Budgeting

I know this blog is for me to write about travelling, fitness and photography (my tagline, if you didn’t know) but I wouldn’t be able to do it without budgeting.  I started keeping a detailed budget when I was doing a paid internship between my third and fourth year of university. After working for 4 out of the 16 months I realized I hadn’t saved any money. Where was all my money going??? I researched “saving money” on Google, read this blog and downloaded the spreadsheet (making a few edits to make it my own).

Now, I’m obsessed with budgeting – a little excessive for the average person but I love it! I have about 8 excel spreadsheets keeping track of my budget calculations, daily expenses, savings accounts balances, things to save for etc. (If I wasn’t an engineer I would definitely be doing something in finance.) The one spreadsheet (I assume) you would be most interested in is how to save and budget for a trip.

I am by no means an expert but I’m passionate about budgeting and saving money. So, I figured I’d split this post into two parts: 1. Making a budget for your trip and 2. Budgeting to save money for that trip.


PART 1: Making a budget for your trip

The groups that require a bit of research include:

  • Travel costs: flights; public transit (bus, train, subway); connections (to/from the airport etc.); car rental and gas; etc.
  • Accommodation costs: price for the nights in your accommodation of choice (hostel, hotel, AirBnB, staying at a friends, camper van, etc.). It’s best to check for the dates you’ll actually need a bed since prices increase for holidays or popular events
  • Daily Costs: Check this website for some very accurate budgeting. I take the “Budget” estimate, subtract the “accommodation” for my daily food costs
  • Spending money: for items such as souvenirs or getting a treat
  • Entertainment: extras such as museums, going to a show, going our for drinks with friends
  • Contingency: I like to add about 5%-10% of your total cost of your trip to the final budget. There is ALWAYS something that comes up while you’re travelling that you can’t plan for.

If you like planning, you can add specific tasks like museum costs, calculating gas costs or planning to drink a beer a day with friends. If you like to be more spontaneous, give yourself a spending amount per day using this website.

In my personal opinion, you need to have your monthly spending in check to figure out exactly how much you have for your next trip. Can you afford $2,000 or $5,000 (or more? or less?). You won’t know till you sit down and do the calculations. If you’re interested, below are a few things I found helpful when starting to budget.


PART 2: Budgeting

Step 1: Calculate current expenses

When I started keeping track of my expenses I was spending WAY more than I thought on things like eating out, clothing and entertainment. It’s funny how you can spend $10-$20 occasionally and next thing you know you’ve spent over $200 on eating out in a month.

Review your online banking and calculate how much you spent in one month. You can divide it into headings such as: housing; bills; eating out/delivery; drinks; savings; debt repayment etc. (This is where that spreadsheet above and here comes in handy). This will give you an idea of where you’re money is going.

This is much harder to do if you spend cash. Instead of looking back on the previous month, you can keep track of your expenses for this month with apps like Mint.

Step 2: Create your monthly budget

Take those values you calculated from Step 1 and put them in the spreadsheet (here). Add in your expected pay in a month. If the value at the bottom is less than $0 you’re overspending. If your value is greater than $0, you can put a little away to save for whatever you want!

Step 3: Check out tips on saving

If your spending is greater than your income, you can sit down and think about where you can cut costs. I love scouring the internet for tips on saving money. Do a Google search for “budgeting” or “saving money” and you’ll get hundreds of tips. What works for me won’t necessarily work for you. I personally save $10-$15 a week by making tea in the morning at work rather than buying it at a coffee shop but if you love it then keep it up! It’s all about balance. Here are a few I’ve come across through the years:

1. Meatless Mondays. It helps you save on your grocery bill.
2. Making coffee/tea/hot chocolate at home/work. If you buy a medium coffee from Tim Hortons every weekday ($1.79/day) by cutting out one day a week you’ll save $1.79/week, $7.16/month or $93.08/year!
3. Flyers. Save more money on your grocery bill by reviewing your local grocer’s flyers and planning your meals around what’s on sale. Flipp is a pretty great app for this purpose.
4. Recommend staying in rather than going out. Making dinner at home is a fun date idea/girls night in and much less expensive than eating out!
5. Cutting back on your internet/phone/cable bill. Netflix is great for cutting back on your cable bill (but using lots of bandwidth for your internet). Cutting back on your data usage on your phone bill also helps cut costs.
6. Using active transportation/public transit instead of taxis/uber/your car. I try to bike or walk to work as much as possible to cut on my gas bill for my car. I’ll also take the bus downtown rather than grabbing a cab to visit friends.

Step 4: Review your budget

I can guarantee that the first month or two will be very difficult to stick to your budget and that’s okay! It takes both major and minor changes to cut back on your spending habits. It’s easy to get downhearted when you’ve overspent a few months in a row but that’s no reason to quit. Instead, try cutting back instead of going cold turkey. For example, don’t buy coffee one morning a week or try spending $10 less per week on eating out. Little changes are better than nothing!

Step 5: Redo your budget

Month-to-month and season-to-season can drastically change your budget. From experience, I know I spend more during the summers on “Entertainment” because I want to be outside more! I use more gas in my car to drive to hike, I spend a little more on drinks on the patio or going to outdoor events like a concert. I don’t like the cold so in the winter I prefer to stay in and make food/bake with friends rather than going out! So, I adjust my budget depending on what I plan on doing that month. It’s all about balance!

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