There are ways to have fun without it costing an arm and a leg. Why not invite friends over for a clean-out-the-fridge party. Everyone brings their leftovers and you act like it’s a Chinese food fiesta, nibbling on bits of this and that as you gab about the week and catch up on the gossip.

If you’re towing kids, consider hosting a game night. You can make bucketsful of popcorn for very little money. Add some homemade iced tea, and you can play Monopoly, Scrabble or Charades all night. Each family can bring its favourite game, you can drop the game names into a hat and pick randomly to see what you’ll be doing first.

Want to wear those kids out before bed so the ‘rents can watch a movie and sip some wine? Get ‘em outside. A game of flashlight tag, gathering leaves for a spring tree paste-up, or blowing bubbles and feeding the ducks are great ways to fill their lungs with fresh air and wear ‘em out. Suggest impromptu races with rewards (like gummie worms) for all the runners when they hit the finish line.

If you’re leading the single life, start a tradition. Invite a bunch of friends over for competitive Scrabble or poker night. Each person brings a libation and nibbly to share with the group. See how easy?

Challenge yourself to be more mindful of your money on weekends. Think twice before blowing your budget on those days when watching your wallet isn’t necessarily top of mind. You can have fun on the cheap and head into the week cheerful because you stayed on track and still have money left in your entertainment jar.

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Zsanett in Winnipeg wants to know if there are any “financially awoken followers, here in Winnipeg and area who would be interested in getting together and discuss and share their stories.” If you’re interested send an email to getgvo@gmail.com with Zsanette in the subject line and I’ll forward on to her.

In my house cooking has never been a chore; it’s an activity. It’s something we do together. Even if was the one stirring the pot, the kids were there chatting their heads off, doing homework, or skylarkin’ with each other, and the whole thing was fun. And I’ve been to several pot-lucks of late where everyone brings something to the table. I particularly like the yabber-jabber that goes on as people talk about what they made, how they were inspired and how much they love food.

My friend Annie had an “origins” dinner. We each had to bring something that was representative of our cultural heritage. I made oxtail soup (tomorrow’s recipe) and mango upside down cake. And I was introduced to some new folks and some very interesting foods. It was a blast.

Let’s face it folks, if you can read a cookbook, you can make a meal. It’s not rocket science, particularly with the great instructions we now get in recipes. Anyone else remember when measurements were “a pinch” of this and “a dash” of that. Once you get good, you can start improvising, and then the fun really begins. To this day, I don’t measure. And whenever my kids say, “This is great Mom” I respond with, “Enjoy it!” meaning it isn’t likely to happen just the same way again.

Ever wondered how jerk seasoning would taste mixed in with basil pesto? (It’s fabulous.) I mix world-class cuisines to entertain my friends, and I spend only a quarter of what I would if we went to a restaurant and paid premium dollars for food, drink, taxes, and tip.

The trick to making cooking at home interesting is to experiment. The trick to making it a money-saving strategy is to use whatever is on special to inspire you to create something new. When my local supermarket had fruity salsa on sale for $1.29 off, I immediately thought how lovely that would be combined with some jerk seasoning (yah, I’m a jerk-freak) over chicken. Slice it up and top a fresh salad of spinach, dried cranberries and ‘shrooms and not only will your friends think you’re a genius, you’ll save money too!

Imagine the freedom of never having to worry about money. Some dopes think that means having so much of the green stuff that you could never spend it all. But bad money management has put many a Richy Rich in the poor house. I’m talking about the kind of freedom that comes from being in control of your dough. I’m talking about a budget.

I know budgets aren’t romantic. And for all those people who feel they are entitled to buy whatever they want, whenever they want it, a budget can seem like kryptonite.  You can choose to continue to see a budget  as a major pain in the butt or you can choose to see it as a useful tool that helps you spend your money on the things that are most important to you.

Once upon a time to try and get away from the stigma the word “budget” carried, I took to calling them “spending plans.” But you know what? It wasn’t the word people hated, it was the discipline, the work, the focus required to pre-determine how much you were going to spend, and then spend no more.

Regardless of whether you call it a spending plan or a budget, the point of the exercise is to decide how you will spend your money. Having a plan gives you the freedom to enjoy yourself because you don’t have to worry about how you’ll pay the bill when it comes in. You’ll know, right from the start, whether you can afford the purchase you’re contemplating or not. And if you really, really want it, you can decide what you’re prepared to give up to get it, whatever it may be.

