Saving through DIY

Your contractor just charged you $100 per hour to… [insert easy task here]

Have you ever run into that before? I know I have on more than one occasion.

One of the best ways to save money on a task or service is to do it yourself. You could pay a house cleaner to clean your place once a week or you can do it yourself; one costs you money the other costs you a bit of time. If you’re rolling in the money then lets be honest it doesn’t matter one bit. But chances are you’re not rolling in the money.

Doing things yourself (DIY) is an easy way to save yourself a ton of money. There are a lot of things that most people would back away from and call in an expert when they really don’t need to. Doing something yourself doesn’t mean it needs to be hard nor in many cases does it have to have someone with 10 years experience.

I wanted to give you an example of this: we’ve done a few renovations I’ve had some chances to DIY some of it. In most cases this involved tearing out walls in order to fix a room or a whole floor. The first DIY piece that I took on in almost every case is the demolition; not everyone can do demo but most people can and you can save yourself lots of money. Next on the list is Drywall – this one was a bit harder and I completely fucked a few things up and spent hours fixing them but I learnt and pretty much from the first attempt I saved money, literally thousands of dollars for each renovation. The best part is that I now save money on every reno involving drywall.

Now these examples are tied my house renos because that is something I’ve been working on recently. This is simply an example doing something yourself can be as simple as painting a room, steam cleaning your own carpet, washing your windows and the list can really go on and on.

Before you really have a chance to object to this thinking you don’t need to be an expert to do something yourself. I wouldn’t suggest rewiring your house or rebuilding your car’s engine on day one. But there are a lot of things that you can do with either a little research and patience that can save you thousands.

You can save yourself tons of money by doing things yourself and if you’re scared of messing up take heart that the you probably can’t mess it up that badly and if you can you can still bring the pro in. Do your homework and save yourself some money.

Tracking your Finances – finding the balance

Whether you budget or not, knowing where your money is going is incredibly important and without this information you’re like a rat lost in the rat race. Unfortunately tracking your finances for some people is the same as asking them if they want to be tortured. I know because I used to be one of these people. The fear that grips you when you are forced to go into your own financial details can be palpable.

But if you really want to get yourself on track this is a necessary evil. You simply have to know what you’re spending your money on and more importantly if you’re overspending.

In its basic form the concept of tracking your finances is pretty simple – know where your money is going. You can do this any number of ways:

  • Pen and Paper
  • Spreadsheet on your computer
  • Tracking software
  • Online tracking software like Mint (my preference)
  • Even tracking it on your phone.

How you track your spending isn’t really an issue other than you need to do it. The details shouldn’t be scary but too often they are.

The fear behind tracking your spending.

For me it came down to two pieces the first was a fear that came up when i tried to track my spending manually, I kept getting overwhelmed but the sheer volume and then the second item kicked in and that was the realization of where my money was actually going. That fear and frustration is part of what has been holding me back all these years.

Yes tracking your spending will uncover some potentially ugly truths; you might be overspending or not budgeting correctly. But this is a fact and the tracking is what you need to do in order to make sure you’re living within your means. It’s simple information to be used, don’t make yourself feel guilty. I struggled with this because I did have a nagging feeling of guilt – I’ve simply had to remind myself that its information as a result of my actions and I can use this to fix these actions.

Finding the right amount of information to track

Everyone will be a bit different but at the end of the day you need to find what will work for you – if you track too much information then you can easily become overwhelmed and lose momentum. To illustrate this I started off by writing everything down in a little notebook, keeping receipts and then transferring everything into a spreadsheet that had an elaborate system for categorizing each spend. If I fell behind by a few days it became a large task to keep this up to date. For me the solution was pretty simple – I now use Mint to track virtually all of my spending.

While this might not work for you finding a system that will work with just the right amount of information is key. Not too much information that it becomes difficult to track things but enough that you know how you’re spending your money.

