Unimor Capital Corporation

Tag: budgeting

  • 5 Good Financial Habits to Bring Into the New Year

    5 Good Financial Habits to Bring Into the New Year

    When the New Year bells ring, finances are typically at the top of the resolutions list. It can be exciting and empowering to want to achieve your financial goals once and for all. However, what most people fail to realize is that you must strengthen those financial muscles first. It’s just like setting a fitness goal: you don’t set out to run a marathon without also changing your eating habits, sleeping habits, and workout habits. It’s the shift in these small habits that gets you prepared and moving towards your goal. The same is true for finances. If you intend to pay off your debts or save for that home in the coming year, you need to ensure that you are making changes to your everyday financial habits as well.

    1. Create a Budget
    It might be hard to hear this, but creating a budget is one of the best financial habits that you can have. Managing your money starts with knowing where your money is going, and without having a proper budget it can be quite easy to lose track of your monthly spending. How many times have you asked yourself, ‘Where did my money go?’ Creating a budget provides the clarity and control you need to stay on top of your finances.

    Keeping a budget ‘in your head’ is not wise. We can hardly remember what we did last week, so how do you expect to remember all the places where your money has gone? Create a well-formed budget by pulling together at least the last 6 months of all banking transactions. Use that data as a basis for how you would like to spend your money going forward. Be sure to include your savings goals and debt repayment goals within your budget as well. A budget is meant to capture your entire financial picture and should show how all your monthly income is being allocated.

    2. Check in With Your Money
    Having a budget is one thing, but using it is another. Most people fall into the trap of only looking at their finances at the end of the month, which makes it difficult to adjust spending before it’s too late. As with any major plan or project, there are check-in points. The same is true for your finances. Setting up weekly money meetings is important to ensure you stick to your budget and achieve your financial goals. Set up a time each week to track your spending and review it against your budget. Have you ordered delivery meals one too many times this week? Did you order another thing online that was not planned? Put a plan in place for the upcoming week of the changes that need to be made to avoid running over your budget.

    Having a pulse on your finances also allows you to be financially proactive instead of reactive. By knowing how your money is allocated, you can easily adjust and adapt in the event of any unexpected circumstance. This is how you remain in financial control.

    3. Say No
    This might be one of the hardest habits to develop, but it’s the most powerful. If you have gotten into the habit of saying yes to you, your kids, and your family, it might be time to release that habit now. Achieving your financial dreams starts with being financially responsible and that means sticking to your plan, living within your means, and saying ‘No’ to anything that is outside of your plan.

    Don’t go on this journey alone. Make sure you have communicated your new financial focus to your family. Have a family meeting to discuss your financial goals and priorities, share your budget and let your family know upfront that spending will be different this year. Tell a trusted friend about your commitment and ask them to keep you accountable. And, when you find yourself tempted to give in, remember why you started on this journey to begin with.

    4. Build Your Emergency Fund
    If there is anything that is certain, it’s that life is uncertain. You never know when life might send you on an unexpected path, so you must always ensure you are financially ready and prepared. This is where having an adequate emergency fund can help you to maintain financial security. Whether it’s losing a job, the car breaks down or the furnace needs to be prepared, life always seems to happen. In these circumstances, most people use their credit cards or line of credit to make it through but having an emergency fund ensures you avoid this debt spiral.

    The goal should be to have 6 to 12 months of your income saved in an emergency fund. Calculate how much that would be for you and your family and then develop the habit of savings towards this goal each month. You can create your own financial security if you prioritize this one important financial habit.

    5. Stop Celebrating the Minimums
    Paying the minimums on your credit cards is no reason to celebrate. If you are serious about getting out of debt, you will need to create the habit of paying more than what is due. If becoming debt-free is a meaningful goal for you, then you must take it a step further and create a debt repayment plan. A goal without a plan is only a wish, and wishing your debts away is not going to cut it. Look at your budget and see how much excess cash you have after all your expenses. Reduce or eliminate any unnecessary expenses. Determine how much money you can put towards your debts each month and then create a plan to do just that. To ensure you stick to the plan, set up automatic monthly debt payments so that the money is actually paid to your debts before you can spend it.

    And while we are on the topic, also make sure you pay all your debts on time. This can greatly impact your credit score which needs to remain intact should you ever wish to leverage credit for significant purchases such as a home or a car.

    Implementing these habits will create a more stable and secure financial future for you and your family.