Have you ever made a large cash withdrawal from a banking machine only to wonder a few days later where all the money went? Think for a moment; where did the last $100 you spent go? Stop for a minute and write it down. Chances are you can account for most of it, but there may be five, ten or twenty dollars missing from your list.

What does it cost you to live each month? Some people under-estimate their expenses because they forget the things that don’t occur every month. Did you include your gym costs even though you pay them once a year? How about your house or car insurance? Did you include the cost of your haircuts, your contact lenses, or your vacation? Do you pay someone to shovel your snow, clean your windows and carpets or do your taxes? What about your vet bills, the flowers for your garden or patio, your best-friend’s birthday present?

Some people under-estimate their expenses because they actually don’t know how much they’re spending on things like take-out, clothes, and coffee. Over and over when I show folks how much money they’re spending on the non-essentials of life, they are gob-smacked. Well, the only way to make a budget that will work is to know what you have been spending so you get some sense of what you’re going to have to change.

One of the best ways to gain a perspective on your spending habits is to keep a log of everything you spend, each time you do a transaction. The idea is to figure out where you’re spending all those dimes that seem to go missing each month. It’s also about learning more about yourself and where your place your priorities. This isn’t about shame, blame or deprivation. You don’t have to change anything you don’t want to change. But you should at least know. With a transaction log, you’ll have a clear picture of what you’re getting for your money.

When you do all your money management in your head, it’s very easy to forget things — sometimes important things — that will have an impact on your overall financial life. You’re always guessing how much you have left. And you shouldn’t really be surprised when your account is overdrawn. After all, if you don’t know how much you have, how can you know how much you can spend?

If you don’t believe you can find the time to maintain your budget: collecting receipts, entering details onto your budget, adding it all up and balancing it out, think about the time you have to spend solving the problems that arise from not taking care of the details. And think about all the money you waste on overdraft fees, interest costs and ATM transactions. You’ll have to decide whether you’d rather live life peacefully, or continue waking to the specter of financial worry rattling his chains at the foot of your bed.

Y’know the cable package and digital recorder that you pay for every month without a second thought. That’s you thinking about the cable bill as “spent” money. With one call you could cut your costs substantially and slam $50 or more a month against your mortgage or into your retirement savings.

You see the money you blow on your smart phone as “sunk” money; by the time you get the bill you’ve already spent the money. Never mind that a call to pick a better plan that gives you more for less money, or a switch to a pay-as-you-go plan, could save you hundreds of dollars a year.

Switching banks is too much trouble. Golly, just think of all the auto-debits you’d have to change. (Lazy!) Switching telephone providers is a major pain in the butt, even though you could reduce your long-distances charges significantly. Switching from buying new to buying used as just plain yucky. (Oh, get over it!)

If you’re whining about not being able the find the extra money to make a dent in your debt, if you’re concerned that you’re not saving enough for the future, if you wish you had an emergency fund so you could sleep at night, it’s time to look to your sunk costs.

Today, pick an expense you’ve been paying for a while – be it your gym membership, your book-of-the-month-club subscription, your car or home insurance – and look for ways to trim your costs. It is amazing how quickly small expenses start to erode savings potential simply because you’ve gotten used to spending the money. And it’s equally amazing how much you will accumulate in savings when you start small, consistently moving a little money away for the future. It’s not about giving up all the good stuff. It’s about becoming conscious about how you’re spending your money, and making sure you’re also saving enough so you can have a nice life later when it comes time to hang up your tool belt.

Do you know what you’re spending every month?  If you don’t know where your money is going, how can you ever hope to know what you may be over-spending on?

Unconscious spending is at the crux of the problem for most people who see their circumstances change even slightly. Lost a few hours a week at work? Where will you trim? Decided the time’s right to have a baby? What will you cut back on in your spending while you’re on maternity leave? Just broken your leg, twisted your back or come down with something that’s gonna take more than a few days to heal? How will you cover your costs when your income slows to a trickle?

If you want to be able to cope with life’s little surprises you have to first know exactly where your money is going. Sure, you may have a big emergency fund, but you may need it to last a long time, so that’s no excuse for being complacent.

