061: FI School Lesson 3 | Budgeting and Tracking

FI School is back in session! After a long hiatus, Money Mechanic and Chrissy are reviving this back-to-the-basics series. But even if you’re a FI veteran, it’s still worth a listen. You could still discover some new FI info and hacks to help you in your journey!

In this episode, we’re diving into Lesson 3 of FI School, which is all about budgeting and tracking. We discuss why we prefer tracking over budgeting, why budgeting is still useful, and our favourite content to learn more about tracking expenses.

Thanks again to listener Alexi, who volunteered to edit the transcripts for our show notes. Thank you, Alexi—we’re so grateful for your help!

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Money Mechanic
Welcome to Explore FI Canada, where we investigate the financial independence topics important to you. Join us as we learn how to optimize our lives, save money and invest for our future. We’ll go coast to coast interviewing experts and chatting with Canadians about their inspirational FI journeys.

Chrissy
EQ Bank’s Savings Plus Account is Explore FI Canada’s favourite bank account. It’s not hard to see why… it functions as both a chequing and savings account, offers an everyday high interest rate, free Interac e-transfers, and so much more. Visit exploreficanada.ca/eqbank to open your account today.

Chrissy
Hello, listeners, welcome back to Explore FI Canada, we are on the mic. And we are resurrecting an old series that we once featured on the show. And it went away for a while. But we’re bringing it back by popular demand. So what are we talking about today, Money Mechanic?

Money Mechanic
Well, this is Lesson 3. Following up from Lesson 2 . If you haven’t caught those, go back and listen to one and two, obviously first, and this is Lesson 3, which is budgeting and tracking.

Chrissy
Yes, and that’d be Lesson 3 of FI School. And that, just to catch everyone up, if you don’t know what FI School is, it is a series on my blog, that’s kind of like a course. It’s a collection of FI material that I collected from all over the internet. It was content that I found the most helpful when I started my FI journey and throughout my FI journey, and includes all kinds of bloggers and podcasters and books and any kind of content and tools that I came across those useful, I collected all together. And originally it was meant to share with my family and friends who are interested in FI and when I started my blog, I thought well, why not share it with everybody. And so I created a series on my blog, and you can find it at eatsleepbreathefi.com/FI-school. So if you go there, you can find all the lessons. And as Money Mechanic mentioned, we have already covered an intro and Lesson 1 and Lesson 2 in previous episodes. So you can look in our catalogue for that. And today we are jumping right into Lesson 3, which is about budgeting and tracking.

Money Mechanic
So Chrissy, are you a budgeter? Or are you a tracker,

Chrissy
I’m completely a tracker, I have tried budgets in the past, and they just don’t work for me. They just don’t.

Money Mechanic
Darn

Chrissy
What about you?

Money Mechanic
I should have said I was a tracker first. Now I got to defend budgeting.

Chrissy
I think we can both defend both. Because I do see the value in budgeting. I think it can be helpful for those who maybe want to rein in certain categories, and maybe feel like there are certain things that they spend too much on and they really want to limit it and it helps them to have those limits in place. What do you think about budgeting?

Money Mechanic
Well, I’ve struggled, I’ve tried to budget I remember way back in the day that was you know, my mother was like, you know, when I was just out of high school, you’ve got to create a budget, you’re an adult now it’s like an adulting thing to do was to budget. And it just turned me off, I could never figure it out what I was never very good at it. And you know, this whole FI journey. For me, it was the tracking that spoke to me. And one of the articles that you have on your website and your blog is what I’m going to use as my reference today. But just before we get to that, my thoughts on tracking for the FI journey is that it’s for me, it felt like a more natural way of coming to terms with where my money was going. And I feel that budgeting is a useful tool that once you’ve kind of made that analysis and made the transition, then you might want to create a budget that you can really work with and get that savings rate higher and things like that. But if you budget right at the beginning, and you don’t really know where you stand, I think people, it’s easy to fail at your budget by mistake because you don’t really know where your spendings going. So for some people, they love the budget, you know, there’s you know, YNAB, we’ve talked about that before. And there’s other ways to budget and for some people that, you know, the the constraints of the budget really work. For me personally, it didn’t, I thought the tracking really helped me get under control.

