Budgeting Investing

Our Investment Portfolio Example and Spending

A lot has changed over the past 12-months. Mainly; Mrs. got pregnant, we started investing in cryptocurrencies, and planned for a long-term leave from work that will start really soon. In this update, we will share our latest portfolio strategies and our spending for the previous year.

We built our own investment portfolio but if you are looking for a more hands-off approach, we suggest Wealthsimple.

Given everything that is coming up soon and the slight changes in income that will follow, we beefed up our emergency fund and are holding most of our investments in non-restricted accounts to be able to withdraw if needed.

By holding most of our investible assets into TFSAs (Roth IRAs) we benefit from tax-free growth and do not have to pay any taxes on the dividends we receive. The best thing is that we can withdraw any amount at any time, tax- and penalty-free.


What does our investment portfolio look like?

Currently, we are each holding our targeted asset allocation and do not plan to withdraw anytime soon but still like to have the option.

For Mr., we try to keep a portfolio holding in 40% American stock market, 30% in the Canadian stock market, 25% in international equities, and 5% in bonds.

For Mrs., we try to keep a portfolio holding in 40% American stock market, 30% in the Canadian stock market, 25% in international equities, and 5% in bonds. Within these, we include small play money investments such as cryptocurrencies in our American allocation and more recently, a cannabis index fund in our Canadian allocation.


Below is a breakdown of my whole portfolio, as of February 25th, 2018:

VTI ♦ 28% of my total portfolio is invested in the Vanguard Total Market ETF. I did not contribute any more money to the U.S. Total Market since our last installment in the series so my allocation actually dropped from 31% to 28%. In addition, the American market has also dropped considerably this month so I am not surprised my allocation is lesser now.

VCN ♦ 22% of my total portfolio is invested in the Vanguard FTSE Canada All Cap Index ETF. This fund also dropped considerably since the beginning of the year. Both sides of the border got hit pretty bad lately but we are not worried about our long-term prospects. We are investing for decades to come and daily movements are the last of our worries.

VWO ♦ 13% of my total portfolio is invested in the Vanguard FTSE Emerging Markets ETF. This fund performed well in the past few months, keeping our allocation steady since our last installment.

ETH ♦ 6% of my total portfolio is invested in cryptocurrencies and tokens such as Litecoins and Etherium. I started investing in cryptocurrencies with only 3% of my portfolio but this quickly grew to 8% of my total asset allocation. Even after the large swings we saw in January, my crypto portfolio is up almost 200% since last November. It now constitutes 6% of my asset allocation.

&&& ♦ 6% of my total portfolio is invested in my Employee stock option. Since this is my current employer, I will not share the ticker symbol or name of this holding. I have set up an automatic investment plan with my employer and they offer a 50% match so I went for the maximum contribution allowed.

VBR ♦ 6% of my total portfolio is invested in the Vanguard Small-Cap Value ETF. This is a purchase I have made a bit more than a year ago to tilt my portfolio towards small-caps. It worked out great so far and even if it does fluctuate more than the S&P 500, for example, it does grow over the long-term. I have not made any new contributions to this fund since it has risen beyond my expectations and kept up with my desired asset allocation.

HMMJ5% of my total portfolio is invested in the Horizons Marijuana Life Sciences Index ETF. This fund seeks to replicate the performance of the North American Marijuana Index and provides exposure to the exciting marijuana industry starting in Canada. This fund goes against all our requirements for a good ETF; it holds very few stocks (only 28), it is sector-centric, it is speculative, and it has a high MER of 0.75%. However, it is the first exchange-traded fund in Canada to focus on the cannabis industry and seemed like a fun play to make. I do not recommend this as an investment and that is why I only invested 3% of my total portfolio in this gamble. It grew to 5% of my allocation within the past months but it stays a gamble.

BND ♦ 4% of my total portfolio is invested in the Vanguard Total Bond Market ETF. My views on bonds have not changed much and I am keeping this low allocation for the foreseeable future.

VGK ♦ 3% of my total portfolio is invested in the Vanguard FTSE Europe ETF. This fund has been performing great since I bought it and have no plans to sell anytime soon.

Investing with ETFVEA ♦ 3% of my total portfolio is invested in the Vanguard FTSE Developed Markets ETF. This is an international, developed world index fund very similar to VGK since so much of it (54%) is invested in European companies.

VRE ♦ 2% of my total portfolio is invested in the Vanguard FTSE Canadian Capped REIT Index ETF. I did not invest any more into this fund yet simply because of our current exposure to the residential real estate market but plan on increasing this allocation gradually. The American version of this ETF is symbol VNQ.


Our final asset allocation

I try to keep a strict asset allocation and rebalance my portfolio about once year. I always re-invest dividends and automate most of my investment contributions on each payday but any contributions I do manually gets invested in sort to rebalance my allocation.


Current Asset Allocation Desired Asset Allocation
  • 42% ♦  US Market
  • 35% ♦  Canadian Market
  • 19% ♦  International Market
  • 4%    ♦  Bonds
  • 40% ♦  US Market
  • 30% ♦  Canadian Market
  • 25% ♦  International Market
  • 5%    ♦  Bonds


In my current situation, I should either sell some of my Canadian holdings to reinvest into the International market or I should make a new contribution and put it all into the International market to stay in line with my desired asset allocation.


Mrs. Xyz investment portfolio

My wife has a very similar asset allocation as me and has kept it fairly simple. Ever since she started her investing journey, she has held four index funds with Vanguard (VTI, VCN, VWO, and BND).

  • 34% ♦ Vanguard Total Market ETF (VTI)
  • 32% ♦ Vanguard FTSE Canada All Cap Index ETF (VCN)
  • 11% ♦ Vanguard FTSE Emerging Markets ETF (VWO)
  • 4%    ♦ Vanguard Total Bond Market ETF (BND)

These still represent the majority of her holdings. However, she recently made a few plays which literally exploded and now represent a huge portion of her portfolio.

Instead of focusing only on the main cryptocurrencies like me, she explored many smaller, lesser-known, coins and token. She took a bigger gamble for, hopefully, bigger returns. In a few months, her small initial investment grew to a whopping 16% of her total asset allocation. She is still following it closely and thinking of rebalancing soon.

In addition, 3% of her portfolio is now invested in the Horizons Marijuana Life Sciences Index ETF.


Mrs. Xyz Current Asset Allocation Desired Asset Allocation
  • 50% ♦  US Market
  • 35% ♦  Canadian Market
  • 11% ♦  International Market
  • 4%    ♦  Bonds
  • 45% ♦  US Market
  • 40% ♦  Canadian Market
  • 10% ♦  International Market
  • 5% ♦  Bonds

If all of this sounds too complicated, we suggest Wealthsimple.

Start your automatic investment account today!


How much are we spending?

With today’s online tools such as Mint or Personal Capital, it is super simple to track our spending and tracking is the first step to a good financial plan. How can you improve if you do not know how you are doing?

Looking at our Big 3 categories, we are still spending most of our income on Housing, Food, and Transport. Controlling these is the key to financial freedom. Once you understand that cars are much more expensive than they seem to be, restaurants are a luxury and housing costs can make or break your savings, you are golden!