Giving up the delusion of “there will always be more money” is the fist step I make people take in my book Debt-Free Forever. Before I lead readers through the process of making a budget, I insist that they do a spending analysis. I’ve had more than a few complaints about how much work it is, how hard it is, how boring it is. Kwitcherbitchin. It is the much over-looked first step. And the knowledge you’ll gain about how you spend your money is worth every minute of the work you’ll have to do.

Don’t even know where to start? Grab your last month’s bank statement(s), credit card statement(s), and line of credit statement(s). Now, break every transaction into one of the following categories:

• shelter (mortgage, rent, hydro, heat, taxes, maintenance)
• services (cable, telephone, security, home-cleaning, cell, internet, childcare, health, pets)
• food (everything you put in your mouth and swallow, including restaurants)
• Shopping (any STUFF you bought for yourself and anyone else — EVERYTHING)
• transportation (car payment, gas, repairs, highway tolls, taxis, bus, train)
• entertainment (movies, books, magazines, hobbies, gym, club, sports)
• bank fees (service charges, ATM fees, NSF fees, DON’T INCLUDE INTEREST)
• interest costs (from everywhere)
• debt repayment (don’t worry about splitting out interest and principal, just add all your debt repayment amounts together)
• savings

In the best of all worlds, you’ll do this for six months’ worth of your paperwork. Why? Well, a half-year is just about enough time to catch all the things that only pop up periodically. Less than six months will give you some insight, but not clearest picture.

Now add it all up. Are you surprised at the places your money has been going? Which categories brought the biggest surprises? For the couples I work with, it is the small purchases made regularly, which add up to big money, that bring the wide eyes and gasps. They never imagined that their $10-a-day habit actually added up to so much money.

Once you know where your money is going, you’re in a much better position to decide how you want to spend it. While it’s all very well and good to say you only plan to spend $400 a month to feed your family of 6, if you’ve been spending two or three times that, your $400 budgeted amount may be nothing more than wishful thinking. When you end up going over, you’ll blame the budget with a song like this: “See, budgets don’t work.”

It wasn’t the budget that didn’t work. It was you. Yup, your unwillingness to do the work to see where the money actually goes meant you were just grabbing numbers out of the air when you came up with that budget, instead of working from a place of knowledge and purpose.

You have to be a good shopper. A dozen eggs cost about $2.70. That’s six eggs each in any form you want to make ‘em. Eggs are full of protein and, therefore, quite filling. Shop the sales: one week bread may be on sale, the next tins of salmon. Have a float of about $20 in your food jar to take advantage of the specials that will save you money over the month. Scour the fliers for deals and then hit the store with the price-matching policy. Peanut butter that usually sells for almost five bucks can be had for as little as $2.49 on sale.  (I bought four.)

You have to use everything you buy. Waste is the biggest enemy of a tight budget. Old potatoes become hash browns. Just-going-off veggies become stew fixin’s. Chicken bones become stock with addition of some onions (cheap) and left over veggies.

Look for alternatives. Beans are a great source of protein. Add a little sausage (you can buy a pack of 5 sausages for $3.49 and one to a meal for flavour), and bulk up with veggies that will give you the vitamins and minerals you need to be healthy. Overeating happens when you’re eating empty calories and your brain says, “keep going” until you get the nutrients it wants.

Invest in healthy staples. Peanut butter, oatmeal, rice, chickpeas and pasta all make your food budget go much further. Batch cook and freeze portions so you can jump-start dinner when you’re short of time or energy. Soup is easy to make and can feed you for days (or freeze it for a meal next week and in weeks to come for variety). I’ve got a squash and some garlic roasting in the oven right now. I’ll add one of my frozen containers of chicken stock (which cost pennies to make), some ginger (a little goes a long way) and I’ll have enough soup for 6 lunches.

Don’t buy prepared foods. Legumes cost less than a dollar a pound and one pound makes the equivalent of three cans. Making your own sauces means you can flavour it just the way you like (more or less garlic, with or without cilantro).

Add variety. Mussels are cheap (less than $2 a pound) and you don’t have to get too fancy with them. Add stock (do you know you can make fish stock from left-over shrimp tails along with fish skin and bones?), sweet onion, garlic, a bay or lime leaf and enjoy a fabulous meal. Or curry those puppies and then use the left-over sauce to cook your next meal of rice.

Eat the recommended size portions. We tend to over-eat big-time. Learn to eat less and take the time to enjoy every bite. Make eating a wonderful experience as opposed to something you rush through. Savour the flavours. Take smaller bites. Relish the freshness.