Chrissy
Yeah, I’ve had the same struggles with budgeting, and I think most people do. And that’s what turns them off is because most of us have very erratic spending. Some things are quite regular, but a lot of things. Sometimes you’ll spend more one month and less the other month. And so it’s really difficult to stick to a budget with that kind of spending. And so that’s why I prefer tracking where you’re just really aware of your spending and where your money is going. And over time you just kind of develop these patterns and rhythms. And I think a budget naturally emerges from that, because most of us, we’re pretty regular with the majority of our spending. And so tracking allows you to see those patterns and really look into it and see where you want to maybe cut back or where you can spend more on things that maybe you enjoy.

Money Mechanic
Yeah, I think one of the things we’ve talked about on the show before is that you know spend where you get the most value, spend with intention, you know, having that intentionality. And for me when I found at the beginning is if I created a budget, I didn’t know where my value spending was I just kind of had random spending. So if I tried to constrict each of those categories at the beginning, then, you know, it’s it’s hard to overshoot or have too much left over things like that. Whereas I think as I mentioned, the tracking identifies where you’re spending then you can make the conscious decisions of where you want to spend. And you know, I’ve talked about this before on the other podcast too, is that, hey, you know you can cut everything out. But if you’re feeling deprivation then you can start adding things back in. Right. So I think it kind of works both ways. And like, just like you said, the budgeting becomes very sort of natural down the road, because I know what my monthly expenses are now. And they don’t need to be spreadsheeted it into a budget per se. But I know what my monthly budget is, right? So, you know, both of these things, I think, are a bit of an evolution in your own FI journey. But the tracking, I think helps so much at the beginning, because it just identifies where your money’s going.

Chrissy
Yeah, it’s building that awareness. And I think that is key, you know, really knowing where your money is going. And knowing if you value where it’s going, right? If you look at it and see I’m spending this much on eating out or this much on groceries, is that really where I want to spend my money, and it helps you really pinpoint where the problems are. And where maybe you do you have extra where you might be able to direct it to new or different things that you’d enjoy more.

Money Mechanic
Well, exactly. And part of this journey is optimizing so that you can find those extra dollars to put them into your investments for future you right, so let’s jump into the references that we used from your blog.

Chrissy
Sure. Yeah, we each picked one from my blog, and you can find all the links that we mentioned, either in our show notes, or you can go to my website to find Lesson 3 for FI School. And all these pieces of content that we will share on these episodes will be there. And so Money Mechanic picked one, and he will go into that. And after that, we’ll go into my pick for this episode.

Money Mechanic
Yeah, and I think it’s worth noting that these are by no means the be all end all references. There’s a lot out there. And I think Chrissy you probably found the same as I did at the beginning of this FI journey, when the content is just you kind of go through like this link-fest read like that takes you to somewhere else. And that takes you to somewhere else. And that takes you to somewhere else. And you’re like oh my goodness, this is so much information.

Chrissy
It’s a FIRE hose.

Money Mechanic
It’s a FIRE hose. Yeah. So the one I picked for this particular lesson is an article that was written in 2018. By the blog Root of Good. And the title is, I Retired at 33 by Tracking Every Dollar I Spent. So of course, this defends my position of tracking, naturally. But I think I like he identifies four main reasons why you should track spending. So number one, is when you know how much you spend each month, you can plan your cash flow better. Okay, that’s important. Number two, detailed expense tracking, lets you focus on problem spending areas, which can free up more funds for saving and investing. Excellent. Number three, tracking expenses ensures transparency and discussion in couples finances. That’s an interesting one. We often talk about that a little bit. Yeah. And number four, knowing what you spend each year leads to better spending projections in retirement. That means a fine tuned portfolio target size. So it’s great, right? You got to know now because you can’t plan for the future if you have no idea, right?

Chrissy
Yeah, I think that is so key. Because the way that people in the FIRE community plan for retirement is so different from the traditional advice, which is a certain percentage of your earned income currently, and it makes no sense to do it that way. Because it really is reliant on your spending, right. And if you don’t track your spending, you have no idea how much you should allow. And you also don’t know which areas might go up or might go down. Because it’s just as big blob of spending, it’s it really is important to break it down, really analyze where you’re spending in different categories. And then you can really work out the numbers and get more accurate and really aim for a number that is what you’ll really need in retirement.

