Why Should you Read my Financial Advice?

I don’t mean to set a pompous tone, like Stephan King’s On Writing. Seriously, though, why should you read my words about money? What have I accomplished? What makes me a credible source of information?

Financial success is subjective. Allow me some wordsmith to share my successes, lending itself to my reason for advising you about finances:

1) I am Debt Free

Yes, I went to school. Yes, I have a bachelor of education from the University of Alberta. Yes, like many other students out there, I took out student loans. I paid off my loans before I left university. How did I do it?

I took advantage of opportunities. On a bi-semester basis, the University of Alberta would host a huge for its apparel. Hoodies were going for 20 bucks a size. I purchased several hoodies, of different sizes and colours, and posted them on Kijji for a little higher than the price of the University of Alberta’s bookstore. I kind of sold each hoodie. I kind of made bank on this investment.

How else did I become debt free? I started working when I was 12 years old at Tim Hortons. Too young to wield a knife, but still old enough to pour a cup of coffee, Tim Hortons taught me essential life skills. And I was able to save money (and later crash a nice sports care. Visit the Annex for this story here).

During my expensive- piece-of-toilet-paper education, I also had the opportunity to study Chinese abroad in Taiwan for 8 months. My program offered a 2000 dollar scholarship and a student visa. Though I wasn’t supposed to “work” on this type of visa, I took up tutoring jobs, where I was paid upwards of 200-400 dollars.

Through tutoring one individual, I met another man who was wealthy, and he paid me loads of cash to speak English to him. All I had to do was talk to him. He was a big guru manager of some Taiwanese hotels in China. I remember him handing me thick stacks of cash.

In the end, I never spent the scholarship money, and because I ran into the right opportunities, I was able to pay for my entire trip and another semester of studying in Taiwan. When I returned to Canada, I put a significant chunk of cash towards my student loans– by that point I was at around 20000 in debt.

2) In the Past, I was very frugal

I basically followed these tips to the letter when I was enrolled in university. Today, however, I live very comfortably. I would recommend following these frugal tips until you have paid down all your debt.

3) I Never Spend more than I make

I cannot remember the last time I ever dipped into my savings account, except when I was paying off my student loans. My salary is enough to cover my expenses, even with inflation costs factored in. And I don’t make very much! My excel spreadsheet coins my salary at 36000USD a year tax free.

With this salary, I do not have to be frugal; I live very comfortably today. I save approximately 50% of my paycheck every month.

4) I have a budgeting system

Monitoring spending is essential to saving in my opinion. I utilize an excel spreadsheet to save my funds. Want more details about my spreadsheet? Click here for some depth.

When creating a system for budgeting, is it important to habitualize using whatever system you are comfortable with. Without it becoming a habit, you will lose the importance and system behind your creation.

Eventually you will find that budgeting helps show where you are spending too much money (or, lord bless you, not enough money), and then you can allocate and make adjustments the following month. Having a monthly budget is useful, but building in a networth calculator is also imperative.

5) I know my networth

I think many people look over this important word: networth. Your networth is how much cash you are worth, with all your assets calculated into the total. Calculating your networth also allows people to make choices on their funds based on a yearly perspective, it makes you feel like your money is working towards something bigger. For example, if I have my milestones (budget) set for each month, then I can see how much money I will make that will contribute to my total networth.

It also provides a good snapshot of which parts of your capital are working for you (IE: invested in other assets, such as stocks, or rental properties), and shows how your money is constantly growing.

None of these accomplishments above make me a qualified financial advisor, but I do know how to save money, prosper, and hopefully impact this earth one day with my dollars (what is my end goal anyway)?

Perhaps following my advice is worth it to you, because in the end, all you lose is a few minutes of your day just to read my words.

 

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Using Excel as a Balance Sheet

Why should you consider my financial advice? What are my qualifications? What makes me a credible source (or am I credible at all)? Click here to see my why. Onto the purpose of this post: balance sheeting, and budgeting.

Before I flex the spreadsheet, please allow me to explain some financial terminology that may have some readers boggled (skip the bold below if you already know these terms):

Profit: how much money you make

Expenses: how much money you spend

Assets: items, stocks, or other things that make you money

Forecast: an estimate of how much money will be spent

Actual: how much money was lost or gained

Year to Date:How much money you will make the entire year, should you remain on budget.

Our life expenditures equate to our expenses. Our salary, assets, interest, and rental income all contribute to the profit side of our balance sheet. Ideally, you want your profit to be larger than your expenses. That way, you can invest money into other assets to make more money.

