Inflation & Survival: Budgeting in 2025
Dealing with money is hard in the best of days. Budgeting and trying to figure out where your money is best spent or saved is hard any time, but now, more than ever, we as a society are struggling.
The increase in prices of food and goods has changed dramatically in recent years. Add to that the stress and tension of recent political events, some of us are wondering how we’re going to pay our rent or mortgages.
Specifically in Canada, I heard on the news that about 90% of our population is living paycheque to paycheque. Many of us are not able to save enough money for emergencies. (The general rule is to save three months worth of income for emergencies or loss of a job). Realistically, not many of us are able to save that much money. As a matter of fact, living paycheque to paycheque means that most of us are not able to save any money at all.
As a family of five, there are always things that come up from time to time. Dental visits, vehicle maintenance, school fees, you name it. In order to pay for those types of things, I like to save money and allocate it to sinking funds. This is a savings that you have on hand for things you know you will have to pay for within the year. (For example, your dental insurance covers a large portion of your visit, but not all, so now you need to pay for it).
I use the Budget Book by the Budget Mom, and I absolutely love it! It’s easy for me since we get paid weekly and the system is set up so you budget for each paycheque. Some people only get one or two paycheques each month, so you would have to allocate enough funds per week to get through the month.
Currently, by the time our bills are paid and we allocate food, gas, non-food and other variable expenses, there is nothing left at the end of it. I remember two years ago, I would allocate $200 for food per week for four of us, and I was told that was way too much to be spending on food. Now, I can allocate $300, and it’s still not enough!
When there is money left over, it usually goes toward a credit card. If for example we had $300 left after bills and variable expenses, I could choose to pay $200 on the credit card and allocate $100 towards savings. Then it’s another task to break up that $100 for each sinking fund that I have. If for example I had to pay for dog food that week, that entire $100 would need to go towards our pet expense. If not, I might put $20 towards medical, $50 for vehicle maintenance, $20 towards Christmas savings and the last $10 towards school fees.
The problem arises when there’s nothing left to save. During those times, my advice is to try and limit your expenses as much as you can just to get through the tough pay period. Maybe switch to a cheaper brand when possible, or eliminate the “wants” from your list that pay period; just pick up the essentials. You could also look at your subscriptions that month and see if you can put something on hold or cancel it for a month. Those sneaky subscriptions add up and you don’t really think about them - $10.00 here and there adds up when there’s many of them.
The main thing here is to save money whenever you can. It’s also important not to limit yourself too much all the time. You deserve a small treat once in a while. It’s harder when you have kids, because they don’t understand why you can’t buy fruit snacks all the time for their lunch. Every once in awhile, let yourself or your kiddo’s have that treat, but keep in mind that it may mean something else has to be left out.
I’ve been stuck on the word frugal lately; it’s such a great word. Many people would think this means to spend less. or to have a tight budget. What it should mean is to really think about how happy a purchase makes you. If you spend money on something, and it gets used all the time, you’ve spent your money well. This doesn’t mean that you’ve decided to buy ten bags of chips, and you’re being frugal because you ate every bag. It means the purchase was well worth the money, and the happiness it brought you is worth the money.
If you are personally struggling, as I suspect most of us are, I send you well wishes to get through it the best you can. All we can do is look to better times and hope that things get better. Maybe a raise is coming soon, or the government offers us some relief in the form of tax credits or benefits. (ie. ccb). Hope is sometimes all we have, and it lets us get through tough times. Save money when you can (i.e. put all your loose change in a piggy bank at the end of every day or week, or save $5 dollars once per week if that’s all you have). Saving a little at a time is better than saving nothing, because it does add up over time.
Thanks for reading and we’ll see you next week!
Sandra
