Personal Finance

How do you plan your goals and finances?

  • Last Updated:
  • Mar 3rd, 2015 6:22 pm
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Newbie
Jan 28, 2015
6 posts
Montreal, QC
I think that you should avoid making debts so that you can manage your wages effectively.
Newbie
Jan 28, 2015
6 posts
Montreal, QC
But on my own I can say that I have no debts so I can manage my wage effectively.
Member
User avatar
Jan 24, 2014
404 posts
86 upvotes
Toronto
I never really worried about a budget, as i knew we had a simple lifestyle from day one. I am sure there were a couple years when the kids expenses kept our savings plan to zero or maybe even took a step or two back, but overall, things got paid and bills were always paid on time. House got paid off and my self funded retirement grew quite large when I sold my business. Wifey was a bookkeeper. We have no stress thinking about the future except for the inevitable health issues which are just starting to rear their ugly heads.... we are well prepared for the final phases of life and have no financial worries.

Live simple, worry less, finances will take care of themselves
Deal Guru
User avatar
Mar 1, 2004
12861 posts
1485 upvotes
Pickering
1. Get paid bi-weekly with deductions on each pay and monthly on investments within TFSA.
2. Company matches a percent of deductions
3. Monthly automatic withdrawal to pay LOC (LOC is invested or used to bridge gaps between investments), insurance, cable, cell phones etc.
4. Buy food and home maintenance/upgrades, car repair/fuel and know how much you should have left over.

Take money from self/work savings to my financial advisor for RRSP (in the months that are historically cheaper) and take the yearly tax refund and put it in TFSA. Invest TFSA money. Any money left over a certain bank account balance goes to angel investing or unregistered investing.

If I had a bad few months, or even a bad year, at least I tried to save as much as I could when the times were good. No money going in isn't so bad, when you still make something on existing investments.

I know how much my bank account should slowly gain over time. If it doesn't, it is easy to track because everything is on credit card. I use my MC and Airmiles at Shell. MC and PC Plus at Loblaws/No Frills. MC at Costco. MC and Airmiles at Metro.

MC gets me free flights and full coverage insurance on trips. Airmiles gets me small electronic gadgets or gift certificates. PC Plus gives me free food. Work has discounts at many places, so I can entertain myself and the GF cheaper. I buy slightly high mileage off lease cars at a discount and because I have a work vehicle, I don't go much 10K per year. In a few years, it is worth more than comparable cars because it now has low mileage. Dinner tonight from the markdown rack because it makes no difference as the food hasn't expired yet. Overstock on deals (not a hoarder like people with 24 boxes of toothpaste and six family members in line ranging from toothless granny to a three year old kid holding a coupon, four boxes of toothpaste, and a $10 bill...)

If I want to buy a $40 bottle of wine, why not? It's not like I drive around throwing money out of the window. I don't bother micro-managing because I don't think it will make much of a difference. I do have the full version of Visual Budget, but is has yet to tell me something I don't know. Don't buy real cheap crap either. You'll just have to replace it.

You should actually visit with your financial advisor to make sure your goals are on track. Most people don't bother.
Banned
User avatar
Jun 8, 2008
3977 posts
1423 upvotes
Toronto
We live within our means, don't spend more than we make, don't buy stuff we don't need, try to find more economical ways of doing what we want and we don't forget to actually spend the money we are saving on things we enjoy. I see a lot of people saving for retirement, we do as well between pensions and RRSPs and savings accounts but we don't want to save to the point of not doing stuff now.