Stick with lots of fruit and veggies, and eliminate most of your meat. You might be surprised at how little meat you have to eat to be healthy.  As Michael Pollan says,  “Eat food, not too much, mostly plants.”

When was the last time you looked over your home phone and cell phone bills? People shell out thousands of dollars a year on communication without a second thought. A little attention could net you a cheaper plan that gets you what you need and puts money into your savings account.

Ditto your electrical bills, your gas bills, your credit card statements, your bank statement. Do you know off the top of your head what you paid in service charges on all your bank accounts last month? No? Time to read your bill!

Today, spend one hour going over ALL your bills so you’re completely familiar with where your money is going. That’s right, gather them all up, get yourself a highlighter pen and start familiarizing yourself with where your money’s going. If you find places where you’re surprised at what you’ve been shelling out, it may be time to re-evaluate what you’re getting for what you’re spending.

Are you paying to have movies piped in, but never seem to watch? Axe it.

Are you buying services at a premium? Move to a lower level of service.

Paying for membership at a gym that you haven’t visited in six months? Lose it.

Paid even $1 in banking machine fees? Stop it!

Look for all the things you pay for, but seldom use, and as you chop, trim, slice and dice, make a list of the money you’re saving.

Eliminate just $50 worth of monthly spending, and you’ll have $600 to add to your savings this year. Take that $600, invest it in an RRSP at an average return of 5%, and REINVEST your tax refund every year to make your RRSP contribution grow and in:

• 20 years you’ll have $29,610
• 25 years you’ll have $37,485
• 30 years you’ll have $45,360
• 35 years you’ll have $53,235
• 40 years you’ll have $95,424

… all from a measly little $50 a month. Can you imagine what you could do with $100?

Merry Christmas all, hope your next few days will be full of joy and laughter. Repeat blogs next week. I’m heading to Arizona on the 26th for some much needed sunshine! I’ll be all sparkly and fresh when I get home. See you then.

When I asked y’all how much you could lower your fixed monthly bills by if you had to, 14% of you said you couldn’t at all. Wow! Living that close to the line, eh? Must be tough.

• 19% of people said they could chop 1-5% out of their fixed expenses.
• 30% said they could chop 5-10%.
• 15% said they could chop 10-15%
• 17% said they could chop more than 15%.

But here’s the number that really makes me take a deep breath: 5% of people said, “I have no idea how much my fixed expenses are.”

Lord love a duck!

I wonder if these are the same people who said that they spend more than $20 a week on coffee/tea.  Might I point out that $20 a week works out to $1,000 a year. Make your favorite beverage at home as 41% of respondents to this poll do and you’d have money for savings. BTW, 44% of people spend less than $10 a week, and 11% spend between $10-20 a week.

At least when I got to the casino-usage poll my faith was restored. Of the 746 who responded, 62% think going to a casino is “dumb”, and 36% said they only go once in a while and limit how much they play with for the night. That’s a whopping 98% who have not been suckered in. So sad for the other 2%.

With an estimated 26 million adult Canadians, that 2% represents about a half a million idiots!

Everyone needs a budget. Even if you’re a Richy Rich, knowing where your money goes makes good sense. But you know that. That’s how you got to be a Richy Rich.

Sadly, it’s usually the Poor Richards who think that having a budget isn’t worthwhile. Yet they are the very people who most need one. Keeping track of your monthly income and expenses lets you make sure your hard-earned money is being put to best use. With limited resources, knowledge is power.

If you only knew how much you were spending eating out, you might decide to pack a lunch and cook at home so you can save up to take that incredible vacation you’ve been talking about.

I’m no good at math so I can’t make a budget. Give me a nickel for every time I’ve heard this and I could buy Saskatchewan. Just because you add one and one and get three is no excuse to give up on managing your money. Buy yourself a calculator (or use the one on your phone). With all the great budgeting software available, you don’t have to be good at math, you just have to follow the instructions and type in the numbers correctly. Or you can use a spreadsheet to create your own budget.

