This last pay period both Mrs. B. and I got raises from our employers and I want to make the most of the extra money it brings us. Mrs. B. got a 6.4% raise and mine was 3.5%. In the past, before we started budgeting raises just disappeared into our spending. The paycheque after a raise it would be as if there had never been a raise.
My understanding is that 3% is a fairly average annual raise in North America, so my 3.5% is a little better. Mrs. B. is a unionized Regional employee and does better than me. My problem was how to make sure that this new income was used and not wasted. Well, the big help here is our budget. Now that we are on a budget each biweekly pay it is impossible for that money to disappear without being accounted for. First we have to give the new money a purpose. Since our expenses are already being met, we are assigning the new money to the Debt Snowball.
Now with the addition of the money from our raises, our Debt Snowball will pack more punch and we will see the day we get out of debt much sooner.
Sunday, February 24, 2008
Making the Most of My Raise
Monday, February 11, 2008
Not Much Happening; Or Is It?
I've been thinking for the last couple of days about a topic to post on. Life has been busy, (isn't it always?), but there hadn't been anything that seemed really solid to post about. My wife's movie project moved ahead this weekend with active filming on Saturday and Sunday. Saturday only got cold really when we hit the 4 hour mark. Temperatures were much colder today, but there were only two of us actors to freeze today.
So it seemed that nothing really had happened with Brian's Money to tell everyone about. The transition to the biweekly budgeting had gone forward smoothly. I didn't have any debt repayment to record or update at No Credit Needed Network. I'll be depositing the cheque with the line of credit payment to the TD account tomorrow (well, later today), and the first Consolidation Loan payment doesn't come out until the 16th. So what was I going to talk about?
Then I started to think of some of the "minor" expenses that had shown up in the last few days. Last week, the sticker on the car window indicated that it was time to get an oil change done again. Mrs. B works in the same plaza as a Canadian Tire, so she took the car in to get the oil change done. It came to $42 and she debited it from the new President's Choice Financial chequing account. That night, I transfered the money from the Operational Savings account to cover the expenditure.
The Operational Savings account is my version of Mary Hunt's Freedom Account. If you are not familiar with the concept, there is a description here, at It's Your Money. I couldn't find a description at Mrs. Hunt's website, apparently you have to subscribe for most content there.
Basically, if you plan on spending a $1,000 on your vacation you put $1,000 divided by 12 months = $83.33 in your savings account each month. It is a way to save for large or unexpected expenses.
On Friday, Mrs. B. needed to get a second battery for her video camera. We were going to be filming outdoors in the winter and the cold reportedly wipes out batteries. She needed one to keep in a warm pocket, ready to swap out for a cold battery. We stopped by the Sony Store and picked one up. It was $90. Once we got home, I transferred the money from the Operation Savings, where we have been budgeting for the Movie Project, and replaced the money we had debited out of the chequing account.
On Sunday on the way out of town for the location shoot up at the Elora Gorge, we heard a scraping noise under the car. I pulled over at a near by gas station and got out to check under the car. The sheet metal around the muffler has come loose and is unwinding off of the muffler. The guy at Canadian Tire doing the oil change had recommended getting the muffler checked, but he hadn't said that it was that bad! Well we'll take it in on Monday and get the muffler fixed. The money to cover the expense is in the Operations Savings, or at least to cover the majority of the cost. Anything over what is in the Operations Savings for car repairs can be covered by the $1,000 cushion in the chequing account. If things go horribly wrong there is $1,026 in the Emergency Fund. If it is truly disastrous, there is another $596 in the Operational Savings account.
It really hit me. Things are different now. In the past, a series of small, unexpected or unplanned expenses would have put us into the position of being forced to scramble to come up with money. Turn to the credit card or the line of credit. Postpone the repair until the next paycheque and put the rent off until the paycheque after that. Go hat in hand and ask my dad for a loan. These expenses aren't major, it's not like I have to fix a hole in my roof, but in the past they would of eaten into the current paycheque and would of seriously cramped any regular spending for the pay period. This week, these three expenses won't even touch our paycheques.
We are no longer living paycheque to paycheque and it feels really good! Our Operation Savings has enabled us to plan for unplanned expenses. The cushion in the chequing account and the Emergency Fund build in resilience to Murphy, which gives an amazing piece of mind. I really recommend that people set up their Emergency Fund and a Freedom Account, it will make a world of difference to your mental health!
Saturday, February 2, 2008
State of the Resolutions: 2008
Over at the MoneyBlogNetwork, they are doing a group writing project called How Are Those 2008 Goals Coming? Since I set some goals for 2008, I thought that it was a really good idea and decided to steal it. So without further ado,
Step 2: Analyze my income versus my expenses. Create a budget. After minimum payments on credit debt and living expenses I have $270 to use to pay down debt.
Step 4: Apply that $270 to my over draft until I have built up the chequing account to a positive balance of $1000.00 to act as my emergency fund. That should be in August of 2008.
KIND OF: With the refinancing of the consolidation loan, I put $1,000 into the savings account and $1,000 as a cushion in the chequing account. I didn't save up the money for them, but they are fully funded.
Step 5: Sell the shares I bought as part of an employee purchase plan and put the money towards our emergency fund. This should put $800 -$900 towards the emergency fund.
NO. I got the share certificates back and the shares are worth more than I thought. $1,637. I find that emotionally I don't want to sell them.
Step 6: Work all the overtime I can get at work and put everything over the regular pay towards the emergency fund. Due to OT availability this might be $100 - $300 dollars extra a month. Assume $150. Steps 5 and 6 should mean that the emergency fund will be fully funded by the end of March.
KIND OF: After Christmas, work hasn't been as busy. Things will be busier towards April though.
Step 7: Get down to ebaying that stuff sitting in the closet.
NO. In fact this has been a big fail. Just have not got moving with this.
Step 8: When the emergency fund is fully funded, close the chequing account and move the money to the no fee President’s Choice bank account that I have set up.
Friday, February 1, 2008
Hey! I won a book!
So Tim, over at Canadian Dream: Free At 45 was reviewing the book RRSP's written by Preet Banerjee, who also blogs at wheredoesallmymoneygo.com. Preet is an investment professional, who has written a book on RRSP's because he was unable to find anything written recently (the last two years) on the effect of changes on RRSP's.
Tim's review is quite favourable and as a perk of reviewing the book Tim was able to give the book away as a prize to a lucky commenter.
As the title might of given away, I was the lucky commenter. I've emailed my contact info off to Tim and will be eagerly waiting to get the book in the mail so I can read it.
