![\"\"](\"https:\/\/aspire-canada.com\/wp-content\/uploads\/2015\/08\/young_investors.jpg\")
Shutterstock.com<\/p>\n
Budget with a YOLO Mindset<\/h2>\n
YOLO is the acronym for \u201cYou Only Live Once.\u201d You can live with a YOLO perspective and because you only live once – you want to make it as enjoyable as possible.<\/p>\n
With a YOLO budget, you start by figuring out what you really want in life. Have a clearly articulated vision and use that as a guiding principle to save, mindfully spend and pay off debt.<\/p>\n
Write your vision statement at the top of your budget as a reminder of how allocating your money to debt repayment and aligning spending with priorities will help you reach your goals. You can also include in your vision statement how you expect to feel when you’re living the lifestyle you want and photos to illustrate that lifestyle.<\/p>\n
The budget will include the actual numbers — how much cash you have coming in each month, the necessary expenses you have to cover and the amount you can allocate to debt repayment, savings and things you truly want. The vision statement is the motivation to stick to that spending plan, so you can pay down debt and live the life you want.<\/p>\n<\/div>\n
![\"\"](\"https:\/\/aspire-canada.com\/wp-content\/uploads\/2015\/09\/shutterstock_252366133.jpg\")
Shutterstock.com<\/p>\n
Read:\u00a0How Your Debt Could Prevent You From Getting a Job<\/a><\/h4>\nUse Digital Cash Envelope Budgeting<\/h2>\n
Cash and Envelopes, that\u2019s how some people budget! Using the digital cash envelope budget approach, you can start by dividing your cash into envelopes for your expenses — one for groceries, gas and so on. The key is to spend only the amount you’ve set aside, so you don’t overspend and end up with little to nothing for debt repayment.<\/p>\n
Once you decide which \u2018categories\u2019<\/strong> you want to use, get an envelope and label it. You can use the cash envelopes that the bank gives out or any kind of envelope or divider system that works for you. Keeping the envelopes in your purse, wallet, or your car is a good idea if you are likely to forget them at home.<\/p>\nEvery time you get paid you simply withdraw or keep enough cash in order to fund your envelopes for that pay period. It is also helpful to write the amount on the envelope that goes into it each pay period to help you keep track of everything. I don\u2019t have regular income so I do not put the same amount of money into each envelope each week. Whenever I do earn any money I just take what I have and make a decision then about how much goes into each envelope.<\/p>\n
<\/p>\n<\/div>\n
\n![\"\"](\"https:\/\/aspire-canada.com\/wp-content\/uploads\/2015\/07\/housing_market.jpg\")
Shutterstock.com<\/p>\n
Try a Zero-Sum Budget<\/h2>\n
According to personal finance author\u00a0Dave Ramsey:<\/p>\n
\u201cThe point of a zero-based budget is to make income minus the outgo equal zero. If you cover all your expenses during the month and have $500 left over, you aren\u2019t done with the budget yet. You must tell that 500 bucks where to go. If you don\u2019t, you lose the chance to make it work for you in the areas of getting out of debt, saving for an emergency, investing, paying off the house, or growing wealth. Tell <\/strong>every<\/strong><\/em> dollar where to go.\u201d<\/strong><\/p>\nBasically, zero-sum budgeting forces you to allocate all of your dollars to something<\/em>, whether you use the money for bills, debt repayment, or for savings. All of your dollars. <\/em><\/strong>According to many budgeting experts, money \u201cwithout a job\u201d will likely get spent \u2014 often carelessly.<\/p>\nOnce you\u2019ve created a new budget with updated categories and dollar amounts, you need to compare that budget to your actual earnings. In the best-case scenario, you\u2019re spending far less than you earn and can immediately begin allocating your surplus funds to debt repayment and\/or savings. In the worst-case scenario, you\u2019re still spending more than you earn and you need to make additional cuts for your budget to work.<\/p>\n
Since zero-sum budgeting uses last month\u2019s income to pay this month\u2019s bills, you\u2019ll need to get one month ahead on your finances to make this work. Getting one month ahead can be accomplished by saving one month\u2019s expenses in your regular savings account and using those funds for the following month\u2019s budget.<\/p>\n