There’s always more money. If you think that having a “secure” job is the solution to having a budget, you’re a dope. No one’s job is truly secure. People lose jobs every day. You could be downsized. You could have your hours cut at work. Or you could get sick. Being prepared for having less money means saving up at least six months’ worth of essential expenses. Now, how the hell are you going to know how much money you need in that emergency pot if you don’t have a budget? As for all the folks who bank on those annual raises or bonuses that come fast and furiously during the good times, might I remind you that the bad times inevitably bring disappointments. Sometimes even pay cuts. Banking on something that “should” happen is a sure way to put yourself at risk.

Unemployment will tide me over. Have you ever looked into what unemployment insurance pays? Talk about having to adjust your expectations! And, besides, getting a cheque isn’t a sure thing. If you haven’t worked enough hours to qualify your SOL. And if you hate your job – or the boss ends up chasing your around the desk – and you quit, you’re SOL. Whatever reason you may have for “voluntarily” leaving your job, it’s very likely you won’t see a penny. And don’t think getting yourself fired is the cure… you likely won’t see a penny either since being turfed for bad behaviour will disqualify you too. Never mind the fact that no one else will want to hire you. And then there’s the EI wait period; whatcha gonna eat for those weeks while you wait for your first cheques?

It won’t happen to me. From the glorious dream-world of eternal optimism comes the belief that bad things don’t happen to good people. Are you kidding me? If you think unexpected bills and misery simply can’t come your way, you’re delusional. All kinds of things go wrong in life: cars break down, lovies get sick, companies go belly-up. Hoping for a great life is one thing. Banking on nothing ever going wrong is just plain dumb. If you want to live like an optimist, you have to plan like a pessimist so all your bases are covered and you’re ready for the next curveball life throws at you. 

I hate depriving myself. Oh grow up! First off, it’s not “deprivation” if you’re making the choice to spend your money on things you’ve planned for.  Budgeting is not synonymous with feel guilty about every purchase. Nor does it require that you spend as little money as possible on yourself. The point of budgeting is to make a conscious decision about where your money is going, not letting it just slip through your fingers. If you discover that you don’t make enough money to cover your expenses, save something for the future and have all the fun you want, that’s a wake up call to find a way to make more money.

As for all the people who have a limited income and must live on a very tight budget, tracking your expenses doesn’t change the amount of money you have available to spend every month, it just tells you where that money is going. If you choose to remain ignorant so that you can spend money you don’t have with no hope of ever paying it off, you’re an idiot.

Well, budgets do work, and here are 7 reasons to have one:

1. A budget is a plan. It’s your choices for how you will spend your hard-earned money. Without the plan, you’re diving down the road with a blindfold on and it’s only a matter of time before you run into the ditch. Oops! Now that’s gonna take some fixin’.

2. A budget is a gage. It lets you see if you are living within your means. Once upon a time, before credit was as common as the cold, people knew whether or not they were living within their means because they either had money left over at the end of the month or they didn’t. With credit cards, lines of credit, and overdraft protection, it is much harder to see that you’re not making ends meet because you can fool yourself into thinking you’ve got it covered. However, if you have a budget and you faithfully plug your numbers in, the budget will tell you the truth.

3. A budget gives you control. You have dreams of things you’d like to have, places you’d like to go, experiences you’d like to… well… experience? With a budget, you set money aside for specific purposes, be it accumulating money for your children’s education, saving for that family holiday, or building a stash of cash to renovate the kitchen. Now those dreams and aspirations don’t have to go ignored because you keep getting to the end of the month and the money is all gone.

4. A budget anticipates expenses. Without a budget, people think of most of their less regular expenses as “unexpected.” Having forgotten about the car insurance bill that comes once a year, they’re shocked and surprised when the bill arrives. With a budget not only would you know when to expect the bill, you’d have set aside 1/12 of the total each month so paying it would be no problemo.

5. A budget keeps you focused. It’s a lot harder to spend willy-nilly when you’re on a budget because you’ve accounted for where the money is going down to the last red cent. If you find a category isn’t working because there’s not enough in it, you have to cut from another category to make the budget balance. But every cent is accounted for. No surprises. Course, not everyone is prepared to be a grown up and spend money consciously. Some people like the rush of spending on a whim. They hate budgets. But they’re the people most in need of a budget because they have no self-control.

6. A budget eliminates squabbling. If you’re married to one of those people who have no self-control, a budget can be a marriage saver since it will reduce arguments about money. The budget serves as your guide so if you and your partner are having a squirmish over whether or not to buy something, you can always fall back on, “not until we put it in the budget.”

