I used to start all my monthly budget posts with a note about how our monthly budget doesn’t change much.
So it only makes sense to start this one by telling you our monthly budget has changed. A lot.
There are two key factors that drove the changes: in March 2021, we had a kid. Then, in July 2021, we bought a house.
What can I say? We apparently thrive on chaos.
Add in the fact that my income is significantly reduced while on mat leave and, well, our budget needed to change.
So, too, do my budget updates — something I realized quickly when I sat down to brainstorm this post. The old format doesn’t make much sense for our current reality.
Today, I’m sharing my first refreshed budget update. My plan is to focus more on the wins coming into the month, any noteworthy expectations and areas I want to focus on in the month ahead. I know I like reading about how people budget their money so hopefully this will be at least a little interesting.
With all that being said, here’s my January budget forecast.
Prior to this update, I would say 95 per cent of our expenses were fixed. The biggest expense was related to our housing, but our rent included everything: heat and lights, water, internet, laundry, snow removal…we just moved the $1K at the end of each month and called it good.
This obviously changed when we bought our house in the summer.
Now, our budget has more variety. Here’s a snapshot of what it looks like:
- Fixed: Mortgage, Internet , phones (Tara and Jeff), insurance (home and car), fees and subscriptions (bank, Amazon Prime, Spotify, Netflix and Huckleberry)
- Variable: Power, water (quarterly), groceries and gas, giving, personal spending
- Temporary: taxes (until end of mat leave), formula (until mid-March)
- Debt: Student loan
- Investments: RESP and RRSP (using Roundup feature from Wealthsimple)
- Savings and sinking funds: Emergency, household, new car, car maintenance, pets medical and food
Best budget move in December 2021
- Cleared all credit card float
We use credit cards all the time. Credit card debt has never been an issue for us and we’re pretty diligent about paying these off, often within minutes of making a purchase. I’ve never paid a dime in credit card interest.
But I’ll admit: the last couple months, purchases have not been paid off as quickly as I would like.
While I’m so grateful to have paid parental leave, it would be disingenuous to suggest our budget has not been impacted by my reduced income. On leave, I’m losing about $1K a month of my take-home pay.
And while we have done the best we can to live within our new budget, life doesn’t always line up with our pay periods right now.
Anyway, while I’m a big believer in the idea that you don’t need to wait for the new year for a fresh start, I liked the idea of coming into January without any lingering credit card float.
So I pulled a few hundred dollars out of savings and paid it all off.
Budget expectations for January 2022
- Our power bill will be ridiculous
I fully anticipate our power bill will be somewhere in the $500 range — and I honestly would not be surprised if it was closer to $600. The house is from the 1970s and in need of more insulation in the attic. We came into our first winter here expecting some big bills once the heat was turned on. Our December bill was about $430 and it’s only going to go up from there. Another reason to look forward to the end of winter!
- Our property tax assessment will arrive
Property tax assessments are issued here in October, but because we bought our house in the summer, we received a letter saying ours would be issued at the end of January. Not sure what to expect here. Average values have gone up in the province, so I’m expecting an increase even though we have not really done anything to improve the property yet.
- Resume RESP contributions
In 2021, we contributed the $2,500 required to receive the maximum CESG. J received some money from family at Christmas, so we’ll be putting that, along with our January child tax benefit, into her RESP. Our goal for 2022 is the same — contribute enough to get the maximum CESG.
- Resume personal spending allowances
We have always had a personal spending allowance line in our budget for each of us but in the lead up to Christmas, we shifted that money into our Christmas fund. I’m excited for this change!
One budget-area I’d like to focus on in January 2022
- Food spending
Our food spending has been a hot mess for…oh man. Weeks? Months? I don’t know anymore.
I’m calling it our food spending because it includes both groceries and takeout. While we’ve definitely gotten better about eating at home, we’re still doing more takeout than usual. It’s totally a convenience thing. I don’t believe being in debt means you should only eat at home but I know we do need to get back into a more typical range of takeout spending.
In January, I am going to focus on meal planning. This is something I used to do and it helped a lot. I’m also hoping that doing most of our grocery shopping online will help. Hopefully I’ll be able to report back on this next month under the best budget move category.
Our budget has changed so much over the last several months, both on the income and expense side. These changes have caused some growing pains, but that’s not surprising. If there’s one thing I’ve learned, it’s that managing your money isn’t always a static process; it can shift and change based on the season of life you find yourself in.
Tell me, friends: what was your best budget move from December 2021? What budget area do you plan to focus on for January 2022?