Monthly Saving Report – July 2020

Going solely by my budgeting spreadsheet, we saved a total of $3,873 in July. In reality, it was a bit of a mess from a budgeting perspective, and might be the month that broke my system! Additional income, large unbudgeted expenses, and having to deal with some finances back home in the UK meant that I’ve probably got a lot of cleaning up to do in August 🙈.

Income

Our joint income after tax as a couple (an Executive Assistant and a Customer Success Manager) was $8,495. As usual, I choose not to list our separate salaries for work confidentiality reasons.

This month, I also did some freelance work, building a website for a friend’s business in the UK that brought in £2,000 gross (about. $3,400).

This means our total income for the month was $11,895, although this will need to be adjusted for tax down the line.

Credit Card Debt Free!

First, a quick backstory. Initially, I had earmarked the additional income for dental work. I’ve always wanted Invisalign braces to improve the appearance of my teeth, but as it’s mostly cosmetic, and quite expensive, it’s been low on the list of priorities. However, our current work benefits will cover 40% of the work, meaning they would cost $3,000 – the lowest price I would probably ever have access to, and conveniently close to the $3,400 pulled in for the freelance work. I was going to send the money over from the UK, pay for the braces, and consider it cancelled out.

However, there is one area of money management that we have been a little head-in-the-sand about – our UK finances. We have some small monthly outgoings that are manageable through some light freelancing that I do periodically. Before we moved to Canada, however, we did not have much expendable income, and had outstanding credit card debt of around £5,000 between us ($8,000, more than the amount of cash we moved here with!). As we couldn’t really afford to pay it off in big chunks, we spent years using 0% balance transfers to move the debt over to a new credit card provider, and just pay off the minimum each month. It worked for us at the time, but it was stressful knowing that at some point, you would have to face that debt head on.

I bit the bullet last year and sent some precious Canadian dollars home to pay mine off as the 0% period was expiring. Candice’s remaining balance of around £1,400 ($2,400) still had 0% interest running on it until the end of this year. Even though the £2,000 earned through freelancing was supposed to be sent over to Canada to pay for my teeth, it just seemed like there would never be a better time to just deal with the debt we knew we had to face up to. We are no longer in financial difficulty like we were at the time, and the delay in paying it off was largely an administrative one (as well as the additional dollars in the bank looking great!)

So, we made the decision to pay the whole balance off in one go. Which made us officially credit card debt-free! If you have never had to do it before, sitting in front of a laptop and paying off a debt that has hung over you for years is the best feeling! It’s a mixture of relief, pride, and accomplishment – a weight comes off your chest, and you feel a little more grown up inside.

(We do still have student loans to pay back, but…. another day.)

Fixed Expenses

Our fixed expenses went up around $140 this month – mainly owing to the upfront costs of switching cell providers and getting a new phone and contract. It’s my first contract in over 10 years, and I would almost never recommend taking one out as the provider almost always wins in the long run! However, I have access to great EPP deals at work, so I was able to get a new flagship phone for a fraction of the retail price, and double my data for the same monthly cost – I really value having a good camera on my phone, so locking in to a contract was a gamble worth taking for me.

Sports is also back, so DAZN is back on the list. I can’t live without sports, and my girlfriend can’t live without Netflix, so they are costs we just have to live with.. I haven’t touched my guitar or my Xbox in about 6 months however, so I’m seeing $23/month of wasted expenses there – one to look at cutting out next month.

Rent	$1800
Car insurance	$155
2x phone bills, plus one off fee for new phone (minus $75 covered by work)	$170
Hydro	$29
Internet	$101
Netflix subscription	$17
DAZN subscription	$20
Strava subscription	$4
Fender Guitar app subscription	$6
Google One subscription	$3
Xbox Live subscription	$17
Total	$2322

Living Allowance

We had two trips planned for July – 4 days in the campervan in the Okanagan, and a multi-day hike along the Juan de Fuca trail on Vancouver Island – that we would be using money from our Holiday Fund for, so I budgeted less for our regular living allowance this month, to account for the reduced number of days we would be living off it.

First payday	$650
Second payday	$600
Total	$1,250

This was added to our pre-paid Koho card that we use as a living allowance account.

