You might not know this, but I kiss a lot of frogs.

In my neck of the woods, it’s spring peeper season, which means that if you’re near a pond at dusk you’ll hear a chorus of tiny little frogs making some of the most beautiful music on earth. (Have a listen here.)

These aren’t the frogs I’m kissing.

Would you be surprised to hear that the single most common question I hear from clients isn’t should I pay myself a dividend or salary? or can I afford to retire? or where does all my money go?

Nope. It’s: can you recommend an insurance advisor/lawyer/accountant/investment counsellor?

Identifying where my professional expertise ends and connecting clients to colleagues I trust to do right by them is one of my core mandates. It only makes sense to find smart, engaged professionals who know more than I do in their own fields. It increases our collective intelligence, and lets us do more, better...provided they care about my clients’ well-being as much as I do.

And here’s where the frog kissing comes in…

Clients don’t ask me who to trust (which is what all professional recommendations boil right down to) because they don’t know how to Google “insurance advisor [my town].” They ask because discerning the difference between someone who will serve them and someone who will sell to them is hard to do.

I have spent a lot of time meeting with accountants, lawyers, insurance advisors, and investment counsellors, asking about core values, walking through process, and discussing the kinds of clients they feel best equipped to serve. Often, they turn out to be steady, reliable folks who keep their heads down and do the work. Sometimes they turn out to be toads (ugh).

Every once in a while (more often than you’d think, but less frequently than I’d like) I find royalty: professional colleagues who have incredibly high ethical standards, radical transparency, generosity with knowledge, and who care fiercely for their clients’ well-being.

These are the ones who make it all worthwhile, and who I recommend to clients. I still expect my clients to ask the hard questions even after an introduction, but helping them by providing a short list to start from is worth all the frog kissing.

On that note:If you know any professional royalty, I’d love to know them too. (Remember to practice good email introduction hygiene.)

Now that tax season is over, please forward copies of your 2017 tax returns and notices of assessment (or introduce me to your accountant so they can do it for you!)

Does this sound familiar?

You've read a book or a blog series or watched a show about budgeting and getting your money under control. You're all fired up, ready to really get it together, and get to work on that budget. The first few lines are easy:

Monthly net income? Read it off the paycheque, check. Mortgage payment? Burned in the memory, check. Oh, man. This budgeting stuff is easy.

Groceries? Uh...well, we usually shop once a week (unless we forgot something) and it usually comes in between $120-$180...I'll put $150.

Clothing? Oh, man. I don't know, $50? Except in September, when the kids go back to school, and October when their feet maliciously grow and we have to buy new running shoes with only one month until the snow falls...and April, when we realize it's too warm for winter coats and too cold for sweaters...

Entertainment? Erm...let's say $10. I dunno, do late charges at the library count?

When the time comes to "stick to the budget" and that budget is just a series of made up numbers, what happens?

Or this?

You take the advice most people are offering about controlling your spending: you begin to track your income. You get a notebook and a pen, and you write down every penny you spend, every day. Until Thursday comes along, and you're so busy that you just keep the receipts in the book, because you know you'll have time on Friday and you'll remember, but Friday becomes Saturday two weeks later, and you're sitting in front of a pile of little pieces of paper, trying to forensically reconstruct seventeen days of spending and hoping that missing the two pocketfuls of receipts that went through the wash won't screw you up too much.

Maybe, instead of the notebook or spreadsheet, you signed up for Mint or Quicken or YNAB instead, and you faithfully input or categorize all of your spending for almost a month. And then suddenly your checking account (according to the program) has $1,315.92 in it, when your checking account (according to reality) has $541.01. And you can't find the mistake.

When your books are a mess and you actually have no idea how closely you've been "sticking to the budget", what happens?

Protip: use what you already have to start budgeting well

Look, these things happen, even to someone who ::cough:: has been tracking her transactions and living on a spending plan for ::coughtenyearscough:: But when one of these is your first experience with the whole budgeting thing, it can very, very easily be your last. Or your last for a while.

I truly don't understand why the inevitable advice for first-timers is always A) write out a budget and/or B) track your spending. The only people who won't get lost in the land of 78 spending categories and account reconciliation are the ones who probably wouldn't have needed to read the book or watch the TV show to get themselves organized, and were going to be fine anyway.

The frustration goes away with time and practice, it really does. Any budgeting system will work if you give yourself enough time to learn and adapt to it, honestly. But why go through all the aggravation of trying to live by a guess-timated budget if you don't have to?

If you're convinced that some part of budgeting is worth doing, then the first place to start isn't how you're going to spend in the future; it's how you've already spent in the past. You have years worth of data lying dormant in your bank and credit card history as we speak - a complete picture of how you spent your money when you weren't paying attention, and accessing it is as simple as downloading a good sample size to a spreadsheet, sorting them out, and adding them up.

Easy for me to say

This is one of those pieces of advice that could very easily become that "just" advice that I hate so much.

"Just" is the dirtiest four-letter word in personal finance. "Just" DIY/"Just" cook at home, etc. #CPFC15

— Sandi Martin (@SandiMartinSPF) October 18, 2015

I use spreadsheets every day (and love every minute of it) so this is an easy thing for me to do and recommend. If you don't speak spreadsheet very fluently, this exercise might be as frustrating as trying to guess how much you're going to spend on clothes in the next _insert arbitrary period of time here_.

But, like most things prefaced with "just", it might be worth your time and effort to try. If you have even a passing familiarity with rows, columns, and cells, and know how to use the "sort" function, examining your past spending in aggregate is a good way to set yourself up for success with your future spending.

Why start with a guess when you can start with data? 

Hi Sandi,

I am a 22-year-old and just starting my career. Do I need a financial planner and is talking to a financial advisor at the bank the same thing as talking to a financial planner? 