How to track your spending


What our spending looks like for the past 12 months (in Canadian $)

Home $21,758
Food & Dining $8,285
Auto & Transport $5,014
Shopping $3,297
Taxes $3,102
Bills & Utilities $2,590
Uncategorized $1,134
Health & Fitness $1,591
Pets $1,401
Travel $1,174
Business Services $558
Personal Care $450
Total $50,354


Let us go through these expenses one by one. To begin with, our total House spending includes the $21,758 (mortgage, renovations, and maintenance) and the annual property Taxes of $3,102. This brings our total housing costs to $24,860. Almost $2,000 less than the previous 12 months.

In our Food and Dining category, we roughly spent five thousand dollars on groceries and the rest on restaurants. We cook most of our meals at home and eat out roughly once per week.


Budget Planning


To continue, our Auto and Transport category includes the maintenance, gas, and repairs of our two cars and the subway tickets we sometimes purchase to skip traffic. Each car costs us about $2,500 per year, which is amazing considering that similar cars would end up costing us over $10,000 per year in payments alone if we bought them brand new!

Our spending on Shopping is pretty high, however, this also includes all store purchases we did as gifts. We bought a few things for the Baby off Amazon and bought a new laptop this year which bumped that figure a bit. Unfortunately, my new employer does not pay for my work clothes so I had to buy a few suits this year.


What is your yearly spending budget?


On the Bills side, we include our two cell phones, home internet, and electricity. Our heating is all electric so the utilities go up considerably in the winter. Last month, we switched Mrs. cell phone plan and saved $30 per month opting for a lower data plan and my contract ends this summer so both our plans should be much cheaper for the year to come.

The Uncategorized category includes all the smaller categories not represented here. (Entertainment, Education, ATM withdrawals, or any purchase that was not automatically categorized.) The good thing is that our entertainment expenses are pretty low; we pay $10 per month for Netflix and rarely go out for expensive activities. Most other expenses in this category were very small amounts.

The Health and Fitness category represents Mrs. yoga, pharmacy purchases, and Mrs. massages. That one is pretty straightforward.

Furthermore, Pets represents cat food and one large veterinary expense incurred this year.

For the Travel category, it gets really interesting. Not too long ago, we were spending almost $10,000 per year on travel but now that we started using travel rewards for flights and hotels, we were able to drop this ten-folds! The thousand dollars we spend this year represents taxes on rewards flights and a few hotels we could not find for free.


Travel for free


Under Business Services, only products and services purchased to run this blog are included. Finally, in the Personal Care category, we included hairdressers, salons, and spas for Mrs.

Even after all of this, we still had a good chunk of change leftover. We invested most of it following our desired asset allocation mentioned above and kept the rest to beef up our emergency fund. Our future income might slightly drop and we want to have enough saved up to cover that gap.

How about you? What is your Big 3 spending categories?



Budgeting Debt-Free Living

How to Spend your Tax Return the Smart Way?

Here it is again; tax season!

While some of us, or some companies, do not have anything to pay to the taxman, most people will get a tax return once they file their taxes, although we’re still trying to pinpoint how the tax bill for 2017 is going to pan out. About 75% of American receive refunds or in other words, most American have too much taxes withheld from their paychecks every year. Most people actually plan to receive a refund each year and imagine these grand spending sprees as if it was free money.

Some companies even jump to the occasion to promote stuff like this eBay ad I have noticed last week:


What to do with your tax refund


It argues that it is time to treat yourself and holds the slogan: Turn your tax refund into your next favorite thing. This is absolutely the wrong way to approach all of this.

A tax refund is not free money from the government, it is your money you simply gave, in excess, to the government. Here is how it works:


tax refund tips


The first step is pretty straightforward; you work and earn a wage. From that said wage, your employer then takes off source deductions, in other worlds; withholds your taxes, according to your projected earnings and sends those taxes to the government. Once you file your taxes and made all your deductions, the government then compares the taxes you paid with the taxes you should have paid. If there is an excess, you get a tax refund. If there is a deficit, they ask you to pay that difference.

It is not you who should thank Uncle Sam, he should thank you!

The IRS, for example, gladly takes your money all year long and then, once you file your return, it has 45 days to process the return and issue your refund if you are owed any. All of that without owing you any interest. Tax refunds are just interest-free loans to the government.

Actually, if you are receiving a huge refund, you are probably having too much taxes withheld at source. For Americans, you can check your W-4 form and adjust your federal income tax withholding allowances. For Canadians, you can use this calculator to see the proper payroll deductions you should have.

When eBay is promoting how this is the perfect time of the year to treat yourself, it is completely ignoring the fact that this is just your hard-earned money you overpaid the government which you are getting back.


What should you do with your tax return?

Now that we have established that a tax refund is simply your own money, we can start exploring better ways to use it. Instead of spending on more stuff you do not need from eBay, you should treat this money as extra help to reach financial freedom. Splurging on lavish vacations or gadgets only sets you back and, most likely, would only make you temporarily happy without many long-term benefits.


Tax refund ideasSource: _AJL


Get a grip on your money

The first thing to do with your refund if you have high-interest loans, credit card balances lingering or old bills due is to pay those off. Put your refund to work and buy yourself some peace-of-mind with some big-time debt repayment.

The same goes for high-interest student loans. You could always refinance at a lower rate with companies like SoFi but the best would be to pay them off completely. The average individual income tax refund was about $3,050 in 2016, according to the IRS. This kind of money could really put a dent in your debts.

The next best thing to do, if you did not already address this, is to have at least 3-months-worth of expenses in an emergency fund.  Most people go up to 6 or 9 months-worth but this would take months and months of diligent savings to get there. Putting your tax refund towards your savings not only builds up a good pillow for you to fall back on in case of emergency but also puts your money to work in a good interest-bearing account.


12% of those receiving tax refunds will spend it on a vacation, and 13% on a major purchase such as a car or television. Meanwhile, 42% say they’ll save at least part of their refund. – National Retail Federation.


Invest in your future

Once your basics are covered, start investing in yourself and try to max-out your tax-sheltered investment accounts like your TFSA (Roth IRA) or your kids RESP (529) plan.  If that is already done, invest in a taxable account with brokers like Vanguard or Ally.

By investing in properly-diversified, low-cost, investments such as exchange-traded funds, you can get your tax refund to work for you and start generating long-term returns for your future self. For example, if we took the average refund of $3,050 and invest it in a simple S&P 500 fund such as Vanguard’s VOO, it would have grown to $7,655 over the last decade. That is a total return of over 151% since 2008 and that is including one of the biggest crash in American history.

If the stock market is not your thing, you could also put some of it towards your mortgage or invest in bonds, even in this low-rate environment. This is a great, secure, way to get your money working for you without taking on as much risk as an equity fund would entail.


Treat yourself

Finally, if you really took the time and steps to improve your financial picture, maybe it is time to treat yourself a little. Instead of spending frivolously on a $1000 phone like this eBay ad suggests, spend on a something that will stay with you and make you happy.

Spend on a memorable experience or something that will change you like books, courses, or adventures. Get a new outfit, get a new haircut, or take your loved one out for a nice lunch. It does not need to be much. It does not need to be expensive. Just do something you do not do too often, something special.

This way, your tax refund will be memorable and you will never forget all that excess money you gave your government interest-free, for a whole year. 🙂



Budgeting Saving

Spend on What’s Right

Don’t you wonder sometimes how to spend your money? It all seems so frivolous and abstract but spending on what’s right can actually make you happier. The small things in life can sometimes make a huge difference!