As a reminder, any unbudgeted spending that happens is taken off the savings total for the next month, which means I have to keep a close eye on what it being spent outside of this account. The formula looks like this:

Savings for the current month = Income minus Fixed expenses minus Living allowance minus Un-budgeted spends from the previous month

As I already alluded to at the top of the post, this did not go as planned this month – let’s dig into it.

Un-budgeted Spending

Last month, we spent $1,052 outside of our living allowance, which at the time I felt was bad budgeting and money management.

Well! We totally blew that out of the water this month. I had already decided to leave the British Pounds income in our UK account and use it completely pay off Candy’s outstanding credit card debt, so the monthly costs of my Invisalign braces were now not budgeted for.

On top of this, we bought new bikes for ourselves. This has been a long time in the making, as the commuter bikes we had bought when we first moved to Canada no longer suit our lifestyle here. We both wanted bikes that would us up for trail and touring days – I trawled Craigslist and Facebook Marketplace every day for around 3 months, but with COVID, the bike market (second-hand and new) are crazy right now, and it’s difficult to get a deal. In the end, we had to bite the bullet and buy brand new bikes, as summer is beginning to run out and we want to make the most of it before the endless rain of Fall hits Vancouver. I don’t regret buying them – they were expensive, but I know the they will last us a long time, but to say I hadn’t budgeted for the cost would be the understatement of the year – we only had $355 in the “Big Purchase Pot”, the savings pot dedicated to this kind of purchase.

The bikes costs $2,736, and we sold our old bikes for $300 each. I emptied the Big Purchase Pot too, so the net un-budgeted spend on the bikes was $1,781.

Even worse than this, our other un-budgeted spend went through the roof during the month. Total un-budgeted spend (including the bikes) was $3,183. I clearly don’t have a handle on our outgoings right now. I spent some time thinking about it, and I think this is down to a few factors:

1. We are not being strict enough with the credit and debit cards we have for each type of spending, letting expenses slip through the cracks.
2. I haven’t done a good enough job of sitting down with Candy and making sure we are aligned on the approach we’re taking.
3. I’m underestimating our regular living costs. On the flip side, we are spending more than we need to – too many takeaways and other expenses that add up.
4. The big one – the system I’m using is probably too complex, which is causing me to lose my handle on it.

I’m going to spend some time in August reflecting on the above, and seeing how I can simplify and optimize our budgeting going forward. Even though the savings figure for July is great on paper, it was a terrible month that means August savings are going to be very slim indeed.

Total Left To Be Saved

For the month of July, after paying ourselves first (living allowance), and our fixed expenses, we had the following left to be saved:

$8,495 – $2,322 – $1,250 – $1,052 = $3,873

Splitting The Savings

I got rid of the Gifts pot completely this month, we weren’t keeping on top of it, and it didn’t seem to be serving much of a purpose. The pots we currently have are:

• Joint Savings
• TFSA (Johnny)
• TFSA (Candy)
• Vacation Fund
• Emergency Fund – we didn’t have this separated from our savings until earlier this year.
• Big Purchase Pot – this seems redundant at this stage, as in real terms, this pot is waaaay in the negative after the bikes purchase, but I’ll continue contributing anyway.
• Capital Gains Tax fund – I’m due to pay CGT on some sold company shares in 2021, so I’m putting money away each month to ease the blow come tax return time.

Joint Savings	22%
TFSA (Johnny)	22%
TFSA (Candy)	22%
Emergency Fund	5%
CGT Coverage	3%
Big Purchase Pot	5%
Vacation Pot	21%
Total	100%

The percentage going into long-term savings (Joint Savings + both TFSAs) fell significantly this month (66% down from 75%). This is something I just felt we had to take a hit on this month because of the excess spending that I will need to clean up in August. We also have a 2 week vacation in August that I want to make sure we are fully budgeted for, so I increased the contribution from 10% in June to 21% this month.

Summary

Our final savings for July 2020 are as follows:

Long-term savings goals and investments	66%	$2,556
Emergency Fund	5%	$194
CGT Coverage	3%	$86
Budgeted spending pots	26%	$1,007
Total	100%	$3,873