Estimated reading time: 8 minutes
Making good personal financial decisions takes more than saving money and finding deals.
The Canadian economy is struggling, and residents aren’t sure of the future.
Related: Canadian banks may downgrade economic forecasts but not confirm the recession.
We’re already experiencing increased pricing on housing, groceries, utilities, petrol, clothing, and everything else in between.
These are the days Mrs. CBB and I forecasted when we made decisions that would impact our lives.
At this point, we are thankful that we stuck to our financial commitment of zero debt.
I was lying in bed scrolling through Reddit Personal Finance Canada when a question caught my attention.
A Reddit user asked, “What personal financial decision positively transformed how you live?”
I replied to the question but, seconds later, realized that it wasn’t just one decision that changed our lives; it was many.
Today, I want to answer the Reddit question in more detail and hope you might share how personal financial decisions transformed your life.
1. Understanding Basic Finance
If I could turn back time, I’d want to learn more basic finance before I turned 30.
I had just turned 30 when I moved to Canada and was still investigating personal financial paths.
Moving out on your own and into the real world is an eye-opener, and I don’t mean living off-campus.
Although going to University did help me understand spending and saving, it didn’t prepare me for home ownership and the years to come.
The thing about personal finance is that you can only predict because there is never a certainty.
Basic Finance 101, in our eyes, revolves around banking, savings, budgeting, debt, and investing.
Frugal living is one thing, but understanding the layer underneath saving money is another.
You won’t learn this overnight because it comes with experience, but you can read about it.
That’s another reason I read other reputable personal finance blogs: because I want to learn.
Just as you are here to learn from our experiences, I draw on experiences from bloggers who have experience in what I lack.
Investing and dividend income comes to mind from my buddy Mark at My Own Advisor.
He’s a wealth of investing information, and we virtually met many years ago.
Personal financial decisions will continuously improve when you are educated on the topic.
Take time to initiate a trip to the library to read a few personal finance books, follow reputable investment bloggers, and don’t forget to ask questions.
2. Budgeting
When I answered the Reddit question, I submitted that paying our mortgage off was our best personal financial decision.
In reality, only one part of a whole led to us being able to do so.
Without understanding finance and creating our Excel budget, we would not have quickly become debt-free.
Not everyone agrees with using a budget, but that’s okay because we track our money differently.
I’m not going to argue whether a budget is a financial bible, but I can say that without it, we’d still have debt.
3. Saving Money
Thankfully, we took the initiative to save money in our 20s and were curious about how to save even more.
By 2010, we were knee-deep in extreme couponing in Canada with the big binder in tow.
Our stockpile of products has dwindled over the last 12 years, but we are still using products we got free or near-free using coupons.
Isn’t it wild how some products have lasted this long?
Most products are razors, shaving cream, shampoo/conditioner, lip balm, floss, and dishwashing tablets.
I remember paying $0.50 for a whole box of dishwasher tablets; we didn’t own one.
We convinced ourselves that when I remodeled our kitchen, we would install one, and the tablets would come in handy.
Well, I still haven’t renovated our kitchen, but eventually, we will, and yes, I will install a dishwasher.
My wife jokes that if I don’t get a move on, the dishwasher will change and will no longer accept the tablets.
She’s probably correct, like always.
Take advantage of all ways to save money, using the Flashfood App, cash back options, coupons, or rewards cards.
There are definite advantages to living a frugal life before and after the debt is paid in full.
4. Found A Financial Advisor We Trust
Yes, we pay an advisor fee, but the price has been reduced to a 1% Management Expense Ratio since we have over one million dollars in our portfolio.
It may seem like lots of money to someone who invests independently, but it’s a fair price considering what one can lose without investing knowledge.
We’re fortunate to have built a strong relationship with our financial advisor, someone my wife worked with before she was laid off.
She already knew he was a dedicated advisor, always on time, and made an effort to do yearly review callbacks.
5. Paid Off Our Mortgage
We bought our house in 2009 when the economy took a nose-dive along with house prices.
I had told Mrs. CBB that now was the time to ditch the basement bedroom rental for our first home.
Finally, after looking at countless homes for sale, we settled on one that we could afford on one income.
With the second income, we would invest and pay our mortgage quickly.
Although we had a bump in the road with health issues, we crushed our $265,000 mortgage in just five years.
I’d have to say that was one of the best personal financial decisions we would make to allow us to live the way we do today.
We’re still a frugal couple and invest quite a bit more money, but we enjoy life without financial worry.
Tip: Don’t rush into the housing game until the timing is right, and purchase a home on one income if possible.
If we had to do this again but to buy and sell our home, we’d wait until house prices dropped.
In the meantime, we would save as much as possible to knock out another mortgage-free home.
6. Investing In Our Retirement
We sought financial advisor help because neither of us is confident about investing.
I think we poured our heart and soul into the budgeting aspect of personal finance, and the investing side is slowly piquing my interest.
You don’t want to make a big mistake with your investment money if you lack confidence in what you’re doing.
Starting with Questrade and their Questwealth portfolio is what I’ve been toying with and reviewing for all of you.
https://canadianbudgetbinder.com/2013/05/16/working-towards-a-debt-free-lifestyle-in-8-steps
7. Working Together As A Team
Without saying, if you are married or plan to marry, you must work as a team.
There has never been a time during the 16 years we’ve been married that I’ve made a big purchase without discussing it with my wife.