I do not know where you are at the moment but where we are from, it is snowing. It is snowing a lot and it will snow much, much, more in the next 4 months to come. When we were living in the city, we had an indoor garage and ever since we owned a house, we paid someone to plow our driveway.

Depending on the neighborhoods and driveway size, snow plow services can charge up to a thousand dollars per season. The going price seems to be driven by your driveway size, location, and supply. In our case, our driveway is 2 cars wide, we live in a lower to middle-class neighborhood, and there are a lot of farmers around us. Being in a more rural town dramatically drops the prices since farmers want to put their tractors to work during the winter. Since the supply is high, prices go down.


Why are you paying for thisWe paid this guy to do the job.


Calling the 4 major providers in our town, we got quotes from $200 up to $350 for the whole winter. It’s not a lot but it is easy to do it ourselves and save that money for something we actually value.


Why pay twice?

If you think about it; you can pay others to do the work for you, and then pay for a gym membership to exercise. Or you can just do the work yourself and get free exercise out of it.

In our region, there are, on average, 10 big snowfalls per year. All the rest do not really need plowing. This means we were paying about $20 per snowfall, even with the cheapest guy in town.

We just had our first large snowfall this week and it took me 30 minutes to plow everything. This means that $20 can be saved in 30 minutes of exercise. In other words, I am paying myself $40 per hour to get a workout. 🙂

Shoveling snow is fun and a 30 minutes workout burns about 243 calories, even more when it drops below 14°F (-10°C).

This is why, for the first time, we decided to plow our own driveway this year. This expense just did not align with our values.


It’s not about the money

Like most decisions in life, money is not the main driver. Even as money bloggers, we do not make the cheapest choices all the time. It’s all about what we value.


Your values are what should dictate how you spend your money, not just the price tag.


If you are a bit lost and have not found your core values yet, your first step is to identify the times when you were happiest. What are you doing during these times? Ask yourself what objects are required during this time and how much this activity is costing you if anything. Most of the time, you will notice the happiest moments in life are free or very cheap.

Then, identify the times when you feel the most fulfilled and satisfied. Some of the most expensive things in the world are actually pretty shallow. Will this $60,000 Hermes bag actually fulfill you or is it just a big marketing scheme?

Find out your values and associate them with the things or experiences you enjoy most. For example, some of our values are a spirit of adventure, education, and open-mindedness, so we highly value traveling. We like to go on an adventure, explore our beautiful world, and learn about other cultures. Find your own values and then try to find the things or experiences you value. Core values include:

  • Achievement
  • Appearance
  • Being the best
  • Cleanliness
  • Commitment
  • Compassion
  • Consistency
  • Courage
  • Creativity
  • Dependability
  • Education
  • Efficiency
  • Environmentalism
  • Family
  • Fitness
  • Good humor
  • Honesty
  • Innovation
  • Motivation
  • Open-mindedness
  • Optimism
  • Passion
  • Patriotism
  • Perseverance
  • Positivity
  • Privacy
  • Professionalism
  • Reliability
  • Respect
  • Safety
  • Service to others
  • Spirit of adventure
  • Teamwork
  • Worldliness

This is not an exhaustive list, write your own and add all the core values you can think of. When looking at our expenses, we could easily find stuff that is not necessarily in line with our values or stuff we could easily find better alternatives.

As an exercise, go through all your expenses last month and ask yourself if this is in line with your values. If so, spend a quick 5 minutes searching for an alternative. All you need is a quick online search to see if you are overpaying for these.


Step One: Aggregate

Once you know your values, the first step is to glance at your budget. Go through your expenses and see if you are spending money on things you do not particularly value.


Wealth consists not in having great possessions, but in having few wants. -Epictetus


You can go about this by category or, if you really want to be thorough, look at each expense one-by-one. We highly suggest you go through at least a month’s worth of transactions to spot even the small amounts which are wasted. To see all your expenses in one place, we suggest Personal Capital or Mint, they are free and highly customizable.


Why use Mint


Step two: Make it fit

Once you know your values and your spending, make each expense or category fit with some of your core values. This can get tricky, no one gets joy and fulfillment from mortgage payments. However, your home might be perfectly in line with safety, dependability, reliability, or even appearances. Our mortgage is our biggest expense and we value its resulting asset very much.


I bought some pretty good stuff. Got me a $300 pair of socks. Got a fur sink. An electric dog polisher. A gasoline powered turtleneck sweater. And, of course, I bought some dumb stuff, too. -Steve Martin


All jokes aside, going through our expenses, we can see how we align our purchases with our values. We mostly spend on food, we really enjoy discovering the flavors from around the world, spending quality family time together, and eating healthy home-cooked meals. This would correlate with our worldliness, family, and health values.


Our Expenses and Values


In this snippet of our spending, we also spent on charity, our pet, and entertainment, all things directly aligned with our core values.

Try it yourself. Going down your list, ask yourself why you did that purchase and if they are in line with your values. Start eliminating the things you do not care for or cannot answer why you bought them in the first place.


Step three: Find alternatives

Finally, you will be left with the actual expenses you value and enjoy. From there, try to find alternatives to each of them. This might be a different provider, a different brand or store… You do not need to change anything but at least you will be aware of the other options out there.

In some cases, you might find that you can get the same happiness and fulfillment out of a cheaper product and you will end up saving a bit. In other cases, you might find better, more expensive, options that you value even more. For example, we highly value skiing and spending on a brand new pair of skis last year was one of our best purchases of the winter. Even if we already had perfectly fine skis, spending more on an upgrade was worth it in this case.

After this little exercise, you should end up with the optimal spending for optimal happiness and fulfillment. Of course, this was looking backward but you can consciously think about each and every purchase you make and go through these steps quickly in your head. Hopefully, you will live a better life, save more, and be happier. Mr. and Mrs. Xyz.




How to Manage Money Like we do

Every month, we earn, we spend, we save. Preferably, you are spending less than you are earning and are building up some savings but this is not the reality for most Americans. If you plan ahead and take the time to think about your financial management, you can budget reasonable spending and prioritize savings (or debt repayment).

In our case, we are DINKS (Dual Income No Kids) and automate most of our savings and investing to (hopefully) reach financial freedom in less than 10 years and pull the plug on full-time employment before our 40s. Our money flows in a bunch of accounts and it would be hard to track without tools like Personal Capital or Mint. These amazing free tools are a lifesaver when it comes to tracking our dollars and investments!

Inspired by Apathy Ends and Budget on a Stick, we created our Money Map, which shows how and where our money flows each month.


Money flow


Starting from the top, we each have our incomes from our day jobs. Mr.’s income then gets automatically allocated to different investment accounts with TD, Questrade, and his employee stock option before even touching the bank account. For Mrs., her employer does not offer stock options, so she invests in Vanguard index funds through Questrade.

We get free commissions on ETFs with Questrade, so we invest in Vanguard index funds at every paycheck. When we invest, we follow our asset allocation to buy in any fund that would be under our target. For example, if the Canadian market is raging up but the International markets are showing some resistance, we would allocate our new contributions to our International market ETF (VWO).