So we don't drive a fancy new car, and we haven't bought a bigger house, and we don't have cable or expensive data plans on our cell phones, but we are taking a month long vacation to Africa with our kids this year.
Deal Addict
Jan 11, 2004
1277 posts
161 upvotes
Budgets, accountants and personal finance software all very helpful. But the three fundamental items that have guided my financial goals/plans:

1. Living below your means. This allows you to get off the treadmill of spending everything you have no matter how much you make. If you can afford to purchase a Mercedes/BMW, instead purchase a VW or Toyota.
2. Increasing your income. This allows for #1 to be relatively comfortable and sustainable. In other words living below your means when you make 1 million dollars a year vs 30k is very different. Living below your means @ 30k is not something I aspire to do.
3. Becoming financially literate. Many of a person's large expenses in life are linked to financial literacy. Mortgages, investing, loans/financing and the list goes on. Many people try to save a dollar or two on the coffees but those savings get dwarfed by the bad decisions they make because they aren't financially literate.
Moderator
May 28, 2012
12485 posts
5278 upvotes
Saskatoon
^The only thing I would add to that would be, if you do get married, pick someone who is on the same page as you financially (hopefully, it's a good page). ;)
Newbie
Jan 25, 2015
10 posts
Toronto, ON
MrInvest wrote: I think you can try to start by trying to start changing your principles by saving money first, it's really hard to apply this if you have incurred big debts already.
Agree! But still, you need to do saving first.. I think no matter how much you save doesn't matter as long as you save. Though it is never easy, but it is doable. I used to do the same but it left me with nothing.. so I change strategies now.. save first... that additional money can be a great help one day or a great party! :) You'll never know..
Newbie
Jan 25, 2015
10 posts
Toronto, ON
MissJmarie wrote: I kind of follow Warren Buffet's principles in Investments and Savings. I've also learnt about the "Income - Savings = Expenses" Rule. And to keep track with my finances, I use a Personal Financial Management Software.
How do you like the software? I am learning and training myself to "income - savings = expenses" as well! :)
Deal Addict
Feb 9, 2013
1912 posts
1314 upvotes
Mississauga
Is using mint.com for just credit card websites, like mbna.ca, safe?
It's detached from my bank account. Even if someone has my login to mbna.ca, they can't make any withdrawals.
Worst case I can think of, is seeing/changing my personal info and address. Thoughts?
Sr. Member
Aug 6, 2014
830 posts
300 upvotes
Ottawa, ON
wirebound wrote: We live within our means, don't spend more than we make, don't buy stuff we don't need, try to find more economical ways of doing what we want and we don't forget to actually spend the money we are saving on things we enjoy. I see a lot of people saving for retirement, we do as well between pensions and RRSPs and savings accounts but we don't want to save to the point of not doing stuff now.

So we don't drive a fancy new car, and we haven't bought a bigger house, and we don't have cable or expensive data plans on our cell phones, but we are taking a month long vacation to Africa with our kids this year.
i don't know, if you skip that expensive trip to africa you can save even more.
Deal Fanatic
User avatar
Jul 29, 2005
5736 posts
354 upvotes
fisher44 wrote: i don't know, if you skip that expensive trip to africa you can save even more.
You can always save more if you skip out on living.
Sr. Member
Aug 6, 2014
830 posts
300 upvotes
Ottawa, ON
bokep wrote: You can always save more if you skip out on living.
the personal finance forum's mantra
Deal Addict
Jan 28, 2014
3926 posts
1039 upvotes
Toronto
The problem with goals etc. is that life has a way of getting in the way of the best laid plans.
Banned
Jul 3, 2013
1508 posts
300 upvotes
I have a 10 and 20 year net worth goal that I update on a monthly quarterly, or annual basis.

My monthly budget is fed into my 20 year plan and I don't allow myself to make financial decisions that will harm my plan.

I have been updating my plan for the past 6 years and noticed the following:

1. My income has grown faster than I expected which means that I am a couple of years ahead of my initial plan in terms of net worth.

2. My expenses have grown due primarily to inflation and me moving to a high cost location. My goal this year is to decrease my spending by 5%.

3. I have had to sacrifice vacations, having a car, buying a place, and enjoying the fruits of my labour for the provilage of attaining financial freedom by the age of 40 (unless there is another market crash).