We discuss the decision together when money is to be spent, invested, or saved.
Knowing that we have a personal financial mindset is critical to keeping debt outside the door.
Once someone in the relationship veers in a different financial direction, money problems can arise.
Whether it’s a husband spending too much money or a wife spending cash behind her husband’s back, it all comes from the same pot.
8. Side-Hustles (Earning Extra Money)
Over the years, side hustles have helped us save more money to pay the mortgage before we were 40.
We have all contributed to our financial success from focus groups and earning cash for hosting international students to blogging.
I must admit that we had the mortgage paid by the time this blog earned money.
There were mistakes I made blogging early on, which contributed to that, but it’s not uncommon to now earn thousands each month.
Putting yourselves out there and searching for ways to make extra money is essential.
We would look on Kijiji for focus groups and sign up with local companies that needed people for a study.
For example, the University needed a couple to do a three-year marriage study, which paid well.
If I remember correctly, it was $350 each for the first visit and $100 each for a quick interview and questionnaire the following two years.
Newspapers are also an excellent source for finding focus groups and other studies conducted in your area for cash.
Personal Financial Wins and Losses
There will always be lessons learned regarding your financial wealth and health.
You’re not alone on this journey; we all have to walk it somehow.
If you’ve learned anything from our experiences today, please take budgeting seriously.
None of this would have been possible without budgeting and the mindset to achieve financial freedom.
Today, we live a life free from financial stress, all thanks to being frugal and tracking our money.
It has nothing to do with how much money you earn; It’s about how you save it.
I’ll probably have that saying engraved on my tombstone.
Discussion: What Personal Financial Decision Has Positively Transformed The Way You Live?
Please leave me your comments below.
Thanks for stopping by, and please subscribe to CBB for weekly updates from me, Mr. CBB.
My husband and I vowed we would never pay interest again (only make interest from our savings) and for the last 22 years we haven’t-no personal loans-no car loan-no credit card interest-no mortgage.What freedom!
Congratulations Kathi,
What was the turning point for you both?
That’s some feat, and you’re right it is freedom. We are similar to both of you and we don’t ever want to pay interest ever again. We haven’t paid any besides on our mortgage when we had it for the 5 years. Keep up the great work!! 🙂 Thanks for stopping by.
Oh, so many things…..1. The last 3 vehicles have all been paid for IN CASH!!! No financing or interest. what a great feeling that is!
2. I have a couple of side gigs that provide income, but I love them so much, it replaces spending money on entertainment. And the stuff for each business is deductible!
3. Make a monthly budget. This was HUGE!. It’s not perfect and life happens sometimes, but to me the budget is like a road map of where I am going.
4. Couponing, flash food app and thrifting. They all help me get what I need at a reduced price. Thrifting also helps me get rid of things I no longer want.
Hi Alexandra,
Right off the hop, I like how you made bullet points for your successes which is fantastic since they are all inspiring. The feeling of paying cash for something is uplifting. There’s no debt to anyone, and that’s what matters. What was your turning point in getting on track? I agree no budget will ever be perfect, which is why we are honest. Just because I created a budget doesn’t mean I’m a master with it. Things happen that we cannot control. Very good point to bring up, thanks. Couponing and using apps without a doubt can impact a budget. It’s great to see you are using some of the best apps out there. Keep up the great work and thanks for sharing your positive points. Mr. CBB
Mr. CBB…..
1. Growing up with parents who lived through the 30,s.
2. First car with instalments …did not like the burden. Saved ever after before buying
Again for cash.
3. Began budgeting early,, as newlyweds we wanted a long overseas vacation.
We had 6 weeks living from The Envelope Plan.
4 Home again Living on The Envelope Plan forevermore. (Now The Jar Plan thanks to Vaz oxlade)
5. Dave Ramsay came along so I knew I was on track. Love the wealthy barber, it should be required reading in all schools.
6. Take advantage of every opportunity. After saving for a (low) down payment on first house I learned of a property selling for 6000. Yes, good old days! I bought it and worked weekends ina dry cleaners to pay it off.
7. Later sold property for 42,000 and paid off home. Only 6 years mortgage total.
8. Lived nicely raising two children but saved every extra bit. It adds up,
9. At 70 was surprised with divorce but thankfully had saved enough. I was able to buy a 3 bdrm townhouse for cash. Todays increases took value almost double.
10. I am able to live nicely albeit frugally into my80s, all thanks to not letting money rule my life. You must rule your money.
Ann
Hi Ann,
Wow, thanks for sharing this with us. I agree that Wealthy Barber is a great book for the educational system. I’ve read it both books and learned quite a bit from them. I don’t think many people think about divorce when they are in their 60’s, 70’s, and beyond. I’m sorry you had to go through that but it must have been in the plan for you both. The good thing was that you were frugal and knew how to save money so the equity, savings, and knowledge went with you. I agree, rule your money. When we lose control is when money has a hold over us and it’s never a good thing. You mention you are now in your 80’s. Does anything about the future sit heavily in your mind about finances? I appreciate your feedback on this topic Ann. Mr. CBB 🙂
Thank you Mr CBB….yes the one recurring worry is losing health and needing care, worse having to enter a care home. I have no family near, and both still working in their 50s. Home care is expensive here. I tread softly avoiding falls and injury. I try to remain physically active with gardening and online exercise. The government could put our tax money to better use by improving programs and in home care for seniors. Ann