Mr. Xyz Target Asset Allocation Mrs. Xyz Target Asset Allocation
  • 40% ♦  US Market
  • 40% ♦  Canadian Market
  • 15% ♦  International Market
  • 5%    ♦  Bonds
  • 40% ♦  US Market
  • 40% ♦  Canadian Market
  • 10% ♦  International Market
  • 10% ♦  Bonds


With past projects and this blog, Mr. gets a small additional income coming in each month but it is nothing considerable. This is certainly a nice little extra that he throws in his vacation fund. Apart from his main bank account, he has an emergency fund and vacation fund with Alterna Bank earning 1.90% interest.

We keep our bank accounts separate, even if we are married, just because it is simple, and we never got the need for a joint account. Keeping the finances separate takes away the scrutiny, we trust each other’s decisions and share common goals, so we leave the day-to-day transactions aside instead of constantly looking at each other’s purchases. Apart from our main bank accounts, we each have an emergency fund and a vacation fund with Alterna Bank earning 1.90% interest. We try to never touch our emergency funds unless we really need it.

Each month, we put all our expenses on credit cards to maximize rewards points. Practically no expenses go by the bank accounts except for the mortgage and municipal taxes which we share 50/50. We simply automated those payments and keep everything else separate. For groceries, for example, we will alternate the chore but no one is keeping tabs.

We each have a main card that we keep for daily spend and each goes through multiple cards per year for points. When using credit cards for all expenses we always spend money we actually have in our accounts and, obviously, ALWAYS pay the balance in full each month.

It can get really hard to track everything if you play the rewards game. We currently hold 6 different credit cards each and track our rewards through an excel spreadsheet but also suggest Personal Capital to see all your balances at one place and never miss a payment.

Using this money flow, we are able to save over half of our incomes by saving first, automating most of our finances, and spending only what is left afterward.

Do not over complicate things and over think your finances, your days are much better spent enjoying truly amazing things like nature, family, or traveling the world. Once you have a process for your finances, you can start thinking about more important things and enjoy life.


Tips to improve your money flow:

  • Track everything
  • Save first, only spend what is left
  • Do not get into high-interest debt
  • Hold some money in a high-interest savings account
  • Create multiple income streams
  • Always pay your credit card balances in full. Always

We wish you great success in your journey, Mr. and Mrs. Xyz.





Managing your Personal Finances to Maximize your Happiness

It can be hard to find how to be happy when you do not really know where you are heading. Without goals, life can seem a bit vague. Fortunately, it is never too late to find your purpose and find your true happiness.

This week, I have learned that our water tax bill just jumped from about $90 to a whopping $600 because of a small plumbing issue that was leaking fresh water down the drain twenty-four, seven for the past year!!! I never looked into the issue before I got a real incentive to do so. Honestly, I heard a strange noise coming from a pipe but never looked into it. In the end, I fixed the problem myself for a total cost of ten dollars.

Most issues can be fixed cheaply if you ask the right questions to the right people. I have zero experience in plumbing and thought I had to call a plumber. They usually charge at least $50 just to show up then, $45 to $150 per hour of labor but instead, I called a local plumber and described my problem, simply asking which parts I would need to fix it.

I then visited our hardware store and chatted with one of their oldest guys on the floor to seek his knowledge. He explained to me the proper way to attach the parts and my total cost ended up to be right under $10.

If you are ready to get your hands dirty, you can fix almost anything around the house for a fraction of the price. Ask the pros or search YouTube for some How To videos, they are some on every topic imaginable. In the end, it only took me half an hour to fix my issue.

How to fix your financesAny house owner should be attentive to his property. Listen to new noises, look for new cracks. Fixing it early on will always be easier and cheaper than if you wait until a problem becomes critical.

Moral of the story is; if something breaks, fix it now. You do not always need to outsource all your house maintenance, you will learn a lot and save a ton!


Fix your finances early on

The same goes for your personal finances, if there is a leak somewhere, fix it now. Take the time to rethink your financial life to optimize it and attain your goals faster. So many people and spending away without thinking about the true meaning of their expenses. Living their life buying things to impress people they don’t know with money they don’t have.


Goals and happiness

The first step of our financial makeover is to clearly define your goals and to create a plan to attain each goal. Money is often thought of as an antagonist, an enemy that keeps you from doing what you want to but it is exactly the opposite; Money is a tool to achieve your goals. Ultimately, money can be your tool to financial freedom. Money should make you happy, not trap you in a lifestyle influenced by peers and marketing agencies.

I suggest writing down your goals and going back on them at least once a year, depending on the time frame of your goal, to reassess.


How to have good financial goals


Having long-term goals is a great start and can be a great motivator. Retiring early, for example, is certainly a huge priority for me and this pushes me to outperform at work, pursue side-hustles, and stay on target with my savings.

However, I am also thinking of my other goals to work on projects I love, travel the world, and spend time with my family. Balancing all of these, I get to fully enjoy the journey towards early retirement while living a life of happiness.

Once this is done, start writing down everything that truly makes you happy. This might be a hard exercise but it will truly enlighten you in later steps.


what makes you happy


Track your finances

Do you know how much you are actually making per year? Do you know how much you spent on food last month?

Now that you know what your goals in life are, you need to know if you are on the right track to attain them. I highly suggest Personal Capital to track all your accounts in a simple, clean, app that lays out all your earned income and spending.

Once you know how much is coming in and where it is going out, you can then start optimizing your financial life to attain your goals. Personal Capital offers a great free tool to set monthly spending targets and easily budget all of your expenses.


Fix the leaks

Start working towards your dreams instead of working simply to pay the bills. If you feel trapped in a consumerism hamster wheel; buying things you feel you deserve since you work so hard and working so hard to pay for all those things, know that it is never too late to change. Now that you see where all your money is leaking, you can go back to your happiness list and see which expenses are truly making you happier.

Break down your expenses into 3 general categories; Activities that make you happy, Things that make you happy, and stuff you have no choice to pay for.

The latter should be optimized to maximize the other two. For example, I do not get much joy out of driving, so we own 10 years old cars that get us from point A to point B. Even if manufacturers spend billions on advertising (the big-3 spends almost 3 billion a year each), I am not inclined to spend my hard-earned dollars on a brand new car just to keep up with the Jones.

By optimizing our transportation expenses, we are able to enjoy life and focus on our goals.

To come back to our example, we have a super economical Honda Fit, but we also own a mid-size SUV that consumes twice as much gas and did cost more to purchase. It may not be the cheapest way to get from A to B but it is a great contributor to my happiness since it has all the room we need to enjoy all the outdoor sports we enjoy. Would a newer SUV make me even happier though? I do not think so.

Once you categorize your expenses, go back to your goals list and see which expense is compromising your greater life plans. Once you start patching up the leaks in your budget, you will find yourself with more flexibility, more power over your life, and more happiness.


Stay on top of things

Just like a house, your budget needs maintenance and refining. Revisit your goals and happiness list once in a while and stay on top of your finances.

Add to your lists, tweak them, and never forget to enjoy the journey.

If you are only focusing on the end destination, you will give up long before the finish line. Hopefully, you will be able to maximize everything on your happiness list while completing your goals list within the time frame you imagined, Mr. Xyz.