     

  • Meal Planning: The Money-Saving Ingredient

    Meal Planning: The Money-Saving Ingredient

    Meal Planning: The Money-Saving Ingredient

    Let’s call it a Wednesday, mid-afternoon. Lunch is a distant memory and you’re starting to feel a bit peckish. Just then, your phone buzzes. It’s your partner, roommate, or child, asking, “What’s for dinner?”

    If you’re like most people, that question is a source of low-volume stress every single day. In fact, the average person faces these five stumbling blocks:

    • No idea what to cook
    • No groceries to make whatever idea we do come up with
    • Short on skills or equipment
    • No time
    • Out of sync (not everyone in the house eats the same things or at the same time)

    There’s a fix to all of these problems, but it isn’t particularly glamorous or thrilling, and you might groan at the next two words: meal planning. Hear me out! Meal planning creates a framework to fall back on. It’s the first line of defence against all the dark arts conspiring to make you order take-out or convincing you to eat cereal standing over the kitchen sink. It puts you in the driver’s seat and makes you proactive instead of reactive. After decades of teaching home cooks, I can vouch that meal planning and shopping are the two most underrated, under-discussed (and yet most critical) elements of getting dinner on the table.

    Having a meal plan is also the best way to save money on your weekly food bill. With a plan, we make fewer impulse buys when grocery shopping and decide against picking up those aspirational ingredients we buy then never use (I’m looking at you, jar of sauerkraut at the back of my fridge), as well as those extra ingredients that end up in the compost bin. Plus, with a plan in place—and the groceries on hand—we’re much less likely to order take-out or delivery. Don’t worry if you’ve tried meal planning before and found it didn’t stick. I bristle against rules, so the classic two-week meal plan has never worked for me. Luckily, there are four other methods that still deliver all the benefits.

    The Camper method assigns a theme or protein to each day of the week, just like at summer camp (e.g. Taco Tuesdays, Chicken Wednesdays, Breakfast for Dinner Thursdays). The themes repeat every week or two, but the recipes themselves can change.

    Maybe you have time on the weekend to stock the fridge and freezer with big-batch recipes, then dish them out over the week. The Batcher system is perfect for people who have next to no cooking time during the week.

    If your day-to-day schedule changes on a dime, you might prefer to pencil in just three or four dinners and lean on quick pantry meals on other nights. This Semi system works well for me, and it’s also a perfect starter system for anyone who is reluctant to try meal planning.

    The fourth system, the Wingnut, is for those people who truly prefer to fly by the seat of their dinner chairs and simply rely on a well-stocked fridge and pantry. It’s a great system for retired chefs or young couples who don’t mind popping out to the grocery store at the last-minute, but not terribly helpful for most of the rest of us.

    Whatever framework makes sense for your life, there are two critical pieces I recommend for everyone. First, have a back-up plan—what I call a back-pocket dinner. This is a meal you can make without a recipe, using pantry staples, and in very little time. Back-pocket dinners are typically really simple dishes. My own is garlic spaghetti—a dish of pasta, oil, garlic, and Parmesan. If I had a dollar for every time, I’ve been so close to ordering delivery only to realize that garlic spaghetti is faster, cheaper, and smarter, well, I’d be rich. So bring on the grilled cheese sandwiches, the fridge-clearing omelettes, and the pita pizzas. When you can feed the family from what’s in the pantry, you’ve got a superpower.

    The second piece is to designate one night a week to eat what’s in the house. Whether that’s leftovers or something from the freezer, eating what you’ve got before buying anything new just makes sense. In our house, we call it Scraps Night and it’s usually on a Monday when we have a variety of leftovers from the weekend. This simple weekly ritual dramatically reduces food and money waste. If there’s nothing obvious to use up or eat up, just lean on that back-pocket dinner.

    While meal planning might feel tiresome or limiting at first, it will likely grow on you. I love how meal planning saves time, money, and energy, but most of all, I love having an answer to that daily “What’s for dinner?” question. It eliminates the dull stress of decision fatigue, and that’s a high-five everyone needs!

  • How to Set Up Your Holiday Spending Budget

    How to Set Up Your Holiday Spending Budget

    Did you know Canadians spent $25 billion last holiday season? And retailers expect shoppers to spend even more this year, despite the pandemic. That’s a lot of photo cards, candy canes, CD’s, and sparkly ornaments. But unless you plan on skipping Christmas this year, you’ll find yourself a part of that $25 billion machine. To enjoy the gift-giving season without any guilt-ridden overspending, set up your Christmas budget now—and then stick to it like sap on a fir tree.

