Good Morning Green Panda Friends and welcome to the last week of February.  Hopefully soon the snow will start to melt, the grass will start to show, and the flowers will begin to bloom.  Soon we will come out of hibernation from the cold winter and we will start going out more often as the weather gets warmer.  I don’t feel that winter is a physical hibernation because I hate the cold; I also think that winter is 3 month hibernation for my money.

I don’t like to go out (other than for necessities) in the cold winter months and therefore I spend less money as both my body and my budget go into hibernation.  I don’t know about you but I spent a lot less money in the winter months than I do in the months during spring and summer.  During the warm months I like to go on vacation, I like to go out for dinner with my friends, and in general I like to be out of the house more often, but all of this costs money.

No Spending Spree

You may remember from a previous post that in January I decided to start a 6 month No Spending Spree  so that I can save money for my upcoming trip to Italy in May.  I am proud to say that January was a very successful month for my No Spending Spree.  However, I cannot say the same for the month of February.  In early February I received the devastating news that one of the girls who was planned to go on the trip to Italy can no longer afford to go on vacation.

As soon as I heard the news that our trip to Italy will be postponed for one year I almost immediately started to ease up on my No Spending Spree and I started spending more money. I definitely feel bad for my friend, she had an unexpected financial emergency that is expected to cost over $15,000 and therefore she cannot afford to live up to her financial obligations as well as spend another $2000 on a trip to Italy.

As I started to slowly spend more money in February than I was spending in January I started to wonder…why do people love spending money?

Spending Less Money

I am happy to say that the first 30 days of my strict No Spending Spree has definitely changed my personal views about saving money because I was spending less money. I began to realize how carelessly I used to (sometimes) spend money.  I took little things like buying sweets, splurging on snacks, and renting movies on a weekly basis for granted.  I don’t actually need these items to live; I just like spending money on them.

Now as March approaches I am definitely spending less money.  I think that it was a little bit unrealistic to want to stop spending money altogether cold turkey.  Trying not to spend any money is like trying to quit smoking or trying to eat healthier…it’s a progress because our life style cannot change overnight.

I don’t think that I will ever go back to spending money on things that I don’t need because I have now adjusted to my lifestyle of spending less money. I have increased my biweekly savings and I am also maintaining a rolling monthly balance in my bank account.

Have You Changed Your Spending Habits during the New Year?

Photo by Images of Money

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Many of the readers of this blog have graduated from college and have gone on to find work in their respective fields. Now that you’re working you’re likely wondering what’s next? You want to know what to do with your money now that you’re working full time?

I wanted to write about getting the most out of your entry level salary while living in a big city.

Entry level salaries aren’t the greatest paying. College graduates still need to survive and enjoy life in their 20s. This is why I really wanted to write about how college graduates can stretch their entry level salary as much as possible. Don’t worry because today I will refrain from typical advice that everyone else wants to give you like telling you to stay at home with your parents until you’re 40.

How can you push that entry level salary to the max in a big city?

Use public transportation.

I totally recommend that you use public transportation when you start working in a big city. Believe me I feel the same way most of you do about taking the bus. The bus can take too long and it’s filled with smelly people. However, the savings are just phenomenal. If you drive to work, you’re going to spend more on parking than you would on taking the bus both ways.

Enjoy entertainment on a budget.

You spent 4-5 years working hard and pulling all nighters, so obviously you’re going to want to enjoy your life a little more now. I’m not going to preach to you and give you judgmental advice. No matter what a personal finance blogger tells you, you will still drink on the weekends. This is why you need to enjoy entertainment on a budget.

The best way to still meet up with your friends on the weekends while trying to stretch your entry level paycheck is to apply some of the following tips:

1. Pre-drink at a friend’s place.
2. Stay in once in a while.
3. Go out during week nights.
4. Host a backyard party.

How will you save money on entertainment?

Save money on rent.

Once you graduate from college and starting working as a young professional, rent will probably become your largest monthly overhead expense. It’s critical that you figure out a way to save money on rent. I’ll give you my best tips on saving money on rent:

• Find roomates.
• Consider a smaller unit.
• Move a bit further out of town.