Budgeting Debt-Free Living Financial Independence

BMW is Your Secret to Early Retirement

Everyone has to start somewhere. No one is born a financial genius, nor does everyone have an interest in their personal finances. We all have dreams, goals, bills, and expenses. Reaching early retirement might sound impossible but it isn’t. Anyone can retire early if they take the proper steps towards their freedom.

From a young age, children see their parents swipe those magic plastic cards that let you take anything from stores. They then learn how the bank of mom and dad can pay for the movie nights and new shoes.


Financial literacy is an ongoing learning experience. Kids should start learning basics at a young age so they understand that the “Bank of Mom and Dad” has limits. – Justin Thouin


Once kids grow, they quickly learn (usually the hard way) that those magic plastic cards need to be paid back and that bills don’t pay themselves.

Unfortunately, our school system does not teach basic finances and most parents are as lost themselves so young adults start in life with little guidance.

There are so many free resources available online there should not be any excuse to know basic personal finance. We should all know how to set up (and follow) a budget, manage daily finances, invest and make our money work for us, and live under our means. Starting on the right path from a young age will get you far.


You might get 85 years on this planet—don’t spend 65 paying off a lifestyle you can’t afford. – Cait Flanders


This year, since my sister is now in her twenties and will start her career soon, I wrote her guide to start off on the right foot and maybe, one day, retire early if she wishes to.

I thought this would be a great guide for anyone who needs a small introduction to the subject. This was written for my little sister but it is for all of you to learn, enjoy, and prosper.


Since you are a big girl now, and you will soon make a ton of money, it is time to talk finance. Here is my easy guide to freedom and financial bliss.


Step 1: Aggregate and create a budget

You cannot start saving until you track your money so let’s break the fear of looking at your monthly statements and get rolling!

  • Create a free account on Mint or Personal Capital and add all of your accounts (Banks, Loans, Credit Cards, Assets, and Investments). This will give you a snapshot of your current net worth and track all your transactions for you. Net worth is like your current financial health. Any credit and debt will pull it down and any assets will pull it up. Once you see where all your money is going, you can start optimizing your finances.
  • If you have too many accounts, try to consolidate them and close extra accounts to simplify your cash management. It can be practical to have one savings account per goal (Vacation Fund, Car Fund, Education Fund…) but it can also get complicated to optimize your finances that way. Open a high-interest savings account (we use Alterna Bank at 1.90%) and start saving!
  • Use credit cards for their good side, not their dark side. Always pay the full balance every month and use cash-back or travel reward cards to enjoy the best perks. That minimum payment they print on your bill is NOT the amount you need to pay. You will not pay a dime in interest if you pay the balance in full but you will definitively pay a ton if you only pay the minimum.
  • Once you are ready to write up a budget (or type it up), you can start with your fixed and variable expenses. In one section, write down all your recurring costs such as rent, internet, phone, electricity, and other bills. You can always cut these down but it will be harder than cutting down your variable expenses. Then write down all the other stuff; shopping, food, entertainment, gas… The best tip I can give you about budgeting is to include savings in there somewhere. Set aside money first and live on the rest.


Step 2: Lower expenses

Marketing is everywhere and companies are constantly coming up with new schemes to get you to spend your hard-earned dollars. It is important to revise and be very strict about your monthly reoccurring expenses. Now that you will see them all on your budget, you can revise each item one by one and see if 1; you really need that and 2; is there a way to lower that expense. Here are some tips arranged by budget category:


Bills & Utilities

  • Drop your cable plan and just have the internet. We cut the cable long time ago and now only use Netflix. It has better content, no ads, and is about 8 times cheaper than cable.
  • The single best thing a person can do to keep costs down is to reduce how much they spend on housing. Your home will be a huge expense throughout your life so only buy what you need. If you take the biggest mortgage the bank is ready to give you, you will end up spending half your pay on your house and you will be stuck to live paycheck to paycheck like everyone else.
  • You will find that many people in expensive neighborhoods are strapped in debt to the neck and stuck trying to keep up with the Joneses. Living in a low cost of living area not only costs less but also has much less competition and incentives to get all those fancy things. You will see once you start working that most people give in to lifestyle inflation; once they get a new raise or a bonus, their spending goes up. Instead, try living on what you need and saving the raises.


Auto & Transport

  • I have one word for this: BMW. Yeah, that’s right, Bike, Metro, and Walk everywhere you can. The less car-dependent your life is, the easiest it will be for you to control this expense. Cars are a huge expense for average Americans ($720 per month on average) but you do not need to spend nearly as much to get from point A to B.
  • If you do get a car, get one that suits you need and nothing more. Having a car bigger than you need or new than you need is just a hole in your pockets. Buying 5-years-old cars will literally save you thousands. Let the others take the depreciation loss and keep your dollars for something else more interesting.


Food & Groceries

  • Limit eating out to social activities and do not eat out just out of laziness. Meal planning and a good cookbook can easily cut down your restaurant outing to once per week and save you thousands per year.
  • Find the right mix of online stores, grocery stores, and bulk stores. We found that most household items are cheaper on Amazon and ethnic supermarkets offer the best produce at the lowest prices. Due to the home-cooking customs of the non-westernized world, their customers buy a lot more fresh produce so stores waste less of it and can buy in bulk. Those savings are going right in your pockets and you will eat a much healthier diet including more fresh produce in your meals. Their meats are also very cheap and they offer more variety than most chain supermarkets.



  • There are so many fun things to do outdoors if you let yourself wander.
  • Find local festivals and tastings in town.
  • Have house/dinner parties instead of going out with friends.
  • Go out with only a 20$ bill and leave the cards at home.
  • Eat at home. The more you get cooking, the better it gets.
  • Stop those impulse buys, always shop around and wait a few days before making any purchases.
  • Always compare on Amazon and craigslist before buying larger items. You can also apply the previous point by leaving items in your Amazon cart a day or two before checkout.
  • Do not think about the great sales stores are always advertising. Everything is 100% off when you are not buying it.


Step 3: One month of expenses + $1,000 buffer

It is important to have some breathing room and not live paycheck to paycheck. The first step is to have enough in your checking account (or savings) for 1 month of expenses + a 1,000$ buffer for unexpected emergency expenses. You will have a budget now so you know exactly how much you spend per month.

Once you are comfortable with this, you can even upgrade to a 3-month emergency fund.


Step 4: Eliminate debt

Your credit score is a number the credit bureaus (Equifax, TransUnion…) come up with to help lenders judge risk. Having a good score will make you save thousands over time. Not only do some lenders use your score to determine your interest rate but even some non-lenders also use your credit score to determine prices like insurance companies, landlords, utilities, etc… We have lower insurance premiums because of our score, get access to super cheap credit easily, and gained access to premium travel cards.

Scores are calculated based mainly on payment history, available credit limits, and age of accounts.

Basically, keep high limits but do not use them (try to use less than 20% of your credit card limits month-by-month), pay back your balances in full each month, and keep older credit products open. To eliminate debt as quickly as possible, start paying off the highest interest rates first (Credit Cards, Personal Loans, Lines of Credit).


Step 5: Get your money working for you

After you saved enough for emergencies (roughly 3 months of expenses) you can start investing to get your money working for you. Throughout the last century, stocks have outperformed other investment types and our tax system also encourages investors to partake in the equity market.