Money Mechanic
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Money Mechanic
Yeah, absolutely. So I just want to dig into these four items a little bit deeper each one of them and we can just have a quick discussion and talk about those. So the first one was tracking for better cash flow. Now this is important because you know, you’re going to have sort of a fixed amount each month that comes in from your paycheck or whatnot. And if you aren’t looking at where that money is going, you may not be optimizing that cash flow that comes in the door, right? If you track everything, and initially like this is discussed quite a bit in the book, Your Money or Your Life as well as track to the dollar for a while so you can see that and once you understand where your cash flow is going, then you can make proactive changes and help you on your FI journey. And this rolls really well into number two, which is the detailed tracking helps you focus on problem spending areas. So this isn’t a comparison of what you spend versus anybody else, or how you’re doing or any of that. It’s just for you to be able to track and once you can look at those expenses, you may find there’s wasteful spending in there. Right, if you’re overspending on eating out, if you’re overspending on subscriptions, if there’s things that you just don’t have, just don’t offer value for your life, you may not notice that and we’re all victims, myself included, of complacency, right? We kind of get into our routine, we form habits. And if we don’t reassess them, we don’t see where the waste is. So I like how that those two kind of roll together to identify that. Now the third one the discussion with couples finances, I really like this one because Chrissy How many times have we talked on the show about that, you know, the first person that finds FI gets super excited. And then there’s the spouse,

Chrissy
The reticent spouse,

Money Mechanic
The reticent spouse! That’s right. And it’s like, I’m super excited! I’m a Mustachian. Now Let’s Go, Let’s Go!! The other ones like, Uh what are you talking about?

Chrissy
You’re crazy! There’s no way I’m riding a bike everywhere.

Money Mechanic
That’s right, yeah. But if you’re tracking your expenses, and you can do it with your partner, then you have an opportunity, it opens up discussion and saying, hey, you’re spending a whole ton on car parts. And hey, you’re spending a whole ton on subscription cosmetics. And maybe both of those are valuable to the each partner and that’s fine. It’s just a be able to open up the discussion and go, hey, look, this is what we’re spending. Are we okay with it? And opening that discussion, I think is super important, because it’s gonna be foundational, in your whole FI journey is being able to have that communication, especially about all the finances, what do you think?

Chrissy
Yeah, absolutely. that’s helped us so much, because my husband, he loves eating out, we all love eating out. But when we really looked at how much we spent on eating out, I said, Do you really want to spend that much on eating out? And he’s like, no. So let’s cut it, cut back on fast food, for example, and have more of the nicer meals that maybe it’s food or dishes that we can’t cook at home, because they’re too complicated, or we don’t want to buy the special ingredients, right? So it’s really helped us to get more intentional as a couple, right. Whereas he was just like, I want to spend more, I want to spend more on eating out. But let’s instead talk about as a couple and find ways to do it that worked for us and fit within how much we want to spend for each category. And you can’t see that unless you really dig down and really analyze it. And it’s not a one month thing, you kind of have to do it as an ongoing process. I would say at least for a year. But I think once you even start doing it, you’ll get hooked, and you just want to keep doing it forever. And that’s how I feel. And most people I know do feel that way. What about you? Do you think it’s something you’ll just keep up for the rest of your life?

Money Mechanic
Yeah, I definitely think it is. And it becomes so much easier over time. Because once you’re kind of dialed in and you’ve had those discussions, you can it becomes so much easier. It doesn’t feel like a big challenge to kind of go like, Oh, hey, we we overspent this month on this, but that’s okay. You know, it’s within our quote unquote, “budget”, it’s fine. we’ve tracked it, we’ve identified it, we chose to do it, it’s done with intention, right. So I think it just helps down the road, it becomes easier and easier. The longer you track it, and the better communication you have with your partner. So the last one, just quickly here, we talked about Chrissy, you brought it up a little bit before about knowing what you spend now, it’s going to help you get a kind of game plan ahead. Because how many times have we seen the question? How do I know what my FI number is right? And the traditional rule of thumb in the community is 25 times your expenses. Now, I think that’s pretty nebulous, because if you’re in your 20s now or your 30s, and your expenses are 50k, that may change a lot between now and your 90, right? So, but knowing now at least that gives you a target to work towards, right? You know, it doesn’t have to be set in stone. But if it says it’s “x” amount, then you know, 25x is your goal, and you can work towards something. And I think if you track you then you become aware of sort of each year to be like, Oh, this year was 50, next year 60, then it’s 40. And you can kind of gauge things as you go. But if you’re not tracking, then you can’t even make a plan for what you might spend in retirement or even what your savings goal is because you could think you’re getting close to FI but you’re way under because you haven’t accurately thought about what your spending is right? So yeah, I thought I liked this article. He kind of identifies all those items. And you can go way deeper into it. And he talks a little bit about how to track and this one. There’s so many options today. FinTech is amazing. There’s all sorts of apps. I know even with TD where I bank they’ve got like an on the phone app for spending tracker, moves things into different areas. And I don’t use that one. But you could just start by making a spreadsheet and I’ve kind of harped about this before is I get it, I’m not a great spreadsheet person, either. And if you’re not, hey, this is a great time to learn, you can download templates, it’s super easy, you’re just doing basic math. And learning to be a little more comfortable with some spreadsheet basics is going to help you in your whole FI journey.

