Inside: Taking the first steps to building wealth using a personal, household spending plan and a One Number Solution; how to track spending without a budget.
If you follow IG Stories at all, you might have seen that we have decided to change things up with our financial planning lately. I also recently polled my newsletter subscribers and was pleasantly surprised to hear that a majority of them are interested in building financial abundance and ‘budgeting’.
Today marks Day One of what I hope will be a full series that sheds light on finances and planning and how we’re taking steps to change our relationship with money.
A little back story before we get into today’s financial update: a decade ago, I never dreamed I’d be writing this post. And a little known fact is that before I landed on writing DIY Passion, I stopped and started two other blogs. One was about cupcakes (which is why you’ll now see more baking and home cooking on the site) and the other? It was about money.
We were so far in debt in our twenties that I can remember not spending $2.50 for a bus ride and walking home in the rain. Read more about the steps we took to dig out of the six-figure debt.
I won’t rehash all of that, but safe to say we persevered and now live mostly debt-free. The couple exceptions are Dan’s current car loan (which is more than half paid) and our mortgage, which we want to have paid off in the next five to seven years. Lofty goals for sure.
Even with having no real consumer debt and living within our means, we found we were still feeling ‘unwell’ when it came to finances. After some careful reflection and considered thought, we both came to the conclusion that we were still ‘poor’ in our minds. We are still having trouble cutting a cheque for the basement renovation because we’ve never spent that kind of money before on something that wasn’t 100% necessary.
Even though we can afford the renovation, we were (and are) still holding back. I knew there had to be a reason for it. So we decided to bring in some help and hired our first Money Coach.
A lot of people think a Money Coach is a financial planner – someone who will look at your assets and liabilities and then tell you where to invest your money or how much insurance to buy. And while April is helping us with that to a certain extent, she’s really helping us come up with a spending plan that will eliminate the guilt we feel around our money.
I her words ‘we are going to spend our way into abundance’. Sounds nice, right?
She’s not selling us on commissions-based investments or GICs or anything like that. She’s not even putting us on a BUDGET. She did do a full forensic analysis of all our bank and credit accounts for four months to come up with our ONE NUMBER. It’s the amount of money we have to spend every single week that we don’t have to track or log or justify to anyone.
Our One Number has been set at $460/CAD per week.
Our One Number covers:
- retail purchases
- convenience foods (like coffee and work lunches)
- restaurants and weekend activities (like when we go to the water park or the zoo)
It does not cover:
- gas or car repairs
- mortgage, utilities, insurance
- business expenses
- home repairs, maintenance
- pet care (because right now, we are in a stage of life where our pets cost us more than our groceries some months)
- day care costs
We’ve been using our One Number for exactly one week. Today, we’ll take out our One Number again in cash and go through another week using it and see how much is left over.
How did we do? As of today, we still had a whopping $263.15 cents left for the week. We managed to buy coffees, work lunches, have an entire Saturday where we ate breakfast, lunch AND dinner out and we picked up some weekly grocery necessities.
We didn’t do a big grocery shop, which is why I think there is so much left over. I’m eager to see how things start to even out over the course of the month.
So this first post is quite lengthy, given that I’m introducing you to the program and our spending plan. I’ll update again next week with how things go!
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