If you already have at least one month\u2019s expenses saved, you are already a\u00a0step ahead of the rest. Simply use those funds to pay the expenses you\u2019ve outlined during the next month\u2019s budget<\/em>, and sock this month\u2019s income <\/em>away into savings for use during the following month.<\/p>\n<\/div>\n\n![\"\"](\"https:\/\/aspire-canada.com\/wp-content\/uploads\/2015\/07\/how_to_lower_monthly_bills.jpg\")
Shutterstock.com<\/p>\n
Find Extra Cash in Your Budget<\/h2>\n
If you only make the minimum payments on your debt because you don’t think you can afford to pay more, you might be able to find more cash in your budget.<\/p>\n
According to Statistics Canada, as of the end of 2015, the average Canadian earned $943 a week, or about $49,000 a year. Now subtract income tax, Canada Pension Plan and Employment Insurance and that worker brings home $37,604 a year, or $3,134 a month.<\/p>\n
The average current monthly payment on a new vehicle in Canada is $570 a month for a loan, $490 for a lease. That $570 a month loan payment represents 18 per cent of the average Canadian\u2019s take-home pay. If you lease, it\u2019s 15.6 per cent of take-home.<\/p>\n
If you\u2019re looking for extra cash in your budget, examining your expenses should be the place to start. Here\u2019s one great place to look: your vehicle. Is there any possibility you could downsize to a smaller, more fuel efficient vehicle, buy a quality used vehicle rather than a brand new one, move closer to work, car pool, or take transit? Here\u2019s another way to think about this: the average Canadian car loan payment is $570 per month. If someone invests this from age 25 to 65 in mutual funds or an index fund and receives an average rate of return of 11% (what the S&P 500 has done over the past 70 years), they will have over $4.2 million at age 65.<\/p>\n
![\"\"](\"https:\/\/aspire-canada.com\/wp-content\/uploads\/2015\/07\/rich_people_daily_habits.jpg\")
Shutterstock.com<\/strong><\/h5>\n<\/div>\nRead: 30 Clever Ways to Make Money\u00a0Online<\/strong><\/a><\/h3>\n\nCreate a Bare-Bones Budget<\/h2>\n
A\u00a0simple, bare-bones budget can be highly effective as an aggressive savings plan, but also if you experience a job loss, take a pay cut, or need to pay down debt. Even if you don\u2019t need to go bare bones now, you never know when you will. For freelancers or for the self-employed, planning your spending around a basic, bare-bones version of your budget modified each month based on your fluctuating income – is a flexible way of ensuring you are living within your means.<\/p>\n
To figure out where your money is going, break out your\u00a0bank and credit card statements from the last few months. Put all of your regular expenses in common sense categories and tally them up. Some potential categories can include things like food, utility bills, transportation, clothes, restaurants, and rent or mortgage. Create other categories as needed and figure out how much you\u2019re spending in each total for the previous two months. Make sure to include debt repayment in its own category so that you know exactly how much you owe each month.<\/p>\n
Once you\u2019ve categorized your spending from the previous two months, it\u2019s time to see what you can reasonably eliminate. This is essentially eliminating everything down to the \u00a0\u201cbare bones\u201d.<\/p>\n
Essential expenses are things like your mortgage or rent payment, utilities, and transportation costs, while non-essential expenses include new office outfits, coffee at Tim Hortons or Starbucks, and new home d\u00e9cor. Basically, anything you could live without is a non-essential expense, so keep that in mind as you figure out how to cut everything down to the bare bones.<\/p>\n
Once you\u2019ve categorized the needs vs. wants in your budget, it\u2019s time to create a new monthly budget based only on your basic, core expenses. Everyone\u2019s bare-bones budget will look different, but most will follow the same general outline. We all need a place to live, the utilities turned on, basic transportation, and food in the fridge, but everything else is optional. Your bare-bones budget should reflect that.<\/p>\n<\/div>\n
\n![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2017\/01\/6_George-Rudy_shutterstock_367274723-848x477.jpg\")
Shutterstock.com<\/p>\n
Try the Debt Thermometer Concept<\/h2>\n