7. A budget reduces stress. Perhaps the biggest benefit reported by people who finally get on a budget is that their stress is waay reduced and they find that they sleep better! Following a budget means you eliminate unnecessary worrying over money and debt. You’re confident that everything is figured out, and as long as you follow the budget, you’ve created a plan that will get you to where you want to be.

Budgeting isn’t just about tracking your costs, it’s about making sure you’re spending your hard-earned money in a way that works for you. While those off-the-shelf forms can be good guides, you need to have spending categories that fit your personal situation, your spending habits, and your income. Don’t compare your budget with other people’s budgets; you’re not living their lives and they’re not living yours. And make sure you review your spending patterns a couple of times each year to see if there are areas where you’re overspending. There may even be things you’re spending money on of which you weren’t even aware.

But it got me thinking about The Life Pie, minimum wage, and how people cope on a small income. If you make minimum wage in Canada, how much you earn depends on where you live since it comes under provincial jurisdiction.

Okay, so let’s say you live in BC, earn $8 an hour and work 35 hours a week. Assuming you take two weeks for holidays, you’ll earn $14,000 a year gross. After tax you’d take home about $1,108 a month.

I’m going to assume for the sake of this argument that you have no debt and you’re saving just 5% since your income is very low and you’re banking on CPP/OAS to do the work during retirement.

Based on The Life Pie you’d have:

• Housing @ 35% = $421
• Transportation @ 15% = $166
• Life @ 25 % = $277
• Savings @ 5% = $55
• Debt @ 0% = $0
• Cash remaining: $189

So you’d have $189 a month to supplement your housing, transportation or life categories, which is a good thing since you might find it tough to find a place to live for $421 (remember, that includes utilities) unless you were sharing with a couple of other people). It might also be a tough to make $277 stretch across food, personal care, clothes, entertainment, and everything else that falls under life.

Course, if you were only making minimum wage, you might actually have to work two jobs to have enough money to do the things you want.

So how much could you actually get by on in a month if you absolutely had to? And if you’re buried in debt and determined to get out, would you be prepared to live on a minimum wage income and pour all the extra money you might make to debt repayment?

If you’re currently living on minimum wage, how do you do it? Do you work extra hours? Where do you shop to make your money go as far as you can? Are you going deeper into debt to make ends meet? And do you manage to save anything?

The finance part is straightforward: numbers are both concrete and absolute. But we people aren’t. And that’s why, so often, people go through the process of doing the math only to come out the other end with a plan they don’t stick to. Sure, the math works. But they haven’t put as much thought and effort as they need to into the “personal” part. In fact, we become so obsessed with the “finance” that some of us don’t even acknowledge the “personal” part. Or is it that we’re hiding behind the “finance” so we’ll never have to come face-to-face with ourselves?

Y’all know the Life Pie: 35% of your net income for housing, 15% for transportation, 25% for life, 10% for savings, 15% for debt repayment.

The thing about the Life Pie is that it is meant as a guideline. While you’re not supposed to spend more than 35% of your net income on housing, if you have no debt and you’ve got all your other costs under control, you can spend more if you really, really want to. And if you’ve got a ton of debt and you’ve been saving sweet-diddley-squat, you may have cut way back on housing in order to balance your budget.

But what a lot of people do is hide behind these percentages. They use the percentages to avoid having to do the hard work involved in getting their money sorted out. And that can be a problem.

I’m a big believer in knowing what you’ve been doing so that you can clearly see what you’ve been doing right and wrong. If you default to using the percentages, and you don’t track your spending (backwards or forwards) then you’re taking a short-cut that may end up looping back on you. Because you’re not working with real numbers – what you’ve really been spending – you can’t make the mental adjustments you need to make to change your behaviour. Sure, you can say you’re going to spend less on groceries. But if you don’t know what you’ve been spending you don’t know how big a change you’re making when you pull a number out of the air for your budget.

When people do a spending analysis, they’re able to identify areas where they have been spending more on something that it is actually worth to them.  If I had a dime for every time someone told me, “I had no idea I was spending that much on ________________” I’d be able to buy Manhattan.

All of the guidelines we use in personal finance are guidelines. They are not cast in concrete nor should they be followed slavishly. Each of us has a unique set of circumstances and the plans we make for what we’ll do with our money must reflect those unique characteristics.

