Boost Operational Budget Efficiency with Legitimate Online Signatures in Canada

How to eSign a document: online signature legitimacy for Operational Budget in Canada

welcome to the budget mom youtube channel i'm camiko love from thebudgetmom.com and today we're doing another real life budget and our first canadian community member so when danielle submitted her information using the pages in the free resource library it came across in canadian dollars which i found very interesting so i chose her budget and information for today's video in order to compensate and to show canadian dollars versus us dollars we put canadian dollars in red and then our us dollars in just plain black so the worksheets and that where i'm going to be showing today the budget by paycheck method worksheets are going to be in us dollars but when i'm showing danielle's information on my forms here you're going to see both canadian and us dollars in those different colors so it's not a huge difference i mean hundreds of dollars between some of the information that she sent to me but we thought it was a big enough difference to go ahead and differentiate between the two so today's video is all about financial priorities specifically between paying off debt and sinking funds because danielle is dealing with a lot a lot of things that she wants to accomplish she recently sold a home bought a home so there's a lot of things going on there so that's what we're going to be looking at today danielle's information inside of the budget by paycheck method [Music] so when we're looking at danielle's information her um story so danielle and her husband sold a house they made money off of that cell they then bought a more expensive house and they needed a 30 000 deposit in order to secure that loan in that house purchase so they took out a second mortgage that second mortgage is what they use for that initial thirty thousand dollar deposit on the new home and then anything m that they made from the sale of their home they applied to the new home but because it is a bigger house there are some additional costs and like i mentioned we're going to be looking at her wants between wanting to save a lot for different sinking funds and her second mortgage and more specifically her debt so that's what we're going to be tackling today now danielle is a senior marketing strategist that's her job so let's look at her information now we actually changed out my ugly purple pad for my budget by paycheck method steps and our wonderful graphic designer made this new one for me for our youtube videos so the first step in the budget by paycheck method is discovering your why so let's look at danielle's a little bit of her backstory and her why so here is a little but her why is me and my family so that's her why is her family my biggest worry is that as we grow our family we'll go back to struggling which is why i have been so focusing on paying off debt and saving at the same time i think the stability for my family currently husband and pup is really what is driving me but i'm also looking ahead at ensuring that we can provide for our children once the family grows a little background information for years we have struggled living paycheck to paycheck two years ago we sold our home and managed to put some of the money we made to our new home and save for some for emergencies now that i'm making a decent paycheck i wanted to get our finances in order and start to save for our future we are currently trying to get pregnant for the first time and want to have stability in our lives for when i go on maternity leave in canada we can take 12 to 18 months leave receiving employment insurance at 55 percent of our pay during this time and for expenses that come with having a child i want to avoid going back to struggle of paycheck to paycheck i found tbm just before the summer of 2019 and the method has changed my life so that's a little bit of her background story selling the home getting the new home using some of that money that she made from the sale of the home to put towards funding a true full emergency savings as well as putting the rest towards the new home and when i read her story and i've talked to danielle it becomes very apparent that she's really focusing on the future especially around children her and her husband know that they want to grow their family and so she's wanting to be prepared ahead of time for that and i will come back to that at the end this video when i go through my recommendations the next step in the budget by paycheck method is all about tracking and categorizing your spending now i assume that all of my community members that submit their budgeting information has completed that step in order to give me the information that i need for these videos step number three identify your regular bills so before we jump into regular bills one of the one things that i like to do is i want to show you income so right now we're looking at danielle's income now her husband her spouse's information is not included in this danielle and her husband share but they also do things separately as well and how this works is danielle's husband gives her a thousand dollars on the first of the month to pay bills and have towards their finances that danielle is in charge of and then she also gets gets paid from her paychecks bi-weekly on april 1st april 15th and april 29th so she's getting a bi-weekly schedule paycheck for 1755 dollars now you can see we put the canadian amounts in here as well uh so total monthly income is four thousand three hundred and five us dollars or five thousand four hundred and twenty canadian dollars so that's the dan that's the income danielle is currently working with now let's look at those fixed expenses or her bills since that's the next step in the budget by paycheck method this is the bills that danielle provided to us now a couple things to mention some of these terms may not have been heard before especially if people living in the united states the retirement savings plan and the tax-free savings account tax-free savings account is just something that canadians can have after they turn 18 if they're a canadian