Buy good clothing on a budget.

I always try to dress my best when I go out because you want to be taken seriously. The thing is that it’s difficult at times to be trendy while trying to live in a big city on a tight salary. This is why it’s fun to try to find ways to get good clothing on a budget. I personally prefer to buy clothing from respectable companies, but not over-priced brands. I also recommend taking advantage of seasonal sales. I try to buy my clothing in bulk. When I feel like changing my wardrobe I go out and buy new clothing in bulk so that I’m ready for the next season.

Those are my top personal picks for stretching an entry level salary while trying to live in a big city. How will you survive?

Good Morning Green Panda Friends. I hope you all had a really great weekend.  Today we are continuing on with our budget themed posts with some helpful hints on how to achieve financial independence and financial responsibility.  We have previously discussed how to create our personal budget, how to manage our money so that our bills are paid on time, as well as how to budget in saving for retirement.

If we are young and still in school, living at home, or starting to enter into the workforce there is probably not a lot of room in our budget for extra activities.  If we are moving out of our parents house for the first time we are learning to live on our own and we are also learning to budget for the first time.  If we are starting our careers after college and entering the full time workforce we may be faced with financial independence for the first time in our lives.

Achieving Financial Independence

The key to financial independence is to enjoy life while maintaining our financial responsibilities.  Very often young people who make the transition from a budget loving student to a full time pay check mismanage their money.  It’s not (entirely) our fault, maybe we just never had the opportunity to learn about money.  It’s only normal that we are going to make mistakes but the true sign of financial independence is for us to learn from our mistakes.  I definitely made my share of financial mistakes in my early 20’s from racking up thousands of dollars in debt to spending everything I earned and living from pay check to pay check. These are common mistakes made by young twenty-something’s who are learning to manage our own money for the first time.

Creating and maintaining our monthly budget is about so much more than just paying our bills.  It’s also about making room in our budget for the things we love.  Here are some helpful tips to help us achieve financial independence while making the fewest mistakes possible as we learn to become financially responsible.

Have at least 3 months of rent saved before you move out. This covers our first month’s rent as well as any deposit that we have to make. If we can only afford to pay one of our monthly bills on time it should definitely be our rent.

Always Split Your Bills in Two. If we make payments onto our monthly bills with every biweekly pay check our bill balances will be more manageable.  It’s definitely easier to pay $75 biweekly rather than $150 one shot for our monthly bills.

Save in an Emergency Fund. This is also known as our financial reserve.  We can save cash money in a high interest savings account and then use it any time in case of a financial emergency.  Even saving $10 per pay check can add up to a lot in our emergency savings fund.  This can be used if we ever need to make a last minute trip home for a family emergency etc.

Keep Credit Card Limits Low. Our total available credit should not be more than 30% of our entire annual income (not including our mortgage).  This ensures that even if we max out all of our Credit Cards we can still afford to pay them off and void excessive interest charges.

Photo by Stew Dean

We all build bad habits in our younger days. Some of us start to smoke. Some of us decide that working out isn’t a good fit for us. Others start jamming on the junk food. We all make mistakes that we learn from. Unfortunately, there are some mistakes that we don’t even realize. There are mistakes and bad habits that follow us for many years to come. Today we’re going to destroy some financial habits.

What are some financial habits you NEED to stop right now?

Not keeping track of your finances.

Do you keep track of your finances? Do you know where your money even goes? Do you know why your bank account’s always at zero?

I’m not a believer of writing down every single expense because that’s flat out boring and very tedious. Instead I have a general overview of where my money goes depending on my income and financial goals. Whichever way you decide to keep track of your money, it’s very important to see how you’re spending your money. This way you can try to spend money on what matters to you instead of wasting it.

Rewarding yourself for every little thing.

It’s great that you met a goal and lost 5 pounds, but do you really need to reward yourself with a new laptop? Do you always spend money on rewarding yourself? I find that young people are a bit too eager to spend money as a reward for every time they do something above-average. It’s good to reward yourself. There’s just no need to go broke trying to make yourself feel good all of the time.

