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If You’ve Ever Tried and Failed at Budgeting

Diane Buchanan • August 4, 2017

This article was written by Sandi Martin from Spring Personal Finance and was originally published on Spring the Blog July 21st 2015, but it was so good we wanted to share it on our blog as well!

If you’ve ever tried and failed at budgeting, or if you’ve never tried at all because it sounds so hard and boring, this post is for you. Those of you with a budgeting system that works and that you possibly even love and want to have babies with are excused for the day. Those of you who are convinced that budgeting doesn’t work are kindly asked to leave the room and do a little more thinking on that subject.

Okay, now that it’s just us, let me tell you a secret: I’ve tried (and failed) at budgeting so many times that it would be embarrassing if I sincerely thought that it was easy (it isn’t) and everyone else knew how to do it (they don’t). The truth is, budgeting is hard and boring. Anyone who tells you different has a book to sell.

But it’s still worth doing. 

Budgeting is worth doing if you have limited income and lots of commitments. It’s worth doing if you spend more than you make and have been for years. It’s worth doing if you’re naturally frugal, if you have joint accounts, if your income is hard to predict, or if you have more money than God.

The cloud of tv shows and books and blog posts (probably even this one) that swirls around the concept of budgeting obscures its value, which is:

  • To know how much we have available to spend right now, given the commitments we’ve made for the immediate future
  • To set aside money we don’t need now for things we know or think we’ll need in the future
  • To base our future spending decisions on a documented (rather than estimated) past
  • To know if a sudden or contemplated change to our income or expenses will be sustainable over the long term, and whether we should adjust our spending before it becomes a crisis

And finding a budgeting system that works for you , whatever your circumstances, is a matter of deciding why you’re budgeting in the first place …and only then deciding on a system to do it.

Starting with a system without thinking about what it has to do for you is one of the two reasons people fail at budgeting. (The other reason is that they’re using too many categories, btw.)

For example: You’re self-employed, with irregular income, joint expenses with your spouse, and a little bit of debt you’d like to get out from under. A particularly painful month makes it very clear that you’ve got to do something about your money, so you sign up for Mint. You enthusiastically set up your accounts and create a budget, logging in on your cell phone throughout the day and categorizing transactions enthusiastically…until your bank balance doesn’t quite match your Mint balance, and you realize that you forgot to budget enough for food but budgeted too much for shoes, and you were sick that week so you stopped checking whether Mint was categorizing your transactions properly, and now you’ve finally found a good deal on an almost-new freezer that you’ve been looking for for months on Kijiji and are flipping between your bank account and your Mint account trying to figure out if you can afford to take out the $400 to pay for it without throwing a major wrench into the next few weeks before your clients pay you, so…you think you’ve failed at budgeting.

Or: You and your partner work full-time at great-paying jobs, but have limited free time to do all of the million and one things you need and/or want to do, like spend time with your kids and cook at home. Every once in a while you think “we make lots of money…shouldn’t we have more to show for it?”, so one day you sign up for YNAB , take a few evenings to watch the videos, and begin assigning a job to every dollar you earn. You faithfully enter your transactions for a week, but realize your partner hasn’t been, and – given the punishing deadlines at work – probably won’t. You know you’re really supposed to enter those purchases manually, and feel kind of guilty every time you download them from the bank, and then your team starts a really exciting project, your kids finish the school year, and it’s not like you can’t pay off your credit card bill every month, and – besides – you make lots of money, so…you think you’ve failed at budgeting.

You aren’t wrong to get discouraged (although in each case you could conceivably have succeeded by dint of sheer bullheadedness). You’re just using a budgeting system not particularly well-suited for your circumstances. You’re spending your time solving a problem of lesser significance than your real problem. You’re using a rolled-up newspaper to fight off a bear, or a bazooka to get that damned chipmunk off your lawn. 

Those people that we dismissed earlier? The ones who were in love with their budgeting system? They’re not us. What works for someone willing to helpfully share their opinion on reddit might not work for you for any number of very legitimate reasons.

So here’s what I propose: before you read another budgeting book, or test-drive another system, think about the most important problem you’re trying to solve. Is it really important to know how much you can spend now, and of lesser importance that you know how you spent last month? Are you trying to plan for the future and need to know what your normal and comfortable spending patterns are, but don’t have any real reason to change them?

(Some people can’t even answer this question right away. If you genuinely don’t know where to start, don’t sweat it. You’ll get there.)

I’ve failed at budgeting in the past. Many long years of trial and error, punctuated by brief bursts of book-inspired inspiration and longer bursts of discouragement have taught me this: the books aren’t necessarily wrong, anybody can make any budget system work (eventually), and chipmunks can be scared off with bazookas, but budgeting works best if you know why you’re doing it in the first place, and only then choose a tool that’s appropriate for the task.

