How to Budget Single Family Income

Has the pandemic brought your family down to a single income? With more than a million jobs lost in Canada, many families are in the same boat. Whether you were laid off or were required to stay home with your children who couldn’t go to school or daycare, it’s important to know how to budget your single family income.
 
Even if you collect unemployment, for now, it may not last. Just in case, consider the following ways to budget your single family income.
 
Make Cuts
 
It’s not a pleasant thought, but you must cut expenses. Get creative here. For example, if you cut cable, can you afford to replace it with a streaming service? Netflix, for example, costs a fraction of standard cable services. See if you can work it into your budget so you don’t feel like you’re sacrificing too much.
 
Think of other places you can cut, such as:
 
·       Eating out
·       Entertainment
·       Grocery store (shop sales and clip coupons)
·       Household goods (shop sales or comparison shop online)
 
Redo your Budget
 
Take an honest look at your budget. Where do you spend? If you can’t cut in certain categories, where does that leave you each month?
 
Think about saving for an emergency fund and retirement. Both should remain line items on your budget even when you’ve gone down to one income.
 

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Stores are Open – Reign in your Spending

Life is trying to get back to normal. As the COVID-19 numbers drop, more retail stores are reopening, which is a great sign for our economy, but may not be as good for your pocketbook. Try to avoid getting caught up in the excitement of things getting back to ‘normal,’ and be mindful of your spending.

Before you shop, ask yourself the following questions.

Is this an Impulse Buy?

Are you shopping with a list? If you are, is the item you’re holding or that you ‘need to buy’ on your list? If not, it’s an impulse buy. Even if you don’t have a list, but you look at things you don’t need or didn’t intend to buy; it’s an impulse buy.

Rather than buying without thinking, give yourself 48 hours. Leave the store or close your web browser without buying the product. After 48 hours, if you’re still thinking about the item, maybe it’s something worth buying. Chances are though, if it was an impulse buy, you won’t even think about it again.

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Creating a Spending Plan to Get out of Debt in 2020

If any part of your New Year’s resolutions has to do with money, you’re in good company. So many people say they want to get their finances straight and get out of debt. But, there’s a difference between saying and acting it. Are you ready to put your words into action? Check out the simple tips to get started below.

Review Your Existing Financial Situation

First, you don’t know what you need to improve until you know your financial situation. Sit down with the last 12 months’ of bank statements. Go through each statement carefully, adding up your income and expenses for each month.

Do you see any trends as you tally up your totals? Do you find that you go over budget often – spending more than you make? That right, there could be a reason for your debt. Now, take out your credit card statements – again, looking at the last 12 months of statements. What do you notice? Did you buy things you didn’t need? Did you make minimum payments rather than paying your debts off in full? Take note of each of these habits as we move onto the next step.

Figure Out What’s Important to You

Now it’s time to think about what’s important to you. After you’ve looked at your statements, you know where your money went. How much of it resonates with you, and how much of it makes you frustrated that you spent your money that way?

This is a great place to start as you figure out what’s important to you. Creating a spending plan shouldn’t be about sacrificing or feeling like you can’t do anything. It should be a good balance between fixed expenses, variable expenses, saving, and giving. Knowing what’s important to you and what you aren’t willing to give up is a big part of the puzzle.

Create a Budget That Includes Debt Reduction Plans

Once you know where you stand, it’s time to create a budget. Don’t let that be the dreaded ‘b’ word in your life. Creating a plan gives your money a job or a purpose. Would you get up out of bed every day without a plan? You might, but it would be a lot harder to be productive, right? The same is true for your money. You know how much you earn, now figure out how best to spend it.

Once you create your budget, put it on paper. Make sure you are flexible, though. Don’t assume the first plan you set will solve all of your problems. You may have success in the first month, or you may find that you have to make some adjustments, and that’s okay. It’s about awareness, flexibility, and taking the steps necessary to put your plan in place.