Perseverance

At the end of the day you make your financial bed and have to lie in it, taking responsibility for your actions and pushing through the challenges is what will make the difference. Perseverance and small steps.

Budget tracking – Old Approach Revisited

There are times in your life when you really need to count all of your pennies in order to make ends meet, a few dollars in the wrong spot and you might be hard pressed to pay a bill or have food on the table. For those times I think that you really need to buckle down and become very rigid with your budgeting and tracking. Now this doesn’t always mean you have to be bordering on broke, there are times when you really want to achieve a financial goal and being very careful with your money can make a big difference.

This year I believe that I am in one of those situations, we’ve been getting by for a long time making ends meet but the credit cards are still mostly full and the savings are low. Its time for some more drastic measures. In the past I’ve tried half heartedly to stick to a weekly budget and where I find myself today is the need to really stay on top of my money but at the same time find a technique that allows me to stick to it.

How are we approaching this?

Weekly budgeting was something I always liked because a lot of items such as groceries, transportation, entertainment,etc… follow weekly patterns and just allotting funds for these monthly can be prone to error. But at the same time a lot of bills, most I would say, are monthly bills.

So I’m going back to a budget – a monthly budget, broken down weekly and tracked weekly.

The benefits of this are that:

  • I’ll be able to track spending weekly, adjusting the monthly budget as needed
  • The weekly spending follows the cycles of most of our consumables costs

Now as with most methods there are a few drawbacks or at least drawbacks as I see them.

  • You have to keep it up to date or you lose some of the benefits
  • It can be time consuming if you’re not careful
  • In our case this approach isn’t fully aligned to our pay cycles

As with any tracking method there are good things about it and bad but its the implementation that will make a difference. I’ve created a template for myself that I’ll be able to create a budget against. This info can be rolled up into a monthly net worth document that we can use to monitor progress. The biggest difference in my approach this time is that I’ll be using Mint.com to help me keep this up to date (with some manual entries from me along with bank tie ins).

Since I’m sure there are a few other Mint.com (or similar) users out there you might wonder why not just use this for everything? I find that it doesn’t give me a clear picture and it doesn’t take into account when things come out – its a little discouraging seeing how much you might still owe in a category for the month while the weekly breakdown takes it into smaller chunks.

I’ve been testing this out for a little over a month now and it seems simple enough but gives me enough of the information to help adjust my spending day to day while keeping me on a budget.

What systems have you used in the past? What has worked for you?

2013 The Year of the Budget

Every year it seems that my finances and overall financial situation remain mostly status quo, improving slightly but never fully under control. This is something I’ve struggled with for years and the worst part about is that there hasn’t been any real pressure to dramatically improve this. I would find that we’re making ends meet even if we’re not saving much but we’re doing alright.

This just getting by is a very insidious and its gotten a bit frustrating. The goal for this year is going to be really force the issue and the new house and new year are a great time for this to happen. There are a few things that we’ve already done in order to get this moving:

  • Constantly tracking our spending
  • More comprehensive budgets
  • A mindset adjustment
  • Investigating alternate income streams

Each one of these is really more than a post in their own right but I did want to go into a little detail about what we’ve done so far.

Constantly tracking our spending
I think that this is going to be the most challenging and most important item on this list because it is something that will need to happen almost in real time. When I first started this blog this tracking of our spending was something I tried to tackle unsuccessfully over the long term.

I found the biggest challenge was actually staying on top of keeping track of what was spent, some was cash some was debit and in the end there was always some kind of gap. I’ve been using Mint.com for the past year and it has really simplified tracking spending and even setting up goals. This tool is really something that along with budgeting has really let me really understand my spending.

The goal is to fully get our finances tracked and then readjust the spending to ensure we’re spending below our means.

Comprehensive Budgets
Again this is is a lesson learned from the past where I have budgeted somewhat successfully, the budgets this time around are more comprehensive including all of our spending in an effort to track it and know where things are going. Weekly I’ll be checking against actual spending. The first month will be a test then we’ll adjust.

