The No Spend Month

One of the best methods to stay accountable for your spending is to frivolously track and be conscious of your monthly total expenditures. One way in which I do this, besides a budgeting app, is to choose one month of the year and challenge myself to get by with just the bare necessities (the simple bear necessities).

This year I did my no spend month in February and I may try and do another one in November. By making a conscious choice to limit spending to only what is required to get by, one can be inspired to permanently remove an unnecessary expenditure they have learned to live without. In addition to encouraging a minimalist lifestyle the no spend month allows one to realize their true saving power. Getting out of the paycheque to paycheque funk may really be as easy as removing all unnecessary spending for a month and reevaluating previous spending habits that we have proven to ourselves we can live without.

I challenge anyone reading this to have their own no spend month in hopes of enlightenment and a refreshed perspective on their own saving potentials.


The Art of Saving

Whether your financial goals include retiring early, taking plenty of vacations, or buying a new toy, all working adults should agree that instituting a savings plan for these things is essential. Am I saving enough for retirement? How much do I need to sock away to go on vacation? How much is acceptable to spend on leisure items? All of these questions are quite personal and therefore differ on an individual basis, but the implemented savings plan should be essentially identical.

There are two basic saving methods (apart from not saving entirely) that one can implement to reach personal finance goals.

  1. Pay off expenses first, save the rest.

This method is by far more popular but I feel that it is inefficient in enabling one to meet their financial goals. This method prioritizes expenses over savings and enables one to save little or even nothing if it means that expenses get paid. It is no wonder that the average Canadian savings rate hovers below 6% of gross income.

2. Pay yourself first, then pay off expenses.

This system of saving is what I believe all working adults should strive towards. By prioritizing saving over expenditures one affirms the ideology that one’s own retirement, vacations, and leisure spending money are more important than other expenses. By forcing yourself to pay yourself first, and then expenses last, one cannot lag behind on savings goals. In my opinion the best way one can implement this saving strategy is through automation. That is, setting up an automatic savings contribution plan corresponding with your pay schedule.

Your own personal savings goals I cannot comment on since these are highly dependent on personal situations, but I can suggest the Pay Yourself First method of saving for those goals. If you and your significant other want to take an annual vacation that will cost roughly $3,000 you should set up automatic contributions of $116 bi-weekly to a savings account for that specific goal. If you wish to save 15% of your income for retirement you should set up an automatic contribution of 15% of your paycheque each pay period for that specific purpose.

It really is that simple.




A Man With A Plan

RETIREMENT. The end goal for most working folk. Whether you’re nearing your 60’s or just starting out in your career, retirement is an essential part of your financial plan. When can I retire? A question most only ask themselves when they are a ways into their working careers but it is a question I attempted to answer right from the start. Knowing when to retire is quite a simple calculation.

There are only 2 things you must consider in determining when you can permanently leave the work force.

  1. How much money will you need (monthly) in order to comfortably live the lifestyle that you choose in retirement.
  2. The date of your death.

All joking aside, all that you really need to determine in calculating when you can comfortably retire is your expected monthly expenses during retirement. If you know this figure (and ballpark is okay) you can begin to plan for retirement.

MY PLAN: Build enough wealth during my working years so that I can withdraw $24,000 per year ($2,000 per month) for expenses without depleting my capital. I plan to accomplish this by continuing to live a minimalist lifestyle and keeping expenditure extremely low in order to allow my investment contributions to be extremely high. When I satisfy my goal I will retire.

In dollars and cents: the wealth that I will need to build in order to withdraw $24,000 per year at a safe withdraw rate (meaning that the withdrawal amount can be expected to replenish by earned interest) of 4% is in the neighbourhood of $600,000. Thankfully since I am planning my retirement so far in advance I have time and, consequently, compounding interest on my side.

I will have more on retirement and the safe withdrawal rate method that I am choosing to deploy in my retirement efforts. Hope any and all readers of my blog have a wonderful weekend.

Why Minimalism?

If we strip personal finance to its core it seems to always revolve around the same principal: SPEND LESS THAN YOU EARN.

There are two basic ways to make this happen.