citizen that kind of acts like a tax advantage account so money grows tax deferred and they can withdraw that money without penalty the retirement savings plan is their retirement plans much like we would see like an employer-sponsored retirement plan here in the us it can also be used for individuals who are self-employed so she has here included in her fixed expenses automatic savings contributions one being maternity savings for forty dollars and she does have those retirement plans automatically contributed to every month on the 11th and the 25th as well you can see here she's also saving for maternity savings regularly every single month on the 25th now bell is their cell tv and internet inner care is heat and cooling and then reliance is their water heater bill which is separate so they own their home um or they have a mortgage but in their in canada we ryan and i thought this was weird a separate water heating bill but maybe that's how they do it you can leave me in the comments below and let me know if that's true but that's how she sent her their information so that's her fixed expenses now if we add up oh and you can also see we have them in canadian dollars here in red as well her total expenses fixed expensive equal 3804 which equals 4767 in canadian dollars now if we look at her income let me go back to her income here so if they're making danielle's income is four thousand three hundred and five dollars a month us dollars a month and her expenses is 3 000 804 every month so right off the bat i do my income minuses expenses check and i can see automatically that i am in the green so we have enough income to cover our fixed costs if we look at the fourth step in the budget by paycheck method it's identifying our variable spending so let's look at danielle's variable spending so danielle provided us with three different categories for her variable spending that she is in charge of groceries eating out in miscellaneous four hundred dollars a month to groceries eighty dollars a month to eating out and eighty dollars a month for miscellaneous expenses equals five sixty a month us dollars or 700 in canadian dollars that's all she has for her variable spending that was provided to us so let's talk about a little bit more i'm going to give you some more detail about her variable expenses with her groceries this does include like dog food bathroom supplies like body wash you're not seeing a gas category in her variable spending because she's currently working from home due to covid so they currently have one vehicle which her husband drives which he covers and she won't be going back and forth between an office or be driving until likely 2022 so that's why you're not seeing any gas her miscellaneous variable spending category is mainly for fun or unexpected costs so now let's look at her debt and savings goals here is danielle's savings goals now she has three bigger savings goals maternity leave her retirement and her emergency fund so danielle's savings goals she's got three really important bigger goals maternity leave retirement and their emergency fund but it's important to note here because we're not showing her husband's information they actually have two different checking account one is 4k which is you're seeing about right here this one that is that they use this same account for purchases like groceries and takeout it's more of their spending account it also holds their emergency fund type of savings the other account is with her husband and they keep about fourteen thousand dollars in that account for emergency emergencies and for bills coming out as well so it would be my suggestion that they have one dedicated savings account for their emergency fund that isn't commingled with any other types of saving or spending at all so that would be one of my first recommendations but that is some information that she did provide to us so this emergency fund is already funded she's already funding her retirement when she's doing her automatic uh investment in contributions that i showed you in her fixed expenses and she's already saving for her maternity leave to get her where she needs to go for success with that so these three goals are being funded and are taken care of let's look at sinking funds so this is where the struggle lies and this was definitely where the struggle the struggle that i felt felt when i created this inside of the budget by paycheck method it's payoff debt or it goes to sinking funds because their sinking funds are so substantial you are left with that one option sinking funds or debt so let's look at this very quickly they want to do a home maintenance fund of 4 500 canadian or 3575 is what they would like yearly for that now they currently have 525 dollars us dollars saved and so that means that if we were to add in to the sinking fund and be successful with it we would have to put away 340 for nine months because they want that by the end of this year they're also doing a vacation saving fund for a vacation to portugal in june of 2022 they wanted 2782 yearly for that and that means they would have to put away 143 for the next 16 months to reach that now personal care i was a little confused about so this is actually covering anything that her medical coverage does not because currently her benefits only cover 80 percent of her medical costs and so she wanted to start a sinking fund for that goal she's currently wanting to do 25 dollars a month towards that christmas 53 dollars a month property taxes and then eventually she is gonna have to go back to work right now they're down to one vehicle which is a vehicle her husband drives and so she is wanting to prepare ahead of time for a vehicle so she can get to and from the office now when i looked at all of these the first thing that i do when i'm looking at many different sinking funds where it's taking a toll on my other huge financial goal which would be paying off debt the first question i ask is when i'm looking at all of my sinking funds listed out is there a priority that sticks out to me that is a must-have in my sinking funds and when i looked at this obviously property taxes she's going to have