Are you ready to get yourself out of debt in 2020? If it’s more than about debt consolidation and more about debt elimination, we’re here to help. Call Creditaid at 204-987-6890 or email info@creditaid.ca for a FREE debt consultation. We’ll help you see where you stand, what you need to do, and how soon you can say that you, too, are debt-free.

Get Your Finances in Shape with a Financial Coach

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According to a 2019 study by the Canadian Payroll Association, 43 percent of workers are financially stressed to the point that their work performance is suffering. Almost 25% of working Canadians spend nearly 40 minutes of each workday distracted from their work by their financial situation.

The distraction is a problem of enormous magnitude, which steals an estimated 16 billion dollars each year from the Canadian economy. Finding solutions to an individual’s financial worries can benefit our economy as a whole.

But what is the solution? At Creditaid, we’re specialists in helping relieve financial stress. There’s no single solution to an individual’s financial worries. However, we’ve found that there is a simple approach that can ease the pressure for many, if not most. We can start by approaching financial literacy as a skill that can be taught and a process that can be coached. It would help remove the stigma that is wrongly attached to people who seek help.

Consider financial planning like your golf swing, or yoga, or anything else you want to learn and improve, and find an expert who can help you. Financial literacy isn’t a mystery – it’s something you can learn, and the more you learn, the more confident you become. A financial coach can help you create a budget and plan for your financial future in both the short and long term. No matter what your present circumstances are, they can be improved.

Many people are intimidated by the thought of sharing their financial situation with a stranger. If you’re experiencing stress over your finances, engaging the services of a knowledgeable financial coach could result in far less stress, not more.

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How to Maximize your Spending Plan (AKA Budget)

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Get the Most for the Least by Shopping Carefully

Budgeting can be like strong tasting medicine – it’s one of the most challenging remedies to take, but its effectiveness cannot be denied.  Whether you’ve got money troubles or not, a budget will help your finances.  You don’t make a budget just to fix problems – you have to do it all the time.

A spending plan is more than just a list with numbers.  It’s a willingness to do things that may seem inconvenient at the time, but add up to a considerable advantage when you’re looking to cut costs, without sacrificing quality.

Here are some everyday actions you can take that will make your bottom line look better:

Check Prices
Ok, so you’ve decided to make a purchase, and you’ve budgeted for it.  Before you expend precious funds, make sure you’re getting the best value for your dollar.  Ask yourself the following:

“Can I save money by buying used?”  A lot of times, a used item will serve just as well as a new one.  Appliances, for instance, are often available used, many from dealers who will offer a warranty.  Clothing, too. Many discount stores offer name brand clothing, gently worn, at a fraction of the original cost.  If you’re ok with previously enjoyed clothes, you’ll find that you can start dressing really well for really cheap.

“Is another store having a sale on this item?”  Is the sale good enough to justify the extra travel time and expense?  Try to avoid paying more just for convenience.

“Is it less expensive online?”  Sometimes it’s worth having to wait a few extra days for delivery.

Prepare your Own Meals
We can’t stress enough just how much impact this one simple act can have on your bottom line.  Take out or delivery costs several times as much as preparing a similar item at home, and when you make it yourself, it’s how you like it.  Compare the savings to the time spend preparing meals, and it’s like you’ve got another job that pays really well.

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How to Spend Less on Food

A recent joint report between Dalhousie University and the University of Guelph states that “The average Canadian family is going to spend $411 more to fill the grocery cart.”

That’s a huge increase in your household budget – equivalent to receiving an extra heating bill or two.  Many people believe that this is a relatively fixed cost and that they would have a hard time reducing it without sacrificing greatly at the dinner table.  We don’t think that’s entirely true. Here are some things you can do to reduce the cost of feeding your household next month:

Cook at home instead of eating out

This is the number one, most effective way to reduce food costs.  Dining out, whether fast food or fine dining, cost a lot more than preparing your own food.  As a bonus, you’ll likely be healthier, and when you prepare your own meals, you always know that they’re made to your liking.  You might miss the convenience of fast food, but after a few weeks of home-cooked meals, you won’t miss the food.