It can be hard to stick to a debt repayment goal, especially if it requires being frugal and making choices about the best ways to spend your money.\u00a0To keep motivated, try the concept of a debt \u00a0thermometer chart to track progress and<\/p>\n
Each link in the thermometer represents a specific portion of your debt. As an example, suppose you have $5,000 in debt, you create a chain of 50 links, whereby each link represents $100 of your debt. As you pay down that debt, you remove one link. It\u2019s a great visual motivator \u2013 as the chain gets smaller, so does your debt.<\/p>\n
As you pay off a portion of your debt, colour in that portion on the debt thermometer or ticker. By the end, you should have a fully coloured thermometer. \u00a0Feel free to download these templates on Pinterest <\/a>to\u00a0make your own.\u00a0As you color in each section on the thermometer, you can actually see — and celebrate — your progress.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"Canadians have a love affair with cheap – affordable debt. According to Statistics Canada, in December 2016, total household credit-market debt reached $2.004-trillion, with $1.31-trillion in mortgages and $590-billion in credit cards, car loans and other personal loans. Household credit-market debt, which includes mortgage loans and consumer credit, increased 1.3 per cent in the third…<\/p>\n
Every time you get paid you simply withdraw or keep enough cash in order to fund your envelopes for that pay period. It is also helpful to write the amount on the envelope that goes into it each pay period to help you keep track of everything. I don\u2019t have regular income so I do not put the same amount of money into each envelope each week. Whenever I do earn any money I just take what I have and make a decision then about how much goes into each envelope.<\/p>\n
<\/p>\n<\/div>\n
Shutterstock.com<\/p>\n
Try a Zero-Sum Budget<\/h2>\n
According to personal finance author\u00a0Dave Ramsey:<\/p>\n
\u201cThe point of a zero-based budget is to make income minus the outgo equal zero. If you cover all your expenses during the month and have $500 left over, you aren\u2019t done with the budget yet. You must tell that 500 bucks where to go. If you don\u2019t, you lose the chance to make it work for you in the areas of getting out of debt, saving for an emergency, investing, paying off the house, or growing wealth. Tell <\/strong>every<\/strong><\/em> dollar where to go.\u201d<\/strong><\/p>\n Basically, zero-sum budgeting forces you to allocate all of your dollars to something<\/em>, whether you use the money for bills, debt repayment, or for savings. All of your dollars. <\/em><\/strong>According to many budgeting experts, money \u201cwithout a job\u201d will likely get spent \u2014 often carelessly.<\/p>\n Once you\u2019ve created a new budget with updated categories and dollar amounts, you need to compare that budget to your actual earnings. In the best-case scenario, you\u2019re spending far less than you earn and can immediately begin allocating your surplus funds to debt repayment and\/or savings. In the worst-case scenario, you\u2019re still spending more than you earn and you need to make additional cuts for your budget to work.<\/p>\n Since zero-sum budgeting uses last month\u2019s income to pay this month\u2019s bills, you\u2019ll need to get one month ahead on your finances to make this work. Getting one month ahead can be accomplished by saving one month\u2019s expenses in your regular savings account and using those funds for the following month\u2019s budget.<\/p>\n If you already have at least one month\u2019s expenses saved, you are already a\u00a0step ahead of the rest. Simply use those funds to pay the expenses you\u2019ve outlined during the next month\u2019s budget<\/em>, and sock this month\u2019s income <\/em>away into savings for use during the following month.<\/p>\n<\/div>\n If you only make the minimum payments on your debt because you don’t think you can afford to pay more, you might be able to find more cash in your budget.<\/p>\n According to Statistics Canada, as of the end of 2015, the average Canadian earned $943 a week, or about $49,000 a year. Now subtract income tax, Canada Pension Plan and Employment Insurance and that worker brings home $37,604 a year, or $3,134 a month.<\/p>\n The average current monthly payment on a new vehicle in Canada is $570 a month for a loan, $490 for a lease. That $570 a month loan payment represents 18 per cent of the average Canadian\u2019s take-home pay. If you lease, it\u2019s 15.6 per cent of take-home.