DIANE BUCHANAN
 Mortgage Broker

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How To Get The Best Mortgage

By Diane Buchanan • February 19, 2025
If you’re looking to buy a property or have a mortgage up for renewal, and you’re thinking about connecting with your bank directly, save yourself a lot of money and regret by reading this article first. Here are four things that your bank won’t tell you, accompanied by four reasons that explain why working with an independent mortgage professional is in your best interest. Banks have Limited Access to Mortgage Products. Now, while this one may seem pretty straightforward, if you’re dealing with a single institution, they can only offer mortgages from their product catalogue. This means that you’ll be restricted to their qualifications which are usually very narrow. Working with a single institution significantly limits your options, especially if your financial situation isn’t straightforward. In contrast, dealing with an independent mortgage professional, you will have access to products from over 200 lenders, including banks, monoline lenders, credit unions, finance companies, alternative lenders, institutional B lenders, Mortgage Investment Corporations, and private funds. Working with an independent mortgage professional will give you considerably more options to secure a better mortgage. Banks Employ Salespeople, not Mortgage Experts. Banks don’t employ mortgage experts; they employ salespeople. Banks pay and incentivize salespeople to sell their products. There is a fundamental misalignment of values here. If the bank incentivizes a banker to make a profit for the bank, how can they at the same time advocate for you and your best interest? They can’t. Banks don’t have your best interest in mind. In fact, the more money they make off of you, the better it is for their bottom line. However, when you work with an independent mortgage professional, you get the experience of someone who understands the intricacies of mortgage financing and will advocate on your behalf to get you the best mortgage. It’s actually in our best interest to assist you in finding the mortgage with the best terms for you. Once your mortgage completes, we get paid a standardized finder’s fee by the lender for arranging the financing. So although we get paid by the lender, that lender has had to compete with other lenders to earn your business. When you work with an independent mortgage professional, everyone wins. You get the best mortgage available, we get paid a standardized finder’s fee, and the lender gets a new borrower. Banks Rarely Offer You Their Best Terms Upfront. Banks are in the business of making money, and they’re usually pretty good at it. As such, banks will rarely offer you their best terms at the outset of your negotiation. This is especially true if you’re looking to refinance your existing mortgage. With over half of Canadians simply accepting the renewal offer they get sent in the mail without question, banks don’t have to put their best rate forward. Instead, they rely on you to be ignorant of the process and will take advantage of your trust in them. When you work with an independent mortgage professional, we don’t play games with rates and terms. Our goal is always to seek out the lender who has the best mortgage for you from the start of the process, and if there are any negotiations to be had, we handle them for you. There is no reason for us to do otherwise. In fact, the better we do our job, the more likely it is that you’ll be happy with our services and refer your friends and family. Banks Promote Restrictive Mortgage Products. As if it’s not bad enough that banks don’t offer their best terms upfront, they actually promote mortgage products that are restrictive in nature. The fine print in your mortgage contract matters; understanding it is challenging. Banks do what they can to make it hard for you to leave. Now, if you’ve ever heard stories of outrageous penalties being charged, this is what’s called an Interest Rate Differential penalty (IRD). Each lender has its own way of calculating the IRD. Chartered banks are known for their restrictive mortgages and high IRD penalties. When you work with an independent mortgage professional, we take the time to listen to your goals and assess your mortgage needs based on your life circumstances. The best mortgage is the one that lowers your overall cost of borrowing. So not only will we walk through the cost of the mortgage financing, but we’ll also clearly outline the costs incurred should you need to break your mortgage before the end of your term. This might be the deciding factor in choosing the right lender and mortgage for you. Working with an Independent Mortgage Professional is in Your Best Interest. Banks have limitations to the mortgage products they offer. Working with an independent mortgage professional gives you mortgage options! Bankers work for the bank; they are incentivized to make money for the bank. An independent mortgage professional advocates on your behalf to get you the best mortgage available. Banks rarely offer their best terms upfront; they leave negotiations up to you. An independent mortgage professional outlines the best terms from multiple lenders at the start of the process. Banks promote restrictive mortgage products that make it difficult to leave them. An independent mortgage broker will outline all the costs associated with different mortgage products and recommend the mortgage best suited for your needs. So if you’d like to talk about the best mortgage product for you, you’ve come to the right place. Please connect anytime. It would be a pleasure to work with you.

Are You Ready To Buy A Home?

By Diane Buchanan • February 12, 2025
Buying your first home is a big deal. And while you may feel like you’re ready to take that step, here are 4 things that will prove it out. 1. You have at least 5% available for a downpayment. To buy your first home, you need to come up with at least 5% for a downpayment. From there, you’ll be expected to have roughly 1.5% of the purchase price set aside for closing costs. If you’ve saved your downpayment by accumulating your own funds, it means you have a positive cash flow which is a good thing. However, if you don’t quite have enough saved up on your own, but you have a family member who is willing to give you a gift to assist you, that works too. 2. You have established credit. Building a credit score takes some time. Before any lender considers you for mortgage financing, they want to see that you have an established history of repaying the money you’ve already borrowed. Typically two trade lines, for a period of two years, with a minimum amount of $2000, should work! Now, if you’ve had some credit issues in the past, it doesn’t mean you aren’t ready to be a homeowner. However, it might mean a little more planning is required! A co-signor can be considered here as well. 3. You have the income to make your mortgage payments. And then some. If you’re going to borrow money to buy a house, the lender wants to make sure that you have the ability to pay it back. Plus interest. The ideal situation is to have a permanent full-time position where you’re past probation. Now, if you rely on any inconsistent forms of income, having a two-year history is required. A good rule of thumb is to keep the costs of homeownership to under a third of your gross income, leaving you with two-thirds of your income to pay for your life. 4. You’ve discussed mortgage financing with a professional. Buying your first home can be quite a process. With all the information available online, it’s hard to know where to start. While you might feel ready, there are lots of steps to take; way more than can be outlined in a simple article like this one. So if you think you’re ready to buy your first home, the best place to start is with a preapproval! Let's discuss your financial situation, talk through your downpayment options, look at your credit score, assess your income and liabilities, and ultimately see what kind of mortgage you can qualify for to become a homeowner! Please connect anytime; it would be a pleasure to work with you!
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