I will have financial freedom at 40 but will likely continue working until 50. The additional 10 years mean an additional $60k that I can draw on an annual basis (today's dollars).
Banned
User avatar
Jun 8, 2008
3977 posts
1423 upvotes
Toronto
fisher44 wrote: i don't know, if you skip that expensive trip to africa you can save even more.
Of course we can, but we aren't living our life to save all our money for some future time either. That's how we plan our goals and finances; the finances fund our goals, one of those goals is travel.
Banned
Jul 3, 2013
1508 posts
300 upvotes
Blanche123 wrote: The problem with goals etc. is that life has a way of getting in the way of the best laid plans.
It drives me insane when people make statements like that. One of the primary objectives of setting plans is to ensure that you save more in times of prosperity so that it will help you whether difficult times.

I have a 20 year plan that I update as often as monthly. During good times I increase my savings rate and during bad times I adjust it downwards. Because of my planning, I could be laid off for two decades and I have enough saved up to not sweat a beat.

Do you believe that not planning will allow you to tackle life's surprises more effectively?
Deal Addict
Jan 28, 2014
3926 posts
1039 upvotes
Toronto
Well, I am too polite to point out the obvious...and I would not want your lifestyle. We are not planning for Armageddon and some people do take things too far but to each his own.

However, I do not recall posting that we have not planned. I repeat, life gets in the way. Oh, and guess what, we have had a few pets that required very expensive surgeries. And they had them. As a matter of fact we have one now. We couldn't imagine life without them.

This reminds me of the lecture I received re the nightmare of TD (our bank of 33 years) and Aeroplan cards - since we do not churn cards - hey, and we do have the credit rating to support said churning. Apparently TD is a business - what a shocker. The difference is that I know exactly what we have (likely soon to be had) with TD - unlike those only to willing to lecture without knowing the details. An Internet forum is just that. And it is not a place to share personal financial details - whether they be true or not. By the way, I do not lie.

Feel free to flame away, I will not be looking at this post again.
Deal Fanatic
User avatar
Jul 29, 2005
5736 posts
354 upvotes
FutureCEO wrote: I have a 10 and 20 year net worth goal that I update on a monthly quarterly, or annual basis.

My monthly budget is fed into my 20 year plan and I don't allow myself to make financial decisions that will harm my plan.

I have been updating my plan for the past 6 years and noticed the following:

1. My income has grown faster than I expected which means that I am a couple of years ahead of my initial plan in terms of net worth.

2. My expenses have grown due primarily to inflation and me moving to a high cost location. My goal this year is to decrease my spending by 5%.

3. I have had to sacrifice vacations, having a car, buying a place, and enjoying the fruits of my labour for the provilage of attaining financial freedom by the age of 40 (unless there is another market crash).

I will have financial freedom at 40 but will likely continue working until 50. The additional 10 years mean an additional $60k that I can draw on an annual basis (today's dollars).
Seems like you're a bit too focused on money and too willing to trade your youth for old age. I wonder if you will regret that by the time you hit 50.

I'm not an extravagant spender by any means (saved 40+% of modest income last year), but no way I'm missing out on vacationing in my 20s and 30s (or ever, really). Go backpacking somewhere, it's cheaper than you think. No way am I missing out on the occasional burrito and shawarma, lunches with colleagues and friends, nights out with friends, etc. You live once, and I'm not missing out on living.

If you plan on working until 50 anyway, I don't think you should be skipping vacations.
Deal Fanatic
User avatar
Oct 23, 2003
8455 posts
2000 upvotes
i dont do anything besides put money away when i have an overflow in my checking account. i cannot project anything even if i wanted to because contracts can be 2 weeks or 1 year long, and even then, nothing is guaranteed. Basically i bank on the money i have, not the money i might not get.

also, "living" in your 20s is vastly different than your 50s. A 20 yr old driving a bmw and a 50 yr old driving a bmw are completely different feelings. Same for vacationing and so forth. Its good to balance a bit of both worlds, dont overspend, but do have fun.

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