Mindset Adjustment
This is similar to the tracking of our spending – we, well at least I need to adjust my mindset a bit in order to really set this as a priority. Our financial health is a topic that is always important and at the back of the mind but it isn’t something that is always first and I think that this is what needs to happen. Always making sure that we track where the money goes rather than deferring it to later. Weekly going through everything and tracking it. Initially i think this will be almost as hard as the tracking but once the habits are formed it will become easier.

Investigating alternative income streams
Both my wife and I have full time jobs and we’re mostly happy with them but its a very active form of income and really takes up a lot of time. We haven’t really explored alternate income streams be the active or passive and during 2013 we will start to explore this in earnest.

I’m sick and tired of just getting by and seeing the debt just sit there without any real progress forward. Its time to get mad about it and really change something. This year will be the year of the budget.

The Mayan’s got it Wrong! 2012 in Review

Most of the time when someone gets something wrong its a bad thing but since the Mayan calendar ended this year I’m actually kind of glad that they got it wrong. The world ending would have really put a damper on the year!

I know that its rather pointless to use an arbitrary date for reviewing your life or what has happened recently but the turning of the calendar year does give us an opportunity to reflect and in many cases it also gives us the time to reflect which can be hard with a busy schedule. Like most years I did pause a little to review the year that just passed in an effort to sum up what the hell just happened. This year was probably one of the busiest years in my life and overall it was a good one.

The Good
There are many good things that happen to us each and every day and we mostly just ignore them and I’ll be honest I typically did just that. This year I’m very grateful for all of those things that were good even if I didn’t notice them all the time. I remained healthy even though I insisted on attempting to sabotage this by working too much, smoking and drinking too much. I’m grateful that my daughter remained healthy, grew like a weed and was a very happy child.

I also learned a lot this year both from my mistakes and from good things that happened. I learned through practice that I really enjoy renovations and by that I mean actually doing the renovations myself. We renovated the bathroom at the cottage in the span of a week (just a little facelift), pretty much gutted our house and are in the process of refinishing it. This second renovation was huge and cost more than a luxury car and the best part about it is that I was involved not only in paying for all the work but did a lot of it myself. This is actually something that I am very proud of and happy that I got to learn as much as I did from my contractors. I am going to leverage this into finishing the renovations myself.

We (my wife and I) also bought a new house which was a huge shift for us because of how much of an undertaking it was. It was also a great investment even though it required a lot of work.

Another great thing that happened to me this year was I got promoted at work, it was almost a reward in recognition for all of the work I put int. Unfortunately this did come as a bit of a double edged sword because of all that work. I’ve realized because of this that I don’t need to keep moving my career forward to be happy. I can be happy doing less and making less to have more time because that is something that is very finite.

The Bad
This year was also the year that a few bad things happened (ok that was an understatement there are always bad things that happen). We did have a few encounters with death this year in that a couple people close to us passed away (way before their time). This has really left an impact on me because it really put mortality into perspective and to really let me realize what is important.

The other bad things that happened this year are that we didn’t make much headway when it comes from a personal finance perspective. We’re still as much and actually a bit more in debt that we were before (thought the new house is an asset that balances all of this).

I also learned the power of details this year. Not necessarily in the best of ways because our renovations were well over budget and we weren’t as good at holding onto our money. But part of this is actually a good thing because it is something that has been staring me in the face for years and I kept ignoring it. Hold onto the details because they’re important – they do say the devil is in the details and in my case the path out of debt may be hiding there. Knowing which details to measure and track and when is the key.

In summary
It was a good year because I watched my daughter grow and be happy, my wife and I were happy together and moved forward with our lives. At the same time I didn’t do enough stuff for me this year, I focused too much on my job and not enough time on the things that are important to me but for once I can say that I really saw that.

Tomorrow I’ll post up some goals that I’ve got for this upcoming year one of which is actually re-focusing on tackling the financial aspect of our lives and we’ll take you along for the ride.