to pay those no matter what and that's a pretty big bill if you're gonna pay them all together so i said this is the priority in the sinking funds so this goal of her vacation that's coming up in july of 2022 the scheduled vacation to portugal yes we want to be financially prepared for that vacation with cash but we also have to look at and see can we hit our other financial obligations and our other priorities with the income that we have because what happens is we might have to bring in additional income if we're wanting to fund a bigger goal like this outside of our other bigger priorities like for instance wanting to pay off debt so remember danielle's why her why is to have stability so we need to look at where can we throw our money to ensure that we hit that underlying goal that purpose in our lives so let's look at her debt and that's the last thing before we start looking at the different worksheets now we made a little note here because she did she needed thirty thousand dollars for that deposit for her new home they had plans to pay it off right away but they ended up using it for their new house and for emergencies so and for to fund their emergency funds so this second mortgage is what that used to be that thirty thousand dollars that they took for that deposit on their new home now it's down to 21 000 has an interest rate of 6.35 and they make a minimum payment 164 us dollars on that they have a car loan but then they also have their new mortgage as well here's how i decided to prioritize her debt taking and getting rid of the second mortgage first taking care of the car loan and then tackling the big mortgage now the reason i say tackle this second mortgage is because one it's the highest interest rate but also and it's not a huge payment every month 164 it's not crazy outrageous it's not the most expensive debts that they have every single month that would be their mortgage but this is something that i would wipe out personally if it were me because i told myself i was going to pay it off sooner than later and if i'm told that to myself when i got the 30 000 loan then that's something that i would definitely want to follow through on and tackle so i'm going to put this as number one and then again carlo number three and then the mortgage so that's their debt so now when we're looking at the budget by paycheck method step number five is all about using a budget calendar so let's look at the budget calendar very quickly so we're going to receive danielle is going to receive the pay from her husband as well as her paycheck on the first she's going to receive her bi-weekly paycheck on the 15th and 29th so she's getting three different paychecks in april the reason this one is in purple is because we are assuming that she is paying some of these bills with last month's paycheck because as we work through the numbers it's not possible to pay all of her monthly expenses with the paycheck she receives during that little that that month she has to save money from her each one of her paychecks to cover bigger expenses like her mortgage payment everything in red she is paying with her paycheck on the first everything in teal she's paying with her paycheck on the 15th as well as covering her mortgage she's paying she's setting aside a little bit for her mortgage with her paycheck on the 15th and then her last paycheck of the month is covering these bills in the beginning of the month until she gets paid again on the 13th may 13th and you can see that when you are breaking down or paying bigger expenses with multiple paychecks i like to just put a little circle of color representing what paycheck i'm using in the amount i'm using from each paycheck it tells me how i am paying for this larger expense so when i visually look at my calendar i can see right away okay this expense is getting paid by two different paychecks and because of the color i know exactly which paychecks i'm talking about so that's how april budget calendar is laid out now if we look at her first april budget remember we're creating a paycheck every single time we're paid so we have the paycheck from or the money from her husband and her paycheck equals 2549 and if we're going to pay all of these different bills in red so her second mortgage hydro bell inner core reliance both of her retirement accounts maternity and savings and maternity savings and her car loan all of her bills that she's paying with this dedicated these two dedicated paychecks equals 102.3 that leaves us one thousand five twenty six now remember these are in us dollars we're going to take care of half of her variable expenses so she needs 400 a month for groceries so we gave we broke that in half and we're doing 200 a month eating out and miscellaneous each 40 dollars a month which means our variable expenses equal 280 leaving us 1 000 246 left over now here is where it gets difficult for some people especially if they don't have clarity around specifically what they're trying to achieve with their money in her case she's looking for stability stability can come from a different couple of different places obviously it's the freedom to have options meaning we have savings in our lives to be prepared for the things real life that pop up the things that we want to do and achieve it also comes from the less obligations within our budgets the more we can decrease our living expenses the more stability we have for additional discretionary income to use as a resource for those things in our lives so we're taking care of property taxes because that was a priority christmas home maintenance and that vacation you're able to fund those sinking funds with this paycheck we then are going to use any extra money to cover our first priority debt which we had established as being that second mortgage so when we're done with that our income minus all of our expenses equal zero now let's move to the second paycheck of the month our second paycheck comes on april 15th for one thousand seven hundred and fifty five dollars we're going to cover all the bills here in teal which i've written down you can also see that i like to highlight where it says paycheck date i like to