You could always try to pick stocks and hope to pick the winners but just think about it; out of all actively managed mutual funds, a whopping 82% of them did not constantly beat the index over the last decade. If even professionals cannot guess the next winners, I do not recommend you try to.

Since good stock picking is so hard and actively-managed funds the banks promote have large fees. An easy solution is index investing. This refers to simply buying all publically traded companies to benefits from the winners and average out the losers. You can start indexing through mutual funds or exchange-traded funds that track the index for very little fees.

Over the last 20 years, $10,000 invested in an S&P 500 index fund would have grown to $65,225 after a 0.05% annual expense ratio.

One quick tip; control your emotions! When your portfolio value goes down, you can keep investing and buy things at a discount. The market will go up and down and eventually, you will collect high returns on the upswing from the cheap shares you obtained when everyone else ran away.

On average you will hopefully get more than 5-6% per year from your investments and if you are saving enough, this will grow to a small fortune. All you need is a balance of a US Market Fund, International Markets Fund, and a Bond Fund.

  • TD Canadian Bond Index Mutual Fund (TDB909)

        or Vanguard Total Bond Market ETF (BND)

  • TD U.S. Index Mutual Fund (TDB902)

        or Vanguard Total Market ETF (VTI)

  • TD International Index Mutual Fund (TDB911)

        or Vanguard Total International Stock ETF (VXUS)


If all of this sounds too complicated, we suggest Wealthsimple.

Start your automatic investment account today!


Long-Term Retirement

Pre-Tax accounts like RRSPs (401k) are great to save on taxes once you make good money. There are also great advantages to use a TFSA (Roth IRA) to minimize your future tax bill.

Using this strategy early should set you up pretty well to retire. You can always access those funds if you wish to retire early as long as your income drops once you take it out, you will not be taxed much.

This may sound crazy but saving at least 50% of your monthly income is not impossible. It would be a huge step towards reaching early retirement. You do not need to work until you are 65 years old and simple, small tweaks in your spending habits could make a huge difference over your lifetime. Keep at it and you will get there while increasing income and decreasing expenses.

If you have been in the same job for a while, consider looking for new opportunities while you are employed. Yearly raises in your current job are usually very small compared to the salary bumps you can get from changing companies.

Once you have accumulated roughly 25 times your yearly spending, your investments can now sustain your monthly expenses. Congrats, you can now retire! You can then have the freedom of doing whatever you want with your own time. If you still enjoy your job by then great, if not, you can stop.


Step 6: Enjoy the journey

It may get rough at some point, especially if you have a lot of debt to pay back, but your finances can be kept simple. Have fun talking about money and reward yourselves when you reach certain milestones. The first big one is net worth zero and from then on, freedom is in your hands.

Live a life of abundance and luxuries but know that there is always a frugal way to do so. Approaching the big 3; Housing, Transport, and Food with frugality will drastically cut your expenses and make the difference between working until 65 or 45. You do not need to be cheap, just be conscious about your purchases.

As the American Dream thought us, we always need the bigger, newer, shinier thing. However, this is just a path down Forever Debt Road. Be mindful of your purchases and buy the things that make you happier but you do not need to keep up with anyone. Enjoy the present and enjoy life, most of the best things in life are free.

This is my road map to freedom and I wish you the best of luck in your wonderful career little sister.




Keeping a Monthly Budget as a Couple

With today’s online tools such as Mint or Personal Capital, it is super simple to track a budget and hopefully, to follow it. We have been keeping a monthly budget for a few years now and our most recent focus is our savings rate. By cutting out and not spending on stuff that does not bring us happiness, we are able to live off half our salaries while living a lavish life (to our standards anyway). We aim to retire very early and we gear our lifestyle towards this goal to be able to save enough to sustain our us in the future.

So many people are simply living their life according to marketing or are influenced by peers. You need to think about the core reasoning behind a purchase; Will this make you happy. 🙂

The principal wealth killers in America are houses and cars. Most people over-spend on their home, buying too much house, thinking it is an investment. With a clear budget, you can see if you can actually afford your home. Preferably, you should not spend more than 25% of your salary on your housing costs.

Buying a brand new car every few years will also greatly limit your savings abilities. With the average new car price at a whopping $33,560 (according to data from auto researcher Kelley Blue Book), no wonder it can put a strain on your budget! Putting this in perspective, a $33,560 car could be resold after 5 years for an estimated $12,488 (according to Edmonds) giving you an actual cost of ownership of $21,072 every 5 years or $4,214 per year to get a brand new car every half a decade. If you were to buy a 5-year-old instead and sell it in its 10th year for half the price you would effectively only spend $1,248 per year. Assuming a $12,488 purchase and $6,244 resell. By driving a 5-years-old car, you are effectively losing 4 times less to depreciation!

Most people fall for the brand-new car trap, even money bloggers,  but if you restrict yourself to a cash diet it suddenly becomes much harder to fall for. Try to pay for cars out-of-pocket and skip the financing. You should also skip the first few years and buy used cars. Unless cars are your true passion and a new car will truly make you happier, they are not worth it.

By cutting down both for our housing and transportation needs, we were able to save. Those two categories alone minimized our expenses and increase our savings drastically. We spent a total of $23,411 on our house in the past 12 months (including mortgage, renovations, and maintenance) and still own two cars from 2007.

If you are not already tracking your income and expenses, you can start for free with Personal Capital or Mint and really know where it is all going. Since we have been tracking our spending for a while now, we are openly sharing it with you today 🙂


What our spending looks like for the past 12 months (in Canadian $)

How to build and follow a great budget

Home $23,411
Travel $9,582
Food & Dining $8,681
Auto & Transport $6,167
Shopping $3,313
Bills & Utilities $3,269
Health & Fitness $3,217
Taxes $2,595
Uncategorized $1,096
Fees & Charges $611
Education $669
Entertainment $649
Personal Care $641
Pets $463
Gifts & Donations $374
Business Services $237
Misc Expenses $174
Total $65,157


Going over these one-by-one will give you a great idea of how we plan our spending and live our life. To begin with, our total house spending should include the $23,411 (mortgage, renovations, and maintenance) and the taxes of $2,595 since those are our annual property taxes. This brings our total housing costs to $26,006. We started renting out our spare bedrooms on Airbnb last month so we are now generating a slight income from our property.

Our second largest expense, and the one we enjoy the most is travel. We do spend a considerable portion of our income on traveling the world but it is our passion and obsession. There is no reason to save every single penny you earn to retire early if it makes the journey miserable.

Becoming financially independent takes time. You need to enjoy the journey as much as you will enjoy your final destination. Money is just like a river, it flows and you cannot keep it stalls, otherwise, it stinks! Out of this $9,582, we got refunded roughly four thousand dollars for business travels.

Whenever we need to assist a conference, we stay a week or two extra at our own cost, but the flights are still covered. We are also drastically cutting down on flight expenses for our next trip with the help of generous credit card rewards. The next 12-months should be much better on that front.


Find your card today and start earning those SWEET miles!


In our Food and Dining category, we roughly spent seven thousand dollars on groceries and the rest on restaurants. We home-cook most of our meals to save a ton on restaurants. In addition, we recently started cutting down on meats to lower our total grocery bill to about $400/month.

If these numbers seem high to you, note that we live in Canada and food costs are considerably higher than in the United States. Using a grocery list sample, food is roughly 29% more expensive in Canada so our current spending is comparable to a $425/month American grocery.