In my opinion, before getting started with investing, it is imperative that we have a budgeting system in place that gives us overarching view of where our money is going. Here’s a picture of my automated Excel Spreadsheet that I’ve used for two years now. If you would love to have a copy of this spreadsheet with all the formulas created by yours truly, please leave your email in the comments, and I will get back to you as soon as possible.

Another source I have used in the past to budget is www.mint.com. Be weary though, Mint requires a lot of your information, which is something I am personally not comfortable divulging, hence why I created a Excel Spreadsheet.

I hope this post provides you with a useful resource, and defines some murky financial vocabulary for those that are new to investing.

 

 

 

 

 

 

6 Frugal Tips

Temptation haunts us from the woods, ready to pounce our meek hearts. Money is no exception; God wants us to give, but we need to make something in order to give it. I wish the picture below had God written in a big bubble letter.

Here’s some tips below to help save a few bucks (and preserve the earth, too):

1. Know Your Why

Simon Sinek speaks a lot to the idea of knowing your “why.” Being frugal is not easy in a consumerist society, understanding why you are trying to save money is proceeds before getting started on any of the frugal strategies listed below.

Not sure how to figure out your why? Brainstorm. Make a mind map, scribble down any idea that comes to mind, assign point values to your brainstorm. See if you have convinced yourself of your why before you plunge into frugal living. Understand the big goal you have behind being cheap, some of the questions may help you flesh out your reason why:

a) are you trying to reach a networth of a certain value? Why?

b) If you are Christian, is your goal in alignment with God’s plan, or is it greed that is driving your motivation to save? Have you prayed about it?

c) How are going to impact the world with your savings?

d) Are you trying to be financially free, so that you can pursue other passions?

These are but a few questions you could ask yourself when embarking on a frugal lifestyle. If you don’t know why you are doing something, then you aren’t completely sold on the idea to begin with!

Last but not least, make sure you are tracking your progress. Here’s a look at my automated Excel Spreadsheet with definitions on financial terms to get you started. Please ask me if you have any questions.

Enough babble, now for the tips:

2. Reuse plastic bags

A plastic bag is offered at almost all grocery stores. Subway puts to-go orders in a plastic bag. Your Chinese delivery food probably arrives bagged in plastic. These bags can be reused. Subway bags are used to stow clumps of urine and poop from my cat’s litter box. Yes, the bag is then dropped into a garbage bin outside my apartment.

Not only did I give the Subway bag an extra life, I also try to extend the life of my Ziploc baggies. Dry goodies are typically placed in these bags, and are easy to reuse and remove the crumbs if the snack isn’t too mooshey. I have saved 10-20 dollars a year on reusing plastic.

Need a garbage bag? No problem, use a grocery bag instead! Save some money on garbage bag, and put all your trash into a grocery back that you were charged for at the store.

3. Turn off your lights!

If you aren’t in a room in your home, close the circuit. No, seriously, make a conscious effort to think about turning off the lights in your home. It amounts to huge savings for planet earth, and on your electric bill.

4. Borrow Books

Public libraries are heavily under utilized these days. Go to your school library and browse the print. Keep reading, but save a tree, and a couple bucks on a book.

5. Displace Water

Open your toilet’s tank, find a brick, or fill a water bottle with water, and drop it into the tank. It’ll displace the water upwards, causing less to swirl down with your business below.

If you are really extreme, you could use a yellow is mellow rule– I did this in university when I was living the super cheap life (I left Uni with 0 bucks in loans, and a few grand to my name to boot. Read how I did that here). Yellow mellow knocked off some of my student loans and is a reason I am debt free at the age of 26.

Displacing water saves our earth and some dollars.

6. Collect your Dripping AC Water

Air Conditioning uses a lot of water. Typical AC units dispense water somewhere. Find out where that location is, stow a bucket underneath it, and collect your prize. The water can be used for a multitude of purposes; you can even Berky filter it! Either way, don’t let those drops of AC water go to waste.

7. You get Paid Last.

Tithing is budgeted first before I pay myself. God is always paid first in my books, it does not matter if I do not make a profit that month or not, God is always paid his share. He only asks for 10%, and when I give 10%, I am still amazed at how he helps me manage the other 90%!

My point isn’t to tell you to tithe, but it is to tell you to give. You must give a portion of the money you make, you cannot become wealthy if you are blinded by greed. Show the world that you aren’t blinded by greed, and give! Give! It makes you feel good, and God has this odd way of ensuring that your giving never goes unnoticed.

I always pay 10% of my net profit for that month to God, and, to be honest, sometimes I give back upwards to 1000 dollars USD a month, because God decided to have my investments increase in value.

If you have employees, you get paid last. If you are donating to a reputable organization, you get paid last. Give and the world will give back to you (I know that for a fact).