highlight the color that is represented on my calendar so i know exactly what budget i'm looking at and what it represents on my calendar so her home gas the two different automatic syncing or automatic savings maternity and mortgage now here is where we're setting aside some money from this paycheck to cover a future bigger expense we're essentially splitting our paycheck we call this the half payment method and the half payment method doesn't have to apply to all your bills it's mainly used when you get paid multiple times within a month to cover a larger expense when one paycheck just can't cover that expense on its own so that's what this is 1195. do you see even though this bill is happening in may we're still writing it on our april budget for that specific paycheck we're left with 280 left over which gives us just enough to cover those variable expenses and because we already covered these variable expenses in the beginning of our first with our first paycheck we're done we've covered our monthly variable expenses with the first two paychecks leaving the third paycheck open to cover the rest of that large mortgage payment now this is our last paycheck in april we're going to cover everything in green so you can see we are using april paycheck to cover may bills and this is what it looks like i get a lot of questions on what does it look like when you're using the last paycheck of the month to cover new bills so with the last paycheck of the month we're combining paychecks so she's going to receive a paycheck on april 29th but her husband is also giving her some money on the first so when she receives this paycheck on the night 29th we're going to hold it aside and save it and we're gonna use it to create and budget our money on the first so we're not doing two separate budgets we're gonna combine them which is why this one's also in green so if we go back to our paycheck bill tracker all of these bills are the ones that you're seeing here in may so our paycheck date is 5-1 even though we're using a 429 paycheck we have 460 left over after paying our fixed expenses we're gonna put 280 to our variable expenses leaving us 180 now when we went back to our sinking funds and our our goals i have money left over after paying my fixed expenses and my variable expenses what did i feel was the most important so this medical even though she's calling it personal care it's truly for medical costs outside of what her benefits cover i felt like it was important to have some money set aside for that currently she's wanting to do 25 a month so we funded that the rest goes towards second mortgage and we're going to be talking about my recommendations around prioritization between her goals here in just a second but this is what it looks like organized inside of a budget by paycheck method so after looking at all of danielle's information and all of her debt and savings goals here are my recommendations first when i look at her bills it's not crazy i don't see anything immediate as far as needing to cut out any bills we don't have any crazy subscriptions going on or a lot of unnecessary spending the one thing that we didn't include in today's video is she wants to do eighty dollars towards a checking account cushion i felt like that wasn't really a necessity though it does bring some more comfort around doing the zero based budget maybe ten or twenty dollars a month would be fine instead of the 80 but we didn't include that because we felt like it could be better used going towards either her sinking funds or her debt a lot of what she is doing within like four or five of the transactions inside of her fixed expenses are automatic investing or savings contributions which is fine the biggest eater i would say the biggest expense in her budget is that new mortgage payment 2 421 dollars a month for her mortgage and that doesn't include the payment for her second mortgage which is 164. we're looking at twenty five hundred dollars more than twenty five hundred dollars a month for that mortgage so with that being said here are my recommendations when it comes to sinking funds i would simplify now like i talked about and showed in the earlier in the video prioritization i would tackle my property taxes because we have to pay that that is a priority i would tackle christmas and i would tackle the vacation but i would do that knowing especially with the vacation goal knowing that i am giving up paying off that second mortgage faster in order to do so so the question becomes what is most important if you're wanting to bring financial stability confidence and freedom with your money and finances before you grow your family what is the most important thing now if it were me it'd be knocking out that second mortgage to do that i would need to simplify the sinking funds so christmas property taxes and vacation that's what i would limit limit those sinking funds just for now remember every change that we make to our finances they never have to be permanent changes they're temporary things that we're doing to get to a better place later so even though we are simplifying some of our wants with our sinking funds after that second mortgage is paid off then we can really start throwing money more towards the car more towards the home maintenance more towards the christmas sure if we have a little bit of extra money we can throw it aside for christmas but right now we need to focus on paying off that second mortgage and that would be my recommendation for danielle other than that i feel like her information was very well organized the only thing that i didn't like about the organization of the finances from the information i was provided was the where she is placing her emergency fund savings remember emergency fund dollars should always be placed in a separate dedicated easily accessed savings account and so we need to separate that from any other spending we are doing including checking accounts and that type of thing like danielle has listed here so that is danielle's real life budget if you found this video helpful please like it and don't forget to subscribe [Music] danielle's why is stability [Music] and [Music] you