To continue, our Auto and Transport category includes the maintenance, gas, and repairs of our two cars. It also includes the subway tickets we sometimes purchase to skip traffic. We roughly spend two thousand dollars per car. There are no monthly payments or interest on them since we paid for them in cash.

We also minimize depreciation by keeping our old cars. Both models are 2007 and still run perfectly so we really do not feel the need to change them.

Our shopping spending is pretty high, however, this includes all store purchases we did as gifts. We also get some work clothes purchases reimbursed so we got back about half of this amount.

On the bill side, we include our two cell phones, home internet, and electricity. Our heating is all electric and we do not pay for water or cable TV.

In the Health and Fitness category, we have spent about two thousand dollars on ski lift tickets. Since we both really enjoy the outdoors, it is worth it. The rest was spent by Mrs. at yoga studios.


Meditate, relax, and pay your taxes.


Furthermore, the Uncategorized and Misc spending are mostly ATM withdrawals for small purchases like coffee and the few shops that do not accept credit cards.

Our Fees and Charges are mostly credit card annual fees. However, they mostly get reimbursed since we take advantage of promotions to get free premium cards. We also used our line of credits (we each have separate ones) for short-term cash-flow management but we mostly stay debt-free (other than the mortgage).

The spending on Education is more of an investment than anything else. Furthermore, our Entertainment expenses are mostly Netflix and video games.

In the Personal Care and Pets categories, we cannot really cut anything. We do not go to $100+ hairdressers or visit the nail salon every week. These expenses are for our basic personal care and pet food.

For the Gifts and Donations category only includes the cash or transfers directly sent. The items we purchased as gifts would be under shopping. Finally, the Business Services section includes all the expenses for this blog and my other projects.

After all of this, our biggest category is still Savings! It is not included in our spending but we do save the majority of our income and invest mostly in index funds for our future selves. 🙂

The government is smart, they deduct our income taxes right out of every paycheck. That way, they benefit from having our money now, rather than later. You should do the exact same with your savings! We deduct a set amount, every paycheck, and automatically invest it to maximize our returns over the long-run.

We hope you enjoyed and please comment away.

Mrs. and Mr. Xyz.




Budgeting Saving

10 Ways to Save Money and Live on a Better Budget

best free budget tool onlineLiving below your means is the key to financial independence. Whether you are trying to get out of debt or you are in the accumulation phase, you always need to earn more than you spend. If you earn less than you spend, you will fall into an ever-increasing amount of debt.

With a good budget and proper planning, anyone can succeed.


Think about your life as a business, you always need to turn out a profit.


If you think about your personal finances as a business, would you invest in yourself right now? As a business, you need to put yourself accountable to not only make money but also to return a profit after expenditures. For example, if you have start-up costs (student loans) you should have a viable repayment plan that will rapidly turn your finances positive. You need to boss around your finances, don’t let them boss you.


Think about your fixed costs

The first step to a good financial plan is knowing your fixed expenses since they are easy to track and usually essentials (Mortgage/Rent, Phone, Electricity). You can make a list of all your recurring bills and see if there is anything you could cut or downsize without hindering your well-being.  For me, the obvious things were cutting cable and reducing my bill from $60/month to $8/month with Netflix. I also bought a cheaper house that I could afford and lowered my electricity bill with smarter house temperatures.

There is plenty of ways to save on your fixed costs that might be slightly less convenient but offer great returns. Living a frugal lifestyle does not mean living a boring lifestyle. I suggest you find a proper balance in frugality to optimize your savings and happiness. Here are 10 tips to become the boss of your finances!

10 frugal tips 1. Getting a non-smart phone can lower your bill to as low as $10/month. If you are currently paying more than $50/month for your current plan you could be saving a lot over a year and even more over decades.

A great alternative to this is to have a smartphone without a data plan. With wifi readily available everywhere you should not have a problem to connect with the world without paying the high premium of data plans.

 2. To help pay your housing costs, you can get a roommate if you have extra rooms. This one might be more of an inconvenience and lifestyle change than other suggestions. Nevertheless, it can make you save around $300 to $1000 a month. I can imagine the drastic change in lifestyle it would be to have 4 or 5 roommates.

I had one roommate and I truly enjoyed it. Having a roommate gives you company, someone to eat suppers with, someone to help out with the chores… I actually preferred living with a roommate than alone, just for the social aspect of it. With the possibility of dropping your shelter-related expenses by half, this is one of the most effective ways to lower your fixed costs. Now, for example, we listed our extra bedroom on Airbnb to earn a small income on the side.

 3. You can decrease your electricity bill easily with a few simple steps. First, lower temperatures in the winter and higher ones in the summers can make you save hundreds per year. If you live in a cold climate like me, your electricity bill probably doubles in the winter time. Taking simple steps like setting your thermostat to 64°F instead of 70°F can make you save as much as 15% off your heating bill.

In the summer, you can close blinds, open windows and use natural shade to cool off your house instead of AC and you can save another 100$ per summer there. This is assuming 1 window mounted AC unit and 6 months of summer but savings go up even more with central AC or if you live in the desert. You can also save by closing lights you do not use, taking shorter showers or lowering your water heater temperature.

 4. As any business would do, you need to negotiate. You would be surprised how much you can save off recurring bills by simply calling your provider and negotiating. Call in the beginning of the month since most agents have monthly refund limits and call on a Friday since it is the day people are the happiest (more likely to give it to you when they are in a good mood). Be prepared and tell them about a competing offer.

I called my phone provider once saying a competing offer that was offering a super low price (with the fine print: for the first 3 months) I ended up getting that price matched without any fine print or promotional period. You can easily cut by almost half any service-based bill if you have good arguments and sound like you are ready to leave the company.


Hi, I’m having trouble paying my bills and I would like to know if you have any promotions or specials that could lower my bills…

– Sorry, there are no promotions currently available in your area.

Oh! Then I would like to cancel my service…

– One moment sir, I will transfer you to our customer retention specialist.


That’s when you can really negotiate and lower your bills. Try to get the retention department on the line since they are the ones with the power to truly reduce your bill. Stay polite and simply compare the competition offerings and you should be able to save some good bucks.

The biggest advantage of cutting or reducing your fixed costs is that you will then be able to plan a fixed investment schedule and increase your savings rate drastically. Remember that as a business, the best customer is a recurring customer. Seeing your personal finances like a business, your best way to save is to reduce your recurring expenses.


Variables are controllable

Your variable expenses should be tracked and budgeted. They are mostly controllable spending that you can easily manage and cut with a little willpower. The first step is to track all of your expenses (I recommend Personal Capital) then see what are the easiest things to cut out or reduce.

how to save on restaurants 5.
For me, the quickest fix was bringing my own lunch to work. Any fast-food will not be as healthy as your own cooking and if you go to better restaurants you will not find much under $10.

Working 5 days a week for 50 weeks, that is $2500 a year you could save just by bringing leftovers or sandwiches to work. I will let you calculate how much you would save if you usually go to mid-range or high-class restaurants! 🙂

 6. Then there is a ton of socializing that can eat through your budget even faster. Dates can always be done at home or in a good quality, reasonably-priced restaurant. When going for drinks with friends, you can always vary your routine and invite people over to your place once in a while. Just a few more nights at home can make some nice room in your budget.

