if you get your foot in the door somewhere it may happen.
I had to work two full-time jobs for a few years and applied many times to only get turned down for full-time positions before I was accepted.
Never give up on yourself even if you don’t get the job, keep trying to find that peace in your life so you can enjoy each day.
Scan Your Credit Report For Good Measure
Another area you will want to dig into on a yearly basis is your credit report and credit score.
Ensuring that everything is what it should be on your report will help boost your good money habits.
By this I mean it will motivate you to do better with budgeting and saving money which will talk about below.
If you have areas on your credit report that need attention to drive your focus on it and deal with it.
Find ways to increase your credit score so you are in a better financial position when the time comes that you need that score to help you get what you need.
Examples:
Mortgage Rental Car Employment Good Money Habits Are For Life
When we started increasing our knowledge about good money habits that was when the money started rolling in.
Actually, I shouldn’t say it was rolling in it was staying put. By that I mean we were earning money but we weren’t spending it.
We were saving it, budgeting it and investing it wisely because better money habits meant more than the high of buying new stuff.
These good money habits have stayed with us for the past 11 years and we’ve gone from living in a room to becoming millionaires on paper.
By that I mean we aren’t sitting on a million dollars cash in the bank as it’s invested.
So, if you REALLY want to increase your wealth you MUST practice good money habits for that to happen.
You can’t expect to go to work, get a paycheque and wonder why you’re not saving like other people.
Let’s have a look at what has worked for us and perhaps you too can adopt some of the same good money habits that we have.
1. Budget Expenses
I might sound like a broken record but this blog is about money and budgeting is obviously a hot topic.
It’s a topic that has taken us from bedroom dwellers to owning a home without a mortgage and it works.
Everyone’s budget will be different but the most significant similarity is that whoever uses one will know exactly where their dollars are going.
For instance, if you have a debt to pay off which you can track the debt payoff schedule in your budget.
If you’re still not budgeting your net income and crying about debt then stop whining and get on the budgeting bandwagon.
Stop pretending you know it all and show yourself the numbers so you can fix them.
Once you make changes to your lifestyle either by earning more money, spending less, eliminating expenses you don’t need or can do without then nothing will change.
Budgeting works.
2. Saving More Spend Less
Always consider your savings as part of a fixed expense when it comes to budgeting as it will help you to develop good money habits.
If you put it on paper that you must save x amount of dollars each month as part of a fixed expense then you should pay it.
It’s like playing a game of mind trickery (is that a word?) and before you know it you’ll develop good money habits without a hitch.
Related: How we paid our mortgage off in only 5 years
3. Splash Account
This is one of my favourites because it’s an account where you deposit money JUST FOR YOU.
In our situation, we both get a $50 a month family allowance that we can spend on whatever we want.
I know not everyone will have splash money but even if it is something small like $5 it’s better than nothing.
This is where having that extra income stream comes in handy even if you buy and sell items for higher than what you bought them for.
We do this and it brings us in enough cash to fund our allowances each month. BINGO.
By allowing yourself some fun money it may deter you from spending other money that you don’t have.
One of the worst things you can do is to use credit for something you haven’t saved for yet.
Some of you might argue with me on this one but it’s true.
If you can’t pay it back by the time the bill comes due, the process of debt begins to build.
4. Pay Yourself First
When you pay yourself first you are accepting that you deserve a piece of the pie that you worked hard for.
In our case paying ourselves comes in the form of investing in our Tax-Free Savings Account, RRSP and Non-Registered Investment accounts.
Anything that is leftover at the end of the budgeted month gets put into our savings account for a rainy day or emergencies.
Pay yourself and build an emergency savings account.
If you do those two things you’ll at least take some of the weight off your shoulders.
5. Plan Expenses
Research is the key to spending less when you shop especially when you are buying big-ticket items.
There are many comparison sites you can visit in Canada as well just doing some shopping around.
When it comes to grocery expenses using coupons, price-matching, coupon apps and savings apps all save you money.
The key to grocery savings is always to plan ahead by meal planning and only buying what is on your list.
There’s never a wrong way to plan as long as it is within your budget.
6. Extra Income Streams
I blogged about extra income streams in last month’s net worth post update and the importance of them to grow your wealth.
If you find that the money you net each month is only paying the bills and not leaving enough for savings or paying yourself first then consider extra income streams.
Even if you are covering all of those areas like we are extra income streams are not a bad thing to have as back-up cash.
This blog, for instance, brings in extra income each month that we apply to our savings account that helps us increase our wealth.
7. Invest In Tomorrow
Financial security should be a big deal on your agenda and if it’s not you may find yourself in a pickle down the road.
Retirement is and always will be tough for Canadians who don’t save money to take care of themselves when they are unable too.
Sure, the government provides assistance to those in need but it is basic and trust me, basic is just that, BASIC.
Take the time to do research into long-term care facilities, retirement villas and visit them.
This will help you to get an idea of price, landscape and what life is like inside these facilities so you can set goals for your future.
Not everyone moves to a facility but a good majority of Canadians will and knowledge is better than going into it blind.
