Budgeting needs 2 things: 1) CALCULATIONS 2) CONSISTENCY
If you follow this simple equation, or if you need me to help you budget FOR FREE. All you need to do is fill this questionnaire and email it to me.
If you can use your calculator here’s the FORMULA:
*Salary (weekly or biweekly or monthly) multiplied by the percentage.
Example: if you make $1000 (after tax) bi-weekly and you need to put aside 15% for savings.
You would calculate 1000×0.15 = $150
Here’s my recommended breakdown:
- 30% RENT/Mortgage (It’s important to put ASIDE THIS MONEY AHEAD OF TIME for payments. If you are relying on a pay-check to pay-check basis to pay rent/mortgage it means you need to budget better) Usually save 2-3 months ahead of time for the next 2 months.. every month the 30% of your salary should be UNTOUCHED it means if you make $1000/bi-weekly you need to put $300 aside. IF you are unable to do that, you won’t be able to afford saving/entertainment/cash. you follow?
- 23% Expenses include: CREDIT CARD PAYMENTS, GROCERIES & UTILITY BILLS. If you are spending more than you can afford to pay off in full, you are living ABOVE your means.
- 18% TFSA/RSP: (TAX-FREE SAVING ACCOUNT + RETIREMENT PLAN) Maximize on TFSA first minimize on RSP… If you can put $100 on TFSA BIWEEKLY and $80 on RSP that works(THIS CAN BE INVESTED: in BONDS/ GICs/ or Mutual Funds (preferred). {more information to come in the future}
- 15% Emergency fund: should be a fund that has 3 months rent/mortgage at all times. In case of an emergency (WHICH WE KNOW happens!!) Example, if your rent or mortgage is $1000 a month, you need to work up $3000 UNTOUCHED in that account. This will save you from misery and headaches. (DO NOT INVEST THIS MONEY)
- 9% Entertainment Ok so you still need to LIVE… but it you are spending MORE that 9% of your salary on your entertainment and you do not have an emergency fund or your Credit Card bills are never paid in full, Sorry to break it to you but you can’t afford to live that life.
- 5% CASH, always have cash on you. Hide it in the house, or put it in a safety deposit box at the bank, or put it in your wallet/purse BUT PLEASE you never know when the whole system might crash or your credit card gets frauded and your left DRY. $50 can save your face.
If your mortgage is paid off, or you are doing or got ALL THIS SET, then you can “gamble” your money in crypto and high risk investments.
Please play smart. And remember CALCULATE THE COST!
More information to come
fleximoney 