Quiz

Mostly 1’s— Zero-Based Budgeting:

Zero-Based Budgeting is a budgeting approach where every dollar of income is allocated to specific expenses, savings, or debt payments, leaving no money unassigned.

Every dollar you take in has a specific job, even if it’s covering random expenses that you forgot about. By time time that you’ve assigned each dollar a purpose, your income minus your expenses should equal zero. Why? Because each dollar has been intentionally tracked and used for a specific function whether it’s to necessary expenses, non-negotiables, savings, and even things you forgot about.

This is great for people who have inconsistent monthly incomes because it helps them strategize how they spend their money before their next payday. You might benefit from zero-based budgeting if your work is seasonal, freelance, or heavily dependent on tips or commissions.

Mostly 2s— 50/30/20 Budgeting:

This method is great if you consider yourself a procrastinator– Think of it like a college midterm essay. By splitting up the work into even parts of effort, you’ll be able to get ahead of the stress when it comes down to deadlines.

• 50% for needs
• 30% for wants
• 20% for savings and debt repayment.

This approach provides a simple framework for managing finances, promoting a balance between essential expenses, discretionary spending, and financial goals. It offers flexibility while emphasizing the importance of saving for the future.

It is best for people who would like general guidelines to see where theyre money is going– but aren’t fans of tracking every single dollar. Following the guide in Rich AF, split up your expenses into categories and then figure where they stand in relation to necessary expenses, discretionary spending, and savings.

The key here is that your spending must be equal or less than the 80% of your income (50% necessities + 30% discretionary spending). If you’re spending more than that, you will know it’s time to re-evaluate your middle 30% for the “wants.”

Mostly 3s— Reverse Budgeting:

Reverse budgeting flips the traditional budgeting approach. Instead of allocating money to specific categories and tracking spending, you start by committing a chunk of cash for savings and investment goals.  You’re then free to spend the remaining money however you’d like while also reaching your financial goals.

This method prioritizes savings and financial objectives first, encouraging individuals to live within their means after securing their financial future. It’s a great option for those who have a tendency to overspend or take money out of their savings accounts. It’s one way to easily “set it and forget it” and get into a budgeting groove

Mostly 4s— Half Paycheck Budgeting:

Half-paycheck budgeting is a strategy where you budget and pay bills every time you receive a paycheck twice a month. You essentially split the cost of your bills into two lump sum payments. Your first paycheck of the month covers one half of your expenses, and the second paycheck covers the other half.
‍
This method is great if you consider yourself a procrastinator– Think of it like a college midterm essay. By splitting up the work into even parts of effort, you’ll be able to get ahead of the stress when it comes down to deadlines.

Don’t fret. We’ll figure it out together.

Take home pay is the money we receive from our employer after they have taken out taxes and other deductions. This amount is what we get to keep and use for our own spending. Take Home pay is the amount of what you make that actually goes into your pocket. This the number you must refer to when building out a USEFUL budget.

If you aren’t immediately sure how much goes into your paycheck, visit your employer’s HR and Payroll programs. Lots of companies use software like Workday or ADP.

Then, take a careful look at how much is going into taxes and other deductions. The deductions may include health or life insurance, 401k, or RSUs.

To help you calculate how much of your wages go into taxes, use this calculator below. Once you’re finished, write down your numbers before moving onto build a budget.

Build a budget.

Now that you’ve gone through all of the motions of figuring out how much you make and your budgeting style. To help you get started, I’m sharing a brand spankin’ new version of  of my personal budgeting spreadsheet.

Remember that everyone’s budget will look relatively different, so use this file as a template to help you start a budget of your own.

Feeling down bad about debt? Well don’t let it keep you down.

Debt is a normal part of most peoples' financial journey. The truth is that all types of people have debt— both the rich and the poor. However, sometimes when regular, average people borrow money - it can be demonized as a "bad thing".

I'm here to tell you you shouldn't feel embarrassed about having debt, BUT if you have debt and want to pay it down, I can help with that too!

The first step to managing your debt is putting it all on the table with a debt paydown simulator like the one I’ve made for you HERE! Use this debt paydown simulator to get a sense of what debt paydown strategy may work best for you. Try to look at it with a neutral lense, use kind words with yourself, and keep a positive attitude about your ability to tackle it! Once you have an idea of what strategy aligns with your personality, you'll be able to make a plan to crush your debt!

• How would you best describe your technology usage in regards to investing?
  A) I mostly plan on investing on my desktop computer
  B) I mostly plan on investing on my mobile phone
  C) I want to utilize a blend of both my computer and my phone
• Choose the option that most accurate describes your current comfort level with choosing investments:
  A) Very comfortable selecting investments on my own.
  B) Pretty new to selecting investments, but I think I can figure it out with a little guidance.
  C) like I have no idea what I'm doing, and just wish someone would do this for me.
• Choose the option that most accurate describes how involved you’d want to be in your investments:
  A) Be super involved in my investing.
  B) Be sort of involved in my investing.
  C) Spend as little time as possible while still investing.
• What do you mostly plan on investing in?
  A) Stocks, Bonds, ETFs, and Mutual Funds
  B) Stocks and ETFS
  C) I don’t know what these words even mean

Mostly A’s— Traditional Brokerages:

You should consider a traditional brokerage!

You seem to be very confident in your own ability to select investments, and these options will give you the widest range of research and information to dive into. While all three of these platforms have apps, they are likely a bit clunkier, so you'll likely want to opt for buying/selling/researching your investments via a desktop computer. DIYing your investments means you will pay the fewest in fees, but likely spend the most time!

Mostly B’s— Modern Brokerages:

You should consider a more modern brokerage!

You have a decent understanding on how to select investments, but want to keep things simple and do most of your investing via your phone. These platforms can be great for beginners as they all offer mobile apps and fractional investing (aka you can get started for as little as $1). DIYing your investments means you will pay the fewest in fees, but likely spend more time! That said, one watch out is that often, these modern brokerages can make investing a little.... too fun. I encourage you to make sure you're still sticking to the investing fundamentals and not diving into risky behaviors like day trading.

Mostly C’s— Robo Advisor :

You should consider a Roboadvisor!

You recognize that investing is an important part of your financial future, but the less time you can spend doing it, the better. You'll take a quick quiz about your money goals - things like how much you make, your age, when you want to retire, your plans for the future, etc and one of these little roboadvisors will put together an investment portfolio that suits your needs! These platforms all have strong websites for desktop, as well as apps for your mobile phone, and you likely won't have to spend a lot of time researching on your own. While you will pay a small management fee to avoid the trouble of DIYing your investments, it'll still be meaningfully less than investing your money with a human financial advisor, and you'll skip the analysis paralysis so you can get investing sooner rather than later!

Remember, while contributions to a TFSA aren't tax-deductible, the earnings and withdrawals from the account are tax-free.

Did you know?

The Canadian government offers a convenient and user-friendly solution, NETFILE, to help individuals and business owners electronically file their taxes. The service is available January to April each year, however feel free to poke around to get the information you need.