    First things first: It’s time to do some digging into your Christmas budget. That means you need to ask yourself the following questions to see where you stand now so you can know how much to spend on presents later.

    How much do you have saved? Before you know what you can spend, see what you’ve got to work with. Hopefully, you started saving early. If not, we’ll talk about how to get extra money, so you don’t end up just doling out coal this year.

    What budget lines can you tweak? Even if you started saving early, you might still need more cash to cover all the Christmas costs. Look through your normal budget and figure out what budget lines can get trimmed down to free up gift money for your Christmas budget.

    Don’t know where to start? Here are a few nonessential budget lines you can probably cut back: restaurants, clothing, personal spending, entertainment, and gourmet coffee.

    How can you boost your income? If you’re able, boost your income for a couple weeks as a way to up your spending power. You could sell some things, take on extra hours at work, or start a side hustle. Get creative: Babysit so parents can go Christmas shopping alone, shovel driveways and sidewalks, offer gift-wrapping services… you get the idea!

    What Christmas traditions can you skip? You can save money this year by cutting some expenses—and that includes traditions that don’t really matter (like the annual office ornament swap). Be open and honest with your budget and your loved ones.

    Do you have a shopping list? If not, make one! You need to list out every person you’ll need to buy for and start brainstorming present ideas.

    How can you save on gifts? Shop sales. Use coupons. DIY and make homemade gifts. Skip random gift exchanges. These are just some of the ways you can save serious cash this Christmas on presents.


    How to Set Up Your Christmas Spending Budget

    1. Plan how much you’ll spend this year.
      Last year, the average Canadian was expected to spend $1,593 on holiday spending. And remember, retailers expect even more this year! First of all, you should never feel pressured to spend that much. You should spend what you’re comfortable with based on what you make, what you’ve saved, and what you can move around in your budget to get the job done. So, crunch some numbers and see how much you’ve got to play around with this year.
    1. Add the names of everyone who need a present.
      Once you’ve set up your budget, make a list of each person you have to buy for. Now, go ahead and assign spending limits to each person.
    1. Track your spending as you go.
      Want to know how you don’t overspend? You track. You track hard. You track often. Keep up with all that spending as you go.
    1. Move amounts around when needed.
      Oh no. You overspent on Mom by $5. What will you do? It has to come from somewhere. You can lower Dad’s line (sorry, Dad!) by $5 and use it to up Mom’s line. Move that money around until your budget balances again.
    1. Budget early for next Christmas.
      Here’s a quick shout-out to planning early—do it! Put a sinking fund in your budget as soon as January to start stashing away cash for next year’s Christmas. If you do it little by little, month by month, coming up with Christmas money won’t hit you like the reindeer that ran over grandma in that song that’s now stuck in your head!
  • Before You Make a Budget

    Before You Make a Budget

    You’re ready to start a budget — awesome!  You’re probably feeling excited and ready to get your money in order. But here’s the thing: It’s super easy to give up on budgets.  They can get complicated and require some maintenance.  So before creating your budget, take these simple steps to set yourself up for success:

    1. Track Your Spending

    Sometimes it feels like each paycheck disappears into thin air. The money lands in your account, you revel in your balance for one day, then you pay your monthly bills and it’s gone!

    That’s why it’s so important to track your spending. Before you even start a budget, you’ll want to get a clear idea of where all your money is going each month. There are plenty of ways to do this: good old-fashioned check book balancing, pen and paper or checking your accounts each day.  Get yourself used to keeping tabs on your spending by using an app like Mint.com.  This will help you better understand what your fixed expenses are each month and where you might be overspending.

    2. Set Yourself a Few Fun Goals

    Because budgeting can quickly become a dreaded chore, you’ll want to set yourself a few goals to keep you encouraged.  No, these don’t all have to be boring financial goals, like paying off student loans or starting an emergency savings.  Although those are great, work at a fun goal, like a road trip or cruise.  Then, hold yourself accountable by setting up a separate savings accounts and have money automatically come out of your chequing account.  You probably won’t even miss that small amount each week, but over time, it will contribute to your goal.

    3. Bundle Your Debt Into One Bill

    One of the trickiest parts about budgeting is keeping tabs on all your monthly payments, especially if you have debt.  Rather than making four different credit card payments each month and logging them in your budget, make life easier for yourself by combining them under one umbrella.  It will be much easier to budget with one, easy-to-manage monthly payment.

