As I sit in my kitchen, writing this post, I see out of my windows and see….snow. The sun has set at 4:30 pm. If this isn’t a recipe to travel to sunnier places, I don’t know what is. Old Lindsey would already be online searching for a one-way ticket out of this winter tundra. However, personal finance savvy Lindsey knows that making these emotion-based purchases never usually ends well. Sure, I would have an amazing time on the beach with unlimited drinks, however, that Visa statement awaiting me a month later would not be awesome.
Do you have a budget for travel? What about your favorite beauty products? Are you an impulse shopper or shop with intention? I am a recovering impulse shopper and have occasional relapses from time to time. I was not raised in a financially literate home and it has taken me decades to get my financial house in order. Before, I would simply put everything on my credit card and worry about it later. Sound familiar? With Canadian debt levels rising exponentially, it is time to change course.
Now, a crash course in creating a budget. First, you need to know your income. This is your starting point. After, you need to see how much debt you owe and include everything; credit cards, line of credits, car loans, student loans, etc. Make sure you know the interest rate. After, you need to list your fixed expenses; mortgage/rent, utilities, insurance, car payments, etc. Based on your income, figure out your budget for debt repayments, savings and fixed expenses. You’ll need to figure out your plan of attack, as everyone is different and no financial journey is the same. Now, you’re ready to create a budget for your variable expenses. These are your expenses which have wiggle room; personal care, dining out, groceries, entertainment, travel, etc.
It will also help to have snapshot of your upcoming year. Have you committed to any events or trips? How much will those cost? What is your plan of attack for saving? It is okay to put things on credit, but what is your plan to pay that back? If we say ‘yes’ to one thing what are we willing to say ‘no’ to? Maybe you would love a new outfit for a work event. Are you willing to say no to a dinner out? Are those home decor items worth the price of a trip? There is no right or wrong answer, only what works for you and your budget.