 7. Groceries can be one of your biggest monthly cost (for us it is about $500/month). For bargains on real healthy food for your home cooking, I suggest you try shopping at an ethnic market. Instead of major grocery stores, try to find a local ethnic grocer since they are cheaper on fresh produce and meats.

Major chains usually make more profits off pre-packaged foods and simply use their produce section to make you feel hungry and then buy something pre-made. Clients in ethnic communities usually are on tighter budgets and, in most cultures, cook much more from scratch with raw ingredients. With bigger volumes, those markets usually can offer cheaper prices on all that good freshness.

best budget tips 8. As much as healthy eating, exercising is important to stay in shape and happy. You can always shop around and find cheap gym memberships (around $10/month for the most basic gyms). However, free is even cheaper than that.

I suggest using local parks and the national beauties of nature around you to exercise. Parks can be great for running, walking, biking, or even exercising on the children monkey bars. In national nature parks, you can hike, bike, walk, rock climb, some might even have lakes to swim in.

 9. When shopping, I try to always wait a day before buying anything. Then, ask myself if I really want it. Clothes, electronics or house furniture should all be thought about twice before buying. You can compare anything in a store with its online version to save a lot off the ticket price. You can even check on Craigslist for some cheaper finds.

Almost everything can be bought online and it literally takes seconds to shop around. Sometimes, we save as much as 50% off the brick and mortar store prices doing this. There is even a site that searches for spelling mistakes and typos in eBay listings to make you save a ton on auction items.

 10. Luxuries can be cut but I suggest simply reducing your spending in this category. We all need a little fun in life! Absolute frugal living might be the absence of all non-necessities. If you try to go cold-cut and make extreme changes to your lifestyle, you will more likely fail. Drastically cutting down your budget might work for a few months. However, you might get overwhelmed and switch back to expensive habits.

I prefer replacing luxuries than cutting them. For example, cable is a luxury that I value a lot. I follow a lot of TV shows and do not think I would happy without it. However, there is a great alternative to cable that costs almost 10x less; Netflix. I get all the shows I want, without ads, for only $8/month. That is a great investment for me. You can find endless replacements like this for a fraction of the price, comment below your finds to share.

I hope these 10 quick frugal tips will help you put money aside in your budget and, hopefully, increase your savings rate.  Live Happily, Xyz.




6 Ways to Find your Perfect Budget + Free Printable Budget Spreadsheet

For most people, starting a budget can be hard and even harder to follow through. I think that a simple personal budget is always better than no planning at all and can drastically help your savings in the long term. Finding your own way is the first step to a clear and sound financial path. I will share a few tips that helped us a ton. If you just want your free budget worksheet, you can scroll to the end of this article.


Try Our Free Budget Template #Budget #DIY #Frugal #Savings


Keep it simple

Most budgets include too many things to follow or are simply too tedious to maintain. I suggest a simple, easy to track, budget that you can actually follow month after month. I included a free copy for you to use at the end of this post.

The first step before starting your plan is to know where you are currently spending your money. Using a free tool such as Personal Capital will greatly help you track your income and spending and has a lot more to offer to improve your financial well-being! I suggest you get the Personal Capital app but if you really want something just to track your spending, a simple budget app or Mint will do the job. Once you know where your money is going, it is time to categorize your spending and create a simple budget.

Going through each little details will make it impossible to maintain and follow through. I suggest keeping track of major categories such as Groceries, Auto, Home, but skip the subcategories like Home Insurance, Home Maintenance, Home Lawn Care.  You can use this free template and modify it for your own needs.


You need to account for the main categories of spending (in order of importance):

  1. Fixed Expenses (Rent, Utilities, Payments…)
  2. Variable Life Expenses (Groceries, Gas, Entertainment…)
  3. Investments (401k, Roth IRA…)
  4. Savings (Emergency Fund, House Down Payment…)
  5. Guilt-Free Spending (Restaurant, Gifts, Shopping…)


I would say that number 1, 3 and 4 should be fixed, I know exactly what my mortgage payment is every month and I invest a fixed amount of my salary every paycheck to get my employer match and maximize my tax benefits. Then 2 and 5 are the most variables and the easiest to cut down. We eat well and spend about $500 a month on groceries but on the other hand, we have cut down restaurants and entertainment. If you are struggling to cut down, you can follow my money-saving tricks to learn easy alternatives to your current spending habits.


Try Our Free Budget Template #Budget #DIY #Frugal #Savings


Keep your budget updated

This is the part were simpler budgets overcome larger, extended, worksheets. Going back to your file and seeing how you are doing over multiple months, or years, will keep you on track and give you a perceptive on where you stand. You can track it manually in excel or you can let aggregators like Personal Capital or Mint do it all for you.


Keep goals

You should also include goals into your personal plan. Having a goal in mind will motivate you and including it in your budget will show you how attainable it is. To come back to my previous point, keeping track of that goal month after month will motivate you to continue forward and push until completion. An easy way to track goals is having separate accounts for different goals. We have a vacation account where we save up for our next trip!


Stay out of debt

Budgeting is a perfect tool to increase your savings but your priority should always be to repay high-interest debt first. If you have credit card debt or high-interest student loans you should definitively include those in your budget and prioritize them. I also recommend you take a look at my tools to repay your debt faster.


Keep revising and rethinking

Once you completed your budget, rethink each and every category and their respective spending. You can make it a goal to reduce certain expenditures or to cut them out completely. From my personal experience, the easiest things to cut to reduce your spending are:

  • Replacing cable with Netflix (around $50/month in savings)
  • Bring your own lunch to work (around $200/month in savings)
  • Not driving to work (around 200$/month in gas savings depending on the distance)
  • Inviting friends for drinks at your place instead of bars (around 50$/night out in savings)


For each expenditure you should ask yourself; do I really need this?


As Maslow’s Hierarchy of Needs states, your physiological needs such as food, clothing, shelter are the most important. The second tier is safety; this includes insurance, utilities, and so on. Anything after those can be reduced, cut, or accepted as guilt-free spending. Once you attain this mindset and choose your luxuries, you will enjoy them even more. You should also take concrete steps to save money if you really want to cut down on your expenses.


Keep it loose 

If you are not using a free tracking tool like Personal Capital, you will probably not get all your figures to the cent on the first try. Keeping some wiggle room in your budget will make it easier to follow. Keep in mind that setting unachievable targets or cutting unreasonably could demotivate you. We all need to budget for fun and luxuries.


Reverse budgeting

When you get more advanced or if you are already comfortable with your abilities, you can try to reverse budget like me. I use reverse-budgeting where I plan to save first, then spend what is left. If you are like me and save more than half your income, you might want to plan things differently and start with a fixed amount of savings each month. This might force you to be frugal and inventive but it can drastically increase your savings rate!

1. Investments (or Debt repayment)

2. Essential Expenses

3. Discretionary Money

The whole point of a budget is to get you to save more (or repay debt faster) so why not prioritize that in the first place. Paying yourself first optimized debt repayment and savings goals and can be set automatically. The reverse-budgeting method teaches you to live within your means and avoid debt.


Get your free budget worksheet

No email, no sign-up or anything. Just click to view it in Excel.


Good luck and happy budgeting, Xyz.