<\/p>\n If you\u2019re looking for extra cash in your budget, examining your expenses should be the place to start. Here\u2019s one great place to look: your vehicle. Is there any possibility you could downsize to a smaller, more fuel efficient vehicle, buy a quality used vehicle rather than a brand new one, move closer to work, car pool, or take transit? Here\u2019s another way to think about this: the average Canadian car loan payment is $570 per month. If someone invests this from age 25 to 65 in mutual funds or an index fund and receives an average rate of return of 11% (what the S&P 500 has done over the past 70 years), they will have over $4.2 million at age 65.<\/p>\n A\u00a0simple, bare-bones budget can be highly effective as an aggressive savings plan, but also if you experience a job loss, take a pay cut, or need to pay down debt. Even if you don\u2019t need to go bare bones now, you never know when you will. For freelancers or for the self-employed, planning your spending around a basic, bare-bones version of your budget modified each month based on your fluctuating income – is a flexible way of ensuring you are living within your means.<\/p>\n To figure out where your money is going, break out your\u00a0bank and credit card statements from the last few months. Put all of your regular expenses in common sense categories and tally them up. Some potential categories can include things like food, utility bills, transportation, clothes, restaurants, and rent or mortgage. Create other categories as needed and figure out how much you\u2019re spending in each total for the previous two months. Make sure to include debt repayment in its own category so that you know exactly how much you owe each month.<\/p>\n Once you\u2019ve categorized your spending from the previous two months, it\u2019s time to see what you can reasonably eliminate. This is essentially eliminating everything down to the \u00a0\u201cbare bones\u201d.<\/p>\n Essential expenses are things like your mortgage or rent payment, utilities, and transportation costs, while non-essential expenses include new office outfits, coffee at Tim Hortons or Starbucks, and new home d\u00e9cor. Basically, anything you could live without is a non-essential expense, so keep that in mind as you figure out how to cut everything down to the bare bones.<\/p>\n Once you\u2019ve categorized the needs vs. wants in your budget, it\u2019s time to create a new monthly budget based only on your basic, core expenses. Everyone\u2019s bare-bones budget will look different, but most will follow the same general outline. We all need a place to live, the utilities turned on, basic transportation, and food in the fridge, but everything else is optional. Your bare-bones budget should reflect that.<\/p>\n<\/div>\n It can be hard to stick to a debt repayment goal, especially if it requires being frugal and making choices about the best ways to spend your money.\u00a0To keep motivated, try the concept of a debt \u00a0thermometer chart to track progress and<\/p>\n Each link in the thermometer represents a specific portion of your debt. As an example, suppose you have $5,000 in debt, you create a chain of 50 links, whereby each link represents $100 of your debt. As you pay down that debt, you remove one link. It\u2019s a great visual motivator \u2013 as the chain gets smaller, so does your debt.<\/p>\n As you pay off a portion of your debt, colour in that portion on the debt thermometer or ticker. By the end, you should have a fully coloured thermometer. \u00a0Feel free to download these templates on Pinterest <\/a>to\u00a0make your own.\u00a0As you color in each section on the thermometer, you can actually see — and celebrate — your progress.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":" Canadians have a love affair with cheap – affordable debt. According to Statistics Canada, in December 2016, total household credit-market debt reached $2.004-trillion, with $1.31-trillion in mortgages and $590-billion in credit cards, car loans and other personal loans. Household credit-market debt, which includes mortgage loans and consumer credit, increased 1.3 per cent in the third…<\/p>\nShutterstock.com<\/p>\nFind Extra Cash in Your Budget<\/h2>\n
Shutterstock.com<\/strong><\/h5>\n<\/div>\nRead: 30 Clever Ways to Make Money\u00a0Online<\/strong><\/a><\/h3>\n
Create a Bare-Bones Budget<\/h2>\n
Shutterstock.com<\/p>\nTry the Debt Thermometer Concept<\/h2>\n