Whether we’re using the Life Pie, a net worth calculation, or The 70% Rule for retirement income, these are guidelines. They help to show you where the trail is. But it is up to you to cut the trail to your personal destination they way you want it to go. These guidelines are like averages, but when it comes to people, there is no “average”. So you must begin by figuring out where you are and where you really, really want to go. Do the math. But don’t forget the “person” in the equation.

————–

Yesterday’s Game:

My favorite guess was from Sabs: 1,324,678… all the numbers except 5! Ha!

The most informative was from Natalie who says the average for airport taxis in Ottawa is 1,876,000. But she may have read the report Becca linked to showing the reality of kms driven. Leave it to a librarian to do the research!

The most optimistic came from Rachel with a question mark: 3 million km? I dunno Rachel, can you imagine driving a car 3 million kms?

The guess that came closest to the info I was given (1.2 million kms) came from Mo. But it really isn’t fair to call it a guess since there was some real math involved. And so I declare Mo the winner!  Send me your snail mail address to getgvo@gmail.com and I’ll send out the book of your choice. Let me know if you want Debt-Free Forever or Easy Money.

All this fun has a point: Can you see how little we really ask of our vehicles? If we’re trashing cars with as little as 300,000 km on them, think of what we’re wasting in terms of resources simply because we believe we NEED a new car or because we don’t have the good sense to maintain our vehicles properly.

The key to getting high mileage, according to my source, is to keep your car really well maintained. High-use vehicles change their oil weekly, which works out to be about every 4500-5000 kms. They tune up every three months.  When you let your auto go into the dumper because your vanity won’t let you drive an old car or your stupidity gets in the way of a solid maintenance plan, you’re not only being eco-UNfriendly, you’re wasting your money.

Friends and family can be your worst enemies when it comes to staying on a budget. It can be a real struggle not giving in to the pressure to go out for dinner, see a movie or come to a shopping-party where you’ll be expected to lay out some dough. They aren’t trying to mess up your budget, they just want to have fun. And it can be frustrating to watch your pals say they’ve trimmed their budgets even as they head out for a day of mall grazing.

One of the best ways to cope with life’s constant financial challenges is to have a Curveball Account. This is not your emergency fund, which you need for major disasters. This is just a slush fund from which you can draw when unexpected expenses come whizzing at you at 60 miles an hour and you don’t want to throw your budget totally off track. Whether you deposit a little or a lot into this account every month, it can be a real budget-saver. And if you move all the money you “save” by shopping smartly into this account right after you haven’t spent it, it’ll grow even faster. So the next time you save 50¢ on a coupon, go home and drop that 50¢ into a I’m-a-smart-shopper Jar and then deposit all those savings to your Curveball Account at the end of the month.

If your slip is minor, you can always cut back on something else in the short-term to get things back on track. So that’ll be less coffee or you’ll take a pass on a night out with the boy so you can rebalance. But if the expense is a whopper – a major car repair when you simply haven’t accumulated enough in your car-repair account – you may have to borrow from your emergency fund to pay the bill. Then you’ll have to trim yur spending throughout your budget so you can crank up the automatic transfers to your emergency fund to get it back to where it was.

Over-spending may mean you’ll have to balance by under-spending: all those things you routinely buy each day may have to go. No Spend Days are becoming increasingly popular among the frugal set as a way to focus on where the money is going by eliminating the automatic itch to spend. Assigning one day a week as a no-spend day may wake you up to all the ways money disappears, while shoring up your bank account.

Use those points you’ve accumulated on your loyalty cards for things that you would normally have to buy so you can use that money to start or boost your Curveball Account. Airmile points can be redeemed by grocery coupons. Use the coupons for grocery shopping and use your grocery money to boost your Curveball Account.

Give up a vice for one month: no wine, no beer, no ciggies, no candy-bars, no potato chips, no __________________ (insert your weakness here). Once you have the $75, $150, $500 you think you need in your Curveball account, you can go back to your vice if you really want to.

Sell something. Y’know that sewing machine you never use, that guitar you never play, that exercise bike you never ride? Wouldn’t you rather have the money in a Curveball Account so you’re not twisted in knots every time something unexpected comes at you? Have a garage sale, take your stuff to a consignment shop, sell it on e-bay or Craig’s List. Bank the money.

Your turn: How do you keep your budget flexible while keeping it on track?