Thank you,

Denise

--

Hi Denise,

You know, you have an enormous opportunity to "get things right" as you move forward with your life. If in this next few years you can learn and keep healthy money habits and attitudes, your future will be a lot easier than those of us that waited until our thirties (or forties, or fifties...) to pay attention.

I'd say for you the most important thing to learn is how to keep your spending and savings aligned with what you want to do in life, without spending more than you earn. The second most important thing to learn is how to invest rationally for the long-term without paying more than you should.

Some people learn at least one of those principles easily on their own, or by reading a few good books and blogs. Some people need a little more help, depending on how little they know when they start and if they learn easier when they have someone to talk to about it.

Who you talk to...well...obviously I'm biased towards my own model and the models of professionals whose only business is to give you advice. The business of the bank is to make money by selling products, so it's sometimes hard to tell if the person you talk to at the bank has your best interests in mind, or if they're under pressure from their manager to sell you a credit card, start a monthly TFSA/RRSP contribution into an expensive mutual fund, and get you out the door in under an hour so they can see the next person in line.

From my experience, I know for certain that there are some of the former type in banking, so you could get lucky, but there's a lot more of the latter type. It's not because they're bad people, it's that they either don't know any better, or their own financial well-being depends on pleasing their manager or their manager's manager.

Whew. This is turning into a long answer. I'm happy to spend a half-hour or so chatting with you about your particular circumstances to see if you really should pay someone for advice or if a couple of good book recommendations might work just as well as a starting point.

Best,Sandi

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.

So you’re spending more than you earn and need to cut back, eh? Let me guess: the culprits are Eating Out and Buying Stuff, and the internet has solved your problem by telling you that buying less stuff and cooking at home to save money are the answers.

Am I right?

As much as I hate to admit it, the internet is mostly right on this one. But the internet is also woefully naive. Let’s take cooking at home as our case study and examine why - while it’s the right choice for so many reasons - it’s also not as easy as saying “I’ll cook at home and fix all my problems”. As usual, I want to discourage you a little before encouraging you, because I want you to understand that the right choices aren’t always easy - and sometimes aren’t even right.

Cooking at home to save money with a baby and a full-time job

When I went back to work after my first son was born, a time that (not coincidentally) was also the first time my husband and I got serious about cutting back our spending so we could afford daycare (among other things), it was a time of enormous personal stress.

I was too sleep-deprived to articulate it at the time, but learning to spend less than we earned was very difficult because we didn’t have the resources to do so.

For us, cooking at home (instead of picking something up in the rush of getting back from work, getting the baby from daycare before they started charging five dollars a minute, and trying to squeeze “real life” with our son into the hours of six to seven-thirty every night) was the “easy” solution that would save us untold riches every year.

But cooking at home takes resources that eating out does not: it takes time. It takes a certain amount of skill. Most of all, it takes capacity - that is, the emotional resilience to stick with a difficult or stressful choice until it becomes less difficult and/or less stressful.

Now, keep in mind, we already knew how to cook. We already owned the pots and pans and whisks, the meat thermometer, the trays, bowls, measuring cups, and oven mitts. For those of you who didn’t grow up cooking or didn’t receive a ridiculous amount of kitchen gear when you got married, buying the basics is one of those “spending money to save money” paradoxes that can be hard to stomach if you’re already short on cash.

Yes, cooking at home saves money

Cooking (and packing up the leftovers for lunch at work the next day) reduced our spending on food to $110 per week for two adults and a toddler. That’s $2.33 per meal, and while I'd love to give you a triumphant comparison of the amount we spent on food before we committed to cooking at home, part of the reason we had to cut back was because we had no idea how we were spending our money in the first place, so the data is lost to history.

I’d estimate that we ate out at least five times a week (including lunches), and the meals we did cook (or “cook”) weren’t planned, so our grocery shopping was haphazard, wasteful, and - because it included a lot of pre-made stuff - cost us a lot more money for a lot fewer meals. A conservative estimate might be something like $210 every week, which works out to $5,200 in unnecessary spending on food every year.

You're still spending, you're just not spending money

The amount of money you can save every year by cooking at home is significant, but saving that money means spending one of your other equally precious resources: time or capacity. It might even mean spending social capital if you’re in a competitive profession that implicitly (or explicitly) requires very long working days and frequent lunches or dinners out with colleagues or superiors or clients.

So what does that mean in practical terms? So far, it sounds like I’ve been advocating for you to learn to cook no matter what because it will save you money, and for some of you that might actually be the only solution. If you’ve already tried to find ways to increase your income, reduce your big expenses like housing and transportation, haven’t bought anything unnecessary in months, and are still having trouble making ends meet, cooking at home might be the last frontier that you have to conquer no matter how thinly your resources are spread.In our case, cooking became a habit that stuck. We enjoy it, in fact, which makes it a (slightly) easier default than takeout on those nights that include badminton, client calls, and podcast episodes.

For others, those with more money and less time, maybe cooking at home - exclusively, anyway - isn’t the panacea the internet is telling you it is. Maybe you’ll need to compromise on other things - the kind of car you drive, or driving at all, vacations, rent, television, or Buying Stuff - so you can still feed yourself and work the long hours that are bringing in the money.

If you live in a bigger city, you could sign up for one of the many meal-delivery companies that are more expensive than cooking from scratch but less expensive than eating out at nine o’clock at night because that’s when you’re finished work.

The easy hard answer

Cooking at home to save money will cost you in other ways, and you need to be prepared to sacrifice other resources. I’d love to tell you what to do, but easy answers aren’t my specialty.

The hard answer is this: if you want to get your spending on food or any other category to line up with your income and goals, you’ll have to spend one of your other resources - your time, your capacity, even your social capital - until it doesn’t feel like a sacrifice anymore.