Spending a fortune on girls.

I get it. Girls go for guys with money. Actually, wait a minute- do you really want to date someone that idly stands by as you foolishly spend money? I personally don’t.

I see guys spending a fortune on girls all of the time. It’s really sad actually. I’ve never been a huge fan of this. As much as I enjoy spoiling my girlfriend, I’ve never been one to spend my savings to impress some chick that only wants me for my money. This is a habit that needs to be destroyed right now, if you don’t want to be broke by 30.

Putting off looking over your finances.

It’s a harsh slap in the face when you check your debit card statement to see you pulled out an extra $100 for drinks late Friday night. Once again you don’t need to be meticulous with every single penny. It just helps to know what your balance is and what you’re dealing with.

Racking up your credit card debt.

Whether it be sheer laziness or a complete lack of spending control, your credit card debt needs to be eliminated, not increased. You already know that credit card debt is bad. I’m not going to nag on you. This is just another reminder to watch that credit card debt.

Checking your email constantly.

It’s great to be in touch with people and to respond promptly to messages. It becomes a problem when you are constantly checking your email all day. This is time and energy that can be transferred to other areas of your life. You won’t miss anything by not checking your email.

Not planning ahead.

Who am I kidding? Planning is boring. However, if you fail to plan you plan to fail (or whatever that quote is). I used to hate planning. Then I realized that there are many financial goals I would love to meet but couldn’t unless I set out a way to get there. It’s very beneficial to plan a little bit. This is how I’m able to go on trips pretty often.

Those are the main negative financial habits that you need to get rid of right now while you’re still young. Did I miss any?

Good Morning Everyone.  It’s February 13^th and this means that some of us who hate the cold have been cooped up in our homes and apartments for almost 2 months.  I don’t know about you, but I am definitely starting to experience some anxiety from cabin fever.  The few months after the holidays can be a big strain on our budgets as we rebuild your savings and pay off our Credit Cards. We don’t want to be stuck inside because that can get very boring very quickly.  However, maybe our budget just doesn’t have the flexibility right now to spend money on having fun.

Here are 5 Tips on How to Have Fun Without Spending Tons of Money:

1. Spend those gift cards.  It’s a great idea to ask for Gift Cards as a Christmas, Birthday, or Graduation Present because we can enjoy them throughout the year.  We can save them in case of an emergency or we can spend them when retail stores are having various sales throughout the year.  Giving Gift Cards as a Present is also very economical because if we live in a city away from our family it doesn’t cost more than the price of a postage stamp to mail them.

2. Hang out as a group. They say that one is the loneliest number; I say that one is the most expensive number.  I agree that sometimes we just need to spend some quality alone time, but doing everything by our self can become very expensive.  If we want to go out we can call a group of friends, get together for dinner or something, and all split the costs.

3. Go to the movies. If we go to the movies on a Friday or Saturday the evening can definitely start to be very expensive with the cost of the ticket and the cost of the food and snacks. However if we go to the movies on a night when the theatres are offering a discounted price on the ticket cost and we skip the snacks we can definitely save a lot of money and still have a good time. Many movie theatres also offer clients the option to purchase their tickets in advance at a discounted price or as a package deal.

4. Cash in your rewards points. If we are a member of a rewards program maybe it’s time to check our rewards points balance and cash in our points for gift cards, coupons, money, and other rewards.  Maybe we can get a free dinner, maybe we can get a free flight, or maybe we can just go shopping and get some free stuff.

5. Get outside.  It is still a bit cold outside but the air is fresh and the sunlight will do us some good.  We can bundle on the layers and go for a walk.  As we walk around our neighbourhood we can discover new stores, restaurants, and other fun places.  I like walking around in winter as long as the sun is shining and there is not a snow storm. As I walk around I picture my neighbourhood in spring when all the snow has melted and the flowers begin to bloom; it gives me hope for the warm weather to come.

Photo by Eden Pictures

Good Morning Everyone. Today we are continuing on with another budget themed post.  Today we are discussing how to fit everything into our monthly budget.  Regardless of how much money we make we can always make room to fit all of our goals into our budget.