Chrissy
Absolutely. And again, if you really don’t like spreadsheets, or you want something that’s a little more polished, done for you, there are tools like my favourite YNAB, and I’m not, I don’t get a referral fee or anything, because I’m still on the free desktop version that I won in a contest a while ago, but I love it. Like I’m gonna use it until it stops working on my computer. But there are other options, and there will be lists of them in on my website on FI school. And there is a free version. I don’t want to call them a knockoff, but there’s a copy of YNAB that works on Google Sheets. It’s totally legit. It’s done really well. It looks a lot like YNAB, but it’s free!

Money Mechanic
A clone. Yeah, it’s a clone. Do you remember, you’re probably you and I are old enough to remember like IBM clones, like the first computer my dad ever bought back in like the 90s was an IBM clone.

Chrissy
A lot cheaper, right?

Money Mechanic
Well, that’s all we could afford, yeah. Tell us about your article.

Chrissy
Okay. So your article is written by Justin at Root of Good and he is known as quite an optimizer. But my article is from, you know, the king of optimizers. Our hero, Mr. Money Mustache. And I picked this article, because it’s one of the first that I read on his website, you know, when I discovered him, I think it was through The Shockingly Simple Math of Early Retirement. And then I just went down the rabbit hole and start reading all his post. But somehow, this one always stuck in my brain. It’s the one that kind of guides me through all of our expense tracking and how we handle our expenses. And it’s, again from Mr. Money Mustache, and it’s called The Principle of Constant Optimization. And in it, he basically outlines his process for optimizing everything in his life it’s not just his expenses, but just the way he thinks about all the things in his life. What it is, is that you revisit what you’re spending on, what life situation you’re in, and you really cut out the fat, you cut out the things that are unnecessary, and you really focus in on the things that are really important to you, and what you’re needing at that time in your life. And by doing that, you’re really, really getting down and optimizing your money and your time and how you’re spending both of those things. And I think it’s just so important to do this. And I do this all the time. You know, I’m constantly optimizing, as he says, like, I look at my phone bill, if my kid suddenly needs a phone, then we’ll start looking at it. But if I you know, I’m now I’m at home a lot more even than I used to be because of COVID. And so I look at my phone and decide, do I really need as much data as I have those kinds of things, you just kind of you keep revisiting whatever it is in your life, and you decide at that moment, as often as you can, “do I still really need this?” And I think that’s a great way to save a lot of money, because you’ll catch anything that’s just wasteful, that you really don’t need in your life. I also want to just read out a quick quote from the article, why I think this is so important. So Mr. Money Mustache, he says, he’s mentioning a story about how he went to a friend’s house. And notice, you know, they, they would like to spend more on some things. And yet he notices some of the luxury items that maybe are not so necessary that they spend on and so he thought, “This brought me to a realization of something I have always done. And that is not widely practiced. But it is so important. I think it could be considered one of the principles of Mustachianism, practice constant optimization in all areas of your life.” And so, yeah, that just sums up everything that I just talked about, from his post.

Money Mechanic
Yeah, I love that you pick that quote, because when we’re doing the pre show notes here, I had read the article recently, I mean, I read it years ago, but I reread it and that quote jumped right out of the article at me as well because it is a principle of Mustachianism and it’s really part of like this budgeting and tracking process is becoming intentional, right? And that part is the optimizing part. You know, once you’ve seen where your money goes then you’re like ohh, we know it’s all about the low hanging fruit at the beginning right? It’s your cell phones, it’s your cable package, it’s your internet package. It’s your house insurance, car insurance, you know all these the low hanging fruit start there and start optimizing just so you can get used to it right?

Chrissy
And almost becomes a game right?

Money Mechanic
You can game, you can totally gamify it however don’t take it too far because I did, I did, like my wife in the kitchen like rinsing plates and I’d like reach over and shut the tap off. Don’t waste water we’re gonna water bill gonna pay for water. You know you could you can definitely annoy Your spouse and your family. But yeah, I think at the beginning, you’ve definitely it does become a bit of a game. And because you can see immediate results from it, that you can start, like, if you can optimize something and save yourself $20 a month, that’s $20, like forever that you can now invest, because you’re not spending it anymore, right. But the only way you can get to this optimization is if you actually track, that’s what he talks about.

