If you’ve been following this blog, then you’ll probably remember my Commiserate: Finances article where I detail everything I hate about keeping track of my finances and why I hate it so much.
You also probably saw the follow-up 7 Ways to be Better With Money article where I list all the things I should be doing, and challenged myself to complete the list for my own finances within about a week.
I won’t leave you in suspense. I totally failed.
I got busy, I got anxious, and I think all I actually accomplished in that timeline was filling out the budget spreadsheet.
If you need a refresher, here it is:
The good thing is that I didn’t stop trying to improve. And over the last several months, I’ve been doing a lot better.
So, I figured it’s time to FINALLY put my money where my mouth is (pun kind of intended) and give you an update on my financial prowess.
I’ll go over the same seven tips from the last financial article and let you know how I’m doing.
Let’s get started!
1. Track Everything and Create a Budget
Ok, so I’ll rate myself about a 6/10 on this one.
I’m definitely doing better than I was before, and probably just a little above average on tracking my spending/budget. I want to get to the point where I log everything I spend in real time, but in reality, I usually add everything up at the end of the month.
The problem with doing things this way is that I have no idea if I’m getting close to or actually going over my budget until it’s already too late.
So, at the end of the month, I can either say: “good job Jenn, you came in way under budget this month, more for savings!” or “Damn it Jenn, did you really need to eat out that many times this month? Next month you need to cook more.”
But I can never catch myself on the edge of my budget and adjust on the go. I definitely need to get better at this!
To be 100% honest, I’m also a little behind on filling out my spreadsheet. I still need to fill out August AND September.
I also need to get better about keeping my business spending separate from my personal spending. I’ll do a tax time update next April to let you know how all that mess goes.
2. Paying Down Debt Should be Your Top Priority
I guess I’m a 10/10 on this one. Like I said in my last post, I’ve never been in any real debt, so this is not a worry for me. However, the idea of figuring out my priorities is a big one for me right now.
My fiancé and I are about to move into a bigger apartment so that I can have an actual office to work in, instead of being shoved in the corner of our bedroom, where there is barely enough room to walk.
If I haven’t explained my apartment before, it’s a mess. Not that we’re messy people, but we always meant for this to be a temporary situation. So we got a bunch of free, beat up furniture from friends and family, and we have a bunch of plastic containers all over the place because there is no room to fully unpack and spread out.
It was fine for a while, but we both started getting tired of living amongst boxes and old miss-matched furniture like broke college students, especially when we’re about to get married.
Long story short, I am SO stoked to buy a bunch of new furniture and finally get to decorate a space the way I want! Because of this, it’s been hard to budget and prioritize what I actually need, where I can splurge, and what I should really save up to replace down the road.
Both of us are so tempted to just get rid of everything and start fresh. Again, I’ll update later on.
3. NEVER Get a Payday Loan
Again, not really relevant. I have never thought about doing this, and I never will.
4. It Doesn’t Matter if You’re 20, Start Saving For Retirement!
I’ll give myself a solid 8/10 on this one.
In my last article, I suggested signing up for an RRSP (Registered Retirement Savings Plan) or an IRA (Individual Retirement Agreement) depending on where you live. But, when I finally got to the bank, and asked about my options for retirement, there was another option available to me: a TFSA (Tax Free Savings Account).
The bank rep suggested that for young people, especially where income is relatively low or variable, a TFSA offers the best flexibility (take money out whenever you want/need without affecting your contribution, and withdrawals are not counted as income, so no government benefits are affected).
He also suggested that once you are more established in your career, moving the funds over to an RRSP makes more sense. I won’t go into great detail, because I’m no expert on the differences, but this is what I ended up doing, and it’s something else to ask when you go to set up your own retirement savings.
I wish I had gone to the bank and gotten this sorted sooner. It feels like a hassle to have something else on the task list – I get it – but it’s actually so easy. And once you set up automatic transfers to that account, you don’t have to think about it anymore!
The only room for improvement for me is that I could be putting more away, but I wanted to make sure I was comfortable with the amount before increasing it.
5. Set Savings Aside BEFORE Spending Any Flexible Income
Again, about an 8/10.
I’ve said it before, and I’ll say it again: this is the easiest thing to accomplish on this list. Once I did my budget, and figured out what I should be saving each month, it took me about 30 seconds to log into my bank account and figure out how to schedule the transfers.
Now the money just goes into my saving account each month. I pretend I never had it, and it’s another thing I don’t have to think about.
To be clear about the before and after of my situation, I started off with a savings and chequing account. Every once in a while, I would move a bunch of money from the chequing account that I use for all of my spending and put it into savings, which (in my mind) counted as my savings and retirement money.
Now, I have the chequing account where all of my income comes in, a TFSA where my retirement savings automatically goes each month, and a savings account that I can use to save up for big purchases and emergencies.
Much more organized!
Like with my retirement savings, I could be putting more away, but I wanted to get used to it before increasing it.
I also have a separate business account, but let’s not get into that just yet.
6. Have More Than One Source of Income
If I’m honest, I’m about a 3/10 on this one.
I could cheat and say I’ve accomplished this. I mean, I’m a freelancer, so I naturally have multiple sources of income. But, my goal was to set up a passive source of income, and I still haven’t quite accomplished that.
I’m in the process of setting up an online retail store (visit brokebuthustling.com on October 13th 2017 *cough* shameless self-promo *cough*), and I plan to sell art/photo prints on Etsy, as well as vintage clothing on Depop as soon as I have the office space, but I need to get through moving first.
This one really wasn’t practical to accomplish in a week, or even a couple months, but I’m definitely working on it!
7. Sell Items You Don’t Need and Avoid Buying New
I’ll give myself about a 4/10 here.
Any time I need new clothing, I head straight to the thrift store, but…
As I’ve already mentioned, I’m LIVING for decorating my new apartment. And there is a whole long list of things we need, so I’m not going to escape buying new things.
I mean, I needed towels. I love buying second hand, but there is no way in hell I’m going to buy used towels!
So far, I’ve bought the towels, art prints, some frames, a wall clock, and a couch. All of it new. Admittedly, I probably could have found the prints, frames, and clock second hand (we already had a second hand couch, and we wanted something new…so we splurged). But I’m excited damn it!
As for my old stuff, I haven’t really made any money on it so far. I wanted to sell my couch, but my mom and fiancé convinced me it wasn’t worth anything.
This was originally a $2000 sectional pull-out couch, so I’m sure I could have gotten 100 bucks. But it had loose fibres and bites from my dog, it had two patched cushions (although, it looked original because my grandma is a damn sewing ninja), and my dog had peed and vomited on this thing countless times when he was a puppy.
So although I cleaned this thing so well that no one would be the wiser, I felt bad charging anything for it.
I do have bags of better quality clothing I plan on selling. But again, I need to wait until I have some space before I can really sell them. So, they’re coming with me for now.
That’s about it for now. I’m nowhere near perfect, but I’m putting a strong effort into getting better!
Now I want to hear about any of the financial wins or pitfalls you’ve found yourself in lately! Tell me in the comments!