If you’ve attempted a budget and tossed it in the trash because you hated the feeling of constraint, maybe you’re doing it wrong.

Budgeting isn’t about obsessing over your money. And it shouldn’t feel like you’ve been put in a straight jacket. A budget is a plan for how YOU want to use your money. It’s your decisions, your priorities, your desires. Having clarified those, you’re free to use your money to achieve what you really, really want. It does require that you become conscious of your decisions, but is that really such a bad thing?

Using a budget like a sledgehammer to beat yourself or anyone else in your family into submission means you’ve turned a budget into something it is not. If you end up thinking that everything is too expensive, if you regret every penny you spend, that’s an attitude problem, not a budget problem. Almost everyone can afford the occasional splurge.

Feeling like you’re a prisoner of your budget will only want to make you (and everyone around you) want to break free, bust out, dump the sucker. So resist the urge to eliminate all the fun stuff. Living on a budget doesn’t mean you can’t have fun. It just means you’re deciding ahead of time how much you’re going to spend on that fun. Cutting out all the fun will make you resent budgeting and that’s not the point. The point is to decide how YOU want to spend your money.

Sometimes people over-commit to a goal to the point where it strangles their budget. Honey, we’re going to have this debt paid off in three months even if it kills us. Hey! Wake up! That’s no way to live a life. And if your goal is very vague – hey lets spend less – then your target will always be moving and you’ll never have a sense of having reached it. Having a well-defined goal that you’re working towards consistently will go a long way to making your budget feel like a guide and your efforts feel worthwhile.

When you do achieve a goal, reward yourself. It doesn’t have to be huge. And it shouldn’t throw your budget off track. But if you spend a little more on fun for one month as a reward for achieving your goal, that’s a good thing.

And don’t expect too much too quickly. It takes time to get used to living on a budget. If you fall a little off track in those early months, correct your course and keep going. It’s easy to underestimate how much you’ll spend on categories like food. Sure you thought your family of five could live on $500 a month, but your partner is always bemoaning the fact that the fridge is empty and your teenagers are gnawing on the couch. If the numbers you’ve picked are too hard to live with, go over your budget and carve out some room. You must give yourself enough time, adjusting your income and expenses as you need to. Giving up only proves you’re a wuss.

Imagine for a moment that you have finally paid off your last debt. That likely means you have all that money you’ve been snowballing for debt repayment that can now be incorporated back into your budget. It’s almost like getting a raise, right? So what would you do with that money? How much would you save? What goals would you start working towards now that you have a couple extra bucks? And what new spending categories would you add to your budget?

Head on over to the interactive budget and recalculate your budget assuming your debt is gone and all that debt repayment money is yours for the keeping.

This is a great exercise for three reasons:

1. You will remind yourself of just how dumb debt is.
2. You will enjoy the anticipation of being debt free and that’ll help keep you on track.
3. You can start planning what you’ll do with the money once you do get to debt-free forever.

This third point is just as important as the first two. Sometimes, having finally achieved debt freedom, we become intoxicated with all the extra money we have in our cash flows. The danger is that we may start thinking of ourselves as “rich” and stop paying attention to the details.

The flip side of this is the unwillingness to spend that sometimes comes after years of living carefully. Having scared ourselves to death and promised to always be vigilant in not “wasting” money, we find it extremely difficult to go out and spend.

Both these reactions are just that: reactions. They are emotional. They aren’t based in logic or sound money management. And one of the best ways to overcome them is to start looking at how life will be different down the road so you can get used to the idea of finally being debt-free.

No one says that the first budget you make has to be the budget you end up living with. This is your opportunity to practice, at least on paper, how you’ll deal with the extra money you have in your cash flow once the final payment on your debt is made. At first you may want to just blow through some money because you can. Or you may finally be able to start saving towards home ownership, going back to school, or a long-wished-for family vacation.

It’s your money. You can do anything you want with it. Take your new budget and post it up on your bulletin board or on your refrigerator. Look at it. Enjoy it. And as you get used to the idea of having more money to spend, think about what it is you really, really want. Adjust your Debt-Free Budget as you figure out what’s most important to you. Stay focused on the future and how great it will be to have eliminated the weight of debt you’ve been carrying. Dream. And think.

Eventually, you’ll tweak that budget to be just what you want it to be. In the mean time, anticipating how life will be different will help you see how what you’re doing without today will bring a big payoff tomorrow.