When you are suddenly thrust into the world of financial independence, the most important thing to do is take stock yourself, your spending habits, and your expenses.
The first step, is to figure out how much money you have and how much money you spend. This means that you have to spend a month or two writing down everything you spend money on. This was the hardest step for me (because I kept forgetting to do it!) but also the most important because it’s important to have an idea of where you’re coming from when you’re making a budget. If you are able, start doing this before you are “cut off” from whatever financial support you’re receiving. It will make everything else SO much easier.
There are a few services and apps out there that will help you with this, the most popular one is Mint, but I found it finicky and I hate how it categorized my purchases for me. Just because I bought something from Shopper’s Drugmart doesn’t mean that it’s a medical expense! The other downside to Mint is that it might cause trouble for you later on. Here’s a post from one of my favourite finance blogs that explains why using Mint may not be the safest idea.
What that worked for me was using my plain old bank statements, my phone, and a spreadsheet. I make most of my purchases on my debit card, so the bank already did all of the work for me, down to the cent. I just log onto my online banking account and look at my electronic statement. When I have cash, I make a note of how much I spend on my phone and reconcile everything onto a spreadsheet. The categories change around each month, but usually it’s something like
- Eating out
- Starbucks (Yes, I know, I’ll explain)
- Video Games
- Sheet Music
- Lessons and Coachings
Then I let the spreadsheet do all of my math! for those interested it’s the function is (=X+y+z).
Now, at this point, most of the books and blogs out there will tell you to start making your budget, but if you’re like me, you want to make sure that you have ALL the information before you start. Thankfully there are so many blogs and books out there that have great information. Here are some of my favourites:
It’s your Money by Gail Vaz-Oxlade– This woman is like, the Queen of Canadian Personal Finance. This book is geared to women and is about taking charge of your money if you are used to having someone else handle it (usually a husband). However, the information is useful for any financial newbie, so don’t let gender get in the way of all of this sweet, sweet knowledge.
Gail Vaz-Oxlade’s website- For more no-nonsense goodness and the most amazing tools and spreadsheets.
From Rags to Reasonable- I wish this blog existed when I was starting to figure this stuff out! It’s written by a fellow opera singer and is full of all the information you need when dealing with money as an artist, from budgeting to tax deductions. This blog helped answer the #1 question I had after I started my financial research “How on earth do you save for retirement as an artist?”
Banking Websites!!! Seriously, you may overlook them at first, but the website for your bank probably has tons of articles and calculators that you’ve never used before, but are so great.
My Alternate Life- This is written by a fellow Haligonian who paid off almost $40,000 of debt in two years by making some fairly simple lifestyle changes. I’m a big fan of her advice and also her spreadsheets.
Microsoft Excel– Ok, so this obviously isn’t a book or a blog, but it is my favourite resource for tracking expenses. It can seem super daunting, but for budgeting purposes, you really only need a few functions (=X+Y) (=A1 – A2) and you’re set. If you’re nervous about making your own from scratch, any of the other spreadsheets mentioned above are Soubrette Approved!
After you’ve done all your homework, you’re ready to start Budgeting! Come back on Saturday to see how I build a budget.
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