Chrissy
Yeah, it’s really looking at what you have, and not just mindlessly adding these expenses. Because I think a lot of us do that, you know, you add the Spotify, then you add the Netflix and you add Disney+ and then you add whatever Amazon Prime and before you know, you have a multiple streaming services, you don’t need them all, right? But I think what a lot of people in the FIRE community do is they, they switch from one to the next to the next. So instead of having all four of them, maybe have one at a time, you know, watch up everything on one of them and the switch to the next one. So that is the kind of optimization that I’m talking about.

Money Mechanic
Yeah, definitely. And I think it’s, you know, the optimization becomes apparent when you figure out what it is that you value. Right? If you’re spending with intention, you can go, “Hey, you know what, I can optimize that.” He talks a lot in that article about, like, optimize away the waste.

Chrissy
Yeah. And the same with tracking is looking at your values, and really looking into each category of spending. And do I value spending that much on this particular category? Because a lot of times, I think before finding FIRE, most of us aren’t quite that dialed in. But once you find this community and you learn about this kind of a mindset, it’s actually I find it really gratifying to go through my categories, like every month, as I reconcile YNAB, I go through each category and think, do I really still need to spend that much on here, can I scale it back again, this time, it is fun for me. And there is something in YNAB called “WAM” whack a mole where you kind of like you zero out each category. So if there’s money that’s unspent in each category, you kind of shift it over to different areas. So it’s kind of fun, you kind of gather up all this unspent money. It can be fun, it can be a game. And I think if you look at it that way, it makes it really enjoyable and way more gratifying than, you know, the way most people think of budgeting.

Money Mechanic
For sure, yeah. And I think this ties in nicely with number three of my article where you can discuss this with your partner, if you have a partner or even discussing it with your family, right? If you have children, as well as like, okay, we’ve tracked we want to optimize now you can have that discussion and see where what the family values and the whole purpose of this is the FI journey, you can make changes today that improve your life and make you happier and your family happier right at the beginning. You know, the goal down the road of reaching FIRE is fantastic to have. But the changes today will bring benefit to your life.

Chrissy
Absolutely. And and as you mentioned earlier, this is the low hanging fruit, right? This is such an easy way to save a lot of money really quickly. I think when I discovered FIRE, I trimmed $3,000 per year out of our just regular spending without any cut to our lifestyle or standard of living, it was so easy to do that it just takes a few phone calls, a bit of research. And like I said you could save $3,000 in one year and every year going forward just by doing that.

Money Mechanic
So now this reminds me of a great little calculator. It’s like, you know, Mr. Money Mustache was always really good at doing like, what’s the 10 year cost of that expense, right? But I think it’s Learning to FI, a Canadian blog that he’s got a little calculator on there that you can go in and plug in, like your expense that you get rid of. I’m gonna have to look up the link, we’ll put it in the show notes. But that’s a great way to think about your recurring expenses. And when you optimize and track and you get those expenses out that $200 you’re like, Well, that doesn’t seem like much do the 10 year compounded growth of that, right? If you need some motivation to pare back some of your spending, that’s pretty good motivation to see that that 50 bucks a month turns into 10,000 down the road, right? It’s the time value of that money. And I don’t want to get into the whole, like, latte factor debate at all, but it’s choose what works for you. This is your journey to FI right? Not ours. We’ve already made our decisions of things that we’ve gotten rid of, but keep what you value. Cut ruthlessly on everything else and and track and pay attention. Right. This is all part of the journey.

Chrissy
Yeah, I love that principle. So yeah, we will add that little tool in the show notes, it’s Sterling at Learning to FI. One of our FI friends in the community. So yeah, I think this is one of the bedrock foundational concepts in the FIRE journey, to really dial in get dialled in on your expenses and find ways to optimize it. It’s not to cut back to the point of deprivation, but it’s really to get in tune with it and make sure you’re spending in the areas that you value and trying to find ways to do it cheaper, you know, there are things you value? Switch to a different internet provider, for instance, and get it cheaper for the same speed.

Money Mechanic
Yeah. And you’re gonna find that in this community too, reach out because everybody’s got ideas of wherever you are in Canada to give you some ideas to get those cheaper products, because things are changing all the time, right?

Chrissy
Absolutely.

