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How I Learned to Budget | Scott Dawson
(778) 668-9320 [email protected]

The following is a guest post by a good friend of mine Caroline Hanna, BA, CIM from Wellington West Capital Inc. Caroline is a third generation investment advisor who grew up in the industry. Her Mom is her highest role model and Caroline shares her passion for working with clients to help them grow their wealth.

I find it odd that one of the most important life skills isn’t taught in school… BUDGETING!

For young people today – we are constantly bombarded and lured into the credit card/debt world. I honestly think this skill is a MUST if you want to shoo away the debt and increase assets!

Often, if you mention the word budget, most people laugh, cry, roll their eyes, or delight in enjoyment (I’m usually the only person who does the latter one). Often we fear that which we don’t understand.

Considering many people learn through story – I wanted to share my story of how I learned to budget.

When I was 12, I was put on a “clothing allowance”. As a young girl, I wanted cool clothes and fashion items. Each week my parents would pay me $12 (provided I completed my chores) and I would have to put $25/month into my bank account for savings (a 52% savings rate). If I wanted to buy a $50 pair of Roxy shorts…I would have to save up my $23 spending dollars each month to do so. If I wanted to go to the movies with my friends…I had to use my spending money to do that. I learned quickly that you can’t be a spontaneous shopper – you have to think, do some math, and save first. Each month my $25 savings was put into an investment account to grow for my future benefit (I had to trust my parents on this part). Each quarter I could look at my statements and see what was going on. I remember being very proud of the investments I owned and LOVED to see my statement increase in value.

In my teenage years, I lost my allowance due to a car accident that was my fault. Now, if I wanted to keep my car and continue my savings, I had to get a real job. At this point I paid for my gas and I had a cell phone/pager (yes a pager!) and paid for my own minutes. While I remember as a kid thinking it was unfair, difficult, and not easy…I learned valuable lessons! (Thank you MOM and Clark!)

I was fortunate enough to have my University Education paid for. So my nest egg that I saved up could continue to grow or I could use it as an emergency. My parents set a limit as to how much of this I could take and after my first year of University, Clark (my dad) actually said to me… “see if you can NOT take out any money from your investment account. Try it and see how you do!”

I liked and welcomed this challenge… “OK! How do I figure this out?” I asked…he said… “BUDGET.”

“Budget?” I said…gulp! What does that mean?

Clark said, “First, start with how much money is coming in (income), then list all your expenses, total your expenses, (the KEY is being honest here – if you’re a university student – “entertainment” budget is pretty high) and subtract your expenses from your income.”

I found this to be a great exercise (and yes FUN).

I listed all my expenses… wow…I spend that much for entertainment…ok maybe I should stay home one more day a week. WOW…I spend that much on gas (maybe I should do all my errands one day every week all together). Wow…I spend that much on eating out and coffee…I should pack my lunches more often. What an eye opener! Right away I started to see the area’s I wanted to improve on to save more money.

I am proud to say that when I was a University student, I learned to live off of $1000/month – including rent, groceries, gas, utilities, and even entertainment!

There is no one else I can thank for my budgeting skills today other than my parents, especially Clark, for challenging me to live like a starving student! Budgeting is a skill set you have to learn…you will struggle, you will falter…the key is to be honest and get clear on your priorities and your goals…and go after them! AND…don’t forget…to SAVE FIRST!

Feel free to contact Caroline if you would like to set up a introductory meeting over coffee or tea.

Wellington West Capital Inc.
Suite 101, Windsor Square
1959-152nd Street
Surrey, British Columbia V4A 9E3

Direct: 604.542.3306
Toll Free: 877.542.2824
Email:[email protected]