Perhaps when you retire you want to travel the world or buy a new car.
You’ll need the money to do that so saving today when you are young will allow your money to compound over time.
Always keep this in the back of your head, “What You Dream Of For Tomorrow Might Never Be“.
What this means is that there are people fighting illnesses who saved money to do all the fun things they should but cannot.
Just because you are healthy today doesn’t mean you will be healthy tomorrow and every Canadian MUST take note and start saving money now.
Don’t rely on the government if you don’t have to.
You deserve only the best.
8. Practice Gratitude
This means to be happy with what you already have instead of wanting more.
So many people need to rush out and buy the latest and greatest when what they have will work equally as well.
This goes for everything such as housing, home decor, vehicles, clothing, gadgets, hairstyles, spa treatments, jewellery and so on.
Think about why you are spending the money on this stuff and if you can do without it.
Trust me when I say living a minimalist lifestyle is far better than leading one you can’t afford.
Discussion: What are some good money habits that you have taken on over the years? Share your comments below and I’ll be sure to respond to them all.
Mr.CBB
Net Worth Losses and Gains
September 2019
What happened to our money in September?
September was a pretty dull month to be honest. Minimal dollars were spent on the bathroom renovation.
In fact, garden clean-up has been more of a priority so I’ve been working on that so it’s done and out of the way.
The months earnings were nothing short of normal and the market performance on the investments was lack lustre too which rounded out the month at a non-spectacular increase, but an increase all the same.
Understanding Net Worth
What Does Individual Net Worth Mean?
Net Worth is a snapshot of your financial health sort of like a picture or debt to net assets.
In simple terms, it’s a total of the value of your assets minus your liabilities.
We credit the growth of our net worth due to patience, perseverance, using a monthly budget and not giving up.
Your numbers may go up and down but don’t let the numbers scare you rather understand why and move on.
If you would like to use our budget I offer a FREE downloadable budget which I created and that you can use at home just like we do.
I don’t charge for it because I want you to save money not spend more!
There are tonnes of other free resources at Canadian Budget Binder to help you build your net worth.
Calculate Your Net Worth
Do you know how to calculate your own Net Worth?
We like to calculate our net worth every month so we know if we are still on track.
Some people calculate it yearly or quarterly but it’s up to you and how informed you want to stay.
Net Worth is only an estimate and not everyone uses the same type of figures to tally it up.
Some of you may not include vehicles like we do or leave out assets inside the home as we have.
You might be that person that believes that your house should be excluded.
It depends on what you want to calculate or what you can sell today and make money on for tomorrow.
Figuring out net worth is fairly easy as long as you know your numbers or monthly finances which means you need to do your homework.
Net Worth is simply adding up all your assets (what you own) then taking away your liabilities (what you owe) which will give you a net worth number.
Understanding your net worth will help you determine if you are on track meeting or beating your personal financial goals.
It doesn’t get any easier than that.
Determining Net Worth
How to Determine Net Worth?
Net Worth = Assets – Liabilities
Why not go ahead and calculate your own using our Free Money saving Tool Net worth Calculator (Canadian Budget Binder 2012)
Financial Numbers
When budgeting anything is possible, we are proof of that although we still have a long way to go in our journey.
These are our numbers and our goals, not a means of comparison towards your own goals to others’ target goals.
We don’t care how much money others make or if they have a high net worth or if it is lower than ours as it’s not a competition.
I hope our experiences will help guide you along your financial path working towards debt freedom.
Not everyone has the same path in life.
Some of you may have had to start over like I did or go to school a second time and now have OSAP loans to pay back.
Others may have divorced, lost money in the stock market or other investments, suffered job loss, fell ill or injured on the job and so on but you can’t let that stop you from achieving your financial goals.
Some of you may have been given trust funds, paid-for homes, paid educations or perks in life that give you a financial kick-start and that’s OK too.
Earn It, Save It, Invest It, Build It
Remember what I said, “It’s not about how much money you make, it’s how you save it”.
The only reason people accumulate wealth is that they know how to save or invest it wisely even if they did inherit money or win the lottery.
The smallest improvements should mean big strides in working towards reaching your goals.
Sometimes we have to fail to learn and we’ve all been there.
Money can be an evil force for some people especially those who have a negative attitude towards their financial situation.
I urge you to be optimistic and little by little with determination you too should see improvements if you want that to happen.
Canadian Budget Binder Net Worth Updates 2019
Click the links below to read our net worth updates for the year.
December 2018 -(1.66%) January 2019 (+2.37) February and March 2019 (+2.15%) April 2019 (+2.63%) May 2019 (-0.79%) June 2019 (+0.87%) July 2019 (+0.56%) August 2019 (-0.03%)
That’s all for this month’s net worth update but please check-in at the middle of November 2019 to see how we made out in October 2019 with our financial portfolio.
~Mr.CBB
The post 8 Good Money Habits That Will Change Your Life : Net Worth Update Sept 2019 (+0.55%) appeared first on Canadian Budget Binder.
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