Hidden in the cat.
Seriously. The money I spend on a regular basis, the funds that I access the most, are kept inside of my cat.
He looks like this:
He holds my toonies and loonies (that’s Canadaspeak for two dollar and one dollar coins). I always keep my change in the cat, and if I need something, he’s the first person I ask to cough it up. My wife named him, but I don’t remember all the names for everything she names around the house, so I just call him the cat.
When I need money, that’s the money I use first.
I also keep a small “float” of $500 in my checking account. I use this to pay for anything that requires more than a handful of coins. However, most things go on my credit card, as I like the rewards, and that gets paid off twice a month from the float.
I don’t keep a strict budget. I just know that I have $500 in discretionary spending each month. This if for things like clothes, food, bills (excluding housing), cool new shorts, tornado fries, and dinner out. If I can’t afford something at the end of the month, like a new rear rim for my bike (curse the Lion’s Gate Bridge Bump) I have to save up for it. Many wiser people than I recommend that you track all of your spending and allocate monthly funds accordingly. This is probably something I should be doing, but right now this method works for me.
My pay, which comes every two weeks on the regular, gets split in a few ways;
- Paying Me: About 25% of my pay (net) goes into my investment portfolio. I have a reinvestment plan that automatically deducts $ from my chequing account and dumps it into four different Index Funds located in my TFSA and RRSP, heavy on the TFSA. Why? Here’s why.
- Paying Me Again: I try to put about 10% of each paycheque into an emergency/travel fund. This is a “high interest” savings account through my branch. This money goes toward emergencies (need a new suit for brother’s wedding), travel (need to travel for brother’s wedding) and emergency travel (can’t meet up at the rebel rendezvous because there’s business in the Dagobah system). Right now there is about three months worth of expenses in this highly liquid, easy to access account. I’d like there to be more, but things do come up.
- Large Bills: Housing, tuition, utilities, cell phone, internet, then tuition again, cause education is expensive, kids! Start saving today! Bills are split between pay periods. Small bills like Netflix are just paid out of my float. My wife contributes, of course.
- Paying Me AGAIN: Who’s gonna pay me like me, right? If my “float” is topped up, my bills are paid, and there’s no surprises, then I often use that money to purchase Exchange Traded Funds. I also own small amounts of common stock, but it’s rare that I invest that way. Track the indexes, kids. Praise Bogle.
- Leftovers: There are none. All my money is accounted for every month.
That’s where it goes.That’s where I stash it.
These aren’t large amounts of money, but I think it’s important that, if it were much less or much more, I’d still stick to keeping a small monthly float, paying myself first, and paying my bills and credit card balance each month. If I get a raise, not much will change except percentages.
If I had all the money in the world, I know what I’d do.
But I don’t, so I do this.
Leave the cat alone.