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How We Budget At Untangle Money

Budgeting is a common practice that lots of people use to save money and work toward their goals. We see it as the first step of the financial planning process because it sets your expectations and tells you what you have to work with. So today we're here to let you in on how we budget here at Untangle Money!

If you want to get straight to the heart of budgeting, you can scroll past this next bit.

We're going to set the stage first:

Financial plans work to both set your expectations as well as reduce any anxiety that you may have around your money. They help you answer the questions, "What can I afford?", and "Will I be ok in the future?".

A financial plan looks at where you currently are, and where you want to go. It outlines your financial goals and what you need to do to reach them. Financial planning is an ongoing process that can help reduce your financial stress; support your needs today with your Now Money; and help you meet your long-term goals for your Future Money, like retirement or buying a house.

Creating a roadmap and strategy for your Future Money is for everyone. You can start by making a financial plan on your own, or you can get help from a financial planning professional or service. At Untangle Money, getting assistance with financial planning is both more affordable and more accessible than ever.

The first part of a financial plan is a budget.

Important note: This is just one way to look at your money. You can use a different budgeting method that you find works better for you. But we hope you'll give ours a shot!

Before we dive into how we budget, let's discuss why you should have a budget and why it's especially important for women to budget.

Why do I need a budget?

It can be super helpful to have a budget, here's why:

  • It's a tool that will help you spend your money intentionally so that you can make sure you're leaving room to buy the things you want for yourself.

  • It can help you to keep track of your spending habits, savings, debt payments, and more. Keeping track of these metrics will give you more control over where your money is going, and visualize the flow of your income and expenses 📈

  • Most people find that without a budget, their money tends to get spent on whichever priority seems important in the now. Having a visual of an overall set of priorities can prevent this from happening.

What are some other benefits of having a budget? A budget will help you to...

  • Reduce anxiety

  • Track your savings,

  • Track your progress towards your financial goals,

  • Make financial decisions faster

  • And allocate resources to things that matter most to you.

Why is this important to women?

Budgeting looks different for women, plain and simple. Life events such as maternity leave and other caregiving roles drive income variability (ie. we're in and out of the full-time workforce, and we're paid less when we're in it). Life is also more expensive for us along the way. We're faced with a Grooming Gap (women are judged more on how we look, so if we don't spend money and effort into looking our 'best', society judges us), the Pink Tax (we pay more for other goods and services - think dry-cleaning, shampoo, haircuts etc.), plus the unconscious bias of many Financial Advisors (they suggest lower risk portfolios - the problem with lower risk portfolios, is that they put us at greater risk of not saving enough for retirement).

Not to mention, on average, women working full-time (in the paid workforce) in Canada earn 26% less than men do. All of these differences compound and culminate into the Wealth Gap. Forget about the Wage Gap, we're here to tell you about the Wealth Gap. That is: for every dollar a man has in net worth, a white woman has only 32 cents, even less for Black and Hispanic women. AND this statistic is trending in the wrong direction... 10 years ago it was 36 cents so we need to act now.

Clearly, women need different financial advice and tools than men and we aren't getting it. So let's get into it!

So how do we budget at Untangle Money?

Setting Expectations

Here at Untangle Money, we find that the first thing we need to do is set our expectations. Find out what you have to work with (your after-tax income minus your committed money*). We find that doing this helps us set reasonable goals and make better decisions on where we put our money to work.

*Committed Money in our terminology, or fixed-costs in accounting terminology (we break out debt so that users can see how much debt burden they are holding). An easy way to determine if something should fall into the Committed Money category, is that you need to take an action to stop paying for that thing. Action can be cancelling a subscription, asking for a lower rate on your phone, and moving to a different place.

Questions to ask:

  1. How much do you make in a year/what's your salary? What about per hour?*

  2. How much do you make in the early part of the year after taxes? What about per hour?

  3. How much of that money is already committed to spending on life? (Your fixed costs: rent, utilities, subscriptions, etc.). What about per hour?

  4. What's left over after all of the above is calculated? What about per hour? (Remember, this pays for the rest: food, clothing, goals and retirement).

  5. Find out what you'll look like when you're older. This has been shown to help you put more money away and give you empathy for Future You).

*To get a "per hour that you work" number: take an annual amount and divide it by 2000. This isn't exact, but it's a good estimate (working 50 weeks a year, 40 hours a week is 2000 hours/year).

Let's look at an example:

Jana is 26 years old.

Jana makes $70,000/year in Calgary (this is ~$35/hr).

After taxes she makes $56,500/year (~$28/hr).

BUT in the first half of the year she will pay $4000 in CPP and EI (through deductions), which means it will feel like she makes $48,500 in those first months (~$24/hr).

The square below represents the $24/hr that Jana makes while working.

Now let's fill that up with what Jana's money needs to pay for.

First, we have debt. Jana's minimum debt payments are $350/month (~$2.10/hr).

Next, we have Jana's committed costs. Jana spends $2000/month on all the things that she's committed to paying (rent, utilities, phone, bank fees, credit card fees, etc).