    4. Find Easy Ways to Cut Back Big Bills

    Building a budget will force you to take a good hard look at your monthly expenses. Ask yourself: Am I paying too much for any of these non-negotiables?  The answer: Probably.  Start with a bill that’s super easy to cut — car insurance.  Yeah, there’s no getting around it, unfortunately.  But to get the best deal, you’ll want to compare rates twice a year.  Sometimes you get complacent paying your bills, but there’s usually ways to save or haggle for a lower price.  Cable/internet is another good example, if you call, chances are there’s some kind of promo they can offer.

    5. Pick Your Go-To Budgeting Method

    Yes, there are budgeting methods — plural — but before you panic, we recommend using the 50/20/30 budgeting method for its simplicity.

    Here’s how it works:

    • 50% of your income goes toward essentials
    • 20% goes toward financial goals
    • 30% goes toward personal spending

    Of course, you’ll want to play around with this, but keeping these base-line percentages in mind will help you figure out how to allot your money for the month.

     

  • How to Create a Budget

    How to Create a Budget

    A budget is a plan, an outline of your future income and expenses that you can use as a guideline for spending and saving. Only 47% of Canadians use a budget to plan their spending. But Canadians are feeling more in debt than ever with 90% saying they have more debt today than five years ago. A budget can help you pay your bills on time, cover unexpected emergencies, and reach your financial goals — now and in the future. Most of the information you need is already at your fingertips and the guidelines below will show you how to create a budget.

    Setting Up a Monthly Budget

    It’s a good exercise to document your own actual spending habits for a month or two, and then compare them to this model. This can be a quick way to find out if you are overspending in certain areas.

    STEP 1: Calculate Your Income
    To set a monthly budget, you need to determine how much income you have. Make sure you include all sources of income such as salaries, interest, pension, and any other income sources, including a spouse’s income if you’re married. Determine your pay after deductions, and then use the following chart to help figure out what your monthly take-home pay is:

    • Weekly cheques, multiply by 4.333
    • Every-two-week cheques, multiply by 2.167
    • Twice-a-month cheques, multiply by 2
    • Irregular annual income, divide the net total by 12

    You also want to make sure you add in other sources of income, such as interest income, spousal support, child support, tenant rent, and other payments. As with your pay cheques, determine a monthly average for these streams. Using the downloadable Budget Worksheet, write a dollar figure next to each relevant income source. Make sure that the figure you write down is the amount you receive from each income source on a monthly basis.

    STEP 2: Estimate Your Expenses
    The best way to do this is to keep track of how much you spend each month. The first step is to sum up just where (and how much) you think you are spending. The Expense Worksheet divides spending into fixed and flexible expenses. If some of your expenses for one or more category change significantly each month, take a three-month average for your total. As for the other categories, you might prefer to split them into more narrow subgroups separating food, clothing, and entertainment, for example.

    STEP 3: Figure Out the Difference
    Once you’ve totalled up your monthly income and your monthly expenses, subtract the expense total from the income total to get the difference. A positive number indicates that you’re spending less than you earn – congratulations! A negative number indicates that your expenses are greater than your income and gives you an idea of where you need to trim expenses and by how much.

    Well done! You’ve created a budget. The next step is to make adjustments to this outline in order to achieve your financial goals. Track your budget over time to make sure you’re on track. You need to start making records of your actual income and expenses. This information will help you to understand any “budget variances” – the difference between the amount you planned to spend in a certain category, and the amount you actually spent. Prepare to be surprised for the first couple of months. You may not need to track your spending indefinitely. Usually, a couple of months are all you need to get an idea of where your money is going.

    Helpful Tip

    The 50/20/30 Rule
    When creating a budget, you can list each and every monthly expense you incur as its own line item, or you can combine some of your expenses and follow what’s known as the 50/20/30 rule. The benefit of the 50/20/30 rule is that it groups certain expenses together to make your budget easier to track. The 50/20/30 rule splits your living expenses into three main categories:

    1. Fixed costs that stay the same month after month, such as your mortgage, car payment, and cable bill, should take up 50% of your income.
    2. Variable costs that can change from month to month, such as entertainment, groceries, and clothing, should take up 30% of your income.
    3. Savings, which should take up 20% of your income.

    The 50/20/30 rule allows you to retain some flexibility in your budget while saving a nice percentage of your income. While you can always adjust these percentages to accommodate your circumstances, limiting your fixed costs to 50% of your income should leave you with enough money left over to save and cover your variable expenses. Along these lines, allocating 30% of your income to variable costs means you’ll have a decent amount of wiggle room within that category alone.