Hey everyone!
Now that we have all the trees and lights down the next biggest priority is being a super star with your money. Everyone should have a new year resolution where this year they’ll be awesome with their bling. My next few blogs are going to take you through the process of being a budget star. Here we go money maverick/mavens!
First thing for a good budget is to figure out where you are. Get three months of statements or more and go through your bank account, credit cards, lines of credits and try and remember where your cash went. A really easy way to do this is at mint.com. You enter your debit cards and credit cards and it pulls all of your info and categorizes it for you. There is now a Canadian version too! If you do have US$ accounts like I do, it’ll pull data from them as well.
Once you have all the data the first thing you will be is shocked. We always drop from our memory this expense or that expense. Or forget exactly how much we spend for Christmas. Take a good hard look at where your money is going and make sure that you’re spending less than you are making. Here are some quick rules of thumb:
1. Rent or Mortgage plus property taxes plus, electricity, plus home insurance should all add up to a MAX of 33% of your gross income. Gross income is the amount you negotiate with your boss before all of the taxes come off.
2. Retirement savings should be at least 10 and I say 15-20% of your NET income. That is the amount that gets dropped into your account or how much your cheque is after your expenses if you’re self employed.
3. You are probably paying too much on all of your bills. Cable, Telephone, Mobile, gym, and internet, etc. Call all of those companies up and say you are going to a competitor. When they transfer you to the loyalty program tell them that you found a better deal. Keep pushing with them until you get the best deal. If you find a better deal with more perks at another provider then go ahead and change!
4. Bank fees and interest charges. Take a close look at these and go to the bank to see what plans they have to eliminate them. I put all of my fixed charges (gas, groceries, gym, mobile, insurance) on my no fee MasterCard and then pay if off at the end of the month. Then I use cash each week for EVERYTHING else. Keep $1,500 or the minimum in your account to waive the monthly account fee. It’ll all add up!
Get all of these numbers together and next week I’ll show you how to budget for the bigger stuff.
Have an awesome week,
Dave