Some people don’t invest because they don’t know where to start.  Some people don’t save because they don’t think that they make enough money, and very often most people spend all of their monthly income.  It’s human nature; we can always find something to spend our money on. The key to sticking to our monthly budget is to spend what is left over only after we invest for the long term, save for the short term, and pay all of our monthly bills.

Saving and Spending with our Monthly Budget

As a general rule we should spend 70% of our salary and save 30% of our total net (after tax) monthly income.  I know some savvy savers who live on only 50% of their monthly income and they save one full pay check every month, however for many of us (especially if we are still in school) this is not possible.  Of course we want to have the least amount of expenses as possible each month, but we don’t want our lifestyle to suffer at the cost of trying to save money.

The key to smart budgeting is to make sure that when we spend money the cost is worth it.  If we overspend in one category of our budget then we have to save somewhere else.  It’s not important (and usually not efficient) to try and micro manage our monthly budget; we have to look at the big picture.  If we pay expensive monthly rent to live close to work or to live in a really nice neighbourhood for convenience then we may not need to have a car or to buy a monthly bus pass.

Our Budget Can Have Investing Too

The 30% of our net salary that should be saved can be divided between saving for the short term in case of an emergency, saving for our 5-10 year goals such as buying a home, as well as saving for retirement.  We should always be saving on a regular basis for the short, medium, and long term; however the percentages allocated to each time horizon depend on our personal goals as well as our age.

If we are very young we may not need to allocate a lot of money towards saving for our retirement, because over the long term even small amounts of savings can add up to large amounts of money over the long term.  We may want to focus on short term and medium term investing when we are younger because we probably have many other personal goals to achieve before retirement.

As we grow older and we start achieving our short term and medium term goals we can start to allocate more of our monthly savings towards retirement because for many of us retirement is our ultimate long term financial goal.

Photo by Borman

Good Morning Green Panda Friends and Happy First Monday of February.  It’s past the first of the month and that means that rent is due, and so are all of our regular monthly bills.  Today we are discussing why it’s important to pay our bills on time and how we can budget our income to make sure that we don’t miss any of our payments.

It’s important to pay our bills on time because our hydro, cable, and electricity bills are a form of credit.  If we miss a payment it can definitely affect our credit score in a negative way.  This past week I had a client come and see me who was retired and living on a fixed income.  He needed help with his budget because he doesn’t have enough income to cover all of his monthly expenses.

When I asked where his money was going each month he said that it was being spent on utilities and maintenance fees to keep his home in the suburbs up and running each month.  I don’t understand why one person who lives alone needs a big house with a pool and a double garage.  Extra space just means extra expenses for heating, cleaning, and up keep.  When I asked him if he wanted to sell his house and downgrade to a more affordable home he said no, he was very happy and did not want to move.

Keeping his home was putting him in debt, and borrowing to make ends meet is never a smart financial strategy.  If we can’t even afford to pay our monthly bills we are never going to be able to afford to pay our monthly bills and repay a loan at the same time. Budgeting is about making sure that we always have more income coming in than we have going out to pay our monthly bills and expenses.

3 Helpful Tips to Make Sure Your Bills Are Paid On Time

1. Make Payments Every 14 days. It is a lot easier to divide our bills into two smaller amounts than it is to make one large payment each month.  It is a lot easier for record keeping purposes to set up automatic payments each month and have our bills directly debited from our bank accounts. However it may not be what is best for our budget.  If we don’t have the money in our bank account to pay the monthly bill in full then our payment will be returned due to non sufficient funds (NSF) and that is very harmful to our credit score.

2. Check The Total Amount Due. Before we make any monthly bill payments we should always double check our last statement.  Even if we miss our payment by $0.03 our bill company will mark our payment as being late; and this will show as a missed payment on our credit bureau.

3. If We Can’t Afford It Then Make Cuts.  If we can’t afford our bills every month there are only two ways that we can fix this problem….earn more income each month or make cuts to our monthly expenses.

Photo by Camera Eye