Take your lunch to work

This is an extension of the above rule – buying lunch at an average cost of ten dollars per day will add up to over $2000 per year to the budget.  That money can buy a lot of sandwiches, and perhaps pay down debt. When you’re preparing your own meals at home, it’s possible to cook a little extra every night for lunch the next (or even the following) day, which will help you reduce your costs even more.

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Build Learn Save Program

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Not everyone knows everything.  Some people are good with hands-on skills, so they enter the skilled trades.  Others may have great people skills and might make a career as a teacher or salesperson.  When it comes to finances, however, everyone, regardless of their strengths or their background, is faced with similar money challenges.

At Creditaid, we’ve developed a program to help you improve your financial situation with our “Build Learn Save” program.  This program will BUILD or improve your credit score. You will LEARN valuable budgeting skills that will help you SAVE money to spend on something important like your first home, a new car, or college education.  It’s an ideal program for individuals who want to take charge of their financial future regardless of their current income and credit situation.

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Call it a Spending Plan, not a Budget!

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Sometimes, the words we use to describe something can affect the way we think about it. “Budget”, like “diet”, is a neutral word, but we often use it to describe something that is restrictive. Nobody really enjoys having to skip dessert, just like nobody really likes counting their pennies to make sure they can meet their obligations each month. Sometimes, however, circumstances dictate that restrictions be made, both dietary and financial. Your mental approach, however, can make a big difference in the psychological effect budgeting can have.

When you make a “budget”, you can easily fall into the trap of thinking negatively. You’ll put it off as long as possible, and rush through it to get it over with, just because you associate it with something unpleasant, which is not having enough money to buy things at will. The more difficult your financial past, the more you are to hate the whole concept of spending restrictions because they’ll remind you of your past issues, and cause you to stress in the present. One of the biggest obstacles to overcoming the financial difficulty is the (wrong) feeling of shame that accompanies it.

If you change the way you think about it, you might be able to change your attitude toward the act of budgeting. Simply calling it a “spending plan” might make it feel like sitting down to balance income with expenses is a good thing (which it is!) and make you dread it less.

Spending plans are necessary, and not only when debt loads are high and income levels are a problem. They’re more important when things are going well – that’s when a lack of awareness of our financial realities can get the better of us, and lead us to overspend, causing difficulties down the line.

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How to Relieve Money Stress

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When we consider all of the stressors in our lives, financial concerns are often near the top.  Money worries can cost you sleep, affect your self-perception and confidence, and often result in denial and a kind of mental paralysis that can cause the problems to worsen, while not making you feel better at all.  And then there’s the issue of shame – we all know that we’re supposed to live within our means, avoid debt, and constantly strive to “put money away” for a rainy day or for retirement.  When we feel like we’re not achieving the goals that we’ve set for ourselves, we get discouraged and stressed.  

Here are a few things you can do to relieve money stress.

Acknowledge the Problem

Financial problems don’t just go away.  Ignoring a creditor’s phone calls isn’t effective in the long term, and only leads to more stress and bigger problems.  Resolve to face the problems right away, and make an action plan.

Take Action

Do something about your situation right away.  No matter how bad the problem is, there are steps you can take to prevent it from getting worse.  Find out what they are, and take them as soon as possible. If you don’t know what to do, consider seeking help. (Read “Seek Help” below).

Don’t Let Money Problems Shame You

Many people experience, at one time or another, financial difficulties.  Money troubles don’t mean you’re a failure and are far more common than you think.  Don’t compare your situation to other people’s.  Your neighbours might appear to be prosperous, but might be drowning in debt you can’t imagine.  Make financial decisions that fit your life.

Seek Help

Financial difficulties can be complex and confusing.  Luckily, you don’t have to go it alone.  Creditaid has been helping Manitobans manage and overcome their debt for more than a quarter century.  We provide credit counselling, budgeting, and other solutions that can help you restore your finances and rebuild your credit.  Take the first step toward a secure, debt-free future.  Contact Creditaid today for a free, no-obligation consultation.