Tuesday, 26 April 2016

My Budgetary Metrics Explained

Okay, so apparently my last entry was a bit confusing when talking about my budget, so today I will go over how I measure my financial health.

First of all, I expect to pay all of my bills within that exact paycheque. That means that my budget must balance, or be in a surplus situation. This is the cornerstone of my financial health, as in only spending less than what I make. 

Second of all, I expect that my bank balance stays at or above $1000.00 at all times. This means that at no point during my payday cycle (The length of time from one payday to the next) is my bank balance allowed to drop below $1000.00.

I also expect that my credit cards are paid off at each payday and that any bills are paid right away. The predetermined savings plan is untouchable and unalterable, that money goes into the Long Term Savings Account like clockwork.

So this has led me to having to dip into my contingency fund and run a deficit for this payday and the next one. Why? Simple, three large bills in quick succession: one that I gave to myself and two that came to me. 

The first bill was Wanda’s tires that needed to be replaced. The second was my decision to put an extra $500.00 into the Long Term Savings Account. Why? Well this way, come the end of December, I will have put in $1500.00 into that account each month. The last bill is Wanda’s insurance (due early next month). 

So, all told I will be down to just over half-way into my Personal Overdraft once all this is said and done. At least my bills are paid and my savings plan is on track. So while it feels bad, and it should, my bills are paid, my savings is continuing and my credit cards are still at a zero balance.  All in all, I am doing okay, I could be doing better. 

One thing to remember is that most of my spare money goes straight into that Long Term Savings, where I don’t touch it. It is for my future, that’s why. I can manage and deal with minor financial dust-ups, as long as that savings plan stays on track.

I have come to realize that unless I: 1) gain a large windfall, 2) gain a cash-flow-positive woman, or 3) just stick it out and pay off Wanda now, that I will be paying for Wanda for a very long time. So while a house or cabin now would be nice, it is not wise, cash-flow wise.

As always: Keep your head up, your attitude positive, and keep moving forward! 

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