As I mentioned in my previous post, I’ve been helping a good friend with her finances. When the friend first told me about her tax bill, I knew she needed to get on some sort of budgeting/tracking system.

I have been tracking just about every dollar I spend for over five years now. I think I started because I had some student debt (not the kind of debt that helped me pay for courses – the kind that helped me move out of my parents house and pretend I was a fully functioning adult when really I wasn’t because I was just using the banks money to live). I was making a pretty meager salary and wanted to make sure I had enough money to chip away at debt and cover my expenses. I googled something like “free budget template” and found a template from TD Bank of Canada. I tried to find the old template but can only find this PDF version. Over the years I’ve continued to use this original template but modified and tweaked it to work for me.

I sincerely believe the most important aspect of financial wellness is tracking your money. I’m more of a tracker than a budgeter. I don’t think most people have a good idea of where their dollars are going each week, month, year.

The first thing I had my friend do was download all of her transactions for the first half of the year (it was already June when we were getting started). We dumped these transactions into a spreadsheet and categorized every single one (Restaurants, Rent, Vehicle – insurance, Vehicle – Fuel etc). I then used formulas to essentially create a cash flow of each month showing incoming funds and outgoing funds by category.

It wasn’t pretty.

We immediately noticed that her phone bill was averaging $150 a month even though she was on a $75 plan. We switched her to a more expensive plan that provided more data, and since the switch, she hasn’t incurred any overages and now pays an average of $90 a month. This is something Canadians should pay attention to. Americans have pretty wonderful and generous unlimited data plans. Canadians do not. I have friends who are paying twice what I’m paying for 2GB of data (I have 5) because they’ve been on the same plan for years and haven’t looked into anything else. Canadians should be checking out their service provider’s offerings on an annual basis to see if they can up their available GBs or any other features without any additional cost. Recently I found out my Dad had only 500 mB on his cellphone plan. HE WAS PAYING $75 A MONTH! Granted he never went over and doesn’t seem to use any data, but I still called his service provider and had them up his archaic plan TO 20 GB for no additional cost.

The other thing we noticed was she was paying for two Amazon Prime subscriptions. She didn’t even know. She had a US account which she has no recollection of signing up for, and a Canadian account, and she never uses Amazon.
She cancelled her Netflix and Crave (Canadian HBO) subscriptions and signed up under her parents plans.
She realized that she was paying $130 for a storage unit for the last 3 years. While she knew she had this payment, I don’t think it really hit her just how expensive this is until she saw all of her monthly expenses in front of her. She got rid of the storage unit within weeks of us getting started. If you have crap in storage for 3+ years… and haven’t once been to look at it or pull stuff from it – it’s probably crap you don’t need.
Getting rid of all of the above costs and altering the phone plan meant she was now saving over $250 per month, or $3,000 a year.

This all happened just from taking the time to review her transactions and expenses. I feel that most people probably think they know what goes in and out of their bank account or credit cards, but if you’re not regularly reviewing your transactions you might be missing charges for things you signed up for and forgot about. Or, just seeing the quantity of transactions and all the crap we pay for can be a bit of a wake up call that we need to cut back.