If You’ve Ever Tried and Failed at Budgeting

Matt Chan • February 6, 2018

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.

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Mortgage Advice to Help You Through a Separation

By Matthew Chan • February 19, 2025

With the latest stats claiming that about half of marriages end in divorce and with around three-quarters of Canadians being homeowners, it’s important to know how to handle your mortgage if you decide to separate. Here’s a quick list of things to consider. Keep making your payments. A mortgage is a legally binding contract between you and the lender. It doesn’t take marriage into account. If your name appears on the mortgage, you're responsible for making sure the regular payments are made. A marital breakdown does not give you an excuse not to make your mortgage payments. If, during your marriage, you've relied on your spouse to make the mortgage payments and you aren’t certain payments are being made after separating, it's in your best interest to contact the lender directly to verify your mortgage is being paid. If payments aren't being made, it could affect your credit score or worse; the lender could start foreclosure proceedings. There is always a financial cost to break your mortgage. When working through how to split your finances, you decided to either refinance your mortgage, remove someone from the title, or sell the property, keep in mind that you will incur legal costs. If you’re in the middle of a term, the penalty for breaking your mortgage might be significant, especially if you have a fixed-rate mortgage. It’s certainly worth contacting your mortgage lender directly to verify the cost of breaking your mortgage. Having that information accessible when writing out your separation agreement will provide increased clarity. Listing your marital status as separated or divorced. When completing a mortgage application for securing new mortgage financing, when you list your marital status as separated or divorced, you can expect that a lender will want to see your legal separation agreement or your divorce papers. The lender wants to make sure you aren’t responsible for support payments. So if you haven’t finalized the paperwork, expect delays in securing mortgage financing. It could be harder to qualify for a new mortgage. With the separation of assets also comes the separation of incomes. If you qualified for your existing mortgage on a double income, you might find it hard to maintain the same quality of lifestyle post-separation. This is where careful planning comes in. Working closely with your independent mortgage professional will ensure you understand exactly where you stand. You’ll want to put together a plan for how to handle the mortgage on the matrimonial home. Purchasing the matrimonial home from your ex. There are special considerations given to people going through a separation to buy out the matrimonial home. Instead of looking at the transaction like a refinance where you can only borrow up to 80% of the property’s value, lenders will consider one spouse buying out the other up to a 95% loan to value ratio. This comes in handy when dividing assets and liabilities. Navigating the ins and outs of mortgage financing isn’t something you have to do alone. If you're going through a separation and you’d like to discuss all your mortgage options, please connect anytime. It would be a pleasure to walk you through the process.

What is a Second Mortgage?

By Matthew Chan • February 12, 2025

If you're not all that familiar with the ins and outs of mortgage financing, the term "second mortgage" might cause a bit of confusion. Many people incorrectly assume that a second mortgage is arranged when your first term is up for renewal or when you sell your first home. They think that the next mortgage you get is your "second mortgage." This is not the case. A second mortgage is an additional mortgage on a single property, not the second mortgage you get in your lifetime. When you borrow money to buy a house, your lawyer or notary will register your mortgage on the property title in what is called first position. This means that your mortgage lender has the first claim against the sale proceeds if you sell your property. If you happen to default on your mortgage, this is the security the lender has in repossessing your property. A second mortgage falls in behind the first mortgage on your property title. When you sell your property, the lawyers will use the sale proceeds to pay off your mortgages in sequence, the first position mortgage is paid out first, and the second mortgage is paid out second. After both mortgages are paid off completely, you get the remaining equity. When you secure a second mortgage, you continue making payments on your first mortgage as per your mortgage agreement. You must also then fulfill the terms of the second mortgage. So why would you want a second mortgage? Well, a second mortgage comes in handy when you're looking to access some of your home equity, but you either have excellent terms on your first mortgage that you don't want to break, or you’d incur a huge penalty to break your first mortgage. Instead of refinancing the first mortgage, a second mortgage can be a better option. A second mortgage is often used as a short-term debt consolidation tool to help provide you with better cash flow. If you’ve accumulated a considerable amount of high-interest unsecured debt, and you have equity in your home, you can secure a second mortgage to lower your overall cost of borrowing. If you'd like to know more about how a second mortgage works, or if you'd like to discuss anything related to mortgage financing, please connect anytime!

Unsure About the Housing Market? Let's Talk.

By Matthew Chan • February 5, 2025

If you’ve been thinking about buying a property, whether that be your first home, next home, forever home, or a home to retire into, the current state of the Canadian economy might have you wondering: Is this really the right time to make a move? There is certainly no shortage of doom and gloom in the news out there. The truth is, that’s a tough question to answer in the best of times. It’s nearly impossible to know for sure what’s going to happen next with the housing market in Canada. It could heat up or it could cool down. So here’s some advice. Instead of basing your buying decision entirely on external market factors, like the economy or housing market, consider looking for the answers internally. When you stop looking at the market to determine your timing to buy a home, and instead examine the personal reasons you have for wanting to buy a home, the picture can become much clearer. Here are some questions to consider. Although they are subjective, they will help bring you clarity. Ask yourself: Does buying a property now put me in a better financial position? Do I make enough money now to afford a new home and maintain my lifestyle? Do I feel confident with my current employment status? Have I saved enough money for a down payment? How long do I plan on living in this new home? Is there any scenario where I might have to sell quickly and potentially lose money? Does buying a property now move me closer to my life goals? Do I really want to buy now or am I just feeling a lot of pressure to just buy something? Am I holding back because I'm scared property prices might drop soon? There’s no doubt that buying a home can be stressful, but it doesn’t have to be. Having a plan in place is the best course of action to help you make good decisions and alleviate that stress. If you’d like to have a conversation to discuss your plans, ask some questions, and map out what buying a home looks like for you, we can address many of the unknowns together. The best place to start is to work through a mortgage pre-approval. There is no cost for this service, you’ll learn exactly what you can qualify for, and it will provide a lot of clarity about your situation. You might decide that it’s best to wait before buying, and that’s just fine. You might find that now’s a perfect time for you to buy! If you'd like to talk, please connect anytime. You’re not in this alone. We can work through everything together.