Money Mechanic
I will add in that on your journey to FI you could possibly, I’m kind of looking at myself here become complacent. So this is an awesome reminder to me that I need to go in and check my optimization again, even though I’m fairly diligent about it. It’s easy to go like, Oh, I’m optimized, right? And I go, You know what? revisit everything and have a little closer look, maybe I can squeeze a little bit more juice out. Right. So anyway,

Chrissy
it’s true. It’s true. Yeah, I thought I was fully optimized a few years ago. But I constantly find new ways to do better, right. And COVID also has presented another opportunity to further optimize, because a lot of us now are working from home, we don’t need a vehicle or less driving so we can cut down on our insurance coverage, all these kinds of things that are new opportunities, because of the way COVID has changed the way we live.

Money Mechanic
I thought we weren’t going to date this…

Chrissy
Oh right yeah… COVID or anything, right? Any life change, I should say, any kind of life change is an opportunity to revisit things

Money Mechanic
Chrissy? What’s my homework for this episode?

Chrissy
Yeah, we got to give homework.

Money Mechanic
I guess so, do we have to do the homework? Do we just get to mark the homework?

Chrissy
Yeah, let’s say that. We’re the teachers. We don’t have to do the homework. Well, we’ve probably already done all this anyway. So that’s why we’re presenting this. So at the end of every FI School, we’re going to give you a little bit of homework just to give you something to take away and for your journey and try to get a little better with your finances. So we picked a few things that you could do. So one of the things I think people could do is pick a budgeting or tracking program and start using it. And so there’s a list in FI School that you could look at, but some off the top of my head, YNAB is my favourite. And there’s also Mint that’s free. There are other things that you can use to track and we’ll list it all there. So that’s one of the things that we’d like, we’d love for you to do for homework. And what else is there Money Mechanic?

Money Mechanic
So the other thing too, is, depending on what you’ve chosen to use for tracking or budgeting, work on this and do it for a year, get started, right, three months, six months, 12 months, and see what patterns emerge and identify them. And Chrissy remind me, what’s the other one that like they do the wall chart as well. The spending, like maybe for a visual indication is good for you as well. Right?

Chrissy
Yeah. Well, I mean, that I think the wall chart idea is from Your Money or Your Life. Right? Yeah. But it’s The Mad Fientist. He has the I think it’s called The FI Lab.

Money Mechanic
That one’s the spending and earned one.

Chrissy
Yeah, it’s your investments as well.

Money Mechanic
For this particular purpose. Have a look and identify the patterns that emerge from your spending as you change over time. That’s good homework for me.

Chrissy
Yeah, yeah. And we would love to hear from you. So you’re on this journey with us and you want to really get into FI School? Let us know like in the comments of our show notes or on our Facebook page, comment and let us know if you were surprised by any of your spending. If you thought maybe you’re spending more, but you’re actually spending less than you thought. Anything that you discover from this, we would love to hear from you. And if you have any tips to share for everyone else. Again, leave a comment in our show notes or on our Facebook page. We always love hearing from you.

Money Mechanic
What’s the next lesson Chrissy?

Chrissy
Exciting, so we will have Lesson 4 coming next. And that would be about income. So yeah, so because the thing is you can only cut so much right?

Money Mechanic
Don’t spoil it. We’ll see you next time on FI School.

Chrissy
Thank you!

Money Mechanic
Explore FI Canada teachers out!


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2 Replies to “061: FI School Lesson 3 | Budgeting and Tracking”

  1. How nice to get back to FI school after all this time. Great episode! I was really looking to get back to basics this month and you have helped. I liked it when MM said “It’s easy to become complacent”. I am finding this is something that happens to me, 3 years in. Also, I realized that I’m becoming more of a tracker than a budgeter. Even though I “budget” funds for each expense, I don’t really pay attention to it until I run out of money in a particular catergory and have to move things around. I think at this point my budget is more like a safety blanket – do I have money to cover all these expenses? Yes? Ok great. I am not going to look at it again for ahwile. Haha. Looking forward to FI School 4.

    1. Hey T—what a lovely comment! Thanks so much for listening and taking the time to share your thoughts. I like how you use budgeting and tracking simultaneously. I’m similar. Though I mostly use tracking, there is a budgeting component to how we handle our finances. I assign average monthly amounts to each category and use them as rough targets rather than hard and fast limits.

      It’s all too easy for most of us to get complacent, and going back to the basics is great way to see if we’re still on track. The bonus is, you already know what to do, so it doesn’t take long to rectify any issues!

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