Sisterly advice: Wonder if you can afford your lifestyle? If your committed money + minimum debt payments adds up to more than 55% of your take-home pay, you are probably going to feel poor.

Look at the white space. The $9.90/hr is what Jana has to pay for retirement, savings goals, food, clothes, gifts. All the things she wants to spend her money on.

Now let's look at those numbers a different way:

Draft Your Budget

Next, you need to look at your retirement plan and/or goals and see how that fits into your budget. How much do you need to set aside for retirement?

It's important that you include retirement in your budget. This is because as investors TIME is our biggest advantage, and since we earn less money in our lifetimes, we need to take advantage of time!

Sisterly Advice: Now another thing we notice is that there is a lot of judgement around the type of retirement you may want. We're going to talk about a typical retirement (that assumes that you invest enough that you can live the same lifestyle you are living now. This is where things start to get personal. A typical retirement may not be worth the trade-offs for you. We'll talk about a few thought exercises you can try to help you determine what your desires are for retirement later. For more information specifically about retirement planning for women, checkout our blog post here!

Women spend 25% less time in the paid workforce. That means we need to start planning for our retirement as soon as possible.

This image above shows what it looks like to start investing $875 per month when you're 25 versus when you are 45. If you start at 45, you would need to put away roughly $3,350 per month to reach your retirement goal. *using Wealthsimple's retirement calculator - we are not affiliated with Wealthsimple.

Let's go back to our example:

Jana needs to save for retirement out of that money. We used Wealthsimple's calculator which assumes she'll need 70% of her current income each year for 30 years. This is where financial advisors telling women that they are risk-averse comes into play. With a low-risk investment portfolio that returns 4%/year, Jana would need to put away $8.46/hr ($1,410/month) using Wealthsimple's retirement calculator.

I don't know about you, but that only leaves Jana with $1.44/hour that she works to feed herself, get clothes, makeup, gifts etc. To us this feels pretty challenging. It's likely that Jana will not put away enough money to afford a traditional retirement.

But, had Jana put that money to work in a higher-risk investment portfolio that returns 6%/year, Jana only needs to invest $5.30/hr to have a traditional retirement.

Sisterly advice: If your company has any sort of retirement matching program, please please please consider using this - it is the best return on your investment that you will ever get.

Let's look at those numbers another way:

Note: after Jana stops paying CPP and EI, she has an additional $4/hour to work with.

Let's talk about a trend we're seeing around the world with women and retirement. We've dubbed this the Golden Girls retirement. Women are coming into retirement with less, and they are pooling their resources together and renting or buying an abode. Many of these women commented that they have never done such little housework in their lives, and other positives such as built-in socialization and someone being there should something happen to you.

Now, this is a good thought exercise for you. Do you hear Golden Girls retirement and think: "that sounds like a unique form of torture?" If so, you may want to put more emphasis on your retirement to ensure you're not one of the 41.5% of women who live below the poverty line.

Alternatively, if you hear this and think: "that could be great!" Well, you may be more open to other solutions to limited retirement funds, so you may be able to get away with a little less going into your investments.

Only you can decide.

Now it's time to add in your other financial goals. Remember that things that you buy that go up in value (usually houses), can work towards your retirement amount. When it comes to a house, if you can downsize, or reverse-mortgage your house, then you can use some of the value in your house to help pay for your needs in the future.

Set Your Goals

Now you can set your goals. Questions you should ask yourself at this stage are:

  1. Now that you know what you're working with, what is it that you want? What are your financial goals?

  2. How much does it cost? And, how will you get there? Fast or slow?

  3. If you don't like what your budget is telling you, what can you change?

Sisterly advice: The best place to gain more flexibility in your budget is to reduce your debt and lower your fixed costs/committed money!


Give it a few months and then check in. How are things going with your budget? Here's where you get to reflect on your budget and celebrate!

You should check in with your budget every month to make sure you're on track with your goals and make any adjustments if needed. At the end of the year, you can also take the time to look back at all 12 months and reflect on your goals.

At the end of the day, your budget should:

  • Be iterative;

  • Enable reflection and self-discovery;

  • Be directional;

  • And be your hero product!

A budget is just a tool. Don't let it become a magnifying glass that makes you feel bad about yourself. That is not the point. It helps you see the bigger picture and bring those insights into your day-to-day to get the life that YOU want from YOUR money. Remember to prioritize the spending that brings you joy, and try to get everything else cheaper or free.

A budget helps you to understand the choices that you are actively making, as well as the choices you may not even realize that you're making.

What’s Next?

You can follow us over on Instagram, Facebook, Pinterest and LinkedIn to see more content about women and money, personal finances and planning for your financial future. You can also check out our other blog posts here!

Financial independence is a huge part of being a strong, independent person, and it is our mission to help women, and anyone who doesn't feel safe or welcome in financial spaces typically dominated by cis men, set themselves up for financial success.

At Untangle Money we help women understand their (real!) financial picture, and obtain financial guidance from people that actually, really, get it; this is why we offer affordable options so that we are accessible to everyone. We would love to help you, too! Join the community of hundreds of other women looking to strengthen their financial well-being. You can check out our products and plans here or get in touch for a free consultation!

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