This post will be a bit of a rant. In this morning's local paper, I read that it will be difficult for parents to send their children back to school because of the expenses related to the beginning of the year (notebooks, calculators, etc.).
I am a big believer in a few things when it comes to money. #1) if you realize that expenses will come up, you should plan for them. That is, Christmas, back to school shopping, birthdays, etc. I have a bucket dedicated to "clothing", so that when I need a new pair of winter boots this winter I won't need to go to MasterCard. As well, I am a teacher so I bought myself a new shirt and tie and pants for the school year out of this. I have another bucket dedicated to "XMas", so I will be able to comfortably give around the holidays and not feel financially burdened by it. I don't contribute that much to each bucket ($20 every two weeks), but it is nice to have that cash set aside so when I do need to make a purchase I can easily do so.
#2) If you aren't saving 10% of your income you are living beyond your means. What does that mean? Simply, if you paycheque is $500, you should save at least $50 out of it. If you can't afford to do it, you may have to make some changes in your life: another part time job on this side, finding a cheaper place to live, going down to one (or no) vehicle, cutting some discretionary spending. I try to do most of these things: I tutor, where all this money goes toward paying off bills, and I also worked summer school. I had renters for the last two years in my condo to help defray the costs. I have no vehicle, and knew this would be the case so I purchased my condo close to my school. As far as discretionary spending goes, I set aside $200 every two weeks that goes towards groceries, gifts, clothing, video games, courses and upgrades on the condo, and leave $80 for me to spend on what I want. Once I run out of money, I have to stop spending. My lifetime goal is to have my MasterCard at $0. Is it easy to do this? Not at first, but it gets easier every paycheque to do.