  1. Increase your earning potential
  2. Decrease your expenditures

The first way seems to be the most popular route. It is true that, objectively speaking, earning more money is a better finance strategy than spending less. After all, there is no real limit to how much one can earn. If it is possible for you to increase your earning potential through education, developing marketable skills, and/or networking than it very well may be worthwhile to pursue those options.

The second way, which I am attempting to accomplish through minimalism, tends to be less popular and less appealing. Objectively this strategy is worse than the first as there is a limit to how much one can decrease expenditures. However, I feel that this strategy has merit and is tremendously valuable. After all, these two strategies are not mutually exclusive. One can be at a tremendous advantage if one practices a minimalist lifestyle while or prior to striving for an increase in earnings.

The largest pitfall of the first strategy tends to be that increases in income rarely leave lifestyle unchanged. That is, those who earn more spend more simply because they can. This is where I believe the minimalist lifestyle perseveres .

Minimalism is not about pinching every penny and sitting in your dimly lit unfurnished single-bedroom rented apartment crying between work shifts. It is about eliminating all unnecessary expenditures in your life that do not add value. Ask yourself, what do I value? Almost unanimously we answer that we value happiness and therefor we should be spending our hard earned money on things that make us genuinely happy. That’s what minimalism means to me. Spending as little as possible by limiting my spending to experiences and commodities that bring me genuine happiness. Think about your own purchases over the last year. If you cannot remember a good portion of the purchases on your credit card statements it might be time to reevaluate your spending habits.

The most amazing aspect of minimalism is that when you consciously consider what purchases and experiences bring you happiness, and not the brief joy you may get from buying the latest gadget, but genuine happiness you will notice that these are the often the least expensive. Going on a hike with your family, learning to cook a new kind of cuisine,  going to a public skate with your friends, going to your city’s  yearly festivals, volunteering to a cause you strongly believe in, staying in on the weekend and treating yourself to a pjs only kind of day…the list goes on. Do I care that I do not have the latest and greatest phone? No. Do I care that I’m missing out on watching tv shows on a $3,000 4K entertainment system? No. Do I care that I don’t get to drive to and from work in a quickly depreciating $50,000 “luxury” vehicle. Definitely not.

This conscious minimalism can be an invaluable tool for creating wealth, for when income and earning potential increase, the disciplined minimalist inflates their investment portfolio and not their lifestyle.

That’s all for now, have yourselves a wonderful weekend.

Cheers, Andy.

Beginning At The End

A fitting way to begin my personal finance journey with you would be to define and explain my end goal. For some their journey ends when they have completed their 35+ years in the workforce and collect a company pension in retirement. For others it ends when they reach the ripe old age of 65 and begin to draw from RRSP savings supplemented by CPP and OAS. The ideal end of my journey is something else all together.

WHY DO WE WORK? A question with a seemingly obvious answer but when we explain why we work we simultaneously define the parameters for when we can stop working. In other words, if we can satisfy our reasons for working without needing the income stream that work provides we can theoretically retire from the workforce.

My end goal is to accumulate enough capital over my working years to be able to retire not when I am 65 or when my work pension is satisfied but rather the instant that my own financial needs are satisfied. How and when I will achieve my goals is a topic for a future post. Stay tuned.

Where It All Begins

Wow! I am finally committing to doing this. Throughout my whole life I have been somewhat of a procrastinator, so me taking the time to create a blog and post meaningful content is nothing short of a miracle. So lets begin with why I am creating this blog. My main motivation and inspiration for beginning to document and share my story was listening to Cait Flanders from the blog ‘Blonde on a Budget’ interviewed by Jessica Moorhouse on her podcast ‘Mo Money Mo Houses’. In her interview, Cait explains how she created her own blog to document the progress of paying down her debt. What started out as a simple medium for documenting her progress quickly became a medium for motivation as she began to gain some followers. Her followers rooted and cheered her on and she was able to stay motivated and finally reached her goal of being debt free.

I am hoping to experience a similar phenomenon. Rather than overcoming debt I am hoping to one day become Financially Independent (FI) through maximizing saving and minimizing spending. As a low wage earner becoming FI may seem near impossible. I believe that through minimalism and aggressive saving one may become FI regardless of income level. I hope that with some discipline and motivation derived from this blog my dream can one day (hopefully sooner rather than later) become a reality.

What a beautiful sunset. I think I may just leave this